HomeMy WebLinkAbout10-225JULY 13, 2010 10 -225 RESOLUTION
(CARRIED 4 -2 LOST LAID OVER WITHDRAWN )
PURPOSE: APPROVE DEVELOPER AGREEMENT WITH OSHKOSH
CORPORATION FOR DEVELOPMENT ASSISTANCE FOR
ADDITION TO MANUFACTURING PLANT LOCATED AT 333
WEST 29 AVENUE
INITIATED BY: PUBLIC WORKS DEPARTMENT
BE IT RESOLVED by the Common Council of the City of Oshkosh that the attached
Developer Agreement with Oshkosh Corporation for the provision of Development
Assistance for an Addition to Oshkosh Corporation's manufacturing facility located at 333
West 29 Avenue, Oshkosh, Wisconsin, is hereby approved and the proper City officials
are hereby authorized to execute and deliver the agreement in substantially the same form
as attached hereto, any changes in the execution copy being deemed approved by their
respective signatures, and said City officials are authorized and directed to take those
steps necessary to implement the terms and conditions of the Agreement.
CITY HALL
215 Church Avenue
P.O. Box 1130
Oshkosh, Wisconsin
54903.1130 City of Oshkosh
—
Of HKCYH
TO: Honorable Mayor and Members of the Common Council
FROM: Allen Davis, Community Development Director
Lynn A. Lorenson, City Attorney
DATE: June 24, 2010
RE: Oshkosh Corporation Development Agreement
BACKGROUND
On February 23, 2010 the Common Council approved the creation of Tax
Increment District #24 South Industrial Redevelopment and adopted the Project
Plan for TID #24. The TID was created to promote industrial development
through the construction of a 150,000 square foot addition to Oshkosh
Corporation's South Plant located at 333 W. 29 Avenue in the City of Oshkosh.
The purpose of the addition is to create an E -Coat facility that is required as a
part of the manufacturing process for the Family of Medium Tactical Vehicles
(FMTV) for the federal government.
In order to submit a competitive proposal and secure the award of the federal
contract, Oshkosh Corporation excluded the cost of the E -Coat facility from the
bid and relied upon a combination of state and local incentives as well as their
own internal funding to pay for the cost of construction of the E -Coat facility. It
was estimated that approximately $5 million in local incentives would be
necessary to assist with the financing of the project. Based upon the estimated
costs of the plant expansion, tax increment from the newly created TID #24
would support approximately $4 million in borrowing capability. The additional $1
million necessary for the project was approved, also on February 23, 2010,
through a transfer of positive tax increment from TID #7.
ANALYSIS
The proposed Development Agreement provides the means for the transfer of
the approximately $5 million in local incentives necessary for the construction of
the E -Coat facility.
co
Memo/ Oshkosh Corp. Dev. Agmt: 6/24/10: Page 2
A copy of the proposed Agreement is attached to this memorandum. Following
are the main points from the Agreement.
• Oshkosh Corporation will construct an Addition on the Property which will
generate a minimum additional property tax valuation of $15 million. The
Agreement contemplates a combination of financing of up to $1 million in
the form of a grant to the corporation and up to $4 million in the form of
paygo assistance, with the final amounts dependent upon the final
valuation of the building addition.
• Combination of Paygo and Development Assistance — Originally Oshkosh
Corporation had requested that the City provide the necessary financial
assistance in the form of a development assistance grant (DAG), meaning
that the money invested by the City would be paid upfront and then repaid
to the City through property taxes generated from the new increment.
Through negotiation, the City was able to reach agreement with Oshkosh
Corporation that $4 million of the assistance would be provided in a paygo
format. The principle behind the concept of the paygo form of financing is
that instead of the City incurring debt to pay for project costs, the
developer privately finances the costs of the project. Once the
development is completed, the increase in property taxes is used to pay
principle and interest to the Developer to repay the financing costs. The
interest is proposed to be 7.5% which is consistent with other pay -go
financing. The primary benefit of the paygo format is that any risk
associated with performance of the TID is borne by the Developer.
• The requested paygo assistance includes $4 million to be financed
through tax increment created from additional property taxes based upon
the projected value of the project improvements, and $1 million to be
provided as a grant from TID #7. The Agreement contains provisions
reducing the amount of the grant and paygo assistance should the value
increment created be less than the anticipated project cost of $15 million,
as a lesser value would not support the full $4 million in assistance.
• Under the terms of the Agreement the Corporation will pay the City's costs
related to the creation of the TIF District, development of the project plan,
the creation of the development agreement and any other necessary
documents. In addition, the City will retain $5000 from the annual
payment to the Corporation as reimbursement for the City's costs and
expenses associated with administration of the TIF District.
• The Corporation agrees that it will maintain its primary manufacturing
operations within the jurisdiction of the City for not less than five years.
Should the Corporation breach the covenant to maintain its primary
manufacturing operations within the City, the City may demand repayment
of a portion of the grant money given to the City and cease all future
Memo/ Oshkosh Corp. Dev. Agmt: 6/24/10: Page 3
payments under the Agreement. This language was used because this is the
same language used by the State of Wisconsin and Oshkosh Corporation in
its incentive package.
FISCAL IMPACT
Consistent with the previously approved Project Plan for TID #24 and
Amendment #5 to TID #7, upon execution of the Agreement, the City of Oshkosh
would pay to Oshkosh Corporation $750,000 of the proposed $1 million grant to
the Corporation. The remaining payment of the grant money would be made
upon verification of the final valuation of the Addition on the property assessment
roll.
Thereafter, the City will pay annually to the Corporation a payment made solely
from the tax increments attributable to the improvements made on the property to
reimburse the Corporation for the $4 million investment in the project with an
interest rate of 7.5% per annum.
The City's initial and continuing costs for creation and administration of the TID
will be reimbursed through the proceeds of the TID.
RECOMMENDATION
Staff recommends approval of the Agreement.
Respectful) Submi d,
.c, vJ J
Allen Davis
Director of Community Development
Lynn A. Lorenson
City Attorney
Approved:
�,,, � -., �-/, I a � "4 �/,�
Mark A. Rohloff
City Manager
DEVELOPMENT AGREEMENT
This Development Agreement (this "Agreement ") is made as of the day of July,
2010, by and between the CITY OF OSHKOSH, WISCONSIN, a Wisconsin municipal
corporation (the "City "), and OSHKOSH CORPORATION, a Wisconsin corporation (the
"Corporation ").
RECITALS
A. The Corporation owns and operates a manufacturing plant located at 333 West
29 Avenue in the City of Oshkosh, Wisconsin, on a parcel of land legally described on the
attached Exhibit A (the "Property").
B. The Corporation was awarded a five (5) year contract by the Federal Government
to manufacture the Family of Medium Tactical Vehicles (the "FMTV Contract ").
C. In order to fulfill the FMTV Contract, the Corporation will construct a one
hundred fifty thousand (150,000) square foot addition to its existing manufacturing plant on the
Property, and install therein an electrocoat complete painting facility (the "E-Coat Facility "),
allowing for the on -site priming and painting of the manufactured vehicles, acquire equipment
and tooling for use therein, and make other improvements to the Property (collectively, the
"Project ").
D. In order to fulfill the FMTV Contract, the Corporation expects to add or retain up
to two thousand (2,000) jobs, and local suppliers and other businesses that contract with the
Corporation will indirectly benefit from the Corporation's fulfillment of the FMTV Contract.
E. The City has created its Tax Increment District No. 24 (South Industrial
Redevelopment), the boundaries of which are the same as the boundaries of the Property.
F. To assist the Corporation with the Project, the City has agreed to provide a cash
grant to the Corporation, as specified in, and subject to, the terms and conditions of this
Agreement.
G. The City and the Corporation enter into this Agreement to set forth their
respective duties and obligations with respect to the construction, installation, furnishing, and
equipping of the Project on the Property.
NOW, THEREFORE, in consideration of the recitals and mutual agreements herein set
forth, and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Corporation and the City agree as follows:
1. Definitions As used in this Agreement, the following terms shall have the
following meanings:
(a) "Addition" means that certain addition to be constructed to the
Corporation's existing plant located on the Property, which addition will house the
Corporation's E -Coat Facility.
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(b) "Addition Cost" means the actual costs of the construction of the
Addition, including all capital expenditures (or expenditures that could be treated as
capital expenditures) and preliminary expenditures (such as architectural, engineering,
surveying, soil testing, and similar costs that are incurred in connection with the
construction of the Addition).
(c) "City" means the City of Oshkosh, Wisconsin, a Wisconsin municipal
corporation, its successors and assigns.
(d) "City Contribution" means payments to be provided by the City to the
Corporation from future Tax Increments in an amount not to exceed Four Million Dollars
($4,000,000), plus interest.
(e) "Closing Date" means the date on which all conditions precedent to the
funding of the Grant and the City Contribution have been satisfied or waived by the City.
(f) "Completion Date" means December 31, 2010.
(g) "Corporation" means Oshkosh Corporation, a Wisconsin corporation, its
successors and assigns.
(h) "Default" means the occurrence of any one or more of the events
described in Section 14, below.
(i) "E-Coat Facility" means the Corporation's electrocoat complete painting
facility.
(j) "Equity Contribution" means a cash contribution to the Addition Cost by
the Corporation in an amount of not less than Eight Million Five Hundred Thousand
Dollars ($8,500,000).
(k) "Expiration Date" means the earliest to occur of. (i) the day on which both
the Grant and the City Contribution plus all interest thereon has been paid in full; or (ii)
the termination of the TIF District under Wis. Stat. § 66.1105 (7); or (iii) the repayment
by the Corporation of the amount shown for the applicable year in the schedule set forth
on Exhibit B hereto, following a demand to make such repayment made by the City
pursuant to Section 15, below.
(1) "Grant" means a development assistance grant in an amount up to One
Million Dollars ($1,000,000) to be provided by the City to the Corporation under the
terms and conditions of this Agreement.
(m) "Lender" means Bank of America, N.A. and its successors and assigns, as
Administrative Agent under the Corporation's current credit agreement, as the same may
be amended from time to time.
(n) "Minimum Value Increment" means Fifteen Million Dollars
($15,000,000).
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(o) "Minimum Project Cost" means Forty -Five Million Five Hundred
Thousand Dollars ($45,500,000).
(p) "Payment Date" means each August 15.
(q) "Project" means the construction, installation, furnishing and equipping of
the Addition; the improvement of a surface parking lot on the Property; the acquisition
and installation of equipment and tooling for use therein; and the construction and
installation of all other improvements for the development of the Project in accordance
with the Project Plans or as may be required by any applicable zoning law, rule,
regulation, or ordinance.
(r) "Project Costs" means the total costs of construction, installation,
furnishing, and equipping of the Project, including all capital expenditures (or
expenditures that could be treated as capital expenditures) and preliminary expenditures
(such as architectural, engineering, surveying, soil testing, and similar costs that are
incurred in connection with the construction of the Project) and all other direct or indirect
costs of development of the Project in accordance with the Project Plans.
(s) "Project Plans" means final detailed plans and specifications for the
Project including, without limitation, all improvements located or to be located on the
Property, the footprint of the Addition and the square footage thereof, all easements,
pathways, exterior boundary lines, walkways, parking and circulation areas, adjoining
public streets and alleys, utilities, exits and entrances, signage, curbs, gutters, sidewalks,
landscaping, all materials to be used in construction, all interior and exterior finishes,
building sections and elevations, and a narrative description of all structural systems,
mechanical systems, electrical systems and any specialty systems.
(t) "Property" means the parcel of land upon which the Project is located, as
legally described on Exhibit A .
(u) "Tax Increment" shall have the meaning set forth in Wis. Stat.
§ 66.1105 (2) (i).
(v) "Term" means the period of time commencing on the Closing Date and
terminating on the Expiration Date.
(w) "TIF District" means Oshkosh Tax Incremental District No. 24 (South
Industrial Redevelopment).
(x) "TIF District Project Plan" means the Project Plan for Tax Increment
District No. 24 as approved by the City's Common Council on February 23, 2010 and by
the Joint Review Board on March 1, 2010, as the same may be amended from time to
time.
(y) "Value Increment" shall have the meaning set forth in Wis. Stat.
§ 66.1105 (2) (m).
MILW_9967070.9
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(z) "Year 2011 Value Increment" means the Value Increment determined
with respect to ad valorem property taxes levied for the year 2011.
2. Project Overview The Corporation will construct the Addition on the Property in
accordance with the Project Plans. To assist the Corporation with the Project, the City will
provide to the Corporation, as the owner and developer of land within the TIF District, a cash
grant consisting of the Grant and the City Contribution. The Corporation will make the Equity
Contribution and will provide or obtain any additional money required to complete the Project.
The Corporation expects, but is not required, to obtain assistance from the State of Wisconsin in
an amount of up to Thirty-Five Million Dollars ($35,000,000).
The City will provide or obtain any money required to make the Grant through a donation
of generated increment from the City's Tax Increment District No. 7 (Southwest Industrial Park).
3. Cites To assist the Corporation with the Project, the City shall make a
development assistance grant in an amount of up to One Million Dollars ($1,000,000), so long as
the terms and conditions set forth in this Agreement are met. If the Year 2011 Value Increment
is less than the Minimum Value Increment, then the amount of the Grant will be reduced by an
amount equal to the percentage difference between the Year 2011 Value Increment and the
Minimum Value Increment, rounded to the nearest dollar. For example, if the Year 2011 Value
Increment is Fourteen Million Dollars ($14,000,000), then the difference would be One Million
Dollars ($1,000,000) or six and two - thirds percent of the Minimum Value Increment, the Grant
would be reduced by a like percentage, and the total amount of the Grant would be Nine
Hundred Thirty -Three Thousand Three Hundred Thirty -Three Dollars ($933,333).
4. Disbursement of Grant Funds Following the Closing Date, and upon the City's
receipt of a certificate from the Corporation confirming that the Equity Contribution has been
fully spent to pay for Addition Costs, the City will provide Seven Hundred Fifty Thousand
Dollars ($750,000) of the Grant funds to the Corporation. The Grant funds will be used to pay
for Addition Costs. At such time as the Addition has been completed and the Property, including
the Addition, has been fully assessed (which the City estimates will occur in August, 2011), the
final amount of the Grant will be calculated in accordance with Section 3, above, and the balance
of the Grant funds will be paid to the Corporation by the City.
5. City Contribution
(a) Subject to all the terms and conditions of this Agreement and applicable
law, the City will provide payments to the Corporation solely from future Tax Increments
to assist with the Corporation's Project Costs; provided, that the total aggregate principal
amount of the City's payments to the Corporation shall not exceed Four Million Dollars
($4,000,000). The Corporation shall also be entitled to interest on the City Contribution,
as provided herein, with interest commencing to accrue from the Closing Date.
If the Year 2011 Value Increment is less than the Minimum Value
Increment, then the principal amount of the City Contribution will be reduced by an
amount equal to the percentage difference between the Year 2011 Value Increment and
the Minimum Value Increment, rounded to the nearest dollar. For example, if the Year
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2011 Value Increment is Fourteen Million Dollars ($14,000,000), then the difference
would be One Million Dollars ($1,000,000) or six and two - thirds percent of the
Minimum Value Increment, the principal amount of the City Contribution would be
reduced by a like percentage, and the principal amount of the City Contribution would be
Three Million Seven Hundred Thirty -Three Thousand Three Hundred Thirty -Three
Dollars ($3,733,333).
(b) As the sole source of payment for the City Contribution, the City agrees to
pay the Corporation all Tax Increment (net of those costs payable to the City pursuant to
Section 9, below) attributable to the Property based on taxes accrued through the
Expiration Date. Payments under this Agreement shall be made on Payment Dates solely
from Tax Increments attributable to the Property actually received by the City by each
Payment Date. The interest rate payable by the City as the City Contribution shall be
equal to seven and one -half percent (7.50 %) per annum. In no event shall the City's
payment to the Corporation exceed the total Tax Increment generated by the Property.
The City Contribution, as evidenced by this Agreement, shall be a special and limited
obligation of the City and not a general obligation. Payments under this Agreement shall
be due in annual installments beginning on the first Payment Date of the calendar year
following the first tax year in which positive Tax Increment is allocated to the City and
continuing each Payment Date thereafter until the Expiration Date.
(c) The Corporation acknowledges that as a result of the special and limited
nature of the City's obligation to pay the City Contribution, the Corporation's recovery of
the City Contribution, plus interest thereon, depends on various factors, including, but not
limited to, future mill rates, changes in assessed value of the Property, the failure of the
Property to generate Tax Increments at the rate expected by the Corporation, changes in
the Tax Increment Law, and other factors beyond the City's and/or the Corporation's
control.
(d) The City covenants to the Corporation that (i) except as set forth in
Section 9, below, City shall not use the Tax Increments from the Property for any
purpose other than to pay the City Contribution, plus interest thereon; and (ii) unless the
City Contribution, plus interest thereon, has been paid in full, the City shall not close the
TIF District prior to the Expiration Date.
(e) The City shall, at the Corporation's request, provide to the Corporation an
accounting of the TIF District, including, but not limited to, the outstanding principal
balance of the City Contribution and the annual Tax Increments received from the TIF
District.
6. Conditions Precedent to City's Obligations In addition to all other conditions
and requirements set forth in this Agreement, the obligations of the City hereunder (including,
without limitation, the obligation of the City to disburse the Grant and pay the City Contribution)
are conditioned upon the satisfaction of each and every of the following conditions:
(a) On or before the date of this Agreement, the Corporation shall provide the
City an opinion of its counsel reasonably acceptable to the City stating, among other
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things, that the persons executing this Agreement on behalf of the Corporation are
authorized to do so, that the Corporation has duly authorized entry into this Agreement,
and other matters as are reasonably requested by the City.
(b) On or before the Closing Date, the Corporation shall have provided the
City with (i) certified copies of its Articles of Incorporation and Bylaws and (ii) a current
Certificate of Status issued by the Wisconsin Department of Financial Institutions.
(c) On or before the Closing Date, the Corporation and the McMahon Group,
the Corporation's architect, shall certify to the City that the Corporation has or will incur
Project Costs not less than the Minimum Project Costs.
(d) On or before the Closing Date, the Corporation, at its sole cost, shall
provide the City with the Project Plans, which Project Plans must be reasonably
acceptable in all respects to the City.
(e) On or before the Closing Date, the Corporation shall certify that it has
entered into a construction contract with Miron Construction Co., Inc. for the Project.
(f) On the Closing Date, no uncured default, or event which with the giving
of notice or lapse of time or both would be a default, shall exist under this Agreement.
Unless all conditions contained in this Section 6 are satisfied within the time
periods for satisfaction of such conditions as set forth above or such conditions are waived in
writing by the City within the time periods for satisfaction of such conditions as set forth above,
the City, at its option, exercised in its sole discretion, may terminate this Agreement, in which
event none of parties to this Agreement shall have any further liability or other obligation to the
other party.
The City covenants that it will take the following actions:
(a) On or before the date of this Agreement, the City shall provide the
Corporation an opinion of its counsel reasonably acceptable to the Corporation stating,
among other things, that the persons executing this Agreement on behalf of the City are
authorized to do so, that the City has duly authorized entry into this Agreement, that the
TIF District has been duly and effectively created, and other matters as are reasonably
requested by the Corporation.
(b) On or before June 30, 2010, the City shall have received any necessary
approval for the donation of generated increment from the City's Tax Increment District
No. 7 (Southwest Industrial Park) as a source of money to make the Grant, or the City
shall obtain the necessary funds from alternative sources.
(c) On or before June 30, 2010, the City shall determine that the Project is in
compliance with the TIF District Project Plan and any other covenants, restrictions,
documents, or instruments governing the Property and/or the TIF District.
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(d) As required by Wis. Stat. § 66.1105 (2) (f) 2. d., the City shall send a copy
of this Agreement to the appropriate joint review board or, if that joint review board has
been dissolved, shall retain a copy of this Agreement in the official records for the TIF
District.
7. Representations, Warranties and Covenants The Corporation represents and
warrants to the City as follows:
(a) The Corporation is a corporation duly formed and validly existing and has
the power and all necessary licenses, permits, and franchises to own its assets and
properties and to carry on its business.
(b) The Corporation is duly licensed or qualified to do business in good
standing in the State of Wisconsin and all other jurisdictions in which failure to do so
would have a material adverse effect on its business or financial condition.
(c) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary corporate action of the Corporation and constitute the
valid and binding obligations of the Corporation enforceable in accordance with their
terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium,
general principles of equity, and other similar laws of general application affecting the
enforceability of creditors' rights generally.
(d) The execution, delivery, and performance of the Corporation's obligations
pursuant to this Agreement will not violate or conflict with the Corporation's Articles of
Incorporation or Bylaws or any indenture, instrument or agreement by which the
Corporation is bound, nor will the execution, delivery or performance of the
Corporation's obligations pursuant to this Agreement violate or conflict with any law
applicable to the Corporation or to the Project.
(e) Except as disclosed in the Corporation's filings with the SEC, there is no
litigation or proceeding pending or affecting the Corporation or the Project, or, to the best
of the Corporation's knowledge, threatening the Corporation or the Project, that would
adversely affect the Project or the Corporation or the enforceability of this Agreement,
the ability of the Corporation to complete the Project or the ability of the Corporation to
perform its obligations under this Agreement.
(f) To the best of the Corporation's knowledge, no default, or event which
with the giving of notice or lapse of time or both would be a default, exists under this
Agreement, and the Corporation is not in default (beyond any applicable notice and cure
period) of any of its obligations under any other agreement or instrument to which the
Corporation is party or obligor.
(g) The Property is in substantial compliance with all applicable material
federal, state, and local statutes, regulations, rules, and/or ordinances, and with all orders,
decrees, or judgments of governmental authorities or courts having jurisdiction, relating
to the use, generation, manufacture, collection, treatment, disposal, storage, control,
removal, or cleanup of hazardous substances (as that term is defined in Section 11,
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below). In the event any hazardous substances are present in, at, on or about the
Property, the Corporation shall be responsible for removing or otherwise monitoring or
remediating such hazardous substances as required by, and in full compliance with
applicable law.
(h) No portion of the assistance expected to be provided to the Project by the
State of Wisconsin would reduce the assessed value of the Property for property tax
purposes.
The representations and warranties contained herein shall be true and correct as of the
date hereof and as of the Closing Date.
During the Term of this Agreement, the Corporation covenants to the City as follows:
(a) The Corporation shall pay for all work performed and materials furnished
for the Project as and when due.
(b) On or before the Completion Date, the Project shall be completed (subject
to matters of force majeure), with a certificate of occupancy issued, and in all other
respects be ready for occupancy and use by the Corporation.
(c) To the extent it deems practicable, the Corporation shall cause the Project
Plans to incorporate sustainable design principles such as the use of recycled materials,
passive heating and cooling, day lighting, water conserving fixtures, flexible and
adaptable HVAC systems, and other elements which will increase energy efficiency and
indoor workspace quality.
(d) The Corporation shall conform and comply with, and will cause the
Project to be in conformance and compliance with, all applicable federal, state, local and
other laws, rules, regulations and ordinances, including without limitation, all zoning and
land division laws, rules, regulations, and ordinances, all building codes and ordinances
of the City, all environmental laws, rules, regulations, and ordinances.
(e) The Corporation shall cause the Project to be constructed in a good and
workmanlike manner and substantially in accordance with the Project Plans and will
promptly correct any defects, structural or otherwise, in any construction or deviations
from the Project Plans. Construction of the Project shall be completed free of all liens
and encumbrances except for those liens and encumbrances permitted by this Agreement.
(f) Except as permitted below, the Corporation shall not, without the prior
written consent of the City: (i) approve any change or modification in the Project by
change order or otherwise that would cause the Project Costs to be less than the
Minimum Project Cost, or (ii) modify or amend any agreement affecting the Project in a
manner which would cause the agreement to be materially inconsistent with this
Agreement.
(g) The Corporation shall permit the City and the City's construction
consultant or inspector, at all reasonable times, to inspect the Project and all matters
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relating to the development thereof. The City assumes no obligation to the Corporation
for the sufficiency or adequacy of such inspections, it being acknowledged that such
inspections are made for the sole and separate benefit of the City. The fact that the City
may make inspections shall in no way relieve the Corporation from its duty to
independently ascertain that the construction of the Project is being completed
substantially in accordance with the Project Plans.
(h) The Corporation shall pay or cause to be paid prior to delinquency all
federal, state and local taxes in connection with the Project. The Corporation shall pay
when due all operating expenses in connection with the Project.
(i) The Corporation shall substantially comply with the prevailing wage
requirements under Wis. Stat. § 66.0904, the requirement to provide notification of
position openings under Wis. Stat. § 66.1105 (6c), and, to the extent notified by the City
prior to the date of this Agreement, with any other applicable material restriction
affecting the TIF District applicable to the Project and with all laws, rules, regulations
and ordinances generally applicable to tax increment districts that are applicable to the
Project.
0) The Corporation shall have in effect at all times, all permits, approvals and
licenses that may be required by any governmental authority or nongovernmental entity
in connection with the development, construction, management and operation of the
Project.
(k) The Corporation, at its cost and expense, shall operate, maintain, repair
and replace (including without limitation, replacements and repairs of a capital nature) all
elements of the Project. The Corporation's maintenance and repair obligations shall
include both day to day maintenance and repair and extraordinary maintenance and repair
and shall include maintenance, repair and replacement of any elements or systems of the
Project as are necessary in order to maintain the Project.
(1) The Corporation will not, without the City's consent, initiate any change
in the zoning classification of all or any portion of the Property.
(m) The Corporation shall maintain its primary manufacturing operations
within the jurisdiction of the City for not less than five years after the Closing Date.
(n) The Corporation will maintain the Project within the jurisdiction of the
City.
8. Damage; Destruction The event of fire, damage, or any other casualty to any part
of the Project shall not operate to release the Corporation from its liabilities and obligations
under this Agreement.
9. Costs The Corporation shall pay all reasonable, customary, and itemized out -of-
pocket third party fees, costs and expenses actually incurred by the City, including attorneys' and
consultants' fees, in connection with the creation of the TIF District, the development of the TIF
District Project Plan, the negotiation and preparation of this Agreement and all documents and
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agreements executed in connection therewith; provided, however, that the annual amount of such
payment shall not exceed Fifty Thousand Dollars ($50,000) for the first year, and after the first
year of the Term of this Agreement, the annual amount of such payment shall not exceed Five
Thousand Dollars ($5,000), (i) with the amount of the payment to be deducted from the City
Contribution annually payable to the Corporation, and (ii) with the maximum amount to increase
by one and one -half percent (1.5 %) each year during the Term. The Corporation shall also pay
all reasonable, customary, and itemized out -of- pocket third party fees, costs and expenses
actually incurred by the City, including attorneys' and consultants' fees, in connection with the
enforcement of its rights against the Corporation under this Agreement, including without
limitation, the enforcement of such rights in the bankruptcy, reorganization or insolvency
proceeding involving the Corporation.
10. Real Estate Taxes and Assessments The Corporation shall pay timely to the City
generally applicable property taxes assessed and levied by the City on the Property under
applicable property tax laws, rules, rates, regulations and ordinances in effect from time to time.
Nothing in this Agreement shall impair any statutory rights of the City with respect to the
assessment, levy, priority, collection, and/or enforcement of real estate property taxes. In
addition, the Corporation agrees to pay timely to the City all special assessments that may be
assessed or levied in connection with the Property under the applicable special assessment laws,
rules, regulations, ordinances and rates in effect at the time said special assessments are assessed
or levied.
11. Indemnifications The Corporation hereby indemnifies, defends and holds the
City harmless from and against all loss, liability, damage and expense, including reasonable
attorneys fees, suffered or incurred by the City to the extent caused by the following: (a) the
failure of the Corporation or its contractors, subcontractors, agents, employees, or invitees to
comply with any environmental law, rule, regulation or ordinance, or any order of any regulatory
or administrative authority with respect thereto; (b) any release by the Corporation or its
contractors, subcontractors, agents, employees or invitees of petroleum products or hazardous
materials or hazardous substances on, upon or into the Project; (c) any and all damages to natural
resources or real property or harm or injury to persons resulting or alleged to have resulted from
any failure by the Corporation and/or its contractors, subcontractors and/or agents to comply
with any law, rule, regulation or ordinance or any release of petroleum products or hazardous
materials or hazardous substances as described in clauses (a) and (b) above; (d) claims arising on
the Property under the Americans with Disabilities Act, and any other laws, rules, regulations or
ordinances; (e) claims for third parties for injury to or death of any person on the Property; and
(f) the failure of the Corporation to maintain, repair or replace as needed any portion of the
Project.
The term "hazardous substances" means any flammable explosives, radioactive materials,
hazardous wastes, toxic substances, or related materials, including, without limitation, any
substances defined as or included in the definition of "hazardous substances," "hazardous
waste," "hazardous materials," or "toxic substances" under any applicable federal or state or
local laws or regulations.
12. Insurance The Corporation shall maintain the following insurance policies issued
by insurers with a rating of at least "A -" and in a financial size category of at least "X" as
10
MILW_9967070.9
established by A.M. Best Company and licensed to do business in the State of Wisconsin: (i)
property insurance on the Addition with coverage limits equal to the full replacement cost of the
building and contents; (ii) commercial general liability insurance with limits of $1,000,000 per
occurrence and $5,000,000 in the aggregate; (iii) statutory worker's compensation insurance; and
(iv) automobile liability insurance with a combined single limit of $1,000,000.
Each insurance policy shall require the insurer to provide at least thirty (30) days prior
written notice to the City of any material change or cancellation of such policy.
13. Nondiscrimination The Corporation shall not use the Project in any manner to
permit discrimination or restriction on the basis of race, creed, ethnic origin or identity, color,
gender, religion, marital status, age, handicap or national origin, and the Corporation shall
construct and operate the Project in compliance with all laws, rules, regulations and ordinances
relating to discrimination or any of the foregoing.
14. Default The occurrence of any one or more of the following events shall
constitute a default hereunder:
(a) The Corporation or any successor shall fail to pay when due any amounts
due from it under this Agreement, and such failure continues for fifteen (15) days after
the Corporation has received a written notice of default; or
(b) Any representation or warranty made by the Corporation or any successor
in this Agreement or any document delivered by the Corporation or its successor pursuant
to this Agreement shall prove to have been false in a material way as of the time made or
given; or
(c) The Corporation or any successor shall materially breach or fail to
substantially perform or observe its covenant under Section 7(m) or (n), above.
(d) The Corporation or any successor shall materially breach or fail to
substantially perform timely or observe timely any of its material covenants or
obligations under this Agreement (other than its covenant under Section 7(m) or (n),
above), and such failure shall continue for thirty (30) days following notice thereof from
the City to the Corporation (or such longer period of time as is necessary to cure the
default as long as the Corporation has commenced the cure of the default within the thirty
(30) day period and is diligently pursuing to cure the default and as long as the default is
cured not later than one hundred eighty (180) days following notice thereof from the
City); or
(e) The Project is not substantially completed on or before the Completion
Date (subject to matters offorce majeure); or
(f) The Corporation shall: (i) become insolvent or generally not pay, or be
unable to pay, or admit in writing its inability to pay, its debts as they mature; or (ii)
make a general assignment for the benefit of creditors or to an agent authorized to
liquidate any substantial amount of its assets; or (iii) become subject of an order for relief
within the meaning of the United States Bankruptcy Code, or file a petition in
11
MILW_9967070.9
bankruptcy, for reorganization or to effect a plan or other arrangement with creditors; or
(iv) have a petition or application filed against it in bankruptcy or any similar proceeding,
and such petition, application or proceeding shall remain undismissed for a period of
ninety (90) days or more, or the Corporation shall file an answer to such a petition or
application, admitting material allegations thereof; or (v) apply to a court for the
appointment of a receiver or custodian for any of its assets or properties or have a
receiver or custodian appointed for any of its assets or properties, with or without
consent, and such receiver shall not be discharged within ninety (90) days after its
appointment; or (vi) adopt a plan of complete liquidation of its assets.
15. Remedies Upon the occurrence of a default concerning the Corporation's
covenant under Section 7(n), above, the City may cease all future payments of the City
Contribution. Upon the occurrence of any other default (beyond any applicable notice and cure
period), the City may, at its option, pursue any one or more of the following remedies
concurrently or successively:
(a) demand the repayment by the Corporation of the amount shown for the
applicable year in the schedule set forth on Exhibit B hereto, or
(b) Cease all future payments of the City Contribution, or
(c) Pursue any or all of the rights and remedies available to the City at law
and/or in equity against the Corporation and/or the Project.
Except as may be otherwise specifically set forth herein, no remedy herein conferred
upon the City is intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given under this Agreement,
and/or available to the City under the TIF District Project Plan and any other covenants,
restrictions, documents or instruments governing the TIF District, and/or now or hereafter
existing at law or in equity. No failure or delay on the part of the City in exercising any right or
remedy shall operate as a waiver thereof nor shall any single or partial exercise of any right
preclude other or further exercise thereof or the exercise of any other right or remedy.
Notwithstanding any of the foregoing authorizations, the City shall have no duty or obligation
whatsoever with respect to any of the matters so authorized.
16. No Personal Liability Under no circumstances shall any council member,
official, director, attorney, employee, or agent of a party have any personal liability arising out of
this Agreement, and no party shall seek or claim any such personal liability.
17. City Authorization The execution of this Agreement by the City is authorized by
Resolution No. of the City's Common Council dated , 2010.
18. Miscellaneous.
(a) Except as otherwise specifically set forth herein, the respective rights and
liabilities of the City and the Corporation in this Agreement are not assignable or
delegable, in whole or in part, without the prior written consent of the other party.
12
MILW_9967070.9
Provisions of this Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the parties.
(b) No waiver, amendment, or variation of the terms of this Agreement shall
be valid unless in writing and signed by the City and the Corporation, and then only to
the extent specifically set forth in writing.
(c) All material applicable agreements, representations, warranties, covenants,
liabilities and obligations made in this Agreement and in any document delivered
pursuant to this Agreement shall remain effective during the Term of this Agreement.
(d) All communications or notices required or permitted by this Agreement
shall be in writing and shall be deemed to have been given: (i) upon delivery to an officer
or the person entitled to such notice, if hand delivered, or (ii) two business days following
deposit in the United States Mail, postage prepaid, or with a nationally recognized
overnight commercial carrier that will certify as to the date and time of delivery, air bill
prepaid, or (iii) upon transmission if by facsimile, any such communication or notice
shall be addressed as follows, unless and until any such party notifies the other in
accordance with this section of any change of address:
If to the City City of Oshkosh
City Attorney's Office
215 Church Avenue
Post Office Box 1130
Oshkosh, WI, 54903 -1130
Attn: City Attorney
Facsimile No. 920 - 236 -5090
With a copy to : Godfrey & Kahn, S.C.
100 West Lawrence Street
Appleton, WI 54911
Attn: Michael J. Lokensgard
Facsimile: 920 - 830 -3530
If to the Corporation Oshkosh Corporation
2307 Oregon Street
P.O. Box 2566
Oshkosh, WI 54903 -2566
Attn: General Counsel
Facsimile: 920 - 233 -9231
With a copy to : Foley & Lardner LLP
777 East Wisconsin Avenue
Milwaukee, WI 53202 -5306
Attn: Reed Groethe
Facsimile: 414- 297 -4900
13
MiLW_9967070.9
(e) This Agreement and the documents executed pursuant to this Agreement
contain the entire understanding of the parties with respect to the subject matter hereof.
There are no restrictions, promises, warranties, covenants or understandings other than
those expressly set forth in this Agreement and documents executed in connection with
this Agreement. This Agreement and the documents executed in connection herewith
supersede all prior negotiations, agreements and undertakings between the parties with
respect to the subject matter hereof.
(f) This Agreement is intended solely for the benefit of the Corporation and
the City, and no third party (other than successors and permitted assigns) shall have any
rights or interest in any provision of this Agreement, or as a result of any action or
inaction of the City in connection therewith. Without limiting the foregoing, no
approvals given pursuant to this Agreement by the Corporation or the City, or any person
acting on behalf of either of them, shall be available for use by any contractor or other
person in any dispute with the construction of the Project.
(g) This Agreement shall be governed by, and construed and interpreted in
accordance, the laws of the State of Wisconsin applicable to contracts made and wholly
performed within the State.
(h) This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but such counterparts shall together constitute but one in the
same Agreement. Facsimile signatures shall be deemed original signatures for all
purposes of this Agreement.
(i) Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be in effect to the extent of such prohibition
or enforceability without invalidating the remaining provisions of this Agreement in such
jurisdiction of affecting the validity or enforcement of any provision in any other
jurisdiction.
0) Nothing contained in this Agreement or any other documents executed
pursuant to this Agreement shall be deemed or construed as creating a partnership or joint
venture between the City and the Corporation or between the City and any other person,
or cause the City to be responsible in any way for the debts or obligations of the
Corporation or any other person or cause the Corporation to be responsible in any way
for the debts or obligations of the City or any other person. Each party represents,
warrants and agrees, for itself and its successors and assigns, not to make any assertion
inconsistent with its acknowledgement or with the acknowledgement and agreement
contained in the preceding sentence in the event of any action, suit or proceeding, at law
or in equity, with respect to the transactions which are the subject of this Agreement and
this paragraph may be pleaded and construed as a complete bar and estoppel against any
assertion by or for a party and its successors and permitted assigns, that is inconsistent
with its acknowledgement and agreement contained in the preceding sentence.
MILW_9967070.9
14
(k) Time is of the essence as to each and every obligation or agreement
contained in this Agreement.
(1) If any party is delayed or prevented from timely performing any act
required under this Agreement other than the payment of money, by reason of fire,
earthquake, war, terrorist act, flood, riot, strikes, labor disputes or shortages, government
restrictions, judicial order, public emergency, or other causes beyond the reasonable
control of the party obligated to perform, the performance of such act shall be excused for
the period of such delay and the time for the performance of any such act shall be
extended for a period equivalent to such delay.
(m) No disbursement of any portion of the Grant or payment of any portion of
the City Contribution shall preclude the City from declaring a default hereunder and
pursuing its remedies hereunder in the event the Corporation fails to fulfill its obligations
hereunder or cure any such default.
(n) A memorandum of this Agreement may be recorded in the office of the
Register of Deeds of Winnebago County, Wisconsin, it being understood by the parties
that until termination of this Agreement, this Agreement will run with the land and will
be binding upon the Property. This Agreement inures to the benefit of the City and its
successors and assigns. The City shall have the right to provide a copy of this Agreement
in full to any person or entity requesting a copy of this Agreement. This Agreement shall
terminate upon the Expiration Date.
(o) The headings to this Agreement are for reference only and are not
intended to modify any of the terms and conditions of this Agreement.
(p) Nothing contained in this Agreement is intended to or has the effect of
releasing the Corporation from all applicable laws, rules, regulations and ordinances in
addition to compliance with all the terms, conditions and covenants contained in this
Agreement.
(q) This Agreement is the product of negotiation between the parties hereto
and no term, covenant or provision herein or the failure to include a term, covenant or
provision shall be construed against any party hereto solely on the basis that one party or
the other drafted this Agreement or any term, covenant or condition contained herein.
(r) Upon mutual consent of the parties to this Agreement, which consent any
party can withhold in its sole discretion, the parties can agree to submit disputes arising
under this Agreement to alternative dispute resolution.
(s) EACH PARTY TO THIS AGREEMENT HEREBY WAIVES TRIAL BY
JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM,
WHETHER CONTRACT OR TORT, AT LAW OR EQUITY, ARISING OUT OF OR
IN ANY WAY RELATED TO THIS AGREEMENT.
19. Other Approvals In addition to any approvals required under this Agreement, the
Corporation shall be required to obtain all approvals, consents, and licenses as may be required
MILW_9967070.9
15
by any governmental or non - governmental authority in connection with the Project, including,
without limitation, all building permits, Project Plan approvals and zoning approvals. The
Corporation's compliance with the terms of this Agreement shall not relieve the Corporation
from complying with all applicable federal, state and local laws, rules, regulations and
ordinances in connection with the Project and to the extent any governmental or non-
governmental entity imposes different or more restrictive conditions on the Corporation or the
Project, compliance by the Corporation with the terms of this Agreement shall not relieve the
Corporation from complying with such different or more restrictive conditions. Likewise, any
less restrictive conditions imposed on the Corporation or the Project by any governmental or
non - governmental authority shall not relieve the Corporation or the Project from complying with
all of the terms and conditions of this Agreement.
20. The Corporation acknowledges that documents in the custody of the City are
public records that may be required to be made available under the open records laws, and the
City acknowledges that the Corporation may have business reasons to keep certain of its
documents from becoming public records. As an alternative to sending a document to the City,
the Corporation may ask, and the City may agree, to review a document that remains in the
custody of the Corporation, its agent, or another nongovernmental entity. The City and the
Corporation pledge to try to resolve any requests made under this section, giving due weight to
the policy of the access to public records and the policy of preserving the confidentiality of
business information.
[SIGNATURE PAGE FOLLOWS]
16
MILW_9967070.9
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
CITY OF OSHKOSH, WISCONSIN
Mark Rohloff, City Manager
Pamela R. Ubrig, City Clerk
Peggy A. Steeno, Director of Finance
Approved:
IN
Lynn A. Lorenson, City Attorney
OSHKOSH CORPORATION
By:
Its:
And:
Its:
17
MILW_9967070.9
EXHIBIT A
Property Legal Description
A parcel of land located in Section 35, Town 18 North, Range 16 East, City of Oshkosh,
Winnebago County, Wisconsin, described as follows:
Part of the southeast '/4 of the northeast '/4 lying southwest of railroad & southeast of
Hughes Street, also east %2 of the southeast 1 /4 lying west of Oregon Street north of W.
Waukau Avenue, and southeast of Hughes Street except the east 400 feet, also excepting
the south 320 feet of the west 400 feet of the east 800 feet, also exceptiu the south 296
feet of the west 502 feet of the east 1,142 feet, also excepting the W. 29 Avenue cul -de-
sac, also the west '/2 of the southeast '/4 lying southeast of Hughes Street and north of W.
Waukau Avenue, also that part of the southeast ' / 4 of the southwest' /4 of said Section 35
lying east of Hughes Street and north of W. Waukau Avenue
Said parcel contains approximately 79.96 acres more or less.
MILW_9967070.9
EXHIBIT B
Default Repayment Schedule
*This schedule assumes that the Grant has been disbursed to the Corporation in the amount of
$1,000,000. If a lesser amount has been disbursed, and repayment is required, then the amounts
in the schedule shall be prorated to reflect the actual amount of the Grant disbursed to the
Corporation.
MILW_9967070.9
Repayment
Amount
Year
(to be prorated)
2010
$ 1,000,000
2011
950,000
2012
900,000
2013
850,000
2014
800,000
2015
750,000
2016
700,000
2017
650,000
2018
600,000
2019
550,000
2020
500,000
2021
450,000
2022
400,000
2023
350,000
2024
300,000
2025
250,000
2026
200,000
2027
150,000
2028
100,000
2029
50,000
2030
0
2031
0
2032
0
2033
0
2034
0
2035
0
2036
0
2037
0
*This schedule assumes that the Grant has been disbursed to the Corporation in the amount of
$1,000,000. If a lesser amount has been disbursed, and repayment is required, then the amounts
in the schedule shall be prorated to reflect the actual amount of the Grant disbursed to the
Corporation.
MILW_9967070.9
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