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HomeMy WebLinkAbout11-17JANUARY 25, 2011 11 -17 RESOLUTION (CARRIED 7 -0 LOST LAID OVER WITHDRAWN ) PURPOSE: APPROVE AGREEMENT WITH CHAMCO, INC. FOR DEVELOPMENT OF INDUSTRIAL PARK LAND INITIATED BY: PUBLIC WORKS DEPARTMENT BE IT RESOLVED by the Common Council of the City of Oshkosh that the attached Agreement with Chamco, Inc. for development of Industrial Park Land, 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. BE IT FURTHER RESOLVED that money for this purpose is hereby appropriated from: Acct. No. 100- 1040- 6466 -00000 Industrial Development — Misc. Contracted Services AGREEMENT WHEREAS, the City of Oshkosh owns certain lands within the corporate limits of the City of Oshkosh and desires to sell such lands for industrial development; and WHEREAS, the City periodically seeks to acquire additional lands for future industrial development; and WHEREAS, CHAMCO, Inc., is a non - profit Wisconsin corporation interested in the industrial development of the City of Oshkosh and having the means and ability to work toward the acquisition, sale and development of land industrially. NOW, THEREFORE, the City of Oshkosh, hereinafter referred to as the "CITY', and CHAMCO, Inc., hereinafter referred to as "CHAMCO ", in order to work towards the industrial development of the following described property, viz: A. AVIATION INDUSTRIAL PARK B. NORTH INDUSTRIAL PARK C. NORTHWEST INDUSTRIAL PARK D. SOUTHWEST INDUSTRIAL PARK agree as follows: 1. That by these presents, for and in consideration of Ten Dollars ($10.00) in hand paid, receipt of which is hereby acknowledged, that CHAMCO does hold until the thirty -first (31 st) day of January, 2013 at 12:00 PM, time being of the essence of this Agreement, an option, to purchase all of the premises owned by the City of Oshkosh known as and consisting of the following: A. AVIATION INDUSTRIAL PARK B. NORTH INDUSTRIAL PARK C. NORTHWEST INDUSTRIAL PARK D. SOUTHWEST INDUSTRIAL PARK and the City of Oshkosh covenants to convey by Warranty Deed any portion of said property thereof at any time within the above time prescribed, to CHAMCO or such person or persons as CHAMCO may direct for and at the price as shown on "Attachment B ", payable on delivery of a Warranty Deed by the City, subject, however, to the further requirement that this Option shall be of no effect and no rights shall inure to CHAMCO or any other person or persons hereunder or by any purported exercise of this Option, unless within the time written, notice of exercise of this Option shall be delivered to the City Attorney of the City. The purchase price attached hereto includes for all industrial parks, graded, graveled and paved streets, street lights, sanitary sewer, water mains and storm sewers, as needed. 2. That the City shall make an annual payment to CHAMCO in the amount of Thirty -seven Thousand Five Hundred Dollars ($37,500.00). 3. CHAMCO, a non - profit organization, agrees: (a) To attempt to work toward the industrial development of the land which is the subject matter of this Agreement. (b) To sell land for uses as permitted in the approved Protective Covenants and in accordance with the "Industrial Park Sales Policies and Guidelines" (see "Attachment A "). (c) That they have adopted Protective Covenants for land sold hereunder and before any changes to said Covenants are adopted, they will be submitted to the Oshkosh Common Council for review. CHAMCO shall monitor the enforcement of these Covenants and if a breach occurs which requires repurchase, then in that event, CHAMCO shall assign its right to repurchase to the City. 4. CHAMCO shall assist the City in acquisition of suitably identifiable lands for future industrial development with the City reimbursing CHAMCO for its reasonable, out -of- pocket expenses. 5. This Agreement may be assigned to a successor organization with written consent of the City, which shall be given by the City Manager. 6. THIS AGREEMENT shall be terminable by either party by giving to the other party six (6) months written notice of its desire to terminate. IN WITNESS WHEREOF, the City of Oshkosh, Wisconsin, and CHAMCO, Inc. have respectively caused this Agreement to be duly executed on this day of , 2011. CITY OF OSHKOSH M Mark Rohloff, City Manager Pamela R. Ubrig, City Clerk And: STATE OF WISCONSIN) WINNEBAGO COUNTY) ) ss. CHAMCO, INC. la Elizabeth Hartman, CEO And: David Omachinski, Chairperson Personally came before me this day of , 2011, the above named Elizabeth Hartman, CEO, and David Omachinski, Chairperson, of CHAMCO, Inc., to me known to be the persons who executed the foregoing instrument and acknowledged same as and for said Corporation, by its authority. Notary Public, Winnebago County, WI My Commission Expires: STATE OF WISCONSIN) ) ss. WINNEBAGO COUNTY) Personally came before me this day of , 2011, the above named Mark Rohloff, City Manager and Pamela R. Ubrig, City Clerk, of the City of Oshkosh, to me known to be the persons who executed the foregoing instrument and acknowledged same as and for said Corporation, by its authority. Notary Public, Winnebago County, WI My Commission Expires: Approved as to form: Lynn Lorenson, City Attorney 2 "ATTACHMENT A" CITY OF OSHKOSH INDUSTRIAL PARK SALES POLICIES AND GUIDELINES Industrial Parks within the City of Oshkosh have been developed as a result of a successful public - private partnership working for the community benefit -- through job creation, economic growth, and expanded tax base. It represents the commitment by the community to provide a suitable setting for planned, orderly industrial development to occur. The sales policies and guidelines described herein will be followed when land sales are considered in each of the City's Industrial Parks. These policies and guidelines in combination with the Protective Covenants, are intended to promote the overall quality of development, to attract quality, labor intensive companies, and to ensure that the industrial parks remain successful public investments. 1) CHAMCO, Inc. is designated as the exclusive agent regarding the sale of property in each of the City's Industrial Parks. 2) All contacts and communications with prospects will be handled by CHAMCO on a confidential basis. 3) To be considered for approval, a project must produce certain public benefits including quality job creation and addition to the tax base. 4) Land sales should be undertaken in such a manner so as to promote and encourage compact and orderly development of each Park. The identification of sites should be done so as to avoid the creation of remnant parcels and areas of irregular shape and size. CHAMCO, Inc. shall consult with City staff in the delineation of sites. 5) Land sales may also be accomplished by an option for a maximum term of three (3) years with the annual option payment equal to the amount of real estate property tax that would accrue on the industrial park acreage if the optioned acreage is on the tax role. The option money, less any reasonable costs for incidental expenses associated with creating the option, would accrue directly to the City and would not be applied to the sales prices. 6) Offers to purchase shall contain a provision that the purchaser, if a not - for - profit or otherwise tax exempt entity, shall make an annual payment to the City in lieu of property taxes equal to the mill rate for City purposes multiplied by the assessed value of land and improvements as estimated by the City Assessor. "ATTACHMENT B" SCHEDULE OF PRICES A. AVIATION INDUSTRIAL PARK B. NORTH INDUSTRIAL PARK Property fronting on Jackson St. (no land available) (no land available) C. NORTHWEST INDUSTRIAL PARK D. SOUTHWEST INDUSTRIAL PARK $17,500 per acre $26,000 per acre The City of Oshkosh reserves the right to reduce the prices herein established for individual parcels for good and sufficient reasons as determined by said City. CHAMCO, Inc. shall have the right to sell the properties which are the subject matter of this Agreement and shall receive sixteen percent (16 %) commission plus any reasonable costs for incidental expenses including land survey fees, attorney fees, engineering studies, and soil tests, excluding environmental studies associated with said sale. Should the City determine to sell land for less than the scheduled price, then CHAMCO's sixteen percent (16 %) shall be determined by the actual selling price. When land is repurchased by the City, due to non - implementation of the project that had been proposed per its initial sale, CHAMCO will be entitled, upon the resale of said land, to a sixteen percent (16 %) commission figured on the value of any increment that exists between the original selling price and the resale price, plus any reasonable costs for incidental expenses associated with said resale. The above schedule shall be in effect until January 31, 2013. However, the above price structure may be reviewed and adjusted prior to January 31, 2013 by the City, in consultation with CHAMCO, and upon approval of the Oshkosh Common Council. CHAMCO Agreement revised Jan 2003; 1/05, 1/07; 1/09; 1/11 4 TO: Honorable Mayor and Members of the Common Council FROM: Allen Davis, Community Development Director DATE: January 20, 2011 SUBJECT: Chamco Inc. Agreement for Industrial Park Land Sales BACKGROUND Chamco provides the City with land marketing, sales and administration services for the City's Industrial Parks. This agreement is a 2 -year renewal of that arrangement for land sales in the City's Northwest Industrial Park and the Southwest Industrial Park. In addition, Chamco administers the restrictive covenants in all the industrial parks. This arrangement is a classic example of a public - private economic development partnership. ANALYSIS Chamco has provided marketing, sales, and administrative services for the City's industrial parks for many years. The City's role has been to obtain and develop the land, and Chamco would then market and sell the land. Chamco has been compensated with a combination of base support of $37,500 and a commission on the sale of the land of 16 %. Chamco works closely with prospects and City -staff regarding site planning, permitting, financing and closings. Chamco also administers the restrictive covenants in all the Industrial Parks regarding appearance, building additions and possible accessory uses. Chamco has provided this service for many years and the proposed agreement does not change the terms of the land sales. The previous agreements have run for two years and the proposed agreement is for 2011 and 2012. FISCAL IMPACT The City budgets the $37,500 for industrial park sales and administration and that amount is contained in 2011 budget. Chamco commissions on lot sales are not a budget item. RECOMMENDATION The City Council approves the Agreement as presented. Approved, City Manager To: City of Oshkosh Common Council City Manager Mark Rohloff From: Chamco, Inc. Date: January 20, 2011 RE: Chamco Report on Industrial Parks The following provides a brief history and overview of the industrial parks in Oshkosh, outlines the services Chamco provides to the city of Oshkosh ( "City ") in connection with the parks and describes some of the recent activity with respect to the parks. History of the Industrial Parks A special subcommittee of the City undertook a comprehensive study of industrial development in the early 1970s. This subcommittee concluded: (1) the City should have a bank of suitable land reserved for industrial development; (2) the developed land should include the installation of sewer, water and roadways and (3) the City should leave the promotion of industrial development to a group singly organized for this purpose. Since that time, Chamco and the City have partnered to create industrial parks, develop covenants governing the parks, acquire land for park development, and market and sell land in the parks to industrial businesses. The industrial parks have been enormously successful in Oshkosh. Since our partnership, over 1000 acres of land have been sold. The industrial parks provide an appropriate home for our industrial businesses which in turn create thousands of jobs in our parks and contribute to the tax base. It is critical in today's competitive environment that we have ample "development- ready" industrial park site choices at an attractive price. Our industrial park land prices have continued to be well below market rates in the Oshkosh area and below other comparable parks in the Fox River Valley. (See Attachment A) Below is a chart summarizing key statistics of our industrial parks. (Maps of the parks will be made available). 120 Jackson Street Oshkosh, WI 54901 • 920.232.9786 North Northwest Aviation Southwest Year 1969 1989 Formerly South 1978 Opened Industrial Park (1967); expanded, combined with South and renamed Aviation in 1991 Number 220 acres 150 acres in 290 acres 792 acres in of Total original park; original park; 178 Acres additional 80 in expansion acquired in area; additional 2009 for 80 acres acquired development in 2009 for develop ment Acres None Development Remnant or Development Available ready: 1.77 landlocked parcels; ready: 52 acres for Sale acres City former landfill site Not development owned; 11.58 ready: 250 acres privately owned; Not development ready: 80 acres Features Railroad; access Access to Direct taxiway Railroad; access to highways 76 highways 45 access to the to highways 41, and 41 and 41; airport 91 and 44, regional storm regional storm water water detention; detention foreign trade zone Price Full $17,500 Full $26,000 Home to Oshkosh Coil Shallbetter, Baldor Generators, 4imprint, Leeco many, Spring, WPS, CREW, FedEx, Evco Plastics, Steel, Bemis here are a CROWN Corrim, Marvel Company, Pepsi, few Packaging, Culligan, Ad, Manufacturing, Lapham Hickey, Curwood /Bemis Inc. Basler Turbo Jay Companies, Conversions, Manufacturing, PACUR FVTC - Spanbauer Miles Kimball Center, Lakeside Company, Lee Plastics, OEC Beverage Graphics Current No current data Approx $16MM Approx $34MM Approx $110MM Assessed Value Services Chamco Performs in Connection with the Parks • Consult with the City on industrial park development • Help identify suitable sites for purchase, at times have conducted the negotiations on the City's behalf • Review and update the covenants • Review requests for covenant waivers or variances • Ensure covenants are followed • Handle communications from park residents about any concerns • Keep tabs on industrial park land prices in the area and consult with the City on appropriate prices for land in the parks • Market industrial park land • Handle the entire land sale transaction o Site selection and development assistance o Survey and title work o Legal work — done in house, no charge to City • Work with the prospect on all aspects of their project not just land sale • Other o We are a full service economic development organization, providing confidential services o We work with prospects sometimes over the course of several years on a project o Many land sale transactions fall through and we receive no compensation o Our commission is merit based: If we don't sell land, we do not receive the commission o We initiated and supported process to have the SWIP designated a Foreign Trade Zone o We work to fill vacant buildings in the parks, for example Ad, Inc referral for the 106,800sq.ft. former Radford building, Corrim Company referral for the 25,OOOsq.ft. former Radford Building Recent Activities • Land sales o 13.3 acres of industrial park land sold o $276,600 in net land sale revenue to the City o New business recruitment and expansion of existing Oshkosh business • Land Purchase o Worked with the City for several years on purchase of Boschwitz property and Clark Hill farm • Covenants o Currently working with the City to update covenants governing all four parks o Chamco reviewed and took action on 6 requests for covenant waivers or variances 3 The 2011 -2013 Agreement The terms of the 2011 -13 agreement are identical to the 2009 -11 agreement with the exception that a section has been added to make the agreement assignable to a successor organization in the event that the merger talks between Chamco and OAEDC are fruitful. I do not anticipate any other situation where this section would come into play. After consultation with the City, we also left the prices in the parks the same, with an expectation that when the land north of the railroad in the Southwest Industrial Park is development ready that we will revisit price. The factors we consider when setting price are (1) prices in other parks in the region; (2) price of non -park industrial land in the Oshkosh area; (3) the City's costs to get the land development ready; and (4) current economic climate. We have not increased prices in the parks since 2007. Any price changes, during the term of the agreement or otherwise, must be brought back before the Common Council for approval. 4 Attachment A Industrial Land Prices — Fox River Valley Appleton DePere Fond du Lac Green Bay Greenville Kaukauna Little Chute Menasha Neenah Oshkosh $40,000 to $45,000 $25,000 to $50,000 $26,000 to $50,000 $48,000 (Negotiable) No land available $38,000 to $55,000 $45,000 No land available $50,000 to $55,000 $17,500 to $26,000 5