Label
DEDSaleofStickneyWest
Business Development
B. Sehlhorst (x1692)
Title
Authorizing the Mayor to enter into a Real Estate Purchase Agreement with FCA US LLC. to execute and deliver needed instruments for the sale and conveyance of 40.67 acres of city-owned real property known as 3808 Twining St., in the City of Toledo, Lucas County, Ohio; making certain findings with respect thereto; waiving the competitive bidding and advertising provisions of TMC 187.19; authorizing the deposit of net sale proceeds into the Capital Improvement Fund; and declaring an emergency.
Body
SUMMARY & BACKGROUND:
The city of Toledo is the owner of certain real property referred to as the Stickney West property including the former Textileather and MedCorp sites, located at 3808 Twining St. Toledo, Ohio (Parcel ID Nos. 11-05974 and 11-06011) and further identified in Exhibit A (“Property”).
FCA US, LLC (“Purchaser” or “FCA”) intends to purchase the Property to construct an approximately 250,000 sq. ft. vehicle customization facility at an estimated of $23 million investment. The project is anticipated to employ approximately 300+ people.
Several years ago, FCA was evaluating various scenarios of how to expand production to meet the global demand of the iconic Jeep Wrangler. The limited ability to expand the existing Toledo Assembly complex created uncertainty regarding the site’s ability to support desired production levels. In an effort to retain the Wrangler production, which has only ever been manufactured in Toledo, the city proactively worked with its economic development partners, including JobsOhio, to redevelop the shuttered Textileather and MedCorp properties into a 40-acre development-ready site. The vehicle customization facility will put this site into productive reuse, create additional jobs, support the Jeep Wrangler and Jeep Gladiator production at Toledo Assembly, add to the available land to support continued future projection at Toledo Assembly, and add new capacity to the complex to support the long-term competitive position of Toledo Assembly.
The purchase price for the property is (one dollar) $1.00. In exchange for the reduced purchase price, the City will implement a Tax Increment Financing (TIF) on the property for 30 years. The TIF is the primary way the City will recoup over time it’s approximate $6.8 million investment into the site. As a condition of sale, the Purchaser will be required to enter into a Service Payment Agreement with the Toledo Public School District (“District”) in an amount equal to sixty seven and a half percent (67.5%) of what the District would have received if not for the TIF. This closing condition is pursuant to the Resolution 304 passed by the District in 2015, which established the District’s requirements for all tax exemptions offered by the City of Toledo. Also as a condition of sale, the Purchaser will be required to execute and record a Conditional Buy-Back Option (“Option”) with the City for the Property. The Option will give the City the ability to buy the property back from the Purchaser for (one dollar) $1.00 in the event a certificate of occupancy has not been issued for the Project within four years (plus a possible 12-month extension if progress in continuing) of transferring the Property to the Purchaser.
The fiscal impact of this ordinance is as follows:
- Funds are not requested in this fiscal year
- New revenue generated (operational revenue, grants, if any): $1.00
- Revenue budget line item (if any): 5040-16400-5661001STDSTDAre funds budgeted in the current fiscal year (yes/no)?: No
- Is this a capital project (yes/no)? No
- If yes, is it new or existing (new/existing)? N/A
- What section of the City’s Strategic Plan does this support:
o Excellence in Basic Services (yes/no) No
o Quality Community Investment (Livable City, Development) (yes/no) Yes
o Workplace Culture & Customer Service (yes/no) No
o Environment (yes/no) Yes
Summary
NOW, THEREFORE, Be it ordained by the Council of the City of Toledo:
SECTION 1. That the Mayor is authorized to enter into a Real Estate Purchase Agreement (“Agreement”) with FCA US LLC for the sale, conveyance and development of 40.67+ acres of city-owned property, having an address of 3803 Twining St., Toledo and as described in Exhibit A (the “Real Property”) at a sale price of (one dollar) $1.00. The Agreement shall be in substantial form as provided in Exhibit B with such additional terms and conditions or modifications as shall be approved by the Mayor and the Director of Law as being in the best interests of this City, and in keeping with the findings, determinations and purposes of this Ordinance, with the execution by the Mayor of the Agreement being conclusive evidence of such approvals; and no further action relating thereto shall be required by Council.
SECTION 2. That Council finds and determines that the Real Property to be sold or otherwise disposed of pursuant to the terms of the Agreement is real property which is not needed by the City for any municipal purpose; that the disposition thereof to FCA US LLC in accordance with the Agreement is necessary to create or preserve jobs and other employment opportunities in the region and to improve the economic welfare of the people of the City of Toledo and is in the best interests of the City; that disposition of the Real Property by negotiation pursuant to the Agreement is the appropriate method of making it available for development; that the negotiated sales price is a fair and reasonable value for the Real Property for the purposes of development in accordance with the terms of the Agreement.
SECTION 3. That this Council approves the Agreement and other described agreements and documents required to pursuant to the Agreement, including the sale of the Real Property provided for therein, notwithstanding and as an exception to the competitive bidding and advertising provisions of Chapter 187 and other provisions of the Toledo Municipal Code. The reason therefore is that sale to FCA US LLC to generate new business investment, create new jobs and support the retention of jobs at and related to Toledo Assembly is in the best interest of the citizens.
SECTION 4. That the Finance Director is authorized to accept and deposit the net sale proceeds into the Capital Improvement Fund, Account Code 5040-16400-5661001STDSTD.
SECTION 5. That the Mayor is authorized to execute and deliver such deeds, certifications, documents and instruments necessary to carry out the terms of the Agreement; that the Director of Law, the Director of Finance, the Clerk of Council and other appropriate officials of this City are authorized to enter into, execute and deliver such other agreements, instruments, documents and certificates and to take such other lawful action as may be necessary or appropriate in order to further implement the Agreement and to further evidence the various matters approved and authorized by this Ordinance.
SECTION 6. That it is found and determined that all formal actions of Council concerning and relating to the passage of this Ordinance were adopted in an open meeting of Council and that all deliberations of Council and any of its committees that result in such formal action were in meetings open to the public in compliance with all legal requirements, including Section 121.22 Ohio Revised Code.
SECTION 7. That this Ordinance is declared to be an emergency measure and shall take effect and be in force immediately from and after its passage. The reason for the emergency lies in the fact that the same is necessary for the immediate preservation of the public peace, health, safety and property, and for the further reason that this Ordinance must be immediately effective to facilitate the execution and delivery of the Agreement and conveyance of the above described real property so that the development may commence and continue immediately, thereby creating or preserving jobs and other employment opportunities and improving the economic welfare of the citizens of the City and surrounding area.
Vote on emergency clause: yeas _____, nays _____.
Passed: _________________, as an emergency measure: yeas _____, nays _____.
Attest: ________________________ __________________________________
Clerk of Council President of Council
Approved: _____________________ __________________________________
Mayor
I hereby certify that the above is a true and correct copy of an Ordinance passed by Council ________________________.
Attest: ________________________
Clerk of Council