HomeMy WebLinkAboutIrritec USA Inc Reimbursement Agmt 1420 N Maple AvenueAGREEMENT No.
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REIMBURSEMENT AGREEMENT FOR CONSTRUCTION
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OF PUBLIC IMPROVEMENTS
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THIS AGREEMENT FOR CONSTRUCTION OF PUBLIC IMPROVEMENTS
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(this "Agreement'), is made and entered into this -ar day of -Tula',, 2011, by and between the
CITY OF FRESNO REDEVELOPMENT AGENCY, a Public Body, Corporate and Politic,
("RDA") and Initec USA, Inc., ("Developer")
RECITALS
WHEREAS, the RDA has adopted and is responsible for implementing its Airport Area
Revitalization Redevelopment Project Area Plan (`Plan"); and
Whereas, The Plan provides for public improvements including, without limitation,
water, sewer, storm drain, street, and traffic signal improvements. Constructing these public
improvements will help eliminate blighting influences in the Project Area by doing the
following: Encouraging existing businesses to remain or expand, attracting new businesses, thus
stimulating employment and economic growth, and strengthening the economic base of the
Project Area; and
Whereas, The Agency is responsible for and is engaged in redevelopment activities to
carry out the Plan; and
WHEREAS, under the authority provided by the Ordinance Code of the City of Fresno,
the City has required Developer to construct certain off-site public improvements
('Improvements"), as depicted in Exhibit 1 and hereto and incorporated herein by this reference,
as part of the development of Irritee USA, Inc. Expansion (`Project'); and
WHEREAS, the RDA desires the Developer to construct the Project as depicted in
Exhibit No. 1, attached; and include within the Project, the construction of the Improvements
also as depicted in Exhibit No. 1; and
WHEREAS, the RDA desires to reimburse the Developer for the cost of constructing the
Improvements to further the elimination of blighting influences in the Project Area;
NOW, THEREFORE, in consideration of the recitals set forth above, which are herein
incorporated by this reference, and the mutual covenants and undertakings set forth herein, the
mutual receipt and sufficiency of which is hereby acknowledged, the RDA and the Developer agree
as follows:
1. The Developer shall locate and expand its North American operations within the
Project Area and construct the Improvements in accordance with all City of Fresno
approved plans, entitlements, drawings, standards and specifications pursuant to the
terms of this Agreement.
2. The RDA shall reimburse the Developer for the cost of constructing the phased
Improvements for an amount up to but not to exceed the Preliminary Estimate of
Construction Costs provided to the RDA. A description of the Improvements, phases of
development and a preliminary estimate of their costs is described in Exhibit No. 2,
attached hereto and incorporated herein by this reference. The total of all progress
payments and final payment to the Developer shall be based on the Developer's actual
cash expenditures for the Improvements but will not exceed the original agreed to and
attached Preliminary Estimate of Construction Costs.
3. Developer understands and agrees that construction of the Improvements is
subject to the prevailing wage requirements contained in California Labor Code §§ 1720
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et seq. It is Developer's sole responsibility to comply with the requirements of that
section.
4. Developer agrees to dedicate all required rights -of way to the City of Fresno as
required for the completion of all project phases.
5. The RDA shall retain the right to periodically inspect as it deems appropriate and
approve or disapprove the construction of the Improvements prior to the Developer's
final acceptance of the Improvements from the construction contractor. Upon completion
of construction by Developer of the Improvements, and within ten (10) calendar days
after receipt of the notification of completion, RDA or its' designee, shall inspect the
Improvements and (i) accept, in writing, those facilities so constructed which conform in
all material respects to the Project Plans, and (ii) notify the Developer in writing of any
portion of the Improvements which do not conform to the Project Plans, and the specific
respects in which they do not conform. In the event that any of the Improvements so
constructed do not conform in all material respects to the Project Plans, the RDA shall
cause such nonconformity to be corrected, at no additional cost to the RDA, prior to the
RDA's acceptance of those Improvements. If the nonconformity cannot be corrected
within a reasonable time, not less than sixty (60) calendar days, after receipt of such
written notice by the RDA, the RDA may reject the nonconforming Improvements, or
may accept them in writing. If the RDA accepts any such nonconforming Improvements,
the reimbursement required pursuant to Paragraph No. 2 hereof may be adjusted as
mutually determined by the RDA and the Developer to reflect the reduced value of the
accepted nonconforming Improvements. Those Improvements that do not conform to the
Project Plans and are not accepted by the RDA shall not be subject to any reimbursement.
6. Subsequent to Developer's completion of all its obligations hereunder, (which
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obligations are conditions precedent to all of RDA's rights hereunder) final
reimbursement shall be made to Developer by the RDA for an amount not to exceed the
Preliminary Estimate of Construction Costs as delineated in Exhibit 2 herein, subject to
the presentation to the RDA of a copy of the Notice of Completion and evidence of
construction costs from Developers contractor.
7. To the furthest extent allowed by law, Developer shall indemnify, hold harmless
and defend RDA and each of its officers, officials, employees, agents and volunteers from
any and all loss, liability, fines, penalties, forfeitures, costs and damages (whether in
contract, tort or strict liability, including but not limited to personal injury, death at any
time and property damage) incurred by RDA, Developer or any other person, and from
any and all claims, demands and actions in law or equity (including attorney's fees and
litigation expenses), arising or alleged to have arisen directly or indirectly out of
performance of this Agreement or the construction of any Improvements as described in
Exhibit No. 2 as attached to this Agreement. Developer's obligations under the preceding
sentence shall apply regardless of whether RDA or any of its officers, officials,
employees, agents or volunteers are passively negligent, but shall not apply to any loss,
liability, fines, penalties, forfeitures, costs or damages caused by the active or sole
negligence, or the willful misconduct, of RDA or any of its officers, officials, employees,
agents or volunteers.
This section shall survive termination or expiration of this Agreement
8. Miscellaneous.
(a) Entire Agreement. This Agreement (including the Exhibits hereto) contains
the entire agreement between RDA and Developer in regard to the subject matter hereof,
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and no oral statements or prior written documents not specifically incorporated into this
Agreement shall be any force or effect.
(b) Modifications. This Agreement may be modified only by a written document
executed by both parties hereto.
(c) Notice. All notices required or permitted by this Agreement or applicable law
shall be in writing and may be delivered in person (by hand or by courier) or may be sent
by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage
prepaid, or by facsimile transmission, and shall be deemed sufficiently given if served
in a manner specified in this Paragraph 8(c). The addresses noted below shall be that
party's address for delivery or mailing of notices. Either party may by written notice to
the other specify a different address for notice. Any notice sent by registered or
certified mail, return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, two (2) days after the
postmark thereon. If sent by regular mail the notice shall be deemed given forty-eight
(48) hours after the same is addressed as required herein and mailed with postage
prepaid. Notices delivered by United States Express Mail or overnight courier that
guarantee next day delivery shall be deemed given twenty-four (24) hours after delivery
of the same to the Postal Service or courier. Notices transmitted by facsimile
transmission or similar means shall be deemed delivered upon telephone confirmation
of receipt (confirmation report from fax machine is sufficient), provided a copy is also
delivered via delivery or mail. If notice is received after 4:30 p.m. in the time zone in
which the party is located or on a Saturday, Sunday or legal holiday, it shall be deemed
received on the next business day.
E
City of Fresno Redevelopment Agency
2344 Tulare Street, Suite 200
Fresno, CA 93721
Attn: Marlene Murphy
Irritec USA, Inc.
4450 North Brawley, #126
Fresno, CA 93722
Attn: Mike Glassberg
(d) Severability. If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws, such provision shall be fully severable, and
this Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision were not a part hereof, and the remaining provisions hereof shall
remain in full force and effect. In lieu of any such illegal, invalid, or unenforceable
provision herein, there shall be automatically added as a part of this Agreement a
provision as similar in its terms to such illegal, invalid or unenforceable provision as may
be possible and be legal, valid and enforceable.
(e) Construction. The parties hereto acknowledge that each party has, or has had
the opportunity to have, counsel of its own choosing review and revise this
Agreement, such that the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the interpretation of
this Agreement or any exhibits or amendments hereto.
(f) Governing Law and Venue. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of California. Venue for
the purposes of the filing of any action regarding the enforcement or interpretation of this
Agreement and any rights and duties hereunder shall be Fresno County, California.
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(g) Waiver. No failure or delay by a party to insist on the strict performance of
any provision of this Agreement, or to exercise any right or remedy consequent on a
breach thereof, shall constitute a waiver of any breach or subsequent breach of such
provision. The waiver by either party of a breach by the other of any provision of this
Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach
of either the same or a different provision of this Agreement. No provisions of this
Agreement may be waived unless in writing and signed by all parties to this Agreement.
Waiver of any one provision herein shall not be deemed to be a waiver of any other
provision herein.
(h) Assi nment. Neither party hereto shall assign this Agreement, or any interest
therein, without the prior written consent of the other. Any such attempted assignment in
violation of this Agreement shall be null and void.
(i) Bindine. Once this Agreement is signed by all parties, it shall be binding
upon, and shall inure to the benefit of, all parties, and each parties' respective heirs,
successors, assigns, contractors, subcontractors, transferees, agents, servants, employees,
and representatives.
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IN WITNESS WHEREOF, the parties hereto have executed this DRA on the day and
year set out below.
Dated--JLAI ZZ 2011.
Dated -JLC Z�, 2011.
APPROVED AS TO FORM
City Attorney's Office
Ex Officio Attorney to Agency
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By: ,
Katherine oerr
Deputy City Attorney
REDEVELOPMENT AGENCY OF THE
CITY OF FRESNO
Marlene Murphey
Executive Director
Irritec USA, INC.
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Name. i e erg
Title: President
ATTEST
REBECCA E. KLISCH
Ex Officio Clerk for the Agency
By: C.Q1417N-W-0 0
Deputy
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Exhibit 1.
Project Description
See Attached Reference Map
Exhibit 2.
PRELIMINARY COST ESTIMATE FOR
IMPROVEMENTS ELIGIBLE FOR
REIMBURSEMENT TO DEVELOPER BY RDA
OFFSITE IMPROVEMENTS
Exhibit No. 2
KAAGENCV REPORTS 01I Council ReportsVDRA hritec FINALAon
Preliminary Cost Estimate For Improvements Eligible for Reimbursement
to Developer by RDA
1420 N. Maple Project Improvements
Vista Avenue
1 Surveying
$
2,500
2 Demolition, Clearing and Grading
$
15,083
3 Erosion Control
$
1,875
4 Concrete Improvements
$
16,500
5 Street Lighting
$
22,500
6 Pavement Improvements
$
69,745
7 R/R Street Approach
$
50,000
Subtotal Offsite Cost $ 178,203
8
A&E Design Fees
$ 4,500
9
Construction Staking
$ 3,500
10
City Inspection Services & Plan Check
$ 7,702
11
Street Encroachment Permits
$ -
12
Insurance, Taxes, GC's, Bonds, & Fee
$
Total Sierra Vista Cost $ 193,905
Maple Avenue
Item
Description
Cost
5,750
I
Surveying
$
2,500
2
Demolition, Clearing and Grading
$
6,125
3
Erosion Control
$
1,875
4
Traffic Control
$
6,250
5
Concrete Improvements
$
72,000
6
Sanitary Sewer Improvements
$
19,703
7
Utility Pole Removal & Underground
$
33,125
8
Street Lighting
$
42,500
Subtotal Offsite Cost $ 184,078
9 A&E Design Fees $ 6,500
10 Construction Staking $ 3,500
11 City Inspection Services & Plan Check $ 8,548
12 Street Encroachment Permits
13 Insurance, Taxes, GC's, Bonds, & Fee
Total Maple Avenue Cost $ 202,626
1
Surveying
$
5,750
2
Demolition, Clearing and Grading
$
19,786
3
Erosion Control
$
4,025
4
Concrete Improvements
$
93,725
5
Pavement Improvements
$
230,263
6
Street Lighting
$
62,100
7
Water Services (Irrigation, Domestic & Fire & BFP)
$
207,230
8
Fire Hydrants
$
21,850
10
8" Domestic Water Distribution
$
160,655
11
Sanitary Sewer Laterals
$
15,640
12
8" Sanitary Sewer Collection
$
79,695
13
Storm Water Collection
$
97,549
14
Etec, Gas, Telephone Distribution
$
97,750
Subtotal Offsite Cost $ 1,096,018
15 A&E Design Fees $ 22,000
16 Construction Staking $ 12,500
17 City Inspection Services & Plan Check $ 47,921
18 Street Encroachment Permits
19 Insurance, Taxes, GC's, Bonds, & Fee
Total On-site Road & Utility Cost $ 1,178,439
Prepared By: Lore Engineering, Inc
Cry of
REPORT TO THE
REDEVELOPMENT AGENCY
AND CITY COUNCIL
DATE: May 5, 2011
FROM: Marlene Murphey, Executive Director
BY: John Quiring, Project Manager
AGENDA ITEM NO.
BOARD MEETING: 05/05/11
/ APPROVED BY
(Cutive Director)
SUBJECT: Consider approval of the following actions relating to reimbursement of costs
incurred within the Airport Area Revitalization Redevelopment Project Area for
the installation of public improvements on North Sierra Vista, North Maple and
East Pine Avenues:
1. Adopt Findings of Categorical Exemption pursuant to Sections 15301
(Existing Facilities), Section 15303 (New Construction or Conversion of
Small Structures) and 15304 (Minor Alterations to Land) of the CEQA
Guidelines, related to the construction of publically owned improvements in
a targeted area generally described as North Maple Avenue, North Sierra
Vista Avenue and subdivision interior streets (unnamed).
2. JOINT RESOLUTION - Making certain findings pursuant to Section 33445
of the Community Redevelopment Law, authorizing the Agency's
reimbursement of costs incurred within the Airport Area Revitalization
Redevelopment Project Area for the installation of public improvements on
North Sierra Vista, North Maple and subdivision interior streets
3. Authorize Developer Reimbursement Agreement (DRA) between the
Redevelopment Agency and Irritec USA, Inc. and authorize the Executive
Director to execute the Developer Reimbursement Agreement
Presented to Fresno ede elopment Agency
RECOMMENDATION Date 5 g]
Disposition
It is recommended that the Agency Board and City Council:
Adopt findings of Categorical Exemption as specified in Sections 15301, 15303
and 15304 of the CEQA Guidelines.
2. Pass the joint resolution making certain findings pursuant to Section 33445 of the
Community Redevelopment Law, authorizing the Agency's reimbursement of
costs for the installation of public improvements on North Sierra Vista, North
Maple and subdivision interior streets
3. Approve the Developer Reimbursement Agreement (DRA) between the
Redevelopment Agency and Irritec USA, Inc. and authorize the Executive Director
to execute the Developer Reimbursement Agreement.
Report to Redevelopment Agency Board
Reimbursement Agreement: Irritec USA. Inc.
May 5, 2011
Page 2
EXECUTIVE SUMMARY
The Redevelopment Agency has been working with Irritec USA, Inc. (IUI) for more than two
years as they sought to establish a permanent North American manufacturing presence and
headquarters. Irritech is one of the top four manufacturers of drip irrigation systems and
products in the world.
The evolution of this industry is reaching well beyond its initial base of San Joaquin Valley
Agriculture. The growing cluster of local water technology companies, along with Fresno
State University's program, has established Fresno as the world's water technology center.
Water technology and irrigation is one of Fresno's leading industrial clusters. IUI has
entered into escrow to purchase and redevelop a blighted 20 acre site located on the east
side of Maple Avenue between Olive and McKinley Avenues into a 10 acre site for their
North American operations and the additional 10 acres as a small -lot industrial park. The
company will relocate their current temporary warehouse operation located in leased space
in NW Fresno to the new site, and expand with a major capital investment in renovation of
an existing building, add new manufacturing capacity, add railroad access, install capital
equipment to produce drip irrigation products and extensive related public improvements.
The site is located within the Airport Area Revitalization Redevelopment Project Area as well
as the City of Fresno's Enterprise Zone. It is zoned M-1 and is appropriate for all planned
industrial uses. It was previously used for a variety of industrial uses and has become
blighted over numerous years of vacancy and neglect. The company will utilize one existing
building through renovation, but will have to demolish numerous other onsite blighted
structures in order to utilize the site. The proposed acquisition and expansion will require
extensive public facilities including roads, off-site improvements and related infrastructure.
The proposed infrastructure will support the revitalization of the subject site as well as the
surrounding industrial neighborhood and improve access within the Airport Area
Revitalization Redevelopment Project Area.
The company has met with Agency staff regarding mutual goals for development that may
be advanced by the Agency, including the reduction of blight and enhancing public
infrastructure for the area. These public infrastructure measures would provide IUI the
means to increase the scope of its business by locating and expanding its operations and
adding new jobs. The discussions with IUI resulted in the attached Developers
Reimbursement Agreement (DRA). The resulting public improvements will help retain IUI in
Fresno at its new permanent location and induce expansion of its sales, service,
manufacturing and distribution operations. The company's expansion is expected to grow 75
new basic industry jobs, increase private investment and increase sales, property and
business license tax revenue to the City of Fresno.
Pursuant to the Developer Reimbursement Agreement (DRA) between the Agency and IUI,
the Agency will reimburse the Developer for the cost of constructing the improvements along
Maple Avenue, Sierra Vista Avenue and internal subdivision streets for an amount up to but
Report to Redevelopment Agency Board
Reimbursement Agreement: Irritec USA. Inc.
May 5, 2011
Page 3
not to exceed the Preliminary Estimate of Construction Costs of $1,574,970. The Agency's
investment in public infrastructure improvements will allow IUI to locate and expand their
North American operations to this site, hire an additional 75 workers at this company site,
and develop and sell parcels to other industrial users in the adjacent industrial subdivision
that will generate an estimated additional 162 jobs.
BACKGROUND
IUI has had a North American presence through a previous industrial joint venture in the drip
irrigation business located in Fresno. Two years ago they established their own company,
Irritec USA, Inc. as a separate entity and opened a leased distribution center in northwest
Fresno. This center sold products produced at Irritec plants in Mexico, Europe and Asia.
During this time they have been actively searching for a site that would accompany their
long range expansion plans for North America and have entered escrow on the 20 acre
parcel identified on the attached location map. The expansion will allow all products sold in
North America to be produced and distributed from the new Fresno site.
Irritec is a privately held manufacturer based in Italy that has an extensive history of leading
technology development in the irrigation industry. They have numerous plants in Europe and
South America and are expanding rapidly into North America and Asia. Their expansion into
the identified site in Fresno will be accomplished in two components.
The first is the immediate use of the Eastern half of the identified site as the location for their
North American operations. This will include the renovation of an existing 47,000 sq. ft.
industrial building into a manufacturing and distribution center, extension of a rail siding,
addition of an office structure, construction of product silos, installation of extensive
production machinery and general demolition of various on-site blighted structures.
Extensive public infrastructure is required on Sierra Vista and Maple Avenues to support this
component.
The second component will be the creation of a 14 parcel industrial small lot subdivision on
the remaining westerly 10 acres. These parcels will be made available to the general
industrial market and also targeted to support business related to the water technology
industry that IUI has already identified with potential interest in expansion near the IUI
facility. These additional businesses will also add investment, jobs and tax revenue to the
Project Area.
The expansion of IUI and additional creation of the small lot industrial subdivision is
anticipated to produce the following benefits to Fresno:
Component 1
Irritec Site — 10 acres
Initial Investment Years 1-2 — (Building and Equipment) $10.5 million
Years 3-4 Investment - $5.1 million
Jobs — 75 by year 3
Report to Redevelopment Agency Board
Reimbursement Agreement: Irritec USA. Inc.
May 5, 2011
Page 4
Component 2
Industrial Park — 10 acres — 8.5 acres retained after ROW dedications.
Predevelopment and sales of 14 lots = $1.5 million in land sales value (at $4 sf)
Building Development 3-5 years = $13,500,000 investment
Jobs — 162 after 3 years of build out of the industrial subdivision
The total projected on-site taxable investment would be approximately $30,600,000 over
four years. This would result in new tax increment of approximately $244,800 annually.
Based upon projected tax increment alone, the investment of approximately $1.6 million
would be returned in about 6 years following project completion.
Public improvements required for this investment are expected to take about 24 months and
include Sierra Vista and Maple Avenues and internal streets in the industrial sub -division.
Engineering estimates have been developed for the project that estimate these public
improvements will cost:
Hard Costs:
$1,458,299
Soft Costs:
116,6_71
TOTAL:
$1,574,970
Following the Developer's completion of construction of the designated phased off-site
public improvements, the Agency will reimburse the Developer for an amount up to but not
to exceed the Preliminary Estimate of Construction Costs of $1,574,970. All off-site
improvements will be constructed at prevailing wage rates.
This project is consistent with the goals and objectives in the Airport Area Revitalization
Redevelopment Area plan. Staff performed a preliminary environmental assessment of this
project and has determined that it falls within the Categorical Exemption set forth in CEQA
Guidelines, Sections 15301 (Existing Facilities), Section 15303 (New Construction or
Conversion of Small Structures), and Section 15304 (Minor Alterations to Land).
Furthermore, Staff has determined that none of the exceptions to Categorical Exemptions
set forth in the CEQA Guidelines, section 15300.2 apply to this project.
This item was unanimously approved at the regularly scheduled meeting of the Housing and
Community Development Commission on April 27, 2011.
Attachments:
1. Resolution
2. Draft Reimbursement Agreement
3. Engineer's Estimate
4. Map