2020-05-12-r2005-24-woolhawk-pilot-terms.txt
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CITY OF GALLATIN
COUNCIL COMMITTEE AGENDA
May 12, 2020
DEPARTMENT: Economic Development AGENDA # 2
______________________________________________________________________________
SUBJECT:
Development Agreement
SUMMARY:
Review of a Development Agreement for Project Wool Hawk.
RECOMMENDATION:
ATTACHMENT:
_ _ Resolution _ _ Correspondence _ _ Bid Tabulation
_ _ Ordinance _ _ Contract _ _ Other
________________________________________________________________________
Approved __ __
Rejected __ __
Deferred __ __
________________________________________________________________________
Notes:
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CITY OF GALLATIN
COUNCIL COMMITTEE AGENDA
May 12, 2020
DEPARTMENT: Economic Development AGENDA # 3
______________________________________________________________________________
SUBJECT:
Resolution No. R2005-24
SUMMARY:
Resolution to approve payment in Lieu of Tax (PILOT) Program Economic Development Incentive
for Project Woolhawk
RECOMMENDATION:
ATTACHMENT:
_ _ Resolution _ _ Correspondence _ _ Bid Tabulation
_ _ Ordinance _ _ Contract _ _ Other
________________________________________________________________________
Approved __ __
Rejected __ __
Deferred __ __
________________________________________________________________________
Notes:
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RESOLUTION NO. R2005-24
RESOLUTION TO APPROVE PAYMENT IN LIEU OF TAX (PILOT) PROGRAM
ECONOMIC DEVELOPMENT INCENTIVE FOR PROJECT WOOLHAWK
WHEREAS, the Industrial Development Board of the City of Gallatin (the
“Industrial Development Board”), is authorized under the provisions of Chapter 53, Title
7, of Tennessee Code Annotated, as amended from time to time (the "Act"), to, among
other things, acquire, improve, construct, expand, equip, own, lease, and dispose of
properties in order to promote industry, trade, commerce, tourism and recreation, and
thereby maintain and increase employment opportunities and further the use of natural
resources in the State of Tennessee, by inducing manufacturing, industrial, governmental,
educational, financial, service, commercial, and recreational enterprises to locate in or
remain in the State of Tennessee, and
WHEREAS, the Industrial Development Board is currently working to bring
additional jobs and revenue to the City of Gallatin and Sumner County through Project
Woolhawk; and
WHEREAS, it is sometimes necessary to entice such commercial enterprises with
financial incentives; and
WHEREAS, the Industrial Development Board has proposed a PILOT program
incentive with Woolhawk, LLC, a Delaware limited liability company (the “Company”),
as follows (the “PILOT Program”):
1. The Company shall make a payment in lieu of tax for the land that it leases
from the Industrial Development Board equal to the amount of ad valorem
taxes that would have been payable to each of the City and the County on
the land for the tax year immediately prior to the date of the lease as zoned
to permit such Limited Manufacturing, from the date of the lease to the date
immediately prior to the date of completion of the first building (defined as
a data center containing at least 155,000 square feet) constructed thereon.
2. Each building constructed on the Project Woolhawk site and the equipment
therein will receive a tax abatement for each of the first partial and next
twenty (20) full tax years after the completion of the construction of the
building, and the Company shall make a payment in lieu of tax for each
building after completion as follows:
a. One Million and No/100 Dollars ($1,000,000.00) per year for the
first building and the equipment therein; and
b. Seven Hundred Fifty Thousand and No/100 Dollars ($750,000.00)
per year for the second building and the equipment therein; and
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c. Seven Hundred Thousand and No/100 Dollars ($700,000.00) per
year for the third building and the equipment therein; and
d. Six Hundred Fifty Thousand and No/100 Dollars ($650,000.00) per
year for the fourth building and the equipment therein; and
e. Six Hundred Thousand and No/100 Dollars ($600,000.00) per year
for the fifth building and the equipment therein; and
f. Five Hundred Fifty Thousand and No/100 Dollars ($550,000.00)
per year for the sixth building and the equipment therein and all
buildings and equipment thereafter.
In addition to the foregoing, upon the expiration of twenty (20) years following the
completion of the first building, the Company shall make a payment in lieu of tax equal to
the ad valorem taxes that would have been payable to each of the City and the County on
the land only.
3. The foregoing payments in lieu of tax are subject to increase as follows:
a. as to each building completed and all equipment located therein
from time to time, the payments in lieu of taxes relating thereto
provided for in the foregoing provisions of Section 2 shall increase
by five percent (5%) on each and every five (5)-year anniversary of
the commencement of the first (1st) full tax year (i.e., January 1)
following the date of completion of such building.
b. the amount of the payments in lieu of taxes provided for in the
foregoing provisions of Section 2 shall increase (i) by 20% for
buildings completed after the date which is ten (10) years following
the date of completion of the first building, but on or before the date
which is thirteen (13) years following the date of completion of the
first building, (ii) by 40% for buildings completed after the date
which is thirteen (13) years following the date of completion of the
first building, but on or before the date which is sixteen (16) years
following the date of completion of the first building, (iii) by 50%
for buildings completed after the date which is sixteen (16) years
following the date of completion of the first building, but on or
before the date which is twenty (20) years following the date of
completion of the first building, after the adjustment pursuant to
Subsections a. and c of this Section 3.
c. the payments in lieu of taxes provided for in the foregoing
provisions of Section2 shall increase (i) by 20% from and after the
date that is seven (7) years following the date of the PILOT lease
(the “Investment Date”) if the company has not made capital
expenditures of at least $500,000,000 or greater, but less than
$750,000,000, by the Investment Date, (ii) by 40% if the company
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has not made capital expenditures of at least $250,000,000 or
greater, but less than $500,000,000, by the Investment Date, and (iii)
there shall be no further abatement if the company has not made
capital expenditures of at least $250,000,000 by the Investment
Date.
4. There shall be no tax abatement for buildings and the equipment located
therein completed after the date which is twenty (20) years following the
date of completion of the first building.
WHEREAS, the City of Gallatin supports and desires to approve the PILOT
Program incentive proposed by the Industrial Development Board for Project Woolhawk and
desires to delegate authority to the Industrial Development Board to grant such payment in
lieu of tax incentives to the Company, in order to implement the purposes of the Act.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Gallatin as follows:
1. That, pursuant to T.C.A. Section 7-53-305(b), the City Council of the City,
hereby finds that the delegation of authority to the Industrial Development
Board to grant payment in lieu of tax incentives for Project Woolhawk to
the Company pursuant to the PILOT Program and the terms and conditions
set forth in the Act and the granting of such incentives by the Industrial
Development Board as payments in lieu of taxes or waiver of payments of
taxes are deemed to be in furtherance of the Industrial Development Board’s
public purposes as defined in the Act; and
2. The City Council of the City of Gallatin, Tennessee, hereby delegates
authority to the Industrial Development Board to grant payment in lieu of
tax incentives for Project Woolhawk to the Company pursuant to the PILOT
Program and the terms and conditions set forth in the Act, and to negotiate,
document and accept payments in lieu of taxes in connection therewith.
3. The Mayor and all officers and departments and agencies of the City of
Gallatin, Tennessee, are hereby authorized and directed to take such further
actions as are deemed necessary or advisable to carry out the intent and
purposes of these Resolutions.
BE IT FURTHER RESOLVED that this resolution shall take effect upon passage,
the public welfare requiring it.
IT IS SO ORDERED.
PRESENT AND VOTING BY ROLL CALL AS REFLECTED IN THE
MINUTES:
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AYE: ___
NAY: ___
DATED: ___________, 2020.
___________________________________
MAYOR PAIGE BROWN
ATTEST: APPROVED AS TO FORM:
____________________________
CONNIE KITTRELL SUSAN HIGH - MCAULEY
CITY RECORDER CITY ATTORNEY
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