Loading...
HomeMy WebLinkAboutCO Truck Loan ConversionDeschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org AGENDA REQUEST & STAFF REPORT For Board Business Meeting of September 3, 2014 l)A'1'E: August 27, 2014 FROM: Judith M. Ure Administrative Services 541-330-4627 TITLE OF AGENDA ITEM: Consideration of converting $50,000 business loan made to Central Oregon Truck Company, Inc. to a grant. PUBLIC HEARING ON THIS DATE? No. BACKGROUND AND POLICY IMPLICATIONS: The Deschutes County Business Development Forgivable Loan Program was initiated to encourage and assist companies seeking to relocate and/or create new jobs within Deschutes County. To receive a loan, companies must agree to create a specific number of jobs within a defined period, then maintain this level of employment for an additional set period of time. Central Oregon Truck Company, Inc. received a business development loan in the amount of $50,000 on June 6, 2012 with terms that included adding thirty-five (35) full-time employees on or before April 11, 2014 and maintaining a level of forty-nine (49) full-time employees through August 27, 2014 (as adjusted by the Board of County Commissioners during a meeting held on April 21, 2014). As certified by Economic Development for Central Oregon (EDCO), Central Oregon Truck Company, Inc. has met these terms and, in accordance with the agreement, is eligible to have the loan converted to a grant. FISCAL IMPLICATIONS: None. RECOMMENDATION & ACTION REQUESTED: Authorize County Administrator to convert $50,000 business loan made to Central Oregon Trucking Company, Inc. to a grant. ATTENDANCE: Judith Ure, Management Analyst DISTRIBUTION OF DOCUMENTS: N/A Loan Recipient: DESCHUTES COUNTY Business Development Forgivable Loan Program Central Oregon Truck Company, Inc. 394 NE Hemlock Avenue Redmond, OR 97756 541-548-4626 Agreement No.: DC -2012-311 Date of Agreement: June 6, 2012 On behalf of Economic Development for Central Oregon, I hereby certify that Central Oregon Truck Company, Inc. has met all conditions of the Deschutes County Business Development Forgivable Loan Program as specified in Agreement DC -2012-311 (attached). I further attest that a representative of Economic Development for Central Oregon has reviewed employment and payroll records furnished by Central Oregon Truck Company, Inc. and that such records confirm that Central Oregon Truck Company, Inc.: a) Employed a baseline of fourteen (14) full-time employees on April 11, 2012, and b) Increased the number of full-time employees by thirty-five (35) for a total of forty-nine (49) full-time employees on or before April 11, 2014, and c) Maintained a total of forty-nine (49) full-time employees over any 12 -month period through August 27, 2014. I therefore, request that the Deschutes County Board of Commissioners authorize that the business development loan to Central Oregon Truck Company, Inc. be converted to a grant in accordance with the terms of the attached agreement. Economic Development for Central Oregon By: Title: ECrL if DcR-EC.flL Date: 8- a_s---((F FEVIEWE Ar,,„1, I/ ha LEGAL COUNSEL DESCHUTES COUNTY AGREEMENT FOR CENTRAL OREGON TRUCK COMPANY, INC. This Agreement ("Agreement") is entered into: BETWEEN: Deschutes County (hereinafter referred to as "County') 1300 NW Wall Street, Suite 200 PO Box 6005 Bend, OR 97708-6005 Facsimile number: (541) 385-3202 Phone: (541) 388-6570 AND: Central Oregon Truck Company, Inc.(hereafter referred to as "Company') 422 NW Beaver Street Future Facility: Prineville, Oregon 97754 394 NE Hemlock 541-416-2180 Redmond, Oregon 97756 RECITALS WHEREAS, the County intends that the program set forth in this Agreement will promote state and local economic activity by creating new jobs and investment; and WFIEREAS, the Company wishes to expand its business operations by increasing employment and investing in facilities and equipment in Redmond; and WHEREAS, the said expansion will relocate or create at least 35 full time positions within one year of occupancy at 394 NE Hemlock or by April 11, 2014, which ever comes first, in addition to the Company's 14 existing full time employees at operations in Terrebonne as of April 11, 2012 and WHEREAS, the County desires to promote the relocation and expansion of the Company by loaning funds to the Company for equipment purchase and personnel expenses and such loan may later be converted to a grant upon the condition that the Company satisfy certain requirements; and WHEREAS, the County has engaged Economic Development for Central Oregon ("EDCO") to assist in administering and implementing the loan; NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree to as follows: Central Oregon Truck Company Page 1 of 5 DC -2012-311 SECTION 1 DEFINITIONS Section 1.1 Dollars and $ shall mean lawful money of the United States of America. Section 1.2 I,oan shall mean the monies loaned by County to Company as provided under Section 3. Section 1.3 Project shall result in the expansion of Company employment in Deschutes County, Oregon by the relocation or creation of 35 positions for full time employees within one year of occupancy at 394 NE Hemlock or April 11, 2014, which ever comes first, in addition to the Company's current Deschutes County employment of 14 full time employees as of April 11, 2012. Section 1.4 Full Time Employee shall mean any employee who has been hired with the expectation that the job will last for at least one (1) year and who will work at least forty (40) hours per week or the equivalent of 2,080 hours per year. SECTION 2 TERM This agreement shall be effective as of the date of execution by all parties and continue until the Loan is paid in full or the Loan is converted to a grant as provided in Section 3.3 below. SECTION 3 LOAN Section 3.1 Loan The County agrees to lend the Company the sum of $50,000 no later than 30 days following the signing of this agreement. Section 3.2 Loan Purpose and Representations of the Company The purpose of the Loan is to carry out the Project, and for no other purposes. The Company represents and warrants that it will diligently pursue and complete the following: 3.2.1 Company will employ a minimum of 35 additional Full Time Employees (FTE) in Deschutes County and maintain this level over any 12 month period through April 11, 2016. Company baseline FTE employment in Deschutes County as of April 11, 2012 is 14. Total Company employment to be reached and maintained in Deschutes County before April 11, 2014 is determined to be 49 Full Time Employees or the equivalent. 3.2.3 Company will submit annual progress reports to EDCO with documentation for job creation, capital investment relating to new facilities and equipment associated with the Project. 3.2.4 Company will submit quarterly updates on employment progress will also be provided to the County. 3.2.5 Company shall comply with all applicable federal, state, regional and local laws, regulations and ordinances. 3.2.6 Company shall timely pay all Deschutes County real and personal property tax when due and shall satisfy all delinquent property tax accounts in full. Central Oregon Truck Company Page 2 of 5 Section 3.3 Loan Repayment or. Conversion to Grant 3.3.1 Unless the Loan is converted to a grant as provided below, the Company agrees to pay to the order of the County the full amount of the Loan, plus interest at the rate of 8% per annurn starting with the date County releases funds to Company, upon the earlier of: (a) the occurrence of an Event of Default, as defined below, or (b) April 11, 2016. 3.3.2 The County agrees to convert the Loan to a grant that does not need to be repaid, if and when the County determines in its sole discretion that the Company has satisfied all of the obligations in under this Agreement. Such conversion shall be effective only upon written verification by the County Administrator that the loan has been converted to a grant. 3.3.3 The County may in its sole discretion convert a portion of the I,,oan to a grant if all of the obligations under this Agreement have been satisfied to the reasonable satisfaction of the County, except the obligation under Section 3.2.1 to employ 49 Full Tune Employees. In the event the Company does not satisfy this employment requirement, the Loan shall continue to be payable on a pro rated basis. For each Full Time Employee employed in Deschutes County by the Company as of .April 11, 2016, in addition to the 14 employed on April 11, 2012, $1,428 of the loan will be converted to a grant that does not need to be repaid. Any remaining amount will be payable as outlined in Section 3.3.1 with annual interest accrued on this portion of the loan at a rate of eight percent (8%) per year from the tithe the Company received the loan monies until the time they are repaid. SECTION 4 DEFAULT Section 4.1 Events of Default The following shall be Events of Default: 4,1.1 Company fails to complete, or the County reasonably determines that the Company will not be able complete, the obligations described in this Agreement; provided, however, that upon such failure or determination, the County shall first provide to the Company written notice of such failure or determination, and the Company shall have thirty (30) days to correct the matter. If the matter has not been corrected by the Company within such thirty (30) day period, to the reasonable satisfaction of the County, the County shall be entitled to declare the Company in default of its obligations under this Agreement and the Loan, plus accrued interest shall be payable in full. 4.1.2 Company effects a change of ownership, a change of control of its business, or relocates its business conducted in Deschutes County, Oregon on or before April 11, 2016 (the end of the contract) without prior written consent of the County. 4.1.3 The occurrence of any event that has or may reasonably be expected to have a material adverse effect on Company's financial condition or Company's ability to make any payment required by this Agreement. 4.1.4 Company fails to pay, becomes insolvent or unable to pay, or admits in writing an inability to pay Company's debts as they become due, or makes a general assignment for the benefit of creditors. Central Oregon Truck Company Page 3 of 5 4.1.5 A proceeding with respect to Company is commenced under any applicable law for the benefit of creditors, including but not limited to any bankruptcy or insolvency law, or an order for the appointment of a receiver, liquidator, trustee, custodian, or other officer having similar powers over Company is entered. SECTION 5 MISCELLANEOUS Section 5.1 Right to Inspect The Company agrees that the County, their agents and employees, shall be entitled, upon reasonable prior notice to the Company, to access and inspect the property and employment records of the Company and its affiliates in order to insure that the Company is complying with the terms of this Agreement and all applicable federal, state and local laws and regulations. The right to inspection shall also include any property or employment records that are in the possession of any affiliate of the Company. The right of inspection shall continue until all of the obligations of the Company under this Agreement have been satisfied. Section 5.2 Attorney's Fee Provision In the event suit or action is instituted to enforce any of the terms or conditions of this Agreement, the losing party shall pay to the prevailing party, in addition to the costs and disbursements allowed. by statute, such sum as the court may adjudge reasonable as attorney fees in such suit or action, in both trial court and appellate courts. Section 5.3 Indemnification Company shall defend, indemnify and hold harmless County and EDCO, their officers, agents employees and members from all claims, suits, and causes of action including attorney's fees, of any nature whatsoever relating to claims by third parties resulting from or arising out of the Loan, this Agreement, or funds provided to the Company under this Agreement. Except as otherwise provided in this Section 5.3, County and EDCO shall defend, indemnify and hold harmless Company, their officers, agents, employees and members from all claims, suits, and causes of action including attorney's fees, relating to claims by third parties as to the validity under public finance law of this Agreement or funds provided to the Company under this Agreement. Section 5.4 Entire .Agreement This Agreement constitutes the entire agreement between the parties regarding the matters herein. Section 5.6 Titles and Subtitles The titles in this Agreement are for convenience only and in no way define, limit, or describe the scope or intent of any provision of this Agreement. Section 5.7 Notice All notices, requests, demands, and other communications to or upon the parties hereto shall he in waiting and shall be deemed to have been duly given or made: upon actual receipt if delivered personally or by fax or an overnight delivery service or by email, and at the end of the third business day after the date of deposit in the United States mail, postage pre -paid, certified, return receipt Central Oregon Truck Company Page 4 of 5 requested; and to the addresses set forth on page 1 of this Agreement or at such other address of which such party shall have notified in writing the other parties hereto. Section 5.8 Time is of the Essence All parties agree that time is of the essence under this Agreement. Section 5.9 Applicable Law This agreement is made, and shall be construed and interpreted under the laws of the State of Oregon without regard to the principles of conflicts of law. Venue shall lie in state courts located in Deschutes County, Oregon, provided, however, if the Claim must be brought in a federal forum, then it shall be brought and conducted solely and exclusively within the United States District Court for the District of Oregon. Section 5.10 Disclosure Under Oregon law, most agreements, promises and commitments made by a lender after October 3, 1989 concerning loans and other credit extensions which are not for personal, family or household purposes or secured solely by borrower's residence must be in writing, express consideration and be signed by the lender to be enforceable. Section 5.11 No Waiver No failure or delay of County in exercising any right, power or remedy under this Agreement shall operate as a waiver of such right, power or remedy of County or of any other right. A waiver of any provision of this Agreement shall not constitute a waiver of or prejudice County's right otherwise to demand strict compliance with that provision or any other provision. Any waiver, permit, consent or approval of any kind or character on the part of County must be in writing and shall be effective only to the extent specifically set forth in such writing. Section 5.12 No Assignment by Company No obligation or right under this Agreement may be assigned by the Company without the prior consent of the County, which consent may be withheld, conditioned, or delayed in the sole discretion of the County. IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed as of the dates set forth below their respective signatures. Deschutes County Cent < re regon uck Company, Inc. By: bioeBy: Erik Kropp, Interim Administrator Paul C il, l Officer Date: Date: (1\ WC Central Oregon Truck Company Page 5 of 5