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HomeMy WebLinkAboutItem #5 Reimbursement AgreementREIMBURSEMENT AGREEMENT This Reimbursement Agreement ("Agreement") is entered into effective the day of Febru- ary, 2025 ("Effective Date") between the Urban Renewal Agency of the City of Chubbuck, also known as the Chubbuck Development Authority, located at Chubbuck City Hall, 5160 Yellowstone Avenue, Chub - buck, Idaho 83202 ("Agency"), City of Chubbuck ("City"), a municipality in the State of Idaho, Bannock County ("County"), a municipality in the State of Idaho, and SimonCRE Prospector, LLC, an Arizona limited liability company and their successors and assigns ("Developer"). The Agency, City, County, and Developer, are referred to herein collectively as the "Parties" and individually as a "Party". RECITALS A. Agency is an independent public body organized pursuant to the Idaho Urban Renewal Law of 1965, Title 50, Chapter 20, Idaho Code, as amended (the "Law"), and undertaking projects under the authority of the Law and the Local Economic Development Act, Title 50, Chapter 29, Idaho Code, as amended (the "Act"). B. By Resolution No. 16-01, dated June 29, 2016, the Pine Ridge Mall Urban Renewal Area and Improvement Plan ("Pine Ridge Mall Plan"), was approved by the Agency pursuant to the Urban Re- newal Law and the Act. C. The City by Ordinance No. 759, dated August 3, 2016, adopted the Pine Ridge Mall Plan and created a revenue allocation are for the Pine Ridge Mall project Area (as more specifically defined in the Pine Ridge Mall Plan, the "Pine Ridge Revenue Allocation Area"). D. The Pine Ridge Revenue Allocation Area provides financing to carry out the goals of the Pine Ridge Mall Plan by collecting property taxes on the difference between the then current equalized value of all taxable properties within the Pine Ridge Revenue Allocation Area and the base assessment established in 2016 (the "Tax Increment") for a period of up to twenty years from the date established by the Pine Ridge Mall Plan. E. The City, the Agency, and the previous developer, Pine Ridge Mall, JC, LLC, a Missouri limited liability company ("Previous Developer"), executed an Amended and Restated Development Agreement in 2017 ("2017 Development Agreement"), wherein such parties agreed to use the Tax Incre- ment to reimburse the Previous Developer for certain Eligible Costs (as defined in the Development Agree- ment). F. The City, the Previous Developer, and the Agency approved the First Amendment to Amended and Restated Development Agreement on March 19, 2020, authorizing the Agency to issue Rev- enue Allocation Series 2020 Bonds to reimburse the Previous Developer its Eligible Costs, with the Tax Increment being pledged to the payment of the bonds. G. The Agency entered into a Trust Indenture with Zions Bancorporation, National Associa- tion as Trustee, dated September 1, 2020, wherein the Agency pledged the Tax Increment to the repayment of the Series 2020 Bonds, until such time as payment in full of the principal and interest due on the Bonds, and any fees, charges, and expenses of the Trustee, or any other amounts to be paid under the Trust Inden- ture are paid, the Tax Increment is pledged and obligated to the repayment of the Bonds. H. All Tax Increment used to repay the debt service of the Bonds, an estimated $2,782,189.00, shall reduce the amount of approved Eligible Costs, $11,732,144.00, under the Development Agreement and the Pine Ridge Mall Plan. I. Developer purchased the Pine Ridge Mall property from the Previous Developer on or about May 16, 2024, and as such is an heir and assign of the Previous Developer and has the same rights to the tax increment monies for qualified reimbursements and other eligible expenses. J. On July 23, 2024, the Board of Bannock County Commissioners authorized the conditional reduction of landfill fees associated with the Pine Ridge Mall redevelopment for up to $200,000.00. K. On August 21, 2024, the Chubbuck City Council authorized conditional fee relief for build- ing permits and of eighty percent of plan review fees, up to $200,000.00. Chubbuck and the Developer s then entered into an Agreement for Obtaining Waiver of Certain Fees Related to Pine Ridge Mall Redevel- opment, dated September 16, 2024 ("Fee Waiver Agreement") under which the Developer agreed to waive any right to collect Tax Increment funding until the City and the County (individually a "Participant" and collectively the "Participants") have been reimbursed their respective $200,000.00 conditional fee waivers through Tax Increment funding. L. The Agency has the authority to use the Tax Increment to reimburse costs of construction in accordance with the Pine Ridge, all as authorized by the Law and the Act. M. The Parties desire to enter into this Agreement to define the terms of the Agency's reim- bursement of conditionally waived building permit and landfill fees by the Participants. AGREEMENT Therefore, with the definitions above incorporated herein, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Effective Date. This Agreement shall be effective once it is signed by all Parties, as evidenced by the last signature date below. The effective date shall be inserted into the introductory paragraph of this Agreement. 2. Term. This Agreement shall commence on the Effective Date and shall terminate upon the earlier of (a) the date that all obligations of each Party are complete, (b) this Agreement is terminated under Section 8, or (c) December 31, 2037. 3. Authority. This Agreement is intended to comply with Agency's authority under the Law, the Act, and the Pine Ridge Mall Plan, and shall not be deemed a gift or donation of public funds. 4. Purpose. The purpose of this Agreement is to effectuate the Pine Ridge Mall Plan by providing for the reimbursement of (a) up to $200,000.00 in landfill fees actually waived by Bannock County in connec- tion with Developer's redevelopment of the Pine Ridge Mail property (the "Site"), and (b) up to $200,000.00 in building permit fees actually waived by the City of Chubbuck pursuant to the Fee Waiver Agreement. 5. Reimbursement Obligation. Agency shall, subject to the terms and conditions of this Agreement, reimburse (a) up to $200,000.00 in landfill fees actually waived by Bannock County in connection with redevelopment of the Site, and (b) up to $200,000.00 in building permit fees actually waived by the City of Chubbuck pursuant to the Fee Waiver Agreement. Such fees are referred to herein collectively as "Quali- fying Fees." 6. Reimbursement Contingencies. Agency's obligation to reimburse Qualifying Fees is contingent upon the following: 6.1 Agency's total reimbursement obligation to each Participant shall not exceed the lesser of (a) actual fees waived, and (b) $200,000.00 each for each Participant. 6.2 Complete satisfaction of (a) the Agency's obligations under the Trust Indenture, (b) there are remaining Eligible Costs under the Pine Ridge Mall Plan, and (c) the Pine Ridge Mall Plan urban re- newal area is still open. 6.3 Submission of properly documented reimbursement requests in accordance with section 5.3 of this Agreement. 6.4 Agency's obligation to reimburse Actual Fees Waived shall terminate upon the earlier to occur of (a) all Actual Fees Waived have been reimbursed in full, (b) termination of Agency's revenue allocation authority under the Urban Renewal Plan, or (c) December 31, 2037. THE PARTICIPANTS EACH ACKNOWLEDGE AND ASSUME THE RISK THAT REVENUE ALLOCATION PROCEEDS MAY NOT BE SUFFICIENT TO REIMBURSE QUALIFYING FEES ON OR BEFORE THE TERMINATION OF THE REVENUE ALLOCATION AUTHORITY UNDER THE PINE RIDGE MALL PLAN. THE PARTICIPANTS FURTHER ACKNOWLEDGE THAT AGENCY HAS NO CONTROL OVER THE ASSESSMENT AND COLLECTION OF TAXES ON THE SITE AND THE IMPOSITION. THE PARTICIPANTS FURTHER ACKNOWLEDGES AGENCY HAS NO CONTROL OVER THE PROJECT. 7. Reimbursement Requests. Within 180 days after the actual of waiver of Qualifying Fees by the City or the County, as the case may be, the City or the County shall submit a written request for reimburse- ment to the Agency, which request shall include documentation detailing the fees actually waived for De- veloper. 7.1 Determination of Qualifying Fees. The Agency shall, in its sole and reasonable discre- tion, make the final determination of Qualifying Fees based on documentation produced by the City or the County and any other information the Agency deems relevant. If the Agency Administrator determines that any fee waiver identified in a reimbursement request submitted by the City or the County does not constitute Qualifying Fees, the Agency shall notify the City or the County in writing of such determination. 7.2 Objection Period. If the City or the County disagrees with the Agency Administrator's determination of Qualifying Fees, the City or the County must respond to Agency in writing within 14 days explaining why they believe the Agency Administrator's calculation was in error, together with supporting evidence. Within 30 days after receipt of the objection, the Agency shall review the objection and advise the City or the County of the Agency's final determination of Qualifying Fees. 7.3 Disbursement. The Agency will reimburse 100% of Qualifying Fees, subject to the con- tingencies set forth above, within 30 days after Agency approval. Approved reimbursements will be dis- bursed in priority based on the date of Agency approval. If revenue allocation proceeds are not available for disbursement at the time of approval, Agency will disburse the approved reimbursement within 30 days after Agency receives revenue allocation proceeds sufficient to make the reimbursement. S. Non -general Obligation. As provided by Idaho Code Section 50-2910, the obligations of the Agency hereunder shall not constitute a general obligation or debt of the Agency, the State of Idaho, or any of its political subdivisions, or give rise to a charge against their general credit or taxing powers to be payable out of any funds or properties other than the monies deposited in the special fund or funds provided for herein and pledged hereby to the payment of principal on the reimbursement obligation. 9. Taxes. 9.1 The Act provides that the Agency will be paid revenue allocation proceeds contingent on the am6unt of assessed value as determined by the Bannock County Assessor each year and the rate of tax levy or the percentage of assessment levied by each of the taxing agencies. The Agency is not a guarantor of the assessment determination made by Bannock County Assessor or guarantor of collection of taxes by the Bannock County Treasurer. 9.2 The increment tax revenues from the Site (as determined from the assessment records of the Bannock County Assessor and the payment records of the Bannock County Treasurer) shall be paid to the Participants if and only as they are paid to Agency by Bannock County, The Agency has no legal responsibility to collect property taxes. 9.3 The Parties recognize the Agency has no authority or involvement in the assessment, levy, or collection process for ad valorem taxes, including real property, personal property, and operating prop- erty taxes. The Parties also recognize the ability of the Agency to reimburse the Participants for the reim- bursement obligation is dependent on the ad valorem assessment and collection process. 10. Subordination of Reimbursement Obligations. The Parties agree this Agreement does not provide the City or the County with a security interest in any other urban renewal plan area, including but not limited to revenue from any "Revenue Allocation Area" (as defined in Title 50, Chapter 29 of the Idaho Code). Notwithstanding anything to the contrary in this Agreement, the obligation of Agency to make the payments as specified in this Agreement shall be subordinate to all Agency obligations that have committed or in the future commit available Agency revenues, including but not limited to revenue from any Revenue Alloca- tion Area and may be subject to consent and approval by Agency lenders. 11. Agency Contribution Assignable. The Parties agree that the Agency's obligations run only to the Participants or their assignees, and that the Agency is under no obligation to grant any additional consider- ation than set forth herein. The Participants shall have the absolute right to assign its right to receive any payments to their lender, successor, or other entity. 12. Indemnification. The City and the County shall indemnify, defend, and hold harmless the Agency and its commissioners, officers, agents, consultants, and employees from and against all liabilities, obliga- tions, damages, penalties, claims, costs, charges, and expenses, including reasonable attorney fees (collec- tively referred to in this Section 12 as a "Claim"), which may be imposed upon or incurred by or asserted against the Agency in connection with this Agreement, including Claims regarding the validity or legality of this Agreement and the reimbursement of Qualifying Fees, provided that the City and the County shall have no obligation to indemnify, defend, or hold the Agency harmless from and against any Claim to the extent (a) it arises from the negligence or willful misconduct of the Agency, or (b) the Agency assumes such liability or obligation by contract. If a Claim is made, the Agency, City, and County shall jointly defend against said claim. The Agency has the discretion to hire its own legal counsel, in which case the City and the County shall reimburse Agency for its reasonable legal fees and costs, including, without limitation, expert witness fees and costs. This section 12 shall survive termination of this Agreement. 13. Default, Dispute Resolution, Remedies, and Termination. 13.1 Default. Neither Party shall be deemed to be in default of this Agreement except upon the expiration of 45 days from receipt of written notice from the other Party specifying the particulars in which such Party has failed to perform its obligations under this Agreement unless such Party, prior to expiration of said 45 day period, has rectified the particulars specified in said notice of default; provided that if recti- fying the matters specified in the notice of default cannot be completed within 45 days with consistent good faith effort, such notified Party shall not be in default so long as they diligently pursue actions needed to rectify such matters within 120 days. In the event of a default, the non -defaulting Party may do any of the following: (a) Terminate this Agreement upon written notice to the defaulting Party and recover from the defaulting Party all direct damages incurred by the non -defaulting Party. (b) Seek specific performance of this Agreement and, in addition, recover all damages incurred by the non -defaulting Party. (c) Perform or pay any obligation or encumbrance necessary to cure the default and off- set the cost thereof from monies otherwise due the defaulting Party or recover said monies from the defaulting Party. (d) Pursue all other remedies available at law, it being the intent of the Parties that rem- edies be cumulative and liberally enforced so as to adequately and completely com- pensate the non -defaulting Party. (e) In the event a Participant defaults under this Agreement, Agency (the non -defaulting Party) shall have the right to suspend or terminate its payment under this Agreement for so long as the default continues. If the default is not cured within the time period specified in Section 8.1, Agency's obligation for payment shall be deemed extin- guished. In addition, if Agency funds shall have been paid, Agency may seek reim- bursement of any amounts paid to that Participant up to the amount of damages in- curred by Agency for that Participant's default. 13.2 Force Majeure. Performance by any Party shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, lock -outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of trans- portation, governmental restrictions or priority, litigation, unusually severe weather, acts of another party, environmental analysis or removal of hazardous or toxic substances, acts or the failure to act of any public or governmental agency or entity (except that acts or the failure to act of Agency shall not excuse perfor- mance by Agency), or any other causes beyond the control or without the fault of the Party claiming an extension of time to perform. An extension of time for any such cause shall only be for the period of the forced delay, which period shall commence to run from the time of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by Agency and Participants. 13.3 Dispute Resolution. If a dispute arises between Agency and a Participant regarding the application or interpretation of this Agreement, the aggrieved party shall promptly notify the other party to this Agreement of the dispute within 10 days after the dispute arises. The Agency and the Participant shall negotiate in good faith to resolve the dispute within 30 days after such notice. If they shall have failed to resolve the dispute within 30 days, they agree to endeavor to settle the dispute by mediation or other process of structured negotiation as they may mutually agree before resorting to litigation. Should they be unable to resolve the dispute to their mutual satisfaction within 30 days after completion of mediation or other process of structured negotiation, the Agency and the Participant shall each have the right to pursue any rights or remedies it may have at law or in equity. Litigation is allowed between them only (i) if the dispute is not resolved by mediation, (ii) for the purpose of enforcing a settlement agreement entered into between them, or (iii) to seek temporary injunctive relief if a party deems such action necessary to avoid irreparable damage. The pursuit or granting of temporary injunctive relief shall not excuse the parties from participating in good faith negotiation and mediation as set forth herein. 13.4 Legal Actions. In addition to any other rights or remedies, any Party may institute legal action to cure, correct, or remedy any default; to recover damages for any default; or to obtain any other remedy consistent with the purpose of this Agreement. The non -defaulting Party may also, at its option, cure the default and sue to collect reasonable attorney's fees and costs incurred by virtue of curing or cor- recting the Party's breach. The laws of the State of Idaho shall govern the interpretation and enforcement of this Agreement, and Bannock County shall be the proper venue. Each Party waives any right it may have to assert the doctrine offorum non conveniens or to object to venue to the extent any proceeding is brought in accordance with this section 13.4. 13.5 Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by any Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same time or different times, of any other rights or remedies for the same default or any other default by the other Party. Agency reserves the right to withhold reimbursement to Participants for any Participant's default, 13.6 Attorney Fees and Costs. If either Party shall enforce any provisions of this Agreement in any action at law or in equity, the unsuccessful party to such litigation shall pay to the prevailing party all costs and expenses, including reasonable attorney fees incurred therein by the prevailing party, and such may be included to the judgment entered in such action. 14. General Provisions. 14.1 Notices, Demands, and Communications Between the Parties. Formal notices, de- mands, and communications (collectively, "Notice") between Agency and Participants shall be sufficiently given if dispatched by registered or certified mail, postage prepaid, return receipt requested, or by email to the principal offices of Agency and Participants as set forth in this Agreement. Notices sent by email shall be deemed received when the intended recipient acknowledges receipt via reply email. Notices may be sent in the same manner to such other addresses as either Party may from time to time designate by mail. 14.2 Non -liability of Agency Officials and Employees. No member, official, or employee of Agency shall be personally liable to Participants in the event of any default or breach by Agency or for any amount which may become due to Participants or on any obligations under the terms of this Agreement. 14.3 Successors and Assigns. This Agreement shall, except as otherwise provided herein, be binding upon and inure to the benefit of the successors and assigns of the Parties. 14.4 Severability. If any provisions of this Agreement shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provisions of this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid provisions had not been contained herein. 14.5 Headings. The section headings contained herein are for convenience and reference and are not intended to define or limit the scope of any provision of this Agreement. 14.6 Counterparts. This Agreement may be simultaneously executed in several counterparts, which when taken together shall constitute one and the same instrument. 14.7 Attachments and Exhibits. All attachments and exhibits which are attached to this Agree- ment are made a part hereof by this reference. 14.8 No Joint Venture or Partnership. Nothing contained in this Agreement or in any docu- ment executed in connection with this Agreement shall be construed as making Agency and Participants a joint venture or partners. 14.9 Amendment. Any Amendments to this Agreement must be in writing and signed by the Parties to be effective. 14.10 Entire Agreement, This Agreement constitutes the entire understanding and agreement of the Parties, and supersedes all negotiations or previous agreements between them, with respect the subject matter hereof. 14.11 Waiver. All waivers of provisions of this Agreement must be in writing and signed by the Parties to be enforceable. [signatures on following page] IN WITNESS WHEREOF, the Parties hereto have signed this Agreement the day and year below written to be effective the day and year above written. URBAN RENEWAL AGENCY OF THE CITY OF CHUBBUCK, IDAHO m Dan Heiner, Chair BANNOCK COUNTY, IDAHO m Title: CITY OF CHUBBUCK, IDAHO Mayor Kevin England SIMON CRE PROSPECTOR, LLC m Date: