HomeMy WebLinkAboutHydrite Chemical Company-2/3/2014Mayor
BUCK
CLARK
COUNCIL
MEMBERS
DAVID
JONES
Ward 1
CAROLYN
COLE
Ward 2
HAROLD
GETTY
Ward 3
QUENTIN
HART
Ward 4
RON
WELPER
Ward 5
BOB
GREENWOOD
At -Large
STEVE
SCHMITT
At -Large
CITY OF WATERL . IOWA
COMMUNITY PLANNING AND DEVELOPMENT
715 Mulberry Street • Waterloo, Iowa 50703-5783 0 (319) 291-4366 Fax (319) 291-4262 .
NOEL C. ANDERSON, Community Planning & Development Director
CITY OF WATERLOO
Council Communication
City Council Meeting: February 3, 2014
Prepared: January 28, 2014
Dept. Head Signature: Noel Anderson, Community Planning & Development Director
# of Attachments: 1
SUBJECT: Resolution approving Contract Amendment to Economic
Development Assistance Contract 13 -TC -026 with Iowa Economic Development
Authority and Hydrite Chemical Co. for the Hydrite Chemical Company expansion
project, with the City of Waterloo as the local sponsoring community, and
authorize Mayor to sign and fully execute the document.
Submitted by: Noel Anderson, Community Planning and Development Director
Recommended City Council Action: Approval of resolution as noted above
Summary Statement: As you may recall, back in May 2013, the City of Waterloo
approved the above agreement with the State of Iowa and Hydrite Chemical
Company for Hydrite's expansion project, a 9,400 sq. ft. expansion onto their
building. Hydrite Chemical Company has been approved for approximately
$300,000 in State incentives for their project — an $8.835 million investment, with
about $1.08 million in site preparation, $1.06 million in building construction, and
over $6.6 million in new machinery and equipment investment costs. Hydrite
was also working to hire 10 new employees, above their current 75 employees,
at an average wage of $21.69 for those new employees to be hired. The State
incentives would primarily be in the form of Enterprise Zone incentives, as well as
tax credits over a 5 -year period with about $46,938 per year.
The item before you now is an amendment to that contract, as Hydrite is working
to do more for their expansion investment at their site. This additional investment
by Hydrite changes their numbers from $300,000 in tax incentives to $412,956 —
as their capital investment will increase from $8.835 million to $15.318 million.
This is a great project for the City of Waterloo in an existing industrial corridor
area. The Hydrite site is located within the MidPort TIF District, the Primary
Growth area for the City of Waterloo, and is designated for Industrial
Development on the Future Land Use Map.
Expenditure Required: NA
CITY WEBSITE: www.ci.waterloo.ia.us
WE'RE WORKING FOR YOU!
An Equal Opportunity/Affirmative Action Employer
Source of Funds: NA
Policy Issue: Economic Development
Alternative: NA
Background Information: The Hydrite Chemical Company has been steadily
working to grow at their current operation in Waterloo. The City of Waterloo has
previously approved a Development Agreement for this project to commence,
and the local Enterprise Zone Commission had recommended to the State of
Iowa for its approval as well.
From:
To:
Cc:
ECEIVED
JAN 2 3 2014
RE: Revised Hydrite Chemical Submission to Contract 13 -TC -026
Bob Hintz to: Rockey, Katie [IEDA] 01/21/2014 01•2a
Cc: "'Lisa Skubal"', "Stueckradt, Paul [IEDA]"
Bcc: Bob Hintz
Bob Hintz/Hydrite
"Rockey, Katie [IEDA]" <Katie.Rockey@iowa.gov>,
"'Lisa Skubal"'<LSkubal@cedarvalleyalliance.com>, "Stu
<Pa u I. Stueckradt@iowa. gov>
Bcc: Bob Hintz/Hydrite
Katie,
Please find attached signed amendment.
Thank you,
Bob
iowarevised01212014_20140121132439. pdf
Bob Hintz
Corporate Controller
Phone: 262-792-8708
Fax: 262-792-7895
Bob.Hintz@Hydrite.com
"Rockey, Katie [IEDA]" 'Bob, I've attached the Hydrite amendment f... 01/21/2014 10:36:09 AM
From: "Rockey, Katie [IEDA]" <Katie.Rockey@iowa.gov>
To: "'Bob.Hintz@Hydrite.com'" <Bob.Hintz@Hydrite.com>,
Cc: "'Lisa Skubal'"<LSkubal@cedarvalleyalliance.com>, "Stueckradt, Paul [IEDA]"
<Pa u I. Stueckradt@iowa.gov>
Date: 01/21/2014 10:36 AM
Subject: RE: Revised Hydrite Chemical Submission to Contract 13 -TC -026
Bob,
I've attached the Hydrite amendment for signature. Please review, sign and forward the original to the
community for signature. Once the community has signed, they can mail the original to my attention at
the address below. If you have any questions, please don't hesitate to contact me.
Best regards,
Katie
Katie Rockey Senior Project Manager, Compliance
QC: deve:c,vattwit
IOWA ECONOMIC DEVELOPMENT AUTHORITY
200 East Grand Avenue I Des Moines, Iowa 50309
PH: 515.725.3040 I katie.rockev@lowa.gov
iowaeconomicdevelopment.com
From: Bob.Hintz@Hydrite.com [mailto:Bob.Hintz@Hydrite.com]
Sent: Friday, December 20, 2013 1:11 PM
To: Stueckradt, Paul [IEDA]
Cc: Rockey, Katie [IEDA]; Steil, Kristi [IEDA]; 'Lisa Skubal'
Subject: RE: Revised Hydrite Chemical Submission to Contract 13 -TC -026
Paul,
Thank you.
Much appreciated,
Bob Hintz
Bob Hintz
Corporate Controller
300 N. Patrick Blvd1Brookfield,VVI153045
Phone: 262-792-8708
Fax: 262-792-7895
Bob.Hintz0Hydrite.com
www.hydrite.com
DISCLAIMER: This message and any attached files are for the intended recipient and may contain confidential and p:
the intended recipient, any unauthorized use or disclosure of this information is prohibited. Please notify the sender
from your system. If this ,14essage includes a business proposal, such proposal shall expire within thirty (30) days unl
standard Terms and Conditions located at www.hydrite.com under -Legal Notices- are incorporated into such prop(
Please return this copy to:
City Clerk & Finance Department
715 Mulberry Street
Waterloo, IA 50703
DESCRIPTION OF THE PROJECT AND AWARD BUDGET
(EXHIBIT C)
Revised December 2013
Name of Recipient: Hydrite Chemical Corporation
Name of Community: Citv of Waterloo
Contract Number: 13 -TC -026
PROJECT DESCRIPTION
Hydrite Chemical Corporation will expand their Waterloo facility with the additional production capacity to be operating in
2013.
AWARD BUDGET
SOURCE OF FUNDS
AMOUNT
FORM
USE OF FUNDS
COST
IEDA Programs
*Land Acquisition
$180,000
EZ Tax Credit
' See Below
*Site Preparation
$1,712,670
*Building Acquisition
$1,815,391
Hydrite Chemical
$15,368,221
Cash/Equity
*Building Construction
*Building Remodeling
Lease Payments
*Mfg Machinery and Equipment
$11,610,160
Other Machinery and Equipment
Racking, Shelving, etc.
*Computer Hardware
Computer Software
*Furniture and Fixtures
Working Capital
Research and Development
$50,000
Job Training
*included as capital investment if
awarded tax credit program
Total
$15,368,221
1 Total
$15,368,221
'$300,000 $412,956 estimated benefit value
OTHER FUNDING
SOURCE OF FUNDS
TOTAL AMOUNT
FORM/TERM
USED AS MATCH
TIF Rebate
City of Waterloo/Property Tax
Rebate
$28,500
50%, 5 years
Yes
260E Job Training
In -Kind Contributions
RISE
RED
Hydrite Chemical/Working Capital
$524,000
Cash/Equity
No
RECIPIENT:
CONTRACT NUMBER:
AMENDMENT NUMBER:
EFFECTIVE DATE:
CONTRACT AMENDMENT
Hydrite Chemical Co.
13 -TC -026
One
December 20, 2013
THIS CONTRACT AMENDMENT is made by and between the IOWA ECONOMIC
DEVELOPMENT AUTHORITY (hereafter "IEDA"), 200 East Grand Avenue, Des Moines, Iowa
50309, an agency of the State of Iowa, Hydrite Chemical Co. ("Recipient"), 300 North Patrick Blvd,
Brookfield, WI 53045 and City of Waterloo ("Community"), 715 Mulberry Street, Waterloo, IA 50703.
WHEREAS, the Recipient requested an amendment of the budget and contract benefits, and
WHEREAS, the IEDA BOARD approved the request, effective as of the Effective Date stated
above, and
NOW, THEREFORE, the Contract referenced above is amended as follows:
1. REVISION OF CONTRACT PAGE 3. Award Amt. —Tax Incentives $300;900 $412,956
2. REVISION OF ARTICLE 3.1, "Total Award Amount." The IEDA Board has approved an
Award to the Community and Recipient from the funding sources and in the maximum
amounts shown below:
TAX INCENTIVES
Enterprise Zone Program
Tax Incentives
$400,000
$412,956
TOTAL STATE TAX INCENTIVES:
$ 300,000
$412,956
3. REVISION OF EXHIBIT B-1 Enterprise Zone Program. Exhibit B-1 Special Conditions to
Contract #13 -TC -026 is amended as follows:
SECTION 2: TERMS AND CONDITIONS OF THE AWARD.
2.1 Award. The Recipient is awarded the following Tax Benefits through the Enterprise Zone
Program, based on the minimal investment requirements described herein: $300,000 $412,956.
2.2 Minimum Investment Requirements. As a condition of receiving Tax Benefits, the Recipient
shall meet the following minimum investment requirements:
(a) Capital Investment. $ 8,835,563 $15,318,221
(b) Qualifying Investment for Tax Credit Program. $ 8,835,563 $15,318,221
(c) Investment Qualifying for Tax Credits. $ 8,835,563 $15,318,221
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2.3 Additional Tax Benefits. The Recipient is eligible for additional incentives pursuant to Iowa
Code sections 15.326, et. seq. pursuant to its participation in the High Quality Jobs Program and its
obligations and rights under the Contract. The following Tax Benefits, in the maximum amounts shown
for each authorized benefit, are so available to the Recipient:
Authorized Benefits
Included in Award
Maximum Amt.
Supplemental New Jobs Credit. Additional funds for
training new employees (1.5% withholding for 10
years)
Yes
$TBD
❑ No
Refund of Sales, Service, and Use Taxes. Refund of
►1 Yes
$44,560
sales, service, and use taxes paid to contractors or❑
subcontractors during construction.
No
$105,842
Refund of Sales Taxes Attributable to Racks, Shelving,
and Conveyor Equipment.
❑ Yes
$ 0
/ No
Investment Tax Credit (negotiated)
$4-343640
/1 Yes
❑ No
$ 306,364
Research Activities Credit.
$750
// Yes
❑ No
Local Property Tax Exemption Provided by Community
❑ Yes
$ 0
// No
2.4 Conditions for Authorized Benefits. The Recipient is responsible to seek these additional
benefits through processes described in the applicable statues and corresponding administrative rules,
ordinances and procedures. The following conditions shall apply to the benefits described in section 2.3
of this Exhibit.
(d) Investment Tax Credit.
2. The tax credit shall be amortized equally over a five-year period as specified below:
July 1, 2012 —June 30, 2013
$16,938
$61,273
July 1, 2013 —June 30, 2014
$46793g
$61,273
July 1, 2014 —June 30, 2015
$4038
$61,273
July 1, 2015 —June 30, 2016
$46,938
$61,273
July 1, 2016 —June 30, 2017
$16,938
$61,273
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4. REVISION OF DESCRIPTION OF THE PROJECT AND AWARD BUDGET (EXHIBIT C).
Exhibit C is hereby amended to reflect the revised estimated benefit value. Details of the
change are reflected in the attached Revised Exhibit C which is hereby incorporated by this
reference and made part of this Contract Amendment
Except as otherwise revised above, the terms, provisions, and conditions of Contract Number 13 -TC -
026 and related exhibits shall remain unchanged and are in full force and effect:
FOR RECIPIENT: FOR IEDA:
SIGNATURE
M /40/Vvie > `-i MA,/
PRINT/TYPE NAME, TITLE Date
Date
Deborah V. Durham, Director
FOR COMMUNITY:
SIGNATURE
PRINT/TYPE NAME, TITLE
L1
Date
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