2001-052Ordinance No. 2001 - 52
An Ordinance Approved an Agreement
with Siemens Building Technologies, Inc. and Subsidiaries
WHEREAS, the Village of Buffalo Grove is a Home Rule Unit by virtue of the Illinois
Constitution of 1970; and,
WHEREAS, Siemens Building Technologies, Inc. ( "Siemens ") has located an Illinois
order acceptance point at its corporate headquarters in the Village of Buffalo Grove; and
WHERAS, as a result, the efficient and effective use of commercial property will
occur which will increase the Village's tax base and increase employment opportunities in
the Village, and in furtherance of this, the Village is willing to grant certain incentives to
Siemens.
NOW THEREFORE BE IT ORDAINED BY THE PRESIDENT AND BOARD OF
TRUSTEES OF THE VILLAGE OF BUFFALO GROVE, COOK AND LAKE COUNTIES,
ILLINOIS:
Section 1. The foregoing Whereas clauses are hereby incorporated herein.
Section 2. The Village President and Village Clerk are hereby authorized to execute the
Agreement between the Village of Buffalo Grove and Siemens Building Technologies, Inc,
and Subsidiaries, a copy of which is attached hereto as Exhibit W.
Section 3. This Ordinance shall be in full force and effect from and after its passage and
approval. This Ordinance shall not be codified.
AYES: 6 - Marienthal, Braiman, Glover, Berman, JOhnson, Kahn
NAYES:
0
- None
ABSENT:
0
- None
ABSTAIN:
0
- None
PASSED:
August
20
, 2001.
APPROVED:
August
20
, 2001.
PUBLISHED:
August
21
-12001.
APPROVED:
Village President
ATTEST:
lage Clerk
8N 3r"l
N:ILEGALW^iemensOrd.dx
AGREEMENT BETWEEN THE VILLAGE OF BUFFALO GROVE
AND SIEMENS BUILDING TECHNOLOGIES, INC. AND SUBSIDIARIES
This Agreement is entered into on this 20th day of August 2001, by and between the Village of
Buffalo Grove, Cook and Lake Counties, Illinois, an Illinois municipal corporation (hereinafter referred
to as the "Village ") and Siemens Building Technologies, Inc., a Delaware corporation, (hereinafter
referred to as "Siemens ").
Recitals
WHEREAS, Siemens is legally incorporated in Delaware, and commercially domiciled in
Buffalo Grove, Illinois. Siemens has numerous offices across the United States, including two
locations in Illinois: Buffalo Grove and Mount Prospect.
WHEREAS, Siemens is primarily engaged in the original installation, repair and maintenance
of building temperature control systems, (e.g. HVAC systems) for non - residential buildings as well as
the retail sale of HVAC system replacement parts;
WHEREAS, The Buffalo Grove headquarters facility is the location for the executive
management function and all supporting business activities. Some of Siemens' supporting activities
are provided by the following departments in Buffalo Grove: Legal, Credit, Accounting, Payroll and
Human Resources Departments. Currently there are approximately 1,200 employees at the Buffalo
Grove campus, which contains five buildings. Siemens has five main lines of business: 1) Systems;
2) Quoted Services; 3) Service Agreements; 4) Time and Material; and 5) Non - Installation Retail
Sales.
WHEREAS, Certain Illinois sales order contracts for System, Quoted Service, Service
Agreements and Time and Material lines of business jobs are received, invoiced, processed, reviewed
and approved at the Buffalo Grove headquarters location, regardless of which Siemens' office /branch
would ultimately provide the service and tangible personal property to complete the job to the
customer;
WHEREAS, Siemens could increase its competitiveness in the marketplace by establishing a
order - acceptance point for Sales (as hereinafter defined) if Siemens and the Village, where the order -
acceptance point is located, enter into a municipal sales tax incentive agreement;
WHEREAS, in order to induce Siemens to make its Corporate Headquarters an order
acceptance point for sales, the Village will make payment to Siemens of a portion of the municipal
component of the sales tax revenue generated by Siemens from sales as provided in this Agreement;
WHEREAS, the entire sales tax rate applicable to sales within the Village is 7 %, the Village's
total portion of which is 1.5 %; the home -rule portion of the Village's portion of the sales tax rate is
0.5 %;
WHEREAS, the Village desires to foster an efficient and effective use of the Corporate
Headquarters that will increase the Village's sales tax base and increase employment opportunities in
1
the Village, and in furtherance thereof, the Village is willing to grant certain incentives to Siemens
subject to the terms and conditions set forth herein;
WHEREAS, the Village, as a Home Rule unit of government, may exercise any power and
perform any function pertaining to its government and affairs pursuant to Section 6 of Article VII of the
1970 Constitution of the State of Illinois, and pursuant to Section 10 of Article VII, is authorized to
contract or otherwise associate with individuals in any manner not prohibited by law or ordinance;
NOW, THEREFORE, in consideration of the mutual covenants and promises set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, the Village and Siemens agree as follows:
1) Incorporation of Recitals: The Recitals heretofore set forth are incorporated herein and made a
part of hereof and shall constitute findings of fact made by the Village with respect to the
designation of Siemens' Corporate Headquarters as its order - acceptance point for sales.
2) Definitions: Whenever used in this Agreement, the following terms shall have the following
meanings unless a different meaning is required by the context:
a) "Commencement Date ": August 20, 2001, which represents the date upon which Siemens
established its Corporate Headquarters as the order - acceptance point for Sales with shipping
locations within the State of Illinois.
b) "Corporate Headquarters ": 1000 Deerfield Parkway, Buffalo Grove, Illinois.
c) "Sales ": All Illinois sales order contracts for System, Quoted Service, Service Agreements and
Time and Material lines of business contracts that exceed $50,000 in value that are sent to
and received by the Buffalo Grove headquarters location for final review, processing, approval,
signature and acceptance, regardless of which Siemens' office /branch would ultimately
provide the service and tangible personal property to complete the job to the customer. After a
System, Quoted Service, Service Agreement or Time and Materials contract exceeding
$50,000 has been approved at the Buffalo Grove location, the approved contract is sent back
to the customer who must then sign and send the contract to the Mount Prospect or Normal
branch to be filled.
d) "Siemens Building Technologies, Inc. ": a Delaware corporation, its wholly -owned
subsidiaries and joint ventures where Siemens performs billing functions.
e) "First Sales Tax Year": 2001.
f) "Gross Receipts ": The term "Gross Receipts" shall have the same meaning as that which is
ascribed to it in the Illinois Retailers' Occupation Tax Act, 35 ILCS 120/1.
g) "Municipal Sales Tax ": That portion or components of the Sales Tax generated from the
Property that the Village actually receives from the State of Illinois pursuant to the Retailers'
2
Occupation Tax Act, the Service Occupation Tax Act, the Service Use Tax Act, the Use Tax
Act, and the Village's Home Rule Sales Tax Ordinance.
h) "Payment Period ": Taxable year as defined by the State of Illinois Department of Revenue
(hereinafter referred to as "IDOR "), unless otherwise provided.
i) "Property": The Corporate Headquarters currently located in the Village of Buffalo Grove.
j) "Sales Tax ": Any and all taxes imposed and collected by the State of Illinois pursuant to the
Retailers' Occupation Tax Act, the Service Occupation Tax Act, Service Use Tax Act, the Use
Tax Act, and the Village's Home Rule Sales Tax Ordinance.
k) "Sales Tax Payment ": The payment to Siemens of a portion of the Municipal Sales Tax that
the Village is required to pay pursuant to Paragraph 3 of this Agreement.
1) "Sales Tax Year": The period of time from January 1" of one year to and including December
31st of the same year.
3) Sales Tax Payment: The Village agrees, warrants and guarantees to pay Siemens Municipal
Sales Tax generated by Siemens to be calculated as follows:
Beginning with the first month of the First Sales Tax Year, which represents Sales Tax generated
during August, 2001 and throughout the Term, as defined herein, the Village and Siemens shall
share on a monthly basis the Municipal Sales Tax resulting from taxable Sales with order -
acceptance at the Property and received by the Village in the following amounts: one percent (1 %)
of the Village's sales tax rate to the Village, 0.5% representing the Village's home -rule portion of
sales tax to Siemens. One percent represents 67% of the total Municipal Sales Tax to the Village,
and 33% of the total Municipal Sales Tax to Siemens.
4) Forms and Reporting Reguirements: Throughout the Term, as defined herein, Siemens shall
cause to be timely delivered to IDOR Forms ST -1 and ST -2 (the "Forms "), or any form that replace
or supplement same and shall deliver copies of same to the Village. The forms provided shall
detail the amount of Sales Tax collected and paid to IDOR as well as taxable gross receipts for the
Property. Siemens and the Village shall keep all Sales Tax information confidential except where
disclosure of such information is required by law.
5) Calculation and Payment of Sales Tax Payment: The calculation and payment of the Sales
Tax Payment shall be as follows:
a) The Village shall calculate in good faith the amount of the Sales Tax Payment applicable for
each month during the Initial Term and any Renewal Terms, as defined herein, and shall
submit those calculations to Siemens within ten (10) business days after the Village's receipt
of the Forms.
b) Payment of the Sales Tax Payment shall be monthly.
3
i) Within thirty (30) calendar days after the Village has received the latter of: (a) payments of
Municipal Sales Tax from the State of Illinois or (b) the Forms, the Village shall forward to
Siemens the Sales Tax Payment for the given month.
ii) The Sales Tax Payment shall be payable solely from the Municipal Sales Tax amounts
actually received by the Village from the State of Illinois.
iii) If for any reason the State of Illinois fails to distribute all of the Municipal Sales Tax to the
Village within thirty (30) calendar days of the close of any monthly period, the Village shall
provide written notification of same to Siemens and the Village shall make the required
monthly Sales Tax Payment to Siemens within thirty (30) calendar days after all required
amounts have been received by the Village.
6) Creation and Approval of Order - Acceptance Point:
a) As of the Commencement Date, Siemens has taken the internal corporate measures
necessary to establish its Corporate Headquarters as an order - acceptance point for Sales
from the Mt. Prospect, Illinois location and has requested a Private Letter Ruling ( "PLR ") from
IDOR seeking its concurrence with Siemens' analysis that order - acceptance takes place within
the Village.
b) The parties agree that all Municipal Sales Tax amounts shall be held by the Village in an
interest bearing escrow account, with 33% of all interest accrued to belong to Siemens and
67% to the Village, until IDOR's issuance of a Private Letter Ruling ("PLR"), substantially
concurring with Siemens' analysis that order - acceptance takes place within the Village.
c) As long as the order - acceptance point is within the Village, as determined by IDOR, then the
Village's Home Rule Municipal Sales Tax rate shall apply to all Sales generated by Siemens.
7) Increase in Sales Tax Rate:
a) This Agreement is conditioned upon existing law which currently provides for, and allows the
Village to collect, Municipal Sales Tax and allows the Village to impose a Home Rule Sales
Tax.
b) This Agreement shall in no way restrict or prohibit the Village from eliminating or amending its
Home Rule Sales Tax Ordinance.
c) In the event that the Village increases its current Home Rule Sates Tax of 0.5 %, during the
Term by 0.25 %, including increases that combined are more than 0.25 %, Siemens shall have
the right to select one of the following as its sole discretion:
i) Terminate this Agreement by written notice to the Village within one - hundred and eighty
(180) days after implementation of said increase; or
ii) Receive 33% of the incremental increase in the Home Rule Sales Tax.
4
8) Term of Agreement:
a) This Agreement shall be in full force and effect for a term of ten (10) years, starting on the
Commencement Date (the "Initial Term "), provided the Village's obligation to make any
payments pursuant to this Agreement, that accrued during the Initial Term and any Renewal
Terms, as defined in Paragraph 8)b) but remain unpaid at the termination date, shall survive
until fully discharged.
b) This Agreement will be automatically renewed for two (2) additional terms of five (5) years
each-(each a "Renewal Term ") (the Initial Term and any Renewal Terms shall be referred to
collectively as the "Term "), unless either party provides the other party written notice not to
renew not less than one hundred and eighty (180) days prior to the expiration of the Initial term
or any Renewal Term.
c) During the Term, Siemens shall not relocate its order - acceptance point for Sales to outside the
Village, unless maintaining its order - acceptance point within the Village would be a violation or
contravention of any case, decision or determination of any state or federal court, agency or
entity, or maintaining its order - acceptance point in the Village would subject Siemens to
penalties or fines of any kind levied or rendered by any state or federal court, agency or entity,
or unless required to do so pursuant to any state or federal court, agency or entity, in which
case Siemens shall have the unilateral right, upon prior written notice to the Village, to
terminate this Agreement.
9) Exclusive Agreement: During the Term, Siemens agrees not to enter into any other municipal
sales tax revenue sharing agreement with other municipalities.
10) Default: The occurrence of any one of the following shall constitute a default by the respective
parties:
a) Siemens shall be considered in default of this Agreement for:
i) Failure to comply with any material term, provision or condition of this Agreement; or
ii) Materially misrepresenting or warranting in bad faith any information contained in this
Agreement; or
iii) Filing a petition for a Chapter 7 bankruptcy or be adjudicated as bankrupt under Chapter 7
of the U.S. Bankruptcy Code; or
iv) Making a general assignment for the benefit of creditors or to an agent authorized to
liquidate its improvement on the Property, provided that, as a result of such acts, Siemens
ceases operations and closes it operations for more than sixty (60) consecutive days.
b) The Village shall be considered in default of this Agreement for:
i) Failure to make complete and timely payment to Siemens on the terms herein provided; or
ii) Failure to comply with any material term, provision or condition of this Agreement.
5
11) Notice and Cure: Before taking any action pursuant to Paragraph 10 of this Agreement, a party
shall first provide written notice to the other party of the breach or alleged breach of this
Agreement which would be the basis for same, and allow a period of thirty (30) days for the curing
of said breach or alleged breach.
12) Remedies: Subject to the requirement of Paragraph 11 of this Agreement, the non - defaulting
party may, at its option, terminate this'Agreement by written notice forwarded to the defaulting
party after any applicable cure period shall have expired; or may continue to respect and abide by
the terms of this Agreement, and may by suit, action, mandamus or any other proceeding, in law
or in equity, including specific performance, elect to enforce or compel the performance of this
Agreement. The exercise of one or more of said rights or remedies shall not impair a party's right
to exercise any other right or remedy provided for in this Agreement, or by law.
13) Notices: All notices required or desired to be given hereunder shall be deemed given if and when
delivered personally, or on the next business day after being deposited with a national overnight
courier service, or on the next business day after being deposited in the United States certified or
registered mail, return receipt requested, postage pre -paid, or upon receipt of a facsimile
transmission with a confirmation delivered by regular mail, addressed to the party at its address
set forth below, or to such other address as the party to receive such notice may have designated
to all other parties by notice in accordance herewith:
Village of Buffalo Grove
Attn: Director of Finance
50 Raupp Blvd.
Buffalo Grove, Illinois 60089
I U NtMtMi:
Siemens Building Technologies, Inc.
1000 Deerfield Parkway
Buffalo Grove, Illinois 60089
UUrT 1 U.
William G. Raysa
Raysa & Skelton, P.C.
1140 Lake Street, Suite 400
Illinois 60301
14) Indemnity: Siemens shall and hereby agrees to defend, hold harmless and indemnify the Village,
its President, Trustees, employees, agents and attorneys from and against any and all claims,
demands, suits, damages, liabilities, losses, expenses, and judgments which may arise out of the
establishment of an order - acceptance point within the Village or this Agreement. The obligation of
Siemens in this regard shall include but shall not be limited to all costs and expenses, including
reasonable attorneys' fees, incurred by the Village in responding to , defending against, or settling
any such claims, demands, suits, damages, liabilities, losses, expenses or judgements. Siemens
covenants that it will reimburse the Village, or pay over to the Village, all sums of money the
Village pays, or becomes liable to pay, by reason of any of the foregoing, and will make payment
C
to the Village as soon as the Village becomes liable therefor. In any suit or proceeding brought
hereunder, the Village shall have the right to appoint counsel of its own choosing to represent it.
15) Assignment: Siemens may not assign this Agreement or the amounts, in whole or part, to be
reimbursed hereunder without the Village's prior written consent, which consent shall not be
unreasonably withheld. The Village acknowledges that this Agreement is an obligation which runs
to Siemens and is not a covenant running with the land.
16) Third Party Beneficiaries: The Village and Siemens agree that this Agreement is for the benefit
of the parties hereto and not for the benefit of any third -party beneficiary. No third party shall have
any rights or claims against the Village arising from this Agreement.
17) Inspection of Books and Records: Upon prior written notice to Siemens, and at a place and
time that is mutually beneficial to both parties, the Village shall have the right to inspect and review
those books and records which are directly related to establishing Sales for any Sales Tax Year or
portion thereof.
18) Severability: The invalidity of any paragraph or subparagraph of this Agreement shall not impair
the validity of any other paragraph or subparagraph. If any provision of this Agreement is
determined to be unenforceable, such provision shall be determined severable and the Agreement
may be enforced with such provision severed or as modified by such court.
19) Governing Law: This Agreement shall be deemed to have been executed, delivered and
accepted in the State of Illinois and shall be construed pursuant to and in accordance with the
laws of the State of Illinois.
20) Entirety of Agreement: This Agreement embodies the entire agreement and understanding
between the parties and there are no other agreements, representations, warranties or
understanding, oral or written, between the parties with respect to the subject matter of this
Agreement. No alteration, modification, amendment or change of this Agreement shall be valid
unless done by like instrument.
21) Binding Effect: This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors.
22) Counterparts: This Agreement may be executed in two (2) or more counterparts, each of which
taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the date and year
first written above.
Village of Buffalo Grove, an
Illinois municipal corporation,
By
Village President
ATTEST:
1 • i c��Xi- e- a,+.c.
Villag Jerk
Siemens Building Technologies, Inc., a Delaware
Corporation,
By
Vice P ent/Treasurer
George Burck, it
ATTEST: Treasurer
f
ACKNOWLEDGEMENT
STATE OF ILLINOIS
SS
COUNTY OF LAKE
This instrument was acknowledged before me on the 5 day
2001, by the President of iemens uilding Technologies, Inc., a
,
�
Delaware corporation and by o q/L0tSIIkA9e of said
corporation.
Notary Public
SEAL:
My Commission expires.
STATE OF ILLINOIS
'�-- W-n 3
ACKNOWLEDGEMENT
=PUBLIC,STATE AL
ZAN
F ILLINOIS :06 /04/03
SS
COUN TY OF LAKE )
This in trument was acknowledged before me on th��ay of -- ,
2001, by4y/ � 13LL, �J , the Village President of the Village of Buffa o Grove, an Illinois
municipal corporation and by of said Municipal
Corporation.
"OFFICIAL SEAL"
FAY RUBIN
bIiiass>l a . Notary P blic
My COMM1��lon IMPIMIy 91/24104
SEAL:
My Commission expires: y //"� 0
14- Aug -01
E