2016-05-16 - Ordinance 2016-032 - AMENDING ECONOMIC INCENTIVE AGREEMENT WITH LAB DEVELOPMENT LLC DBA CONNEXION 5/10/16
Ordinance No. 2016-032
An Ordinance Approving a First Amendment to the First Amended and Restated
Economic Incentive Agreement By and Between the Village of Buffalo Grove and LAB
Development, LLC. (d.b.a. Connexion, Distributor of Electrical
Equipment and Supplies and Connexion Energy Services)
WHEREAS, the Village of Buffalo Grove is a Home Rule Unit by virtue of the Illinois
Constitution of 1970; and,
WHEREAS, Connexion currently conducts its business at the property commonly known
as 1700 Leider Lane, Buffalo Grove, Illinois;and
WHEREAS, the Village and Connexion entered into an "Economic Incentive Agreement
By and Between the Village of Buffalo Grove and LAB Development, LLC," dated March 21, 2011
(the "Original Agreement"), which Original Agreement set forth the terms of the rebate of the
sales tax revenues; and
WHEREAS, subsequent to execution of the Original Agreement, the Village and
Connexion agreed to modify the structure and terms of the Original Agreement and enter into
the First Amended and Restated Economic Incentive Agreement (the "Restated Agreement") as
approved by Village Ordinance No. 2015-71, in consideration of their expansion of operations
into additional space at 1700 Leider Lane in Buffalo Grove, Illinois hereinafter referred to as the
"Premises"; and
WHEREAS, Connexion has finalized a lease on the Premises for a term to run through
June 30, 2024 or 18 months longer than they had originally projected (December 31, 2022) in
the Restated Agreement; and
WHEREAS, Connexion has requested an amendment to the Restated Agreement for
eighteen (18) months of additional revenue sharing along with an increase of the maximum
incentive amount from two-million two-hundred fifty-thousand dollars ($2,250,000.00) over a
seven (7) year period to two-million six-hundred thousand dollars ($2,600,000.00) over an eight
and one-half (8.5) year period from the Commencement Date of January 1, 2016 as outlined in
the Restated Agreement; and
WHEREAS, the Village and Connexion now desire to amend the Restated Agreement in
order to align their respective responsibilities with the modified terms; and
WHEREAS, the Village has determined it is in the public interest to amend the Restated
Agreement increasing the nnaxinourn incentive amount to two-million sin-hundred thousand
dollars ($2,GO0,OOQ.00) over an eight and one-half (8.5) year period from the Commencement
Date of January 1, 2016, as outlined in the Restated Agreement, whichever comes first,
pursuant to the terms and conditions contained in the First Amendment tu the First Amended
and Restated Agreement ("ArnendedAgreemnent") attached as Exhibit A.
NOW THEREFORE BEUT ORDAINED BYTHE PRES|DENTAMJD BOARD KDFTRUSTEES 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
First Amendment to the First Amended and Restated Economic Incentive Agreement between
the Village of Buffalo Grove and LAB Development, LLC. (d.b.a. Connexion, Distributor of
Electrical Equipment and Supplies and Connexion Energy Services), a copy ofwhich is attached
hereto as Exhibit''A".
Section 3. This Ordinance shall be in full force and effect from and after its passage,
approval and publication.
AYES: 6—Berman, Trilling, Stein, Ottenheimer, Weidenfeld,Johnson
NAYS: 0- None
ABSENT: 0- None
PASSED: May 16, 2016.
APPROVED: May 16, 2016.
APPROVED:
Beverly SussmU, Village President
ATTEST:
JanetWSirabian, Village Clerk
EXHIBIT A
First Amendment to the First Amended and Restated Economic Incentive Agreement By and
Between the Village of Buffalo Grove and LAB Development,I.I.C.
(d.b.a. Connexion, Distributor of Electrical Equipment and Supplies and Connexion Energy
Services)
S/1U/16
FIRST AMENDMENT TO THE FIRST AMENDED AND RESTATED ECONOMIC INCENTIVE AGREEMENT
BY AND BETWEEN
THE VILLAGE OF BUFFALO GROVE
AND
LAB DEVELOPMENT, LLC-
(d-b'a' Connexion, Distributor of Electrical Equipment and Supplies and
Connexion Energy Services)
This First Amendment to the First Amended and Restated Economic Incentive Agreement is
made and entered into asof the 16 m day of May, 2Ol6, by and between the Village of Buffalo Grove, ao
Illinois home rule municipal corporation ("Village") and LAB Development, LLC, a Illinois limited liability
company, d.b.a. Connexion, Distributor ofElectrical Equipment and Supplies and Connexion Energy
Services ("Connexion").
WHEREAS, the Village and Connexion entered into an "Economic Incentive Agreement By and
Between the Village mfBuffalo Grove and LAB Development, LLC," dated March 21, 20I1 (the "Original
Agneernen1"),which Original Agreement set forth the terms of the rebate of the sales tax revenues; and
WHEREAS, subsequent to execution of the Original Agreement, the Village and Connexion
agreed to modify the structure and terms of the Original Agreement and enter into the First Amended
and Restated Economic Incentive Agreement (the "Restated Agreement") as approved by Village
Ordinance No. 2015-71, in consideration of their expansion of operations into additional space at I700
Leider Lane in Buffalo Grove, Illinois hereinafter referred toasthe "Premises"; and
WHEREAS, Connexion has finalized a lease on the Premises for a term to run through June 30\
2024 or 18 months longer than they had originally projected (December 31, 2022\ in the Restated
Agreement; and
WHEREAS, Connexion has requested an amendment to the Restated Agreement for eighteen
(lQ) months of additional revenue sharing along with an increase of the maximum incentive amount
from two-million two-hundred fifty-thousand dollars ($2,250,000.00) over seven (7) year period to
two-million six-hundred thousand dollars ($2,600,000.00) over an eight and one-half (D.5) year period
from the Commencement Date mf January 1, 2OI6 as outlined inthe Restated Agreement; and
WHEREAS, the Village and Connexion now desire to amend the Restated Agreement in order to
align their respective responsibilities with the modified terms; and
WHEREAS, the Village has determined it is in the public interest to amend the Restated
Agreement increasing the maximum incentive amount to two-million six-hundred thousand dollars
($2,60O,OOO.00) over an eight and one-half (8.5) year period from the Commencement Date ofJanuary
1, 2016, as outlined in the Restated Agreement, whichever comes first, pursuant to the terms and
conditions contained in this First Amendment to the First Amended and Restated Agreement
("Amended Agreement").
NOW THEREFORE, in consideration ofthe promises and mutual covenants contained herein, and
pursuant to the Village's home rule powers under Section 6, Article V|| of the 1970 Constitution of the
State of Illinois, the Village and Developer hereby agree to amend the Restated Agreement by replacing
the appropriate sections ao set forth below:
SECTION 1. INCORPORATION OF RECITALS
The above recitals and the defined terms contained therein are an integral part of the Restated
Agreement and this Amended Agreement and are incorporated by reference into this Amended
Agreement.This Amended Agreement shall be interpreted in light of such recitals.
SECTION 2. AMENDMENTS TO THE RESTATED AGREEMENT
The Village and Connexion hereby agree to amend the Restated Agreement by replacing the appropriate
sections as set forth below:
|. Section Z, Rules of Construction and Definitions, Subsection B. 16, Sales Tax Year, of the
Restated Agreement is hereby amended to read asfollows:
16. Sales Tax Year. The period of time commencing on the Commencement
Date of January 1, 2016 and ending on the date that is one year after the
Commencement Date and each of the eight and one-half /8.5> succeeding one year
periods thereafter ending June 3O, 3024.
||. Section 3, Connexion's Obligations, Subsections Aand B, Lease Extension and Lease Expansion,
of the Restated Agreement are hereby amended to read asfollows:
A. Lease Extension. Connexion shall extend their current lease for their
existing space of sixty-one thousand four-hundred sixteen /61,4I6> square feet on the
Premises for a term of not less than eight and one-half (8.5) years (June 30, 2024) from
the Commencement Date of January 1, 2O1S.
B. Lease Expansion. Connexion shall enter into a lease for up to an
additional sixty-three thousand one-hundred eighty-nine (63,189) square feet on the
Premises for term of not less than eight and one-half(8.5) years (June 30, 2024\ from
the Commencement Date of January 1, 2O16asoutlined in the Restated Agreement.
The combined leasable area for Connexion on the Premises shall be a minimum of
seventy-five thousand (75,000) square feet during the term of this Amended
Agreement.
(||. Section 4, Municipal Sales Tax Payment, of the Restated Agreement is hereby amended in its
entirety to read as follows:
A. The Village shall pay Connexion the Municipal Sales Tax Payment on or
before the Payment Date an amount equal to the following formulas:
1. For the first Sales Tax Year (January 1, 2016 through December
31 2016), eighty percent (8096) of that year's Incremental Municipal Sales Tax
above the base Municipal Sales Tax tm the Village of$162,2D7.00.
2. For the second Sales Tax Year (January I, 20I7 through
December 312017), seventy percent (70%) of that year's Incremental Municipal
Sales Tax above the base Municipal Sales Tax tu the Village of$IG2,2O7.OU.
3. For the third Sales Tax Year (January 1, 2OI8 through December
31 2018), sixty percent (60Y6) of that year's Incremental Municipal Sales Tax
above the base Municipal Sales Tax to the Village of$I62,3O7.00.
4. For the fourth Sales Tax Year (January 1, 2019 through
December 31 2018), fifty percent (5096) of that year's Incremental Municipal
Sales Tax above the base Municipal Sales Tax to the Village of$1G2,3O7.00.
5. For the fifth Sales Tax Year (January 1, 2020 through December
31 2020\, fifty percent (5096) of that year's Incremental Municipal Sales Tax
above the base Municipal Sales Tax to the Village of$162,2O7.00.
6. For the sixth Sales Tax Year (January 1, 2O21 through December
31 2021>, fifty percent (5096) of that year's Incremental Municipal Sales Tax
above the base Municipal Sales Tax tV the Village of$1G2,207.00.
7. For the seventh Sales Tax Year (January 1, 2033 through
December 31 2023), fifty percent (5096) of that year's Incremental Municipal
Sales Tax above the base Municipal Sales Tax tV the Village of$IG2,2O7.OU.
8. For the eighth Sales Tax Year (January 1, 2023 through
December 31 2023\, fifty percent /SO%\ of that year's Incremental Municipal
Sales Tax above the base Municipal Sales Tax to the Village of$I62,2O7.OD.
9. For the ninth Sales Tax Year (January 1, 2024 through June 30,
2024), fifty percent /50V6\ of that year's portion of the Incremental Municipal
Sales Tax (received from January 1, 2O24 through June 30, 2024), above the
base Municipal Sales Tax to the Village of$81,1O3.GO.
B. The amount due pursuant to this Amended Agreement shall not be
general obligation of the Village, The Village shall not have an obligation to pay any
amounts to Connexion except an amount equal to the Village's Municipal Sales Tax
share actually received from Illinois Department of Revenue on account of the Business
and not exceeding the Sales Tax rates as set forth in this Amended Agreement.
C. The Village shall continue the Municipal Sales Tax Payments for eight
and one-half (8.5) years (June 30, 2024) through the term of this Amended Agreement
or for an incentive of two-million six-hundred thousand dollars ($2,600,000.00),
whichever comes first.
D. |n the event that any Sales Tax returns that have been submitted tothe
Village are amended, Connexion shall promptly forward a photocopy of such amended
sales tax returns to the Village, clearly identifying them as an amendment of a Sales Tax
return previously submitted to the Village.
E. Should Connexion relocate or cease its Business on the Premises within
five (5) years of the Commencement Date of January 2, 3016, then Connexion shall
reimburse to the Village 100%of the Municipal Sales Tax Payments received pursuant to
this Amended Agreement. Said reimbursement to the Village shall be made within
ninety(90) days of relocation or cessation of the Business on the Premises.
F. Should Connection relocate or cease operations after five (5) years of
the Commencement Date ofJanuary 1, 2016, then Connexion shall reimburse to the
Village seven hundred fifty thousand dollars ($750,000.00). Said reimbursement tothe
Village shall be made within ninety /90\ days of relocation or cessation of the Business
on the Premises.
G. Should Connection relocate or cease operations after six (6) years ofthe
Commencement Date of January 1, 2016, then Connexion shall reimburse to the Village
three hundred seventy-five thousand dollars ($375,000.00). Said reimbursement tothe
Village shall be made within ninety /90\ days of relocation or cessation of the Business
on the Premises.
H. Should Connection relocate or cease operations after seven (7) years of
the Commencement Date ofJanuary I, 2OI6, then Connexion shall reimburse tothe
Village one hundred eighty-seven thousand five hundred dollars ($187,500.00). Said
reimbursement to the Village shall be made within ninety (qO) days of relocation or
cessation ofthe Business on the Premises.
|. In the event Connexion conducts less than thirty million dollars
($30,000,000.00) of taxable sales at the Premises in any Sales Tax Year identified in
Section 4. A, then Connexion shall not receive more than fifty percent (5096) of that
year's Incremental Municipal Sales Tax.
J. Connexion shall provide, upon request by the Village, certified copies of
all expenses relating to and in conjunction with the expansion at I700 Leider Lane in
Buffalo Grove, Illinois prior to any Municipal Sales Tax Payment.
K. Prior to the terms of the Restated Agreement and the Amended
Agreement being satisfied, Connexion shall work with the Village on providing sufficient
notice of its future intentions to either renew their lease at their current location or
relocate to another facility. Connexion shall not be responsible for a penalty outlined in
Sections 4. E., F, G, and H. outlined in the Restated Agreement, should they relocate to
another larger facility within the corporate limits of the Village of Buffalo Grove
|V. Section 7,Term, of the Restated Agreement is hereby amended in its entirety to read as follows:
This Amended Agreement shall be in full force and effect from and after the date of its
execution until the date that is the earlier to occur of(a) the date that is eight and one-
half(8.G) years after the Commencement Date (June 30, 2O24\ or(b) until a total of1m/o-
million six-hundred thousand dollars ($2,600,000,00), is paid to Connexion pursuant to
this Amended Agreement.
SECTION 3. RESTATED AGREEMENT
In all other respects, other than modified herein, the terms of the Restated Agreement shall remain the
same and in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized representatives as of the date first above written.
VILLAGE OF BUFFALO GROVE
By:
Village PresixXt
ATrEST:
Village Clerk
LAB DEVELOPMENT, LLC.
By all its Class A Members
By:
David Rosenstein
Its: Class A Member and Manap-er
ATTEST:
Its: fl
By:
Steve Abrams
Its: Class A Member
ATTEST:
Its:
ACKNOWLEDGEMENT
STATE OF ILLINOIS
Ss
COUNTY OF LAKE
This instrument was acknowledged before me on IbIll, AL4 2016 by Beverly
Sussman, the Village President of the VILLAGE OF BUFFALO GROVE, an Illinois ome rule municipal
corporation, and by Janet Sirabian,the Village Clerk of said municipal corporation.
E Julie Kamka
N00kry Public-St me of nlinois
My Commission Expires Jl)a
04106/2019 S;Cna re of Notary
SEAL:
My Commission expires:
ACKNOWLEDGEMENT
STATE OF ILLINOIS
SS
COUNTY OF LAKE
This instrument was acknowledged before me on1j4jy
_�.2 2016 by David
Rosenstein and Steve Abrams, all of the Class A Member of LAB DEVELOPMENT, LL ., an Illinois limited
liability company.
ember r 0'L
ignat e of otary
SEAL:
My Commission expires: