MOTOWN TECHNOLOGY & SPORTS FACILITY, INC OVERVIEW OF DEVELOPMENT PROPOSAL, AGREEMENT AND INCENTIVES
1. Developer: The Developer is Motown Technology & Sports Facility, Inc. a Michigan corporation, whose chairman and chief executive officer is Kenneth W. Bardwell.
2. Project: The Project is a multi-use sports, recreation, hotel and entertainment complex and a bicycle manufacturing facility with an estimated cost of $299,870,000. Elements of the Project include an IMAX theater, an arena for sports events, concerts, etc. with 5,000 seats (9,000 concert seats), 15 VIP suites and a private club, a surf park, a gymnasium and pool facility, and facilities and courts for basketball, dance, aerobics, rock climbing, ice skating, indoor soccer and hockey. The facility will be served by a food court, retail stores, a day care center, and an arcade. A 6-story, 300 room hotel and banquet facility will be developed as a part of the overall Project. The Project will be marketed nationally as a venue for state, regional and national sports competition and training events, concerts, and other special events.
3. Project Location: The Project will be constructed on approximately 150 acres located at Exit 61 in Vandalia, Illinois and the real property is currently owned / under option by the City.
4. Agreement: The City and the Developer have entered into an agreement relating to development incentives for the construction, development and operation of the Project which is the first step for the Developer to finalize financing and other contracts for the Project. Construction of the Project is projected to begin in the Spring of 2010 and to open for business by the end of 2012 subject to a number of contingencies provided in the Agreement.
5. New Jobs: The Developer has agreed that the Project shall create and maintain in Vandalia not less than 676 new full time equivalent jobs by December 15, 2012 and 895 of such jobs by April 1, 2013.
6. Development Incentives: Once the Developer has obtained a satisfactory financing commitment, the City has agreed (subject to satisfaction of required requirements of state law) to proceed with the legal steps necessary to put the following economic development incentives (the "Incentives") in place to assist the Project:
- Tax Increment Financing (amendment to the TIF Plan would be necessary)
- Business District (requires a blight finding and adoption of a Business District Plan) which imposes an additional 1% sales tax and 1% hotel tax at the Project
- Special Service Area which imposes an additional $1.00/$100 EAV property tax on the Project
- Sales Tax Rebate of a portion of the City's 1% share of the State Sales Tax at the Project
7. Incentive Estimates: PGAV has prepared estimated revenues from the Incentives based on the Developer's projections of construction costs and sales relating to the Project. The City has agreed to make available up to 75% of the total available Increment generated by the Project per year to fund eligible project costs advanced by the Developer up to a total cumulative amount over the life of the Incentives (through 2027) of $98,500,000 which amount PGAV projects would pay principal and interest on approximately $55.4M of project costs. The City will have a first priority claim to the Incentives, prior to the Developer, to pay approximately $200,000+/- per year to fund certain obligations of the City with respect to the real property for the Project and to pay any City costs not funded by the Developer.
8. TIF Revenue Bonds: Following completion and opening for business of the Project, the City intends to issue bonds payable solely from the Incentive revenues to reimburse the Developer, with a principal amount and terms based on the recommendation of the City's underwriters Stifel Nicolaus & Co.,Inc.
9. State Incentives: The Developer has made application to the State of Illinois for available grants, loans, tax credits, job training and other State incentives available for the Project. The City has also applied for grants for utility and road improvements to serve the Project. To date, the State has not approved any funds for the Project.
10. Project Assistance: The City has agreed to cooperate to provide certain assistance for the Project:
IRBs for the Bike Manufacturing Facility
PUD and required zoning and site development approvals
Waiver of building permit and other application fees in Enterprise Zone
Sales tax exemption for building materials in Enterprise Zone
Water, sewer, gas and electric utilities sufficient to serve the Project
Financing to improve Main Street and Vansant to serve the Project as shown by a traffic study to be funded by the Developer (projected to require two lanes each way with a center turn lane)
Rent-free office space during construction (approximately 4000 sq. ft.) for the Developer
11. Community Benefits: The Developer has agreed to make available reduced fees and charges for use of the Project by City residents, the YMCA, local schools, and other local public and civic entities in an amount which reflects not less than a 50% reduction from standard fees and charges.
12. Contingencies: The Agreement is the first step in the development process and the Developer's obligations to perform are subject to a number of contingencies. If these contingencies are not satisfied, the parties have the right to terminate the Agreement. The City's schedule of events related to various project approvals does not require further actions to be taken by the City until evidence of financing is presented by the Developer.
13. City's Costs: The Developer has agreed to reimburse the City for out-of-pocket costs incurred by the City (up to $250,000) in connection with the City's negotiation, implementation and performance of the Agreement including costs of attorneys, consultants, financial advisors, engineers, building inspectors, bond issuance costs, costs of required studies, publication of notices and other related costs from the proceeds of financing available to the Developer for the Project.