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2758 RESOLUTION NO. 2,758 A RESOLUTION ACCEPTING AN AGREEMENT BY JACUZZI BROTHERS, INC. FOR THE PAYMENT TO THE CITY OF LITTLE ROCK IN LIEU OF TAXES; AND FOR OTHER PURPOSES. BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF LITTLE ARKANSAS : SECTION 1. The letter agreement concerning payment in lieu of taxes tendered to the City of Little Rock by Jacuzzi Brothers, Inc. , under date of August 1, 1961, which letter agreement is in words and form as follows, is hereby approved and accepted by the City of Little Rock: "LETTER AGREEMENT CONCERNING PAYMENT IN LIEU OF TAXES August 1, 1961 City of Little Rock City Hall Little Rock, Arkansas Gentlemen: The City of Little Rock, Arkansas (hereinafter some- times referred to as the 'City' ) proposes to issue Industrial Development Revenue Bonds under the provisions of Act No. 9 of the First Extraordinary Session of the 62nd General As- sembly of the State of Arkansas, approved January 21, 1960, as amended by Act No. 48 of the General Assembly of the State of Arkansas for the year 1961 (hereinafter sometimes referred to as 'Act No. 9 ' ) in the amount of One Million Four Hundred Thousand Dollars (51,400,000) (hereinafter sometimes referred to as the 'bonds ' ) , for the purpose of financing the cost of the acquisition of lands and the construction of a manu- facturing building and facilities thereon (hereinafter some- times ref erred to as the 'lroject ' ) . The Project has been - 2 - leased by the City to the undersigned by a Lease and Agree- ment dated as of the 1st day of August, 1961, which is recorded in the office of the Circuit Clerk and Ex officio recorder of Pulaski County, Arkansas (herein called 'Lease and Agreement ' ). The bonds of the City are secured by a pledge of all revenues derived from the Project including particularly the lease rentals paid under the Lease and Agreement between the City and the undersigned and are secured by a mortgage lien on the Project. Article III of the Lease and Agreement between the City and the undersigned provides that the undersigned is obligated to pay all taxes and assessments, general and special, levied and assessed on the Project during the term, and all water and sewer charges, assessments and other governmental charges anu impositions whatsoever, all of which are therein designated as 'impositions. ' The under- signed is informed and understands, that notwithstanding the said provisions of Article III of the said Lease and Agreement, under the decision of the Supreme Court of the State of Arkansas in the case of Wayland v. Snapp, Ark. , 334 S. W. 2d 633, the Project will be exempt from ad valorem taxes because owned by the City and used for a public purpose within the meaning of the applicable Con- stitutional provision affording the exemption. Thus, the undersigned understands that it, as Lessee of the Project owned by the City, will, in fact, have no ad valorem taxes to pay under the provisions of Article III of the said Lease and Agreement. The City has indicated a reluctance for the authorities to lose all tax revenues which would otherwise be received by the authorities if the properties involved were privately owned. Therefore, to induce the - 3 - City to proceec with the issuance of the bonus for the purposes indicated, which will inure to the benefit of the unuersigned, and for other valuable considerations, the receipt of which is hereby acknowledged by the City, the undersigned agrees with the City as follows: 1 1. The undersigned will pay to the City the sum of Five Thousand Dollars 05,000) annually with the first such payment to be made on June 1, 1962, ano with payments in 1 saia amount to be made on each June 1 during the initial and any renewal term of the Lease and Agreement, and with such payments being a required business expense of the under- signed. The undersigned reserves the right to make monthly, rather than annual, payments and if the undersigned elects to make monthly payments it agrees to pay one-twelfth (1/12) of the specified annual payment on the first business day of each month. 2. The saia annual payments to be made by the unuer- 1 signed, pursuant to this instrument as aforesaid, are intended to be in lieu of all ad valorem taxes that would have to be paid on the Project leased by the undersigned in said Lease and Agreement to the state of Arkansas, Pulaski County, the City, School iistricts and/or other political sub-divisions of the State of Arkansas if the Project were not exempt from ad valorem taxes under the provisions of Article 16, Section 5 of the Constitution of the State of Arkansas as interpreted by the Supreme Court of the State of Arkansas in Wayland v. Snapp, supra. 3. If by reason of a change in the Constitution, a change by the Supreme Court of the State of Arkansas in its interpretation of the Constitution or otherwise, the under- signee is required to pay any tax which the payments specified 1 - 4 - herein are intended to be in lieu of (as defined in para- graph 2 hereof) , the undersigned may deduct the aggregate of any such payments made by it from the amount herein agreed to be paid in lieu of taxes and need only pay the difference to the City. Furthermore, inasmuch as the payment herein agreed to be made by the undersigned is intended to be in lieu of taxes, it is agreed that said payment shall not as to any year be in an amount greater than would be payable for such year in ad valorem taxes, in the aggregate, by a private corporation on account of its ownership of the rroject. 4. The agreement herein made by the undersigned shall terminate and be of no further force and effect from and after the date that the Lease and Agreement shall terminate for any purpose other than a default on the part of the undersigned. If such termination shall be at a point con- stituting a portion of a year, the undersigned shall pay for the year in which termination occurred that proportion of the specified annual payment that the number of days in such year that the undersigned was Lessee prior to the ter- mination bears to 365 days. The reference to 'year ' shall mean the fiscal year beginning June 1 of each year and ending May 31 of the following year. 5. This agreement shall be binding upon the successors and assigns of the undersigned, but no assignment shall be effective to relieve the undersigned of any of its obligations hereunder unless expressly authorized and approved in writing by the City. If the foregoing is acceptable, please so indicate by executing the acceptance set forth below and returning one copy to the undersigned, whereupon this instrument shall - 5 - constitute a valid and binding contract between the under- signed and the City. JACUZZI BROTHERS, INC. By resident ATTEST: Secretary (SEAL) Accepted and agreed to this day of , 1961. CITY OF LITTLE ROCK, ARKANSAS By Mayor ATTEST: City Clerk (SEAL) SECTION 2. The Mayor and City Clerk are hereby authorized and directed to accept said agreement on behalf of the City of Little Rock. SECTION 3. This resolution shall be in full force and effect from and after its adoption. ADOPTED: November 6, 1961 A`T'TEST: .>> k . , APPROVED: City Clerk Mayo .