3004 RESOLUTION NO . 3,004
A RESOLUTION AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE ON BEHALF Oi THE CITY OF LITTLE ROCK A CONTRACT
WITH DOWSMITH, INC. , FOR THE PAYMENT OF CERTAIN SUMS IN
LIEU OF TAXES; AND FOR OTHER PURPOSES .
WHEREAS, it is in the mutual interest of the City of Little
Rock and DowSmith, Inc. , that the said DowSmith, Inc. , pay to the
City of Little Rock certain moneys in lieu of taxes upon the pro-
perty improved by the City of Little _ ock for use by DowSmith, Inc . ,
pursuant to Act 9 of the First 'Extraordinary Session of the General
Assembly of the State of Arkansas, approved January 21, 1960, as
amended; and
WHEREAS, a stipulated sum has been agreed upon between the
City of Little Rock and DowSmith, Inc. , as a consideration for the
issuance of the bonds pursuant to the said >ct 9 , as amended;
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
THE CITY OF LITTLE ROCK, ARKANSAS:
SECTION 1. The Mayor and City Clerk are hereby authorized
and directed to execute a Contract on behalf of the City of Little
Rock with DowSmith, Inc. , which Contract is fully set forth in
Section 2 hereof.
SECTION 2 . The Contract referred to in Section 1 hereof
small be in form and substance as follows :
DOWSMITH INC. BOX 2369 • MILWAUKEE 12, WISCONSIN • UPTOWN 3-3414 • AREA CODE 4
May 3, 1963
City of Little Rock
City Hall
Little Rock, Arkansas
Gentlemen:
The City of Little Rock, Arkansas (hereinafter sometimes 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 Assembly 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 Two Million
Five Hundred Thousand Dollars ($2, 500,000) (hereinafter sometimes
referred to as the "bonds" ) , for the purpose of financing the cost
of the acquisition of lands and the construction of a manufacturing
building and facilities thereon (hereinafter sometimes referred to
as the "Project" ) . The Project has been leased by the City to the
undersigned by a Lease and Agreement dated as of the 3rd day of
May, 1963, which is to be 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
I 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 and impositions whatso-
ever, all of which are therein designated as "impositions" . The
undersigned 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, 232 Ark. 57, 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 Constitutional 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
City to proceed with the issuance of the bonds for the purposes
GLASS FIBER REINFORCED EPDXY PIPE, ELECTRICAL AND OTHER PRODUCTS
. . .
-2-
City of Little Rock
Little Rock, Arkansas May 3, 1963
indicated, which will inure to the benefit of the undersigned, and
for other valuable considerations, the receipt of which is hereby
acknowledged by the City, the undersigned agrees with the City as
follows :
1 . The undersigned will pay to the City the sum of Ten Thousand
Dollars ($10,000) annually with the first such payment to be made
on April 20, 1965 , and with payments in said amount to be made on
each April 20 during the initial and any renewal term of the Lease
and Agreement, and with such payments being a required business ex-
pense of the undersigned. After the third annual payment has been
made the undersigned will discuss with the City the feasibility of
adjusting subsequent annual payments to a figure that is commensurate
with the then current status of its business . The undersigned re-
serves 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 said annual payments to be made by the undersigned, 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 Districts 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 undersigned is required to pay any tax
which the payments specified herein are intended to be in lieu of
(as defined in paragraph 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 Project.
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 constituting 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 termination bears to 365 days .
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_>' City of Little Rock •
Little Rock, Arkansas April 11, 1963
The reference to "year" shall mean the fiscal year beginning May 1
of each year and ending April 30 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 constitute a valid and binding con-
tract between the undersigned and the City.
DOWSMITH, INC.
ATTEST:
By
Secretary Vice President
(SEAL)
•
Accepted and agreed to this 3rd day of May, 1963.
CITY OF LITTLE ROCK, ARKANSAS
ATTEST: 1
By /
Mayor
City Clerk
(SEAL)
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SECTION 3 . This resolution shall be in full force and
effect from and after its adoption.
ADOPTED: May 6, 1963
k___ xem) APPROVED: 4 /2.
City Clerk ayor .