HomeMy WebLinkAbout1/14/2019 - City Council - Agenda -RegularCi ty Council Meeting
A G E N D A
Monday, January 14, 2019, 6:00 P M
Council Chambers, City Hall, 114 North Broad Street, Salem, Virginia 24153
1.C all to Order
2.Pledge of Allegiance
3.C losed Session
A.Closed Session
Hold a closed session pursuant to Section 2.2-3711A(1) of the 1950 Code of Virginia, as
amended, to discuss a personnel matter.
4.C onsent Agenda
A.Minutes
C onsider acceptance of the minutes from the December 10, 2018, work session and regular
meeting.
B.F inancial Report
C onsider the acceptance of the Statement of Revenues and Expenditures for the five months ending
November 30, 2018.
5.Old Business
A.Amendment to City Code
C onsider ordinance on second reading amending Chapter 14, Article IV, Section 14-106, pertaining
to adequate space and tethering of companion animals.
6.New Business
A.Vacation of Right of Way
Hold public hearing to consider adoption of Resolution 1350 appointing viewers to consider
permanently vacating and disposing of an approximate 0.066 acres of an 18' unopened alley situate
off Mount Vernon Avenue for Lewis S. and Susan F. Bohannon. (As advertised in the December
27, 2018, and J anuary 3, 2018, issues of the Salem Times Register.)
B.Av id Hotel
C onsider setting bond for physical improvements and erosion and sediment control for the Avid
Hotel project to be located at 501 Wildwood Road. Audit - Finance C ommittee
C .Appropriation of F unds
C onsider request to appropriate Sewer Fund Net Position. Audit-Finance Committee
D.Salem Band B oosters
C onsider request for a donation ($594.86) from the Salem Band Boosters equal to the admissions
tax paid in connection with the Blue Ridge Regional High School Band Competition held on
October 27, 2018.
E.Salem Body Shop, L L C - P erformance Agreement Amendment
C onsider the request for a Performance Agreement Amendment between Salem Body Shop,
LLC, the Economic Development Authority of the C ity of Salem, Virginia, and the C ity of
Salem and to authorize the City Manager to execute the same.
7.Adjournment
Audit-F inance Committee Meeting, 8:00 a.m, City Manager's Conference Room
Work Session Meeting scheduled for January 14, 2019, is canceled.
fiEM* 6E
o^ft ilqltq
AMFNDMF'NT TO PERFOR CE AGREEMENT
THIS AMENDMENI TO _-PERFORMANCE AGREEMENT (thE
"*gre€m€ntA!0crylmsil") is dated this _ day of %
20
-
by and among the CITY Of SALEI4 VIRGINIA, a Municipal corporation organized
and existing under the laws of the Commonwealth of Virginia (the "City"), SALEM BODY
SHOP, LLC, a Virginia limited liability company (the "Developer"), and the ECONOMIC
DEVELOPMENT AUTHORITY OF THE CITY OF SALEM, VIRGINIA, an Economic
Development Authority organized and eli5ting under the laws of the Commonwealth of Virginia
c'EDA").
RECITALS
WHEREAS, the etrllhqDeveloper hasanrllhc,pD4 entered into a-€aM
the e it,' (herein "Sales e entraet") te pwehasethat certain Performance Agrc
ZO tZ ftle "Pertbrma
WH gngA S. thLPj=49p4qq=e.,,_ A
aequile,lspoyatc ard day€ p the West Salem Body Shop{-brqlethe rB€dr-SloF)propanry
described as City of Salem Tax Map # 122-6-8 (the "Bodvlhoollor-the Property");-and
-WHEREAS,
rn-conudopugq -of the Developer *ll+--aegt*rq--+sneYet€---€nd
rcae+etepinvestinq at least Sl the Body Shop
and @sads&ine_such renevetien-end-+edevelepment-in
ther oblications- js- cLlodh in
WHEREAS; the Performance Asreeme City has-agreed to llrovide funds
to lhe EDA so that lhe EDA mqq_ould provide certain rebates representing increases in real
estate taxes resulting from the renovation and redevelopment of the Body Shop,-end-aocllgau-up
to $1.400.000.00 t co@eation fees for water. s
etectric ana fliit wal
control ir connection with rhe reelcvclopnqgolqfuhc8odyShog
-WHEREAS,
at the @ the EDA
soPerformance Aqreemen that the EDA-may-{ea*-up+e
$+0+800$kh€-Developer te be repaid by the Develeper as previdC herein;ryoul!
consmrct at leasl letrall0)apa[Ectrls and one ( l ) restaurant in fiffi;
WHERE,\S; ss a forther ineentive te the Devele-er; the €ity has egreed te waive
-WHEREAS.
tollowins the execu
the EDA reouested tha
{l l5 88r3/0er0##00u9eB.Docx61 }
rentat units ana Uul
revenue paid to the
WHEREAS,the@
l, The Prqjeet witl premete eeenemie develepment nithin the nevelopelagrced_..llo
eerS@CCity;and
to cause the ei+izens-e€theGi++: d
3, The Prqieet n'ill impreve en unpreduetive blithted area and ereeBrage renevatien
@
WHERE,\S; E^,\; basC upen the unde*akings ef the Devele-er; has determined
te rebate eertain inereases in -eal estote taxes resulting fiem sueh renevatien arid redevelepment
f+em-frndsBodvShop to be }+e-+he
as
provided
amena fte terms of the P asreement as more speci
WHEREAS; the parties wish te rCuee in n'dthg the Bnderstandhgs ef the psrties in tl s
mas€ri.€nd
WHERET\S; Develeper is rvilling te perferm its ebligatiens in aeeerdanee with this
Agreem€nt'
NOW, THEREFORE, the parties agree that the above Recitals are hereby incorporated
into and made a part of this Agreem€ntAmcldmcnt, and for and in consideration of the muhral
covenants and conditions set forth herein, and for other good and valuable consideration, the
receipt and sufliciency of which the parties hereto acknowledge.,-Be+elepet+he€ittt and€DA
agree as follows:
t. Sectlons t-: ot U
rep l ac ed wllh_lhe_follaudtrs
SECTION 1. EDA REAL ESTATE TAX REBATE. EDA LOAN. WAIVER OF PERMIT
FEES AIID CONNECTION FEES AND ALLOCATION OF FACADE GRANT.
1.1 The EDA, with funding from the City, will rebate to the Developer a sum equal to
the difference in real estate taxes resulting from such renovation and redevelopment ofthe Body
Shop (improved value minus the 2016 assessment (5354,900)), for a period of 5 years. This
rebate is subject to the Developer's acquisition of the Body Shop and the Developer's
expenditure to renovate the Body Shop in an amount of at least Sl'70+80+€ei*-aeeerdanc€
rvith the Sales Conkaet attaehed herete and made a p8trt hereefl-200!0000Q.
( I I 588r3/00.$As?OiIl964l.DOCX;61 )
1.2 The EDA, with funding from the City, will rebate to the Developer a sum equal to
the difference in real estate taxes resulting from such renovation and redevelopment of the Body
Shop (improved value minus the 2016 assessment ($354,900)), for an additional period of 3
years. This rebate is in recognition of the redevelopment in the floodplain and compliance with
the City ofsalem Downtown Plan and is subject to the Developer's acquisition ofthe Body Shop
and expenditure to renovate the Body Shop in an amount of at least S#op0gel:)j+€e€#ane€
'n'ith the Sales €entraet attaehed hereto and made a part hereef.J,200-000!0.
1.3 The EDA, with funding from the City, will rebate to the Developer a sum equal to
the difference in real estate taxes resulting from such renovation and redevelopment of the Body
Shop (improved value minus the 2016 assessment (S354,900) for a period ofup to 5 additional
years, subject to the following:
(D
-#The
acquisition of the Body Shop by the Developer;
(ii) The expenditure and renovation ofthe Body Shop in an amount ofat least
$+;?403200,000.00-in--seeeCan€€-r#ith-+h,e-Sal,e@
hereef; and
(iii) Such rebate shall be paid to the Developer only for those years in which a
@ on the Property generatia6-€ggnqale minimum gross receipts
of $500,000.00 annually (for any and every l2-month period) for a maximum of up to five
additional years. Such annual rebate may be eamed only during the 8-year rebate term provided
in Ll and 1.2 above. For each year the gross receipts revenue is satisfied as provided
hereinabove, the real estate tax rebate shall be earned for an additional year, up to five years.
1,1 The ED,\; t'ith funding &em the Gity; will lean the Develeper an arneunt net
@
--------l+---l:1 The City shall waive the Developer's connection fees for water, sewer,
fiber optics and electric utilities and furtlter waives fees for building permits, erosion and
sediment control and site plan review for dre Proj.eetEo<lclhop.
1.6! The Developer shall be eligible to apply to the City and the EDA for a monetary
grant under the Downtown Fagade Grant Program for the front and rear of the structure situate
on the PrepegBody.
I ,7 Suhie€t t€ the Ese of a pertien ef the Preperty as a restaurantr end uper -15
Upo! request of the Developer, the City agrees, at its cost and expense, to widen the
sidewalk or to install a parklette in a location adjacent to the Property (as determined by the
City), to encourage outdoor dining.
{I r 58 8/731001{611100 I lq6jE.lxrxi6I }
2.1 In accordance with Section 2.2 hereof, EDA shall make the real estate tax rebate
to Developer in annual installments upon written confirmation, to the satisfaction of EDA, of the
receipt of funds by EDA from the city sufficient to fund the EDA real estate tax rebates, and
upon receipt of a completed and executed request (a "Request") fiom the Developer. The
Request shall include all records verifying renovation and redevelopment expenditures on the
Project in an amounr of at least $+70O3J00,000.00 and, if applic^bl", ,""ord, verifuing gross
receipts from ++es+auran+1f;qrcslaua4s operating on the property to the satisfaction of the EbA.
Developer may submit Requests for the difference in real estate taxes resulting
from &e renovation and redevelopment of the Body Shop (improved value minus the 2016
assessment ($354,900)), for the qualifying years as hereinabove provided in Section 1. The tax
rebates will be payable by December 3l"tofeach year by the EDA beginning with the calendar
year in which the Certificate of occupancy on the Property is issued and continuing for all
calendar years thereafter, subject to the qualification of such Request.
2.2 Upon receipt of a Request, written approval by EDA and the City, EDA
will distribute the real estate tax rebate set forth in the Request within ten (10) business days.
Under no circumstances shall the real estate tax rebate be a general obligation of EDA. The
obligations of EDA shall be limited solely to funds received from City pursuant to this
Agreement.
2.3 EDA may disapprove a Request which is not in accordance with the terms
of this Agreement and may require a revised Request be submitted. In this event, EDA shall
provide written notice to Developer stating the basis for disapproval and any defect in the
Request and specifying the required additional information. Developer shall submit the revised
or resubmitted Request within 30 days of receipt of the disapproval and upon approval by EDA,
EDA shall distribute the real estate tax rebate set forth in the Request.
2.4 In the event that Developer (l) fails to submit all Requests in a timely
manner as provided herein, or, (2) if any of the Requests are not approved by EDA, and
Developer fails to submit a revised Request which complies with the provisions of this
Agreement in a timely manner, or (3) fails to meet the renovation and redevelopment investment
threshold requiremenrs of $Hgl2!!,000.00, then all obligations of the City and EDA under
this Agreement shall terminate and neither the city nor EDA shall have any obligation to fund,
distribute, or provide any outstanding part ofthe Rebate to the Developer.
2.5 EDA agrees to deposit funds received from the City pursuant to this
Agreement into the investment account of EDA and such deposit shall be designated for and
limited to this Agreement. However, if the EDA does not pay all such funds to Developer rn
accordance with this Agreement, EDA will return any remaining funds to the city within 30 days
of any City request.
SECTION 3. EDA LOAN TO DEVELOPER:
I ii\\ -r lnx \.
t00;000:
3-l All costs and fees pertaining to the EDA loan of uH€$reU@,000.00, including, without limitation, title ixamination costs, insurance p."-io-r,
survey costs, recording costs of the Deed of Trust, loan document preparation costs and fees of
Developer's attorney and settlement agent shall be borne by the Deviloper. The-fean-amennt
3.2 The EDA- with funding from ft loan
Oevetoper an amount e at an interest rate no greater thar. 4% per annum as
determined by the EDA upon recommendation of the City's financial consultant, Davenport &Company Note
satis'faeteryqhalLbeinIhe_form
funded as-hlows-
the+DA
Q_-fne gOA snat advm
tne Oevetoper oUtain
toan snaU Ue securc
frust'l. fne OeeO
tn Avor of ereeAom P
oroviae tne BOa witn o
ereater than $ 1.1 0
fiil fne eOn snaU lug
taxes ana fooA ana Uev
tUee f:t consecutl
tne funaing of tne Uata
reteasea ofrecot m
3.q- Other terms and conditions of the loan shall include, without limitation, the
following:
(i) Developer shall provide EDA a hazard insurance policy for the
replacement cost of the Property naming the EDA as lienholder / loss payee. The insurance
company issuing the policy must be acceptable to the EDA.
(ii) Developer shall provide a title commitnent from a title insurance
company acceptable to the EDA listing all liens, encumbrances and easements covering the
Property. A title insurance policy insuring EDA's interest as mortgagee for the full amount of
the loan may contain only those exceptions acceptable to the EDA. The insurance company
issuing the policy must be acceptable to the EDA.
{ l l 588/73l0s}064+700_l_l9643.DOCX;61 }
(iii) Other loan documents standard under Virginia law and custom
desigtred to protect the position of the EDA and its collateral, provided that flood insurance shall
not be required.
(i") The EDA loan shall not be assignable by the Developer without
the express written consent of the EDA which consent shall not be unreasonably withheld,
conditioned or delayed. Norwithstanding the foregoing, during the first five years following the
execution of the loan documents the EDA may withhold its consent to an assignment for any
reason whatsoever.
(v) The EDA loan shall be voidable at the option ofthe EDA should a
proceeding be commenced by or against Developer under any bankmptcy or insolvency law or
upon any change in management or ownership of the Developer such that Edward Walker and/or
Brent Cochran is (are) not the controlling membe(s) of the Developer.
3.4 All obligations of the City and the EDA, hereunder, are subject to and
conditioned upon (i) to the Developer's minimum renovation and redevelopment investment
requirements of $f;+e94200,000.00 on the P*ej.ee+Prooqry, and/or (ii) tunding of the loan
amount by the City to the EDA.
W
Eaeh prty atrees te eeeperate n'ith the ether in a reasenable marmer te earry eut the
@
SECTIEN5. P"SPENS
The -arties te this v\-reement n'ill be respensible fer the a€tiens; er emissiens ef its
effieersr employe€s;
the Prqieet; the Preperty; and the aetivities previded fer in this vlgreement te the extent permitted
by law; but nething eentained herein shall be eenstruC as a waiver e€ the immrx ty defenses
@
L*$4
Develeper agrees te md shall eemply rvith all applieable fHeral; state; and leeel laws;
the federal inxnigratien Referm and €entrel r\et ef 1986,
SEEPIEAI+.-N€AI\++IIISR
Eaeh part)'agrees that any party's rvaiver er failure te enferee er require perfermanee ef
any term er €sndit
{l 1588r3/00+e6a#00I9e4.DOCx;61 }
( Ig:xJoc mrf'goioo/€rgss r r ) I
-sll8€ss
ffi
so elrBpsueo teu lprls JadoF^a€ J€ dlrlsr6E,1te dHsJeqrgeE eB EI eSEBqe V .pedBlap:re
PeseltlPuoa 'Pleqqt!,n flqBseseeIgn eq leu IIBqS luessoo qolq,r
"qI3
oqtJe tuesEeo serH,n retsd
eE iloBl,rt ,fuBd ,{w or lso
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@
-,"€tqpe3*useC
Ip prs petaq#u eq tes llsqs tsewee€v sIE Je suelsl,Ierd \qsurer eqt 'eepofpstsnf tuetedgree
e et -eereq selsl,rerC ,{rro Je seltse}ldds egt re lEe'Eaa{3V siq} Je rrelsl,rerd ,{es Jl
ffi
qtloa,nneurrse3 e$Je seelsl^erC s/r.sl Je talHsee eqt 6l taelqns tee sl ls€Eaergv s_rqf slulS*l^
'rlIeles. Je 'q!3 eB rE fle3 lsHsle l€reEeg +e une3 lln^*I3 aqt EI tq3nerq eq lsnrs selHBC
eqt Jo sepnp psg qqgH eqt 3sl
sftsl e^llsslsqns eB Jepsn pen4sgee pga 'peteJ*ets} 'perse,teS eq lluqs tHeureerSv sHt
'r*sl {q *e tuaureargv slqt -epEn ,{}rod as}tlnBJep eB lsrqs3s
ew rBq
rllnqeP 6ql
lsHlnts, Ereri fi'gd 3r{tln
re+!p,t e eq leE IIBqs
peB tes s! emllqI re *e+!s/tr qans ',{lse eoEgtse! toql et spealxe ,,qrBd -eq}e aql {q luellIea$v
W
A delay in; er failrre ef; perfermanee by any perty; sholl net eenstitue a default; ner shall
is
Agreement; if €$d to $
earthquake; fleeCs; riets; strr@s; leber er equipment diffi€Blties; delays in trsnspertetien;
inabitity tB ebtein noee
ef this Agreement any ene delay eau'ed by any sEeh eeeurren€e shell net be deemed te last
lenger than six (6) menths and the -arty elaiming delay eau'ed by any and all sneh eeeurrenees
by sneh party as being suhieet te feree mqieure gll#er b€ing an exeusable delay,
SEETIreINCS
The eaptiens and headints in this ,\greement are fer eenvenienee and referenee purPeses
edy ffrd shatt net affeet
SEETIEN 15. €EUNTE
l.r. This AgreemsntThis Amen may be executed in any number of counterpart
copies, each of which shall be deerned an original, but all of which together shall
constitute a single instrument.
SE€TIEN16. AUTHEru
The persens whe heve exeeuted Exsepfa$oodified-bllthis Arttclrdlne4Llhe Jcrfogralec
Agreement @mains in full force and *alran++h€y-{re-duly
@s Agre€E€Bt:€+w#th,ei+-fesp€€ti+€-€n+ities.
SBE+IEN-T+r-NO:TICEST
4ll netiees hereunder must be in writing and shall be deemC validly dven if sent by
s€nd€r+flil€-a€tie+
trf te City: Gity ef Salern; Vlgfuiia
,t ti!\ -r ln x \
{ ig:xloc mt I ourtgemo/€rls8s I I}
ffi
-Tt-re
rert:lleu:r ""- -i
,E'r,roellddg r;'#"tdgIe,(II€lslIIB3BetBg lou @
u€q3€rlse{Fflrv
gIEIS*I^ 'Hreles re ,ql3 :et ,{Cee e $l7tt
is-r
@i+-eenspieueus plaees; aveilable te empleyees and epplieant fer
B' neveleper in all selie:tatiens er advertisements fer empleyees pleeed by er en
is
seetie*
SE€TIEN 1I|. ACDDEM
+.3-
e-avai{ablq{er
iens
f,tsdine.
TREMATNDER OF PAGE LE
{ I 1588/73l00{e6#7001_l 9643.DOCX;61 }
ie
er fereign busiress entity if se requirC by Title 13,! er Title 50 er as etherffise requirC by law;
ien+e
aoti€€,
The previsiens ef this Agreement ^hall net be eensEued in faver ef er against eit*rer
e
A€reem€nt'
SE€TIEN 23. DEPERT
The eighEDA; and Develeper shall maintain all beeks; reeerds; and ether deetxnents
retating te this Agre€nrcnt for
rn this
^greement,
SECTIEN 23. ENTIDD
------{He-Agreement; tegether with any exhibits; attaetrnents; and refereneed items;
thffippr€priat€-p€rties.
IN WITNESS WHEREOF, the City, EDA, and Developer have executed this Agreement by their
authorized representatives.
CITY OF SALEM, VIRGINIA
Approved as to form:
{l I s88/73l00re64.7?Q81l9643.Docx;61 }
By:
Kevin Boggess, City Manager
By
Stephen M. Yost, City Attomey
Approved as to form:
Attorney for EDA
ECONOMIC DEVELOPMENT AI.]'THORITY
OF THE CITY OF SALEM, VIRGINIA
By:
Chairman
SALEM BODY SHOP, LLC
By:
By:
Its:
{ l l s88/73l00re64+700119643.DOCX;6_1 }
STATE OF VIRGINIA :
: to-wit:
CITY/COI-]NTY OF :
The forgoing was acknowledged before me this _ day of
Kevin S. Boggess, City Manager of the City of Salem, Virginia.
Notary Public
My commission expires:
Notary Registration No. :
STATE OF VIRGINIA
: to-wrt:
CITY/COUNTY OF :
20-,by
The forgoing was acknowledged before me this _ day of 20-,by
Chairman of the Economic Development Authority of the City of
Salem, Virginia.
Notary Public
My commission expires:
Notary Registration No.:
STATE OF VIRGINIA
CITY/COTINTY OF
The forgoing was acknowledged before me this _ day of 20 .by
of Salem Body Shop, LLC.
Notary Public
My commission expires:
Notary Registration No.:
{ I I 588/73I001O64770Q11915.13.DOCX;61 }
ErhibttA
CREDIT Ltr.{E PROMISSO
$2.500.000.00
tne Commonweattn of Vl
Satem. Virqinia 2al
sums aavancea nereunder
tle orincioat amount outs
OOItOO Oottars (SZ.
t. Oefrnitions. es use
Note and such deeds o
suarantee the indebted
suoolemented or mo
2. Interest. Interest on the outstandins nrincioal of this Note shall accrue at a Der
annumrate eouat to . m
Uasis of a vear consl
NoI9.
:. aavances. fne rcn
gonower obtains a ce
ln the Performance aereem
of SAem aatea lune
aatea (cottective
tatance of tne toan o
eereement are satis
+. Pavments. fne aavm
eouat montntv oavmen
ana pavaUte on tne nrs
montn tnereater unt
table at each time an advance is made in accordance with Section i ahove-
S. Preoavments. Preoa
oenattv or premium. a
rtssole-rLsslalra!.
{1 1588/73l00+e0a++qq19643.DOCX;61 }
continue for nteen
rcnaer, nroviaed an
O. gvents of Oefautt
one or more of the follo
(al fhe gonower fails t
tttis Note as and wnen au
fo[owins receipt o
&t fhe gorrower breac
asreement containe
cured:
(cl fhe gorrower brea
warrantv or aereement co
aefautt witnin me nte
fal anv reoresentatl
in anv certincate ael
resDect at the time it was made:
(el fhe gorrower (i) v
tion seeting reUef
Uantruptcv. insotvencv o
timetv ana aoorooriat
aootles for or consen
omcia for it or for a s
atteeations of a po
for tne Uenent of cre
to oav its aeUts as tle
effectins anv of the foresoins: and
fO en invotuntarv oroceea
ntea in a court of como
suUstantiat oart of l
state or foreisn bankruptcv
custodian. seoues
or (iiil tne wmalng-uo
continue unaismiss
foreeoins shail cont
Z. nemeaies. Uoon m
sote option of tne I-e
the gorrower and (b) the L
un0er eacn of tne I,oan Oo
eourtv.
{ I I 588/73l00les7?00ll9@f,.DOcx;61 }
."tt"" qf dt.!9.".
w.alcr -, .inltt *ni"n lt -uu n
p-rT", l*r.t rt 01. N"te
,tratr:a Uy -l f"m".*
gtt .ryt." tt "t tt In"t
t-enaer to secure tnis No
. q. qosts. The Borrowqm Nop p. ir r.er.
altogev'f ft!$.tf aft
the. Lelder frnds it de
q"tt""tt"rl ,. th" ,
f"er r-"ia"a f". rc..
part o-tfhe Lqderlarc
10-____MisceUarcous.
(a) To the maximum extm
knpwinetv. votunhritv
titiqation based he
Document. or anv course o
action of anv partv or
Documents or in atrv w
fescina or cancet tnis No
rna, ucea or is otter*ise
tb! xo-reloaeccplLhsXols
Q) Anv faiture or detav
construed as a waive iloe
fct fle term "t-enaer"
_ fat . , fUs Note snaU
Comq""weatm of Vi.rin
,l ..Wt ."""*. "r t" U" "rc.!"tt US r-t tlrteO Uv ". l*"t
"f rWtr r-t ltiti"r .
remainlne provisions of thisNote.
_ (e) . This Note shatl
shatt inure to ft as.
(n Anv notice provid
f"nn
"U"r" "ra .nU Ut
{l l58tr3/00.1{64fr00119641-DOC&61 }
or Uv a nationattv rc
deliYered.
w wtrNnss wupneor.
aboyc-wriae!"
Salem noav Snoo- Lrc
Bv: Name:
Title:
{r ls88r3/00lees?001196{i.Docx;61 }
exnibit e to Credit I,m
[ettached emortizatio
{ l l 588/73l00{e64+7Qor I9643.DOCX;61 }
Exldbit I
C. CoonerVoueU. rv fV
WniUow t VoueU. prc
PO-Box-ZZ9
Roanoke. VA 24004
Tax Mao No.
NOTICE: THE TTEBT SF
THE TERMS THFREOF BEI
OR CONVEYANCE OF THE P
THIS IS A CREDIT LINE
AND RENTS ("Deed of
ana Uetween SAmet nOny
severattv, itmore
a business address o
Cnaoarrat Orire- Suite
referrea to nerein a
AUTHORITY OF THE CIT
Commonweatm of Virsh
THIS IS A CREDIT LINE
requlreLb, Sectio, 55-58.2 of the Code of Virginia. as amendeffi
communications mav Ue
2415L
The maximum assreeate amount of orincioal to be secured bv this Deed of Trust at anv
one time is SZ.SOO.O
igations"): (a) the narrment
ana oerforrnance of At inaeU
@ or hereafter incurred. however evidenCed. whether matured or urunatru.ed*t"the. ai.ect or im
whether otherwise seq inal. renewed or extended. wtrether contacted
Uv tne g".o*"..indtri
qortraateil@ but not limired to those o
lggoiiaIiog assiqnmqnl transfer or othe.wise from another o. oft
raDrgsg!(9dbv notes. mstruments or other writhqs: fb) the repavment of an; futur.e advarc€s. with
qterpst thereon made "to E a.rd rct theffico.rrenants or
tne Crantor containea ln t
{ I I s88/73l0erea++99119643.Docx;61 }
qum-of-orcDoliarf$f00)
+E=l2tesctrlsJhlrqecrpll
+lqpte_qllo_6e_Lruslcel
Itrco@oraled hcre[bLre&r
appafus,_spunUcr orircsysrclos-llqdlorqfls{Lffi
**""
____Grantqr_fol.,]Ge,lfapd
i r
as
| 1r I sevzloereo+z+qggg.ooc>go1 I
cost of oUtainine such
the holder of the Oblis
eactr insurance comoanv
toss airecttv to ana s
OUtisations or the Prc
pav tne same. and anv sum or s
pavaUte on aemand. stla
secured bv this Deed of Trust
Z. Crantor witt teep the P
witt not commit or pe
wltt not act or fal to
:. Crantor witt teeo tne m
rnsurea aeainst los
sucn oerioas as mav U
requireA to oUtarn nooa
hotder of the OUtieat
attacnea mereto stanaara mo
Qbligations. The holder is authorLe
ttre Crantor to ao so. ana
or anv part thereof mav be m
lndeUteaness nereUv sec
unaer ttre terms of ttris P
tne inaeUteaness secuea
policies then in forc
+. f tne ownersnip of
Crantor. tne notAer of m
successors in interest
retieve Crantor or go
nerformance of anv of the
modification shatl
S. tf: fat teeal or eo
conveved or shall bv anv means become vested in anv oartv other than Grantor (excludine the deed
of trust executeA Uv C
tle interest in tne Crmm
rurtner encumUerea. witno
the Uankruptcv. insolvenc
Crantor. tlen. in anv su
interest-,qwing on the Obligati
retatrne thereto. shall b
Oblisations.
{ l l 588/73100-l€647?0011964].DOCX;61 }
e. fhe tottowlng sh lhjs Deed_of 'IrusL
a. An gvent of nefautt unaer
as of me aate of Ais OeeA of f
U. fne Crantor Ureacnes or
asreement contained(l$ davs after writte
gvent of nefautt stratl
vdftin me nruen f tS aav
Z. Uoon an gvent of OefaUt ana *
aontv tle resiaue to th tom
S. The irevocable power t
suUstltutea *rerefor I
Trust. to ,!=e %ercised
spsgifvinq anv reason therefol
recoraea- a Oeea of en
auties of tne trustee
trustee or nustees. C
trereunaer exoresstv nower. the eivins ofbod
and anv reounement for applic
u$toctrercurder.
g. At anY time after an Ev
Ottisations. the Trus
part thereof at public
conditions. and upon s
concernea consistlns
whlctr tne securitv oroo
otner oerioa as aootica
sa!0c-tuidr such postponemen
may dct
aoorovat as mav Ue reout
ourcnaser wno snal Ue l
proceeds of sale. to
rlefudrnebulxoililoXedrccourt costs. advertisinp
if anv. reoutea o conect
attomevs' fees- ana a
frustees snatt. anO
tat<e lmmeaAte oossess
all rents- issues a
frustees straU aeem iog
I L li\\ -l l)( )( \.
tnis OeeA of frust. ana
tnereon at tne rate nrov
afime of sae. and to rea
pnncioat. costs o
wnetner tne same snaU U
maturitv of tne OUtigation
oav tiens of recora aga
funas remairune in the hand
oroceeds. if anv. to C
aeUverv ana sunenaer
obtainins oossession.
tO. Crantor wanants eenem
execute further assurance
t t. fne powers nerein gr e
them actins individuallv or bv anv sreater number of them actins tosether-
tZ. fnat mis Oeea of fru
at or anv oart of tne OUtl
substitution or reDlacement thereof.
_13-
a. as usea in tnis Oe
suUiect to reeulatio
f-iaUifiw Act as mo0l
nesource Conservation
state or tocat taws and *re
waste aisoosat: ana
nereater s*iect to requl
omer apoticaUte feaeml
stances. "foxic S
fPCg's).petroleum p
quantitv. use or aootic*
envmnmentat taw. eU src
collective|v referred to herein as "Environmental Laws."
b. The Grantor reDresenls- warranls and covenants a,s follows:
fit fne Crantor nas no tnowl
teaa to tne imoosition of
fne Crantofs famitiariw wim
ourcnase orice to tne va
(iil commontv t<nown or
obviousness of the p
{ I I s88/73l00+e64J?00U9eB.DOCx;61 }
f iil fne Crantor tns no mow
litisation. ordeu. rutinss. n ic
Subsanscsaolhclape6l
fiiit me Crantor witt co
rsouirements of atl EnvironmeM
aiscoverv of ftazaraous Wa
tlaUitltv to tne Crantor o
witt prompttv forwffd to fu
corununication! and r rt
Hazardous Wastes and Toxic
creatlon oi anv tien o
mental tiws as thev mav afffft th
Iiil If at anv time the trnder ha
Uazadous Wastes or foxl
the Grantor or the creation
aftq ttre recodation of this De
environmental sfl€ ass t or envk
to assess with a reasombl iq
SuUstances ana fg) the cost
fvl n tne event of ru ores ie
SuUstance uoon tne Proo
frust ana whcn oresence m
all or a oart of the Prope
Crantor slal fal to comotv w ttre reouirements of tle fnv
mav at its election
rerusea to ao so on tte l-ed
performed at the Propertv or (
or-advaablc itodcrlo abate. remove and clean up
omerwise cure tne Crantots no
of ms Section stutt s
fvit anv arnount aisUmel t
this Section shatt be add
secued in the same manner as ftie ittgrsl
ttrereo[ be pavable bv G
tn. fne Crantor atso n
title and interrst in a
part thereof- now or here
mterest in and to all
Prooertv or anv part thereo
{l 1588/73l00.1464+?00119@LDocx.61 }
unconditional and eft
fenaer's asent for the c
(at. fne Crantor reurese
fit fne Crantor witt n
tne l-enaer. Ue aecU
be. fne Crantor witl
and anv assisaments thereof.
(ii) fne Crantor is tne
t-eases: Crantor nas no
nents: and it nas no
which mieht preven
(liit OutsiAe of tne
nereof snaU not Ueen
conditions thereof
annroved in writino hv the T.ender
(ivt fo tne Crantor
tnere are no OeAutts
fne Crantor witt ful
l-eases to Ue rutntte
(v) The Grantor has not and will not collect- or acceot oavment of rent under
anv of me teases morc
fte rerder.
(U) tmmediatelv upo
anvorAt of tne fotlffi
fit fne rcnAer is tlo
take acfual nhvsical oossession of the Pronertv:
(lit tvtanase and operate
fiiit SuUiect to tne
anv oart of tne Prooerw. for
the Lender mav deem DroDer:
GvL-- rqfalq€-atryl=cas€;
anv oart tlereof or co
prior written consent
asslenment or lease m
{r 1588/73l00rs64??00119643.DOCx;61 }
(vl OemanA. cottec
adiust. and make- exe
tnereater Uecome du
subtenants or occuo
(vit tnstrtute- orosec
oroceedings ana actio
occuoants of tle Prooe
fvn enforce- eniol
and conditions of anv [.ease:
fviilt tvtate sucn reoa
reasonable discretio
(ixt Pav from ana out of
Grantor in its posse
sewer rates- or ottler
ProoerW. or anv oortion
wnicn it mav aeem ne
Prooertv. inctuding m
other services that mav be reouired:
(xit Cenerattv. ao.
whatsoever that oueh
the Propertv. as fullv a
(ct Without tatine actu
eqtitled to demand. c
mate. execute and a
Aue. owinq or pavabl
ruture tessees- tenant
comotetion or comp
(01 for tne oumoses
herebv inevocablv app
omcers. as its true an
to tate anv and all acti
with an interest and cannot
{1 1588/73l00-rc#7?00ll9641.Docx;61 }
(e) The Lender will annlv anv Rents received bv it lrom the Prooertv- after Davment
of orooer costs ana cm
@
fO frc Crantor neretv i
upon notice and dem
ageruinq or due under the le
tS. me orovisions of m
Uenent oi Crantor. its n
qqccessor. or substi
successors and assiqns.
sinqular. and the use ofil
Aemainaer of oase in
{ l 1588/73l00.m6a+?00 L19GD.DOCX;61 }
nl WfnVeSS WmnBOf. tne Crmtor nas
of the dav and vear first written abova
GNENTOR:
SALEM BODY SHOP. LLC
Title:
COI\{IVIONWEALTH OF VIRG
CITY/COTJNTY OF
The foresoins document was acknowledsed hefore me bv
of Salem Bodv Shon LLC. a Viroinia limited liahilitv comDanv- on
benatfofsucn enti
Notarv Public
Resistration Numher
Mv Commission Exoires:
(Reuodue rbleScal)
{1 l58E/73l0erc4s70011964:i.DOcx;61 }
nxnibit e to Oeea of
I {ns8sn3/w+o6l*1gotJ9@1.DocX;61}
I . I The EDA, with funding from the City, will rebate to the Developer a sum equal to
the difference in real estate taxes resulting from such renovation and redeveloiment of the Body
Shop (improved value minus the 2016 assessment ($354,900)), for a period ofi years. This rebate
is subject to the Developer's acquisition of the Body Shop and thi Developei's expenditure to
renovate the Body Shop in an amount ofat least $@
eontraet attaehed .
1.2 The EDA, with funding from the City, will rebate to the Developer a sum equal to
the difference in real estate taxes resulting from such renovation and redeveloiment ofthaBody
Shop (improved value minus the 2016 assessment ($354,900)), for an additional period of3 years.
This rebate is in recognition of the redevelopment in the floodplain and compliance with the city
of Salem Downtown PIan and is subject to the Developer's acquisition of the Body Shop and
expenditure to renovate the Body Shop in an amount of at least $ry
*re Sales €entraet attael-ed herete and made a part heree8=20eQ0000.
1.3 The EDA, with funding from the City, will rebate to the Developer a sum equal to
the difference in real estate taxes resulting from such renovation and redevelopment of the Body
shop (improved value minus the 2016 assessment ($354,900) for a period ofup to 5 additional
years, subject to the following:
(i) ------------F-The acquisition of the Body Shop by the Developer;
(ii)The expenditure and renovation of the Body Shop in an amount ofat least
(iii) Such rebate shall be paid to the Developer only for those years in which a
@ on the Property t€fl€ratiflt-agenglaIe minimum gross receipts of
$500,000.0o annually (for any and every l2-month period) ior a maximum ofup to five addiiional
ye-ars_. Such annual rebate may be eamed only during the 8-year rebate term piovided in l.l and
1.2 above. For each year the gross receipts revenue is satisfied as provided hireinabove, the real
estate tax rebate shall be eamed for an additional year, up to five years.
-*-g-
14 The City shall waive the Developer,s connection fees for water, sewer, fiber
optics and electric utilities and further waives fees for building permits, erosion and sediment
control and site plan review for the p+elee+Body JIoB.
$+,7{o4qq,000.
and
{ I t 588/73100120 r l4.DOCX+? }
gEglrq[r. :EPA REAL E oF PERMn
FEES AND CONNECTION FEES AND ALLOCM
1.65 The Developer shall be eligible to apply to the City and the EDA for a monetary
grant under the Downtown Fagade Grant Program for the front and rear of the structure situate on
the PrepertyBor[.
I '7 cuhje€t te the use 6fa -ertien ef the Prsperty as a reslaurant; and Epen l-15
:-:-tlpo! request of the Developer, the City agrees, at its cost and expense, to widen the
sidewalk or to install a parklette in a location adjacent to the Property (as determined by the City),
to encourage outdoor dining.
SECTION 2. DISTRIBUTION OF REBATES.
2.1 In accordance with Section 2.2 hereof, EDA shall make the real estate tax rebate to
Developer in annual installments upon wriften confirmation, to the satisfaction of EDA, of the
receipt offunds by EDA from the City sufficient to fund the EDA real estate tax rebates, and upon
receipt ofa completed and executed request (a "Request") from the Developer. The Request shall
include all records verifying renovation and redevelopment expenditures on the Project in an
amount of at least $W3J00,000.00 and, if applicable, records verifuing gross receipts from a
res+au+afl+the resJ4!r!!nt9 operating on the Property to the satisfaction of the EDA.
Developer may submit Requests for the difference in real estate taxes resulting from
the renovation and redevelopment of the Body Shop (improved value minus the 2016 assessment
($354,900), for the qualifoing years as hereinabove provided in Section l. The tax rebates will
be payable by December 31" of each year by the EDA beginning with the calendar year in which
the Certificate of Occupancy on the Property is issued and continuing for all calendar years
thereafter, subject to the qualifrcation of such Request.
2.2 Upon receipt of a Request, written approval by EDA and the City, EDA will
distribute the real estate tax rebate set forth in the Request within ten (10) business days. Under
no circumstances shall the real estate tax rebate be a general obligation ofEDA. The obligations
of EDA shall be limited solely to funds received from City pursuant to this Agreement.
2.3 EDA may disapprove a Request which is not in accordance with the terms
of this Agreement and may require a revised Request be submitted. In this event, EDA shall
provide written notice to Developer stating the basis for disapproval and any defect in the Request
and specifying the required additional information. Developer shall submit the revised or
resubmitted Request within 30 days ofreceipt ofthe disapproval and upon approval by EDA, EDA
shall distribute the real estate tax rebate set forth in the Request.
2.4 In the event that Developer (1) fails to submit all Requests in a timely
manner as provided herein, or, (2) if any of the Requests are not approved by EDA, and Developer
fails to submit a revised Request which complies with the provisions of this Agreement in a timely
manner, or (3) fails to meet the renovation and redevelopment investment threshold requirements
of $1?003,200,000.00, then all obligations of the City and EDA under this Agreement shall
terminate and neither the City nor EDA shall have any obligation to fund, distribute, or provide
any outstanding part ofthe Rebate to the Developer.
{l 1588/731001201 l4.DOCX;+2 }
. 2.5 EDA agrees to deposit funds received from the City pursuant to this
Agreement into the invesunent account of EDA and such deposit shall be iesignated for and
limited to this Agreement. However, if the EDA does not pay all such funds to' Developer in
accordance with this Agreement, EDA will retum any remaining funds to the city within 36 days
ofany City request.
3.1 All costs and fees pertaining to the EDA loan of npSHOO$210g,000.00,
including, without limitation, title examination coits, insurance premiums, suruey c-osts, recording
costs allheD€ad oflLru$, loan document preparation
"o.ts -d fees of Develoier's attomey and
settlement agent shall be bome by the Developer. The lean ameunt shall be determ:ned by
s+sp-o+$-L400-,e0e
_ , 3.2 The EDA. with fundins ftom loan @pevetoper.al amount at an interest rate no greater lhart 40/o pe, uorrr- as
determined by the EDA upon recommendation of the City's finaicial consultant, bavenport &
Company.tssory-,amortized over 25 rc Note
satisfa€+eryshallta h @fo*
as fotlorer
3.41 other terms and conditions of the loan shall include, without limitation, thefollowing:
(D Developer shall provide EDA a hazard insurance policy for thereplacement cost of the Property naming the EDA as lienholder / loss puy"". ih" irrr*-""
company issuing the policy must be acceptable to the EDA.
LlQ0-Q00 at Ihetime the EDA mak
{l I J88/73l001201 l4.D@&+2 }
SECTION 3. EDA LOAN TO DEVELOPER:
(ii) Developer shall provide a title commitment from a title insuance
company acceptable to the EDA listing all liens, encumbrances and easements covering the
Property. A title insurance policy insuring EDA's interest as mortgagee for the full amount of the
loan may contain only those exceptions acceptable to the EDA. ihi in.u.un"" company issuing
the policy must be acceptable to the EDA.
(iiD Other loan documents standard under Virginia law and custom
designed to protect the position of the EDA and its collateral, provided that flood insurance shall
not be required.
(iv) The EDA loan shall not be assignable by the Developer without the
express written consent of the EDA which consent shall not be unreasonably withheld, conditioned
or delayed. Notwithstanding the foregoing, during the first five years following the execution of
the loan documents the EDA may withhold its consent to an assignment for any riason whatsoever.
(v) The EDA loan shall be voidable at the option ofthe EDA should a
proceeding be commenced by or against Developer under any bankruptcy or insolvency law or
upon any change in management or ownership of the Developer such that Edward walker and,/or
Brent Cochran is (are) not the controlling membe(s) of the Developer.
3.51 All obligations of the City and the EDA, hereunder, are subject to and
conditioned upon (i) to the Developer's minimum renovation and redevelopment invesfinent
requirements of $H{O3-20Q,000.00 on the }f€|€e+prqEry, and/or (ii) funding of the loao amount
by the City to the EDA.
{t 1588r3/00t 201 t 4.Docx+2 }