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CITY OF WEST CHICAGO
FINANCE COMMITTEE
AGENDA ITEM SUMMARY
ITEM TITLE:
AGENDA ITEMNUMBER: __2:C. —__
Resolution No. 19-R-0037 — Sales Tax Sharing Agreement
— Ditch Witch Midwest FILE NUMBER:
COMMITTEE AGENDA DATE: 8/22/19
COUNCIL AGENDA DATE:
STAFF REVIEW: SIGNATURE
APPROVED BY CITY ADMINISTRATOR: SIGNATURE
ITEM SUMMARY:
Prior to choosing West Chicago as its new home, the owners of Ditch Witch Midwest (currently on
Schmale Road in Carol Stream) inquired about economic incentives from the City, primarily sales tax
rebates because of the approximately $11 million in average sales made annually. The location being
considered (northwest corner of Atlantic Drive and Shingle Oak Drive) was one where two previous
seriously interested parties walked from the contract sale due to the extraordinary costs associated with
developing that site, most notably the condition of the soils. Not knowing what those costs would be until
more testing was done and the excavation complete, the parties decided to deal with the incentives after
the costs were known, with the owners of Ditch Witch Midwest knowing that staff will recommend the
sales tax sharing after construction is substantially complete, it is the City Council that has the final
determination.
The cap for the sales tax sharing is still being finalized, and once known, it will be added to the attached
Resolution. The figure will be at least $100,000 and should be no higher than $330,000.
STAFF RECOMMENDATION:
Staff recommends approval of Resolution No. 19-R-0037 with the insertion of the final figure that
represents the extraordinary costs of developing the Ditch Witch site.
COMMITTEE RECOMMENDATION:

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RESOLUTION NO. 19-R-0037
A RESOLUTION AUTHRIZING THE MAYOR TO EXECUTE A SALES TAX
SHARING AGREEMENT BETWEEN THE CITY OF WEST CHICAGO AND
DITCH WITCH MIDWEST TO REIMBURSE THE COMPANY FOR A PORTION
OF THE EXTRAORDINARY SITE DEVELOMENT COSTS
BE IT RESOLVED by the City Council of the City of West Chicago, in regular session
assembled, that the Mayor is hereby authorized to execute a Sales Tax Sharing Agreement with
Ditch Witch Midwest to reimburse the company for a portion of the extraordinary costs
associated with site development, a copy of which is attached hereto and incorporated herein as
Exhibit “A”.
APPROVED this day of 2019.
AYES:
NAYES:
ABSTAIN:
ABSENT:
Mayor Ruben Pineda
ATTEST:
City Clerk Nancy M. Smith

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SALES TAX REVENUE SHARING AGREEMENT
(DITCH WITCH MIDWEST)
This SALES TAX REVENUE SHARING AGREEMENT (DITCH WITCH MIDWEST)
(“Agreement”) is entered into on this___ day of , 2019 (“Effective Date”) by and
between the City of West Chicago, Illinois, an Illinois home rule municipal corporation (“City”), and
Ditch Witch Midwest, a (“Developer”). The City and Developer are
sometimes referred to herein collectively as the “Parties,” and individually as a “Party.”
RECITALS
A. The City is a home rule Illinois municipality, and hereby enters into this Agreement
pursuant to its home rule powers, and, pursuant to Section 6(a) of Article VII of the
Constitution of the State of Illinois of 1970 and 65 ILCS 5/8-1-2.5, the City has determined
that it has the authority to enter into this Agreement.
B. The City deems it to be of significant importance to encourage development and
redevelopment within the City, so as to maintain a viable real estate tax and sales tax
base and employment opportunities.
C. Developer owns the real estate commonly known as 1555 Atlantic Drive, West Chicago,
Illinois, as legally described and depicted on Exhibit A-1 and Exhibit A-2, respectively,
attached hereto and made a part hereof (“Subject Property”).
D. Developer is improving the Subject Property by constructing a forty thousand plus
(40,000+) square feet building thereon as described and depicted in Exhibit B-1 and
Exhibit B-2, respectively, attached hereto and made a part hereof (“Project”), and
Developer will employ approximately forty-eight (48) full-time employees at the Subject
Property upon completion of the Project.
=o The Project enhances the City’s real estate and sales tax bases, and creates additional
employment opportunities in the City.
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F. Developer and the City acknowledge that Developer requires economic assistance from
the City in order to construct the Project, due to certain extraordinary costs of the Project,
and developing the Project in the City would not be economically feasible, but for the
economic assistance promised by the City in this Agreement.
G; In light of the foregoing, the City agrees, pursuant to the terms of this Agreement, to rebate
to Developer up to and No/100 Dollars ($ .00) over up to
a (__) year period, in Developer Sales Taxes (as defined in Section
3.01(A)(4) below), generated by the Project (“Maximum Reimbursement Amount’),
subject to the other terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and
agreements herein made, and other good and valuable consideration, the receipt and sufficiency
of which is acknowledged by the Parties hereto, the City and Developer hereby agree as follows:
ARTICLE |
RECITALS AS PART OF AGREEMENT
The Parties acknowledge that the statements and representations contained in the foregoing
recitals are true and accurate, and incorporate such recitals into this Agreement as if fully set forth
in this Article |.
ARTICLE I
OBLIGATIONS OF DEVELOPER —
CONDITION PRECEDENT TO CITY UNDERTAKINGS
2.01 Condition Precedent. Each of the obligations specified in this Article II shall be a condition
precedent to the City’s financial undertakings in this Agreement. The City shall have no
financial obligation to Developer under this Agreement until the satisfaction by Developer
of each and every condition of this Article II.
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2.02
2.03
State Sales Taxes Information. Developer shall supply the City with State Sales Taxes (as
defined in Section 3.01(A)(5) below) information for the Project, certified as true by an
authorized officer of Developer, in the format, and in compliance with the timing, as
requested by the City Administrator. Developer represents and warrants that all such
information produced to the City pursuant to this provision is, and will be at all times in the
future, true and accurate, and agrees and acknowledges that the City relies on the truth
and accuracy of said information as a basis for its entering into this Agreement. Developer
shall submit to the City an executed Illinois Department of Revenue form PTAX 1002-21,
or such other replacement form as may be utilized from time to time, for the Project with
a reporting period from the Effective Date through December 31, 2035.
State Sales Taxes Reporting, Audits and Confidentiality.
(A) Developer hereby agrees to provide the City with written reports of all the State
Sales Taxes (as defined in Section 3.01(A)(5) below) generated by the Project
during each calendar year of the Revenue Sharing Term (as defined in Section
3.01(B) below), as requested by the City Administrator. Such reports shall be
certified as true by an authorized officer of Developer. Developer will deliver said
reports to the City on a quarterly basis before the fifteenth (15th) day following the
end of the calendar quarter for which Developer is reporting.
(B) The City hereby represents and warrants that any and all information regarding
sales and State Sales Taxes (as defined in Section 3.01(A)(5) below) shall be
confidential and used only for the purpose of calculating any amounts due and
owing to Developer pursuant to this Agreement. The City and Developer
acknowledge that Developer's sales and State Sales Taxes (as defined in Section
3.01(A)(5) below) information is financial information obtained from a business that
is proprietary, privileged and/or confidential, and that disclosure of the sales and
State Sales Taxes (as defined in Section 3.01(A)(5) below) information would
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cause competitive harm to Developer, and, therefore, would not be subject to
disclosure pursuant to a request under the Illinois Freedom of Information Act, 5
ILCS 140/1, et seg, as amended (‘FOIA’). Developer agrees to reimburse the City
for the reasonable attorneys’ fees and costs incurred by the City in responding to
any requests for information under FOIA, subpoena or otherwise relating to this
Agreement or Developer's sales and State Sales Taxes (as defined in Section
3.01(A)(5) below) information supplied under this Agreement. Developer agrees
that the City’s compliance with any court order or directive from the Illinois Attorney
General’s Public Access Counselor to produce information shall not subject the
City to any liability hereunder for said information release.
2.04 Guaranteed Completion, Occupancy and Operation of the Project. Developer agrees that:
(A)
(B)
(C)
(D)
Developer shall construct and operate the Project on the Subject Property
substantially in accordance with Exhibits B-1 and B-2;
Developer shall obtain certificates of occupancy, or final approvals, for the Project
from all governmental entities having jurisdiction over the design and construction
of the Project, on or before December 31, 2019;
Developer shall occupy and operate the Project on the Subject Property for a
minimum of fifteen (15) years from the Commencement Date (as defined in Section
3.02 below); and
The City shall receive State Sales Taxes (as defined in Section 3.01(A)(5) below)
and Home Rule Sales Taxes (as defined in Section 3.01(A)(2) below) from the
Project for a minimum of fifteen (15) years from the Commencement Date (as
defined in Section 3.02 below).
2.05 Real Estate Taxes and Other Charges. Developer hereby covenants and agrees to
promptly pay or cause to be paid before becoming delinquent, subject to any appeal rights,
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any and all real estate taxes and governmental charges of general applicability that may
at any time be lawfully finally assessed with respect to the Project and the Subject
Property, or any portion thereof, which is owned and controlled by Developer.
2.06 Compliance. Developer shall comply with all Federal, State, DuPage County and City
laws, ordinances, rules, regulations and directives.
2.07 No Default. Developer shall not be in default of any term of this Agreement.
ARTICLE Ill
CITY OBLIGATIONS AND UNDERTAKINGS
3.01 Economic Assistance.
(A) Definitions.
(1)
(2)
(3)
(4)
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“Annual Sales Tax Floor” shall be One Hundred Seventy Five Thousand
and No/100 Dollars ($175,000.00) of State Sales Taxes (as defined in
Section 3.01(A)(5) below).
“Home Rule Sales Taxes” shall be those taxes received by the City
pursuant to the Home Rule Municipal Retailers’ Occupation Tax Act (65
ILCS 5/8-11-1), as amended, and the Home Rule Municipal Service
Occupation Tax Act (65 ILCS 5/8-11-5), as amended, or any taxes received
by the City as a replacement for the taxes currently received pursuant to
the Home Rule Municipal Retailers’ Occupation Tax Act or the Home Rule
Municipal Service Occupation Tax Act.
“Developer Sales Tax Allocation” shall be fifty percent (50%).
“Developer Sales Taxes” shall be: (i) those State Sales Taxes (as defined
in Section 3.01(A)(5) below) generated by the Project which are distributed
to the City by the State, in excess of the Annual Sales Tax Floor, during
each twelve (12) month period after the Commencement Date, during the
term of this Agreement, net of any prompt payment discount; multiplied by

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(ii) the Developer Sales Tax Allocation. “Developer Sales Taxes” shall
exclude any Home Rule Sales Taxes received by the City.
(5) “State Sales Taxes” shall be those taxes received by the City pursuant to
the Retailers’ Occupation Tax Act, 35 ILCS 120/1, et seqg., as amended,
and the Service Occupation Tax Act, 35 ILCS 115/1, et seg., as amended,
or any taxes received by the City as a replacement for the taxes currently
received pursuant to the Retailers’ Occupation Tax Act or the Service
Occupation Tax Act.
(B) Assistance. Upon satisfaction by Developer of all of the conditions stated in Article
Il of this Agreement, the City shall rebate to Developer the Developer Sales Taxes.
Said payments shall be made by the City to Developer for a period of
(_) years from the Commencement Date (as defined in Section 3.02 below) or
until the Maximum Reimbursement Amount is reached, whichever occurs first
(“Revenue Sharing Term”).
3.02 Commencement Date. Developer shall give the City written notice that it has satisfied all
of the conditions of Article II of this Agreement, and that it is electing to commence the
Revenue Sharing Term. The City shall thereafter confirm whether Developer has satisfied
all of the conditions of Article II of this Agreement and determine whether Developer is
entitled to receive the Developer Sales Taxes. The Commencement Date will be the first
day of January following the City’s confirmation.
3.03 Payment Procedure. After the Commencement Date, so long as the City has confirmed
that Developer has satisfied all the conditions of Article II of this Agreement, during the
Revenue Sharing Term, the City shall pay to Developer the Developer Sales Taxes, on
an annual basis, within forty-five (45) days of the end of each calendar year, upon receipt
of State Sales Taxes in an amount which results in Developer Sales Taxes being
generated for the particular calendar year.
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3.04
4.01
4.02
4.03
4.04
No General Obligation. The obligation of the City to pay Developer Sales Taxes to
Developer in this Agreement is not a general obligation of the City, and the City’s full faith
and credit are not pledged or encumbered to provide Developer with Developer Sales
Taxes.
ARTICLE IV
GENERAL PROVISIONS
Delay and Force Majeure. For the purposes of any of the provisions of this Agreement,
neither the City nor Developer, as the case may be, nor any successor in interest, shall
be considered in breach of, or default in, its obligations under this Agreement in the event
of any delay caused by damage or destruction by fire or other casualty, shortage of
material, unusually adverse weather conditions such as, by way of illustration and not
limitation, severe rain or storms or below freezing temperatures of abnormal degree or
quantity for an abnormal duration, tornados and other events or conditions beyond the
reasonable control of the Party affected which in fact interfere with the ability of such Party
to discharge its respective obligations hereunder.
Assignment of Agreement. This Agreement may not be assigned by Developer without
the prior written approval of the City, which approval shall be in the sole and absolute
discretion of the City.
Developer Authority. Developer hereby represents and warrants that it is a
authorized to do business in, and in good standing with, the State of Illinois. Developer
further represents and warrants that all corporate action necessary to make Developer’s
obligations hereunder enforceable against Developer have been taken, and that no further
approvals or actions are required.
Defaults; Remedies.
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(A)
In the event of any default under or violation of this Agreement (“Default”), the Party
not in Default shall serve notice upon the Party in Default (“Defaulting Party”),
which notice shall be in writing and shall specify the particular Default (“Default
Notice”). The Defaulting Party shall have the right to cure the Default within thirty
(30) days from written notice of such Default; provided, however, if such Default
cannot practically be cured within said thirty (30) days, provided the Defaulting
Party has commenced the cure within such thirty (30) day period, and is actively
and diligently proceeding with such cure, the Defaulting Party shall be granted
such additional time to cure the Default as shall be reasonable under the
circumstances. In this regard, the Defaulting Party shall advise the other Party, in
writing, during the initial thirty (30) day cure period, of the amount of time needed
to cure said Default, and why the additional time is needed. After issuance of the
Default Notice, and the Defaulting Party's failure to cure within the time frame
required, the Party which served the Default Notice may terminate this Agreement,
or may proceed to seek a cure of the Default by any action or proceeding at law or
in equity, including seeking specific performance of the covenants and agreements
herein contained, and/or an award for money damages for failure of performance.
Notwithstanding the foregoing:
(1) In the event of a Default by the City, relative to its obligations to Developer
under Article Ill, Developer's sole and exclusive remedies shall be to
terminate this Agreement or seek specific performance from a court of
competent jurisdiction, and Developer shall not be entitled to any monetary
damages from the City, and hereby expressly waives any claim for
monetary damages; and
(2) The time period to cure a Default in relation to compliance with Section
2.03 above shall not exceed ninety (90) days.

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(B) In the event that Developer fails to meet any of its obligations in this Agreement,
the City shall have the following additional remedies, after giving Developer the
notice required by Section 4.04(A) above:
(1)
(2)
(3)
In the first (18') through fifth (5"") years after the Commencement Date, the
City shall be repaid one-hundred percent (100%) of any sums paid or
rebated to Developer pursuant to this Agreement.
In the sixth (6'") through tenth (10"") years after the Commencement Date,
the City shall be repaid seventy-five percent (75%) of any sums paid or
rebated to Developer pursuant to this Agreement.
In the eleventh (11") through fifteenth (15) years after the
Commencement Date, the City shall be repaid fifty percent (50%) of any
sums paid or rebated to Developer pursuant to this Agreement.
(C) Developer shall make any repayment owed to the City under this Agreement within
thirty (30) days of a written demand from the City. Any amounts not repaid within
said thirty (30) day period shall accrue interest at the rate of two percent (2%) per
month,
with the minimum interest payment being for a one (1) month period.
4.05 Notices. All notices and requests required pursuant to this Agreement shall be sent by
certified mail,
return receipt requested, postage prepaid, or by personal or overnight
delivery, as follows:
If to Developer:
with a copy to:
If to the City:
With a copy to:
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Attn:
Attn:
City of West Chicago
475 Main Street
West Chicago, Illinois 60185
Bond Dickson & Associates, P.C.
400 S. Knoll Street, Unit C
Wheaton, Illinois 60187
Attn: Patrick K. Bond

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4.06
4.07
4.08
4.09
4.10
or at such other addresses as either Party may indicate in writing to the other Party.
Service by personal or overnight delivery shall be deemed to occur at the time of the
delivery, and service by certified mail, return receipt requested, shall be deemed to occur
on the third (3rd) day after mailing.
Law Governing. This Agreement shall be construed and enforced in accordance with the
laws of the State of Illinois. Venue for any legal action brought by either Party as a result
of entering into the Agreement shall be in the Circuit Court of Kane County, Illinois.
Time. Time is of the essence under this Agreement and all time limits set forth herein are
mandatory, and cannot be waived except by a lawfully authorized and executed written
waiver by the Party excusing such timely performance.
Limitation of Debt. Any obligations of the City created by or arising out of this Agreement
shall not be a general debt of the City on, or a charge against, the City’s general credit or
taxing powers, but shall be a limited obligation payable solely out of the Developer Sales
Taxes as set forth in Article III.
No Waiver or Relinquishment of Right to Enforce Agreement. Failure of either Party to this
Agreement to insist upon the strict and prompt performance of the terms covenants,
agreements, and conditions herein contained, or any of them, upon the other Party
imposed, shall not constitute or be construed as a wavier or relinquishment of the Party's
right thereafter to enforce any such term, covenant, agreement or condition, but the same
shall continue in full force and effect.
Article and Section Headings. All Article and Section headings or other headings in this
Agreement are for the general aid of the reader and shall not limit the plain meaning or
application of any of the provisions thereunder whether covered or relevant to such
heading or not.
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4.11 City’s Authorization to Execute. The Mayor and City Clerk of the City hereby warrant that
they have been lawfully authorized by the City Council to execute this Agreement.
4.12 Amendment. This Agreement sets forth all the promises, inducements, agreements,
conditions and understandings between Developer and the City relative to the subject
matter thereof. There are no promises, agreements, conditions or understandings, either
oral or written, express or implied, between them, other than as herein set forth. No
subsequent alteration, amendment, change or addition to this Agreement shall be binding
upon the Parties hereto unless authorized in accordance with law and reduced to writing
and signed by them.
4.13 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of
which, taken together, shall constitute one and the same instrument.
4.14 Severability. If any provision of this Agreement is held invalid by a court of competent
jurisdiction, such provision shall be deemed to be excised from this Agreement and the
invalidity thereof shall not affect any of the other provisions contained herein.
4.15 Limitation of Liability. No recourse under or upon any obligation, covenant or agreement
of this Agreement, or for any claim based thereon or otherwise in respect thereof shall be
had against any officer, agent or employee of the City, and all and any such rights or
claims of Developer against any officer, agent or employee of the City are hereby
expressly waived and released as a condition of and as consideration for the execution of
this Agreement by the City.
CITY: DEVELOPER:
CITY OF WEST CHICAGO
By: By:
Ruben Pineda, Mayor —_—=—————
ATTEST: ATTEST:
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Nancy M. Smith, City Clerk
Dated: Dated:
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EXHIBIT A-1
Legal Description of the Subject Property
[LEGAL DESCRIPTION]
P.I.N.:
Common Address: , West Chicago, Illinois
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EXHIBIT A-2
Depiction of the Location of the Subject Property
(attached)
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EXHIBITB-1
Descriptionof theProject
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15

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EXHIBIT B-2
Depiction of the Project
(attached)
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