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Home My WebLink About04/11/1994 Regular 4IIt 4IIt 4IIt " City of Springfield Regular Council Meeting MINUTES OF THE CONTINUED REGULAR MEETING OF APRIL 4, 1994, THE SPRINGFIELD CITY COUNCIL HELD MONDAY, APRIL 11, 1994 The city of Springfield Council met in Continued Regular Session of April 4, 1994, in the Springfield City Council Chamber, 225 Fifth Street, Springfield, Oregon, on Monday, April 11, 1994, at 7:00 p.m., with Councilor Burge presiding. ATTENDANCE Present were Councilors Burge, Beyer, Shaver and Schanz. Mayor Morrisette and Councilor Walters were absent. Also present were City Manager Michael Kelly, Assistant City Manager Gino Grimaldi, City Attorney Joe Leahy, City Recorder Eileen Stein and members of the staff. PLEDGE OF ALLEGIANCE BUSINESS FROM THE CITY MANAGER 1. Request by Sony Disc Manufacturing Company for Approval by Springfield Enterprise Zone Sponsors to Extend Property Tax Benefits for an Additional Two Years. RESOLUTION NO. 94-22 - A RESOLUTION AUTHORIZING THE CITY MANAGER TO SIGN AGREEMENTS WITH LANE COUNTY AND THE SONY DISC MANUFACTURING COMPANY TO EXTEND THE PROPERTY TAX EXEMPTION TWO YEARS FOR AN OPTICAL DISC MANUFACTURING FACILITY IN THE MCKENZIE GATEWAY AREA. Ms. Daluddung explained the process for Council review and action of all the Sony items on the agenda as follows: 1) review the property tax exemption request; 2) review and approve the Memorandum of Understanding; 3) hold a public hearing regarding the property disposition and donation of property to Sony; 4) close the public hearing; 5) authorzie the City Manager to execute the Donation Agreement and: 6) review and approve the property tax exemption extension. Development Services Director Susan Daluddung presented the staff report on this issue. Sony has requested that both sponsors (Lane County and the city of Springfield) of the Springfield Enterprise Zone approve extending enterprise zone benefits. In its decision to build a $50 million optical disc manufacturing facility in the McKenzie-Gateway area of Springfield, Sony needs to know if it will have an additional two years (five years total) of enterprise zone benefits. Councilor Shaver questioned the tax exemption as it related to required wage levels. Ms. Daluddung confirmed that 1992 is the year being used as a benchmark and that the benchmark is used as a measuring device for the entire tax exemption period. She also explained that if Council approves the two year extension, checks and balances are in place for determining that Sony's wage levels continue to quality them for tax-emption status. . 4IIt 4IIt Ms. Daluddung clarified that there is a regular reporting cycle between the state of Oregon and the Lane County Tax Assessor. She further explained that the two agencies evaluate what goals have or have not been met. She noted that the city is part of the process and is kept informed and up-to-date. She also explained that the formal process is coordinated with the tax assessment cycle. Ms. Daluddung also discussed the loss of exemption if Sony was not in compliance. City Manager Mike Kelly clarified that the way the agreements are drafted, the word "compensation" is used not "wages". He said the agreement does not compare with compensation. He added that State regulation allows for Sony's total compensation package to be compared with 150% of the average Lane County wage. In return for the two year extension of enterprise zone, Sony Corporation must abide by this. City Attorney Joe Leahy explained that the Oregon Administrative Rules regarding this matter were still being drafted while negotiations were being conducted with Sony. He explained that the State's rationale in adopting the regulation was that they wanted to encourage companies to relocate in Oregon and provide the opportunity to have good benefit packages. He further explained that there is an average wage in Lane County, but it is difficult to come up with an average wage and benefit package because benefit packages differ so widely. He explained that for comparative purposes, the two known elements used were the average local wage and Sony's wage and benefit package. Mr. Leahy explained that this is how the Oregon Administrative Rule reads. Ms. Daluddung and Economic Development Manager John Tamulonis answered questions of Council regarding the proposed salary range of Sony employees in relation to the tax exemption status. ACTION WILL BE TAKEN FOLLOWING THE PUBLIC HEARING. 2. Approval of Sony Memorandum of Understanding (MOU). Development Services Director Susan Daluddung presented the staff report on this issue. The City Council is requested to approve the detailed MOU for the proposed Sony disc manufacturing facility. The MOU will guide the relationship between Sony and the city for the development of the facility as executed by the Donation Agreement. The overall MOU was reviewed by City Council at its March 14, 1994 work session. The MOU provides extensive information about the roles and responsibilities necessary to further the community's goals for economic development, long-term investment, continuous and stable operation, potential expansion, employment of local residents at relatively high wage levels, integration with local economy and vendors, and maximum usage of the site. City staff and Sony officials have worked to ensure that each organization has a full understanding concerning the relationships and obligations that are covered in the individual topic areas and overall in the MOU. This MOU and the Donation Agreement provide the conditions under which Sony will be committed to build and operate the plant in consideration of the city providing a 3D-acre site. 4IIt 4IIt 4IIt ~o~tinued Regular Meeting April 11, 1994 Page 3 IT WAS MOVED BY COUNCILOR SHAVER, WITH A SECOND BY COUNCILOR BEYER, TO APPROVE THE MEMORANDUM OF UNDERSTANDING FOR THE DEVELOPMENT OF THE PROPOSED SONY FACILITY IN THE MCKENZIE-GATEWAY CORPORATE PARK. THE MOTION PASSED WITH A VOTE OF 4 FOR AND 0 AGAINST. PUBLIC HEARINGS 1. Sony Donation Agreement and Proposed Sale. Development Services Director Susan Daluddung presented the staff report on this issue. Subject to City Council approval, the subject property is being transferred to Sony Corporation of America in consideration for it's constructing a facility on the site for the manufacture of optical discs thereby increasing and diversifying the city's employment and tax base. Because the public benefit generated by locating Sony at the site, approximately 22 acres would be sold to Sony for $10. John Brown, member of the Appraisal Institute, has appraised Tax Lot 3600 to be worth $130,000 and Parcel 3 of Land Partition Plat No. 93-P0421 to be worth about $375,487 ($.40 per sq. ft.) before infrastructure improvements are made. The additional 8.06 acres is valued at $165,230. In summary, the city will be providing $670,717 worth of property to Sony in return for Sony's meeting the terms and conditions detailed in the MOU and Donation Agreement. Ms. Daluddung provided Council with a new draft Donation Agreement which contained revisions to Section 9.1, page 3. City Attorney Joe Leahy explained that in Section 9.1, Paragraph 8, Development Period and Paragraph 9, Sale of Basic Site, both provided protection to the city in the event that Sony did not perform. Council President Burge opened the public hearing. 1. Willie Combs, 334 Scots Glen Drive, spoke in support of the Sony project. Council President Burge closed the public hearing. IT WAS MOVED BY COUNCILOR SHAVER, WITH A SECOND BY COUNCILOR BEYER, TO AUTHORIZE THE CITY MANAGER TO EXECUTE THE DONATION AGREEMENT WITH SONY CORPORATION OF AMERICA AND APPROVE THE CITY'S PARTICIPATION IN THE COST OF 8.06 ACRES ON THE SOUTHWEST QUARTER OF TAX LOT 3500 (RICE) FOR THE PRICE OF $20,500 PER ACRE. THE MOTION PASSED WITH A VOTE OF 4 FOR AND 0 AGAINST. IT WAS MOVED BY COUNCILOR SHAVER, WITH A SECOND BY COUNCILOR BEYER, TO ADOPT RESOLUTION NO. 94-22 - A RESOLUTION AUTHORIZING THE CITY MANAGER TO SIGN AGREEMENTS WITH LANE COUNTY AND THE SONY DISC MANUFACTURING COMPANY TO EXTEND THE PROPERTY TAX EXEMPTION TWO YEARS FOR AN OPTICAL DISC MANUFACTURING FACILITY IN THE MCKENZIE GATEWAY AREA. THE MOTION PASSED WITH A VOTE OF 4 FOR AND 0 AGAINST. 4IIt 4IIt 4IIt 'C~ntinued Regular Meeting April 11, 1994 Page 4 ADJOURNMENT THE MEETING WAS ADJOURNED AT 7:53 P.M. Minutes Recorder - Julie Wilson AT~ City Recorder ~tffllli~ Mayor \