ORD NO 20-1990 CITY OF VAN BUREN, ARKANSAS
ORDINANCE NO. D -1990
AN ORDINANCE ADOPTING THE ATTACHED REUSE PLAN AND AUTHORIZING
THE MAYOR AND CITY CLERK /TREASURER TO ENTER INTO A CONTRACT WITH
THE CITY OF VAN BUREN, ARKANSAS PUBLIC FACILITIES BOARD.
WHEREAS, A.I.D.C. has approved the City of Van Buren's
use of the KFG Loan Repayments subject to the
attached Reuse Plan:
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF VAN BUREN, ARKANSAS:
SECTION 1: THAT the City of Van Buren hereby
adopts the Reuse Plan which is attached to this
Ordinance.
SECTION 2: THAT the Mayor and City Clerk/
Treasurer are hereby authorized to execute the
attached contract between the City of Van Buren
and the City of Van Buren, Arkansas Public
Facilities Board.
PASSED AND APPROVED THIS DAY OF
_�GIii4 4 ,19 90
MAYOR
ATTESTED:
C TY CLERK -T
EA URER
0
S REUSE PLAN
CITY OF VAN BUREN
In March of 1990, the City of Van Buren and the Arkansas
Industrial Development Commission closed a loan of AIDC Economic
Development Setaside funds with KFG Enterprises, which purchased
a defunct furniture operation in Van Buren. This reestablished a
once successful manufacturing business, saving many of the jobs
lost with the prospect of additional jobs being created in the
future. The amount of the loan was $450,000 to be amortized
monthly at a 9.5% per annum interest rate for a term of ten
years. KFG's first payment was due October 1, 1990, and was for
accrued interest only. Monthly payments in the amount of
$5,822.90 are to begin in November.
In October of 1990, AIDC approved the City of Van Buren's use of
the KFG loan repayments, which had been assigned by the City to
AIDC, for industrial development purposes contingent upon the
City's submission of a reuse plan acceptable to AIDC and the
approval and adoption of the plan by the City Council. Pending
approval of the reuse plan and its adoption by the City Council,
AIDC directed that KFG's payments were to be made to the City of
Van Buren and held in escrow.
This reuse plan is to guide the City in the use of the KFG
Enterprises' loan repayment funds and includes the following:
(a) initial use of funds
(b) eligible uses of funds
(c) Board and industrial development objectives
(d) administration and management structure
(e) HUD compliance issues
Initial Use of Funds
For several years industrial expansion in Van Buren has been
hampered because of the lack of suitable and available sites for
industrial development. Although inquires are received from
industries interested in locating in the city, it is almost
impossible to present them with sites that are suitable and
available at a certain price. Community development and Chamber
of Commerce meetings have repeatedly established as one of the
community's highest priorities the need to develop industrial
sites.
In response, the Van Buren Chamber of Commerce's Industrial
Development Team in early 1990 decided it would begin a more
focused and concentrated effort to develop a site base for
industrial expansion. The effort has had the wholehearted
endorsement of the Chamber Board, the City, the County and
community leaders. Much investigation and analysis by the
Chamber's Industrial Development Team over this past summer has
resulted in the identification of sites in and near Van Buren and
lit the execution of an option to purchase between the owner and the
Van Buren Chamber of Commerce for fifty acres.
The intended initial use of the initial funds i.e., the KFG
loan repayments is the purchase of the optioned property.
Prior to any payments being made, the Chamber's rights as
optionee will be assigned to the City of Van Buren's Public
Facilities Board, which will be created by the City to expend and
administer the reuse funds on behalf of the City. The use of the
initial funds is not limited to the purchase of the optioned
property.
Eligible Uses of Funds
Funds, both initial and revenues subsequently generated from the
use of the initial funds, are to be used for economic development
purposes. Before any activity is undertaken using the funds,
there should be the reasonable and logical expectation that the
activity will result in or directly contribute to the creation of
permanent, private sector jobs and investment in Van Buren.
Eligible uses of the initial and subsequently generated revenues
include, but are not limited to: the construction or improvement
of public facilities (e.g., streets, water, sewer and other
utilities) to attract, secure or support the development of
industry; business loans to industry for the acquisition or
improvement of land, buildings or equipment; the improvement,
construction or acquisition of buildings and other real estate
that would be made available for sale or lease to and use by
prospective industries; and the procurement of professional and
administrative services associated with the Public Facilities
Board's industrial development activities.
All funds are to be used for activities that are in support of
and will contribute to the economic development of Van Buren.
Board and Industrial Development Obiectives
The Board should target and be selective in dealing with
industries that will enhance Van Buren economically and as a
place to live. In this regard, considerations by the Board would
include:
(a) the number and types of jobs to be created by the
industry
(b) the industry's past performance and prospects for
success
(c) the industry's proposed investment and other tangible
commitments
(d) the appropriateness of the industry to the area's
overall economic development considerations include
the types and the wages of the jobs to be created,
environmental concerns, and the industry's potential to
support or trigger other private, job generating
activities in the area
(e) the value added to the product produced at the
industry's facility in Van Buren
S (f) the industry's needs and requirements for certain terms
and conditions necessary to make possible or induce the
industry to locate in Van Buren the needs and
requirements might be dictated by the financial
condition or resources of the industry, its desire and
necessity to locate in the area, and the extent to
which the City must compete for the industry's location
in the community
Added considerations for the sale or lease of land purchased or
improved with the funds are:
(g) the dollar amount of funds invested in the property and
other costs associated with the property's development,
and the market value of the property
In determining the terms and conditions of land sales and leases
to industry, the policy of the Board is to offer property at
market value terms, conditions and price. The City's interest in
acquiring and developing property for industrial use is not to
offer property to industry at a discount but to make it possible
for the community to offer industrial prospects industrial sites
that are available at a certain and fair price and are suitable
for industrial use.
In pursuit of the overarching goal of economic and specifically
industrial development, the Board should seek to achieve the
following objectives:
(1) The Board should use the funds in ways that will
perpetuate and increase the Board's funding base. The
Board should approach its projects and activities with
the objective that not only will its efforts yield
returns to the community through economic development
but will also eventually return funds back to the Board
so its efforts can continue for years to come.
(2) The Board's activities and efforts should be
thoughtfully designed and implemented with clear,
stated goals and objectives.
(3) The Board should recognize the significant opportunity
it has to establish an on -going industrial development
program that can continue for years to benefit Van
Buren. The Board should also recognize that a
development program is not just a series of projects,
but requires a day -to -day and year -to -year continuity
of effort that can only be provided by full -time,
professional staff support.
Administration and Management Structure
Administration and management of the initial and subsequently
generated funds is to be provided by a five member Public
Facilities Board that is to be established by the City of Van
Buren in accordance with State enabling legislation cited as the
"Public Facilities Board Act."
KFG Enterprises' loan repayments, including principal and
interest, are to be deposited into a bank account in the name of
the Public Facilities Board. The Board shall have the sole
authority to appropriate and expend these funds in accordance
with this reuse plan and State laws governing Public Facilities
Boards. Attached to this reuse plan is the ordinance
establishing the Board.
The Board is to direct that an audit of the Board's financial
records be conducted annually by an independent Certified Public
Account. The audit report is to be completed within ninety days
of the last day of each fiscal year. Soon after completion, the
audit report is to be submitted to AIDC and the City Council and
made available for public review.
Attached to this reuse plan is the City of Van Buren City Council
ordinance adopting the reuse plan and a signed contract between
the Public Facilities Board and the City in which the Board
agrees to adhere to the terms and conditions of this reuse plan.
HUD Compliance Issues
Use and expenditure of program income that is, KFG
Enterprises' loan repayments received by the City prior to AIDC's
final closeout of the AIDC KFG Enterprises Economic Development
Setaside Project is subject to the provisions of Title I of
the Housing and Community Development Act, Small Cities Community
Development Block Grant Program. Accordingly, the City will
adhere to these provisions and will maintain for and provide AIDC
with the records necessary for AIDC to adequately determine that
compliance has occurred. Failure by the City to adhere to these
provisions, as determined by AIDC, could require the City to
repay funds to AIDC.
CONTRACT
This Contract, dated this day of 1990, is
by and between the City of Van Buren, herein referred to as the
"City and the City of Van Buren, Arkansas Public Facilities
Board, herein referred to as the "Board and sets forth the
following terms and conditions:
1. The City hereby agrees to assign the KFG Loan
Repayments received to date and any future repayments
due the City to the Board and directs that future
repayments by KFG be made directly to the Board for
deposit into a bank account in the name of and under
the control of the Board.
2. In consideration of the City's assignment of the KFG
repayments to the Board, the Board agrees to use the
funds in accordance with the provisions of the attached
Reuse Plan and furthermore accepts all the terms,
conditions and provisions of the Plan. The Board
furthermore acknowledges that the Plan was adopted by
City Ordinance No. -1990 and that the City is
bound by the provisions of the Plan by agreement with
the Arkansas Industrial Development Commission (AIDC).
3. The Board understands and agrees that failure by the
Board to adhere to the provisions of the Reuse Plan
could result in termination of AIDC's and the City's
assignments of the KFG loan repayments and that the
Board could be required by the City to repay funds
received.
4. This Contract shall be in full force and effect so long
as the Board possesses KFG loan repayment funds or
assets acquired with KFG loan repayment funds.
The respective governing bodies of the City and Board have
authorized the appropriate officials to execute this Contract and
have acknowledged their acceptance of the above terms and
conditions of this Contract.
CITY:
MAYOR CITY CLERK /TREASURER
BOARD:
CHAIRMAN SECRETARY