ORDINANCE NO. BL2015-1127

ORDINANCE NO. BL2015-1127

An ordinance authorizing The Industrial Development Board of The Metropolitan Government of Nashville and Davidson County to negotiate and accept payments in lieu of ad valorem taxes with respect to American General Life Insurance Company, a Texas insurance company.

WHEREAS, The Metropolitan Government of Nashville and Davidson County (the "Metropolitan Government") is vitally interested in the economic welfare of its citizens and wishes to provide the necessary leadership to enhance this area's capabilities for growth and development; and,

WHEREAS, the provision of jobs to area citizens by local business is both necessary and vital to the economic well-being of the Metropolitan Government; and,

WHEREAS, pursuant to the Industrial Development Corporations Act, currently codified at Tenn. Code Ann. §§ 7-53-101 through 315 (such act, as heretofore or hereafter amended, referred to as the "Act"), the General Assembly of the State of Tennessee (the "General Assembly") has authorized the incorporation of public corporations known as "industrial development boards" in municipalities in the State of Tennessee (the "State"); and,

WHEREAS, the Industrial Development Board of The Metropolitan Government of Nashville and Davidson County (the "Board") has been duly organized and incorporated in compliance with the Act; and,

WHEREAS, the General Assembly has found and declared that the Board is performing a public function on behalf of the Metropolitan Government and that the Board is a public instrumentality of the Metropolitan Government; and,

WHEREAS, the Supreme Court of Tennessee (the "Supreme Court") has found that the Board is an agency or instrumentality of the Metropolitan Government; and,

WHEREAS, the Act expressly incorporates by reference the statement of public policy set forth in Section 3 of Chapter 209 of the Public Acts of 1955; and,

WHEREAS, Chapter 209 of the Public Acts of 1955 states that the declared purpose of the Act is to do that which the State welfare demands and that which the State public policy requires to alleviate the problems of unemployment, to raise family income, to provide a means by which the citizens of the community may promote and develop industry in their area so as to obtain a balanced economic development highly essential to the welfare of the State, and to promote the development of commercial, industrial, agricultural, and manufacturing enterprises by the several municipalities so as to be given local benefits peculiar to each and general benefits to the entire State; and,

WHEREAS, the General Assembly also has declared that the purposes of the Act include maintaining and increasing employment opportunities by promoting industry, trade, and commerce by inducing manufacturing, industrial, financial, service, and commercial enterprises to locate or remain in the State; and,

WHEREAS, the Supreme Court has held that the purposes of the Act include the promotion of industry and the development of trade to provide against low wages and unemployment and that such purposes are public in nature; and,

WHEREAS, the Board is empowered pursuant to the Act to acquire, whether by purchase, exchange, gift, lease or otherwise, and to improve, maintain, equip and furnish, "projects" (as defined in the Act), and to lease such projects to others; and,

WHEREAS, American General Life Insurance Company, a Texas insurance company ("AGLIC"), is an indirect wholly-owned subsidiary of American International Group, Inc., a publicly traded Delaware corporation (“AIG”); and,

WHEREAS, AGLIC is planning to relocate certain of its respective business operations to an office building to be built and developed by Highwoods Realty Limited Partnership (“Highwoods”) on approximate 3.65 acres at 340 Seven Springs Way in Brentwood, Tennessee; and,

WHEREAS, AGLIC currently anticipates that the Office Building will contain approximately 200,000 rentable square feet of space (excluding common areas for shared use by all other occupants and users of the Project, as defined below); and,

WHEREAS, once construction is completed, AGLIC will occupy approximately 173,834 rentable square feet of the Office Building (the "Project") subject to a lease agreement with Highwoods; and,

WHEREAS, AGLIC expects to employ approximately 750 full-time employees immediately upon occupation of the Office Building and to employ approximately 950 full-time employees within five years of beginning operations; and,

WHEREAS, AGLIC and Highwoods anticipate making a significant investment of approximately sixty million dollars ($60,000,000.00) in connection with the Project; and,

WHEREAS, AGLIC expects its expenditures within the boundaries of the Metropolitan Government in connection with the Project to create approximately 200 full-time jobs and to provide other commercial opportunities for area citizens; and,

WHEREAS, pursuant to Tenn. Code Ann. § 7-53-305, all properties owned by the Board are exempt from ad valorem taxation in the State of Tennessee; and,

WHEREAS, pursuant to Tenn. Code Ann. § 7-53-305(b), the Metropolitan County Council (the "Council") has the power to delegate to the Board the authority to negotiate and accept from its lessees payments in lieu of ad valorem taxes, provided that such payments are in furtherance of the Board's public purposes; and,

WHEREAS, the benefits to the Metropolitan Government of the location of the Project within the boundaries of the Metropolitan Government, and in the exercise of its powers above, will provide an opportunity for the Board to acquire, by purchase, exchange, gift or lease, property that will be used with respect to the Project, to lease that property to AGLIC, and to enter into one or more agreements with AGLIC to accept payments in lieu of ad valorem taxes with respect to the property; and,

WHEREAS, the Board may only negotiate and accept payments in lieu of ad valorem taxes with authorization from the Council; and,

WHEREAS, it is in the interest and welfare of the citizens of the Metropolitan Government to delegate authority to the Board to negotiate and execute a payment in lieu of tax agreement with AGLIC and/or Highwoods.

NOW, THEREFORE, BE IT ENACTED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:

Section 1: That the Council of the Metropolitan Government finds that the Board's acceptance of payments in lieu of ad valorem real property taxes with respect to the Project is in furtherance of the Board's public purpose of maintaining and increasing employment opportunities, as set forth in Tenn. Code Ann. § 7-53-102, and the other public purposes described above.

Section 2: That the Metropolitan Government hereby delegates to the Board the authority to negotiate and execute an agreement for payments in lieu of real property taxes with respect to the Project for an initial period of three years, beginning on the effective date of a lease between the Board and AGLIC and/or Highwoods with respect to the Project, permitted to be extended for additional one year terms under the conditions set forth in the payment in lieu of tax agreement. The amount of the payments in lieu of real property taxes that shall be required with respect to the term and the Project shall be equal to 50% of the Standard Tax.

Section 3: That the term "Standard Tax" shall mean the amount of ad valorem real property tax that AGLIC and/or Highwoods would be required to pay with respect to a given tax year with respect to the real property that is then subject to the payment in lieu of tax arrangement authorized hereby if AGLIC owned such property. AGLIC and/or Highwoods shall be permitted to challenge the assessment of any real property that is then subject to the payment in lieu of tax arrangement authorized hereby in the same manner as if AGLIC and/or Highwoods owned such property.

Section 4: That the payment in lieu of tax arrangement authorized by this Ordinance shall apply to all real property comprising a portion of, or used at or in connection with, the Project.

Section 5: That the final version of the payment in lieu of tax agreement authorized by this Ordinance must be approved as to legality by the Department of Law of the Metropolitan Government prior to being executed by the Board.

Section 6: AGLIC and Highwoods will produce and manage a diversified business enterprise program to assist small, minority owned, and women owned business enterprises (“DBEs”) with respect to their participation in the construction of the Project. Such program will be designed with a DBE participation target of not less than 20% of the Project’s hard construction costs and shall be subject to the reasonable approval of the Metropolitan Government and will provide for quarterly reporting to the Metropolitan Council and the Minority Caucus of the status of DBE participation in the construction of the Project. The program will include a process to document all (i) good faith efforts with prospective bidders to reach out to DBE companies, (ii) joint venture or partnership participation by DBE companies, (iii) DBE participation by subcontractors, suppliers or joint ventures proposed by each bidder, (iv) any increases or decreases from an anticipated DBE participation by successful bidders, and (v) the level of payments to DBE’s of the Project’s hard construction costs.

Section 7: That all ordinances or resolutions, or parts thereof, in conflict with the provisions of this Ordinance are, to the extent of such conflict, hereby repealed.

Section 8: That this Ordinance shall take effect from and after its final passage, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.

LEGISLATIVE HISTORY
Introduced:	May 19, 2015
Passed First Reading:	May 19, 2015
Referred to:	Budget & Finance Committee
Passed Second Reading:	June 2, 2015
Deferred:	June 16, 2015
Substitute Introduced:	July 7, 2015
Passed Third Reading:	July 7, 2015 - Roll Call Vote
Approved:	July 8, 2015
By: