City council members agreed Monday night to requests by a German manufacturing firm to change a key provision in negotiations to bring the company to the Garrison Oak Technical Park, east of the city.
As part of previous negotiations with the firm, Uzin Utz AG, council had asked for a 15-year “clawback” provision, where the company would repay the city for the full market value of the property, approximately $315,000, should the company leave within that time.
However, council later extended that provision to 25 years, a move that raised concerns with the company.
Uzin Utz manufactures flooring products for numerous European markets and is expanding into the United States. The company, founded in 1911 and based in the city of Ulm, reported sales revenue in 2012 of just over 207 million Euros (approximately $277 million).
City Manager Scott Koenig reported he had continued negotiations on Aug. 13 with Philipp Utz, president of Uzin Utz Manufacturing, North America, and his attorneys regarding the sale of the 10.86-acre lot in the Garrison Oak park. City council had previously approved sale of the property, which Uzin Utz said would be the site of a facility valued between $8 million and $10 million, that eventually could employ up to 23 people.
As part of an incentive package to bring the company to Dover, council also agreed to a price of $1,000 an acre, even though the land has an appraised value of approximately $35,000 per acre. The proposal included the 15-year clawback provision.
When council extended the clawback requirement to 25 years, it included a scaled back repayment plan for years 16 through 25. For example, if the company left after 16 years, it only would have to pay approximately $283,000 to the city; that figure would have been reduced to zero by the 25th year.
Koenig said that change proved to be a stumbling block in his negotiations.
“I can’t say if the clawback will make or break this, but it was of concern to Mr. Utz,” he said. “He has asked me to bring it back to council for reconsideration.”
Koenig noted the city still would realize a $67,949 benefit in annual utility revenue; Uzin Utz also would pay less than the estimated $21,152 in property taxes for the first 10 years the plant operates in Dover, although that figure would increase to the full amount after the first decade.
Overall, he noted, the deal would prove beneficial to the city by helping to populate the Garrison Oak property and providing an incentive for other companies to move in.
In a 7-0 vote, council ultimately agreed to return to the original 15-year time frame for the clawback provision.
Councilmen David Anderson, who is deployed to Afghanistan, and Bill Hare, were not at the meeting.
Page 2 of 2 - In other actions, the city’s Legislative, Finance and Administration Committee earlier that night approved a resolution calling for action to fight gang activity in the city. The proposal was developed by the city’s Human Relations Commission.
The committee also approved a change altering the commission’s meeting schedule, reducing it to five per year, and downsizing the commission’s membership from 15 to nine. The panel would be made up of two commissioners from each of the city’s four council districts, plus one at-large member.
That ordinance will be subject to a public hearing before a vote to adopt or reject the legislation is made by the full council.