15 - Agreement to terminate a tax abatement with T& K Machine, Inc. (Aequs Aero Machine, Inc)

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Item No. 15 TO: City Council Gene Anderson, Interim City Manager FROM: Stephanie H. Harris, City Attorney SUBJECT: Document terminating 2012 Tax Abatement Agreement with T & K Machine, Inc., now known as Aequs Aero Machine, Inc. DATE: December 2, 2019 BACKGROUND: On October 14th, Council directed me to prepare documents to terminate the November 12, 2012 Tax Abatement Agreement with T & K Machine, which has been succeeded in interest by Aequs Aero Machine. As you will recall, due to market conditions and an acquisition of T & K Machine by Aequs, the company was unable to meet its obligations under the agreement. Aequs has agreed to the termination of the abatement agreement, which is due to expire on December 31, 2019, and in order to assist the company with its financial situation, the City has agreed to suspend making a demand for taxes abated under the terms of the agreement until after April 1, 2020. Because T & K/Aequs made only a small portion of the required improvements, taxes actually abated under the agreement were less than $9,000.00. STATUS OF ISSUE: Council will need to approve a resolution authorizing the mayor to sign the attached agreement to terminate the tax abatement agreement with T & K/Aequs. BUDGET: In 2020, Aequs will repay the City the taxes abated under the tax abatement agreement in the sum of approximately $9,000.00. RECOMMENDATION: Approve a resolution approving the attached resolution and agreement terminating the 2012 tax abatement agreement with T & K Machine, Inc., now known as Aequs Aero Machine, Inc.