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IDA approves lease with SafeGage tied to $6 million grant and job, investment benchmarks
Summary
The Hardee County Industrial Development Authority approved a 10-year triple-net lease with SafeGage American Manufacturing Inc. that is tied to a $6 million state grant and performance metrics including job creation and capital investment; the agreement includes quarterly reporting and a personal guarantee.
The Hardee County Industrial Development Authority approved a lease-purchase agreement with SafeGage American Manufacturing Inc., tying the lease to a $6,000,000 state grant and to company performance benchmarks, agency staff said.
Sarah, an IDA staff member, told the authority the agreement covers a 10-year, triple-net lease for construction of the building shell paid for from the $6,000,000 grant; SafeGage would be responsible for the interior build-out. "We're basing that base rent calculation off of 7% of our investment, which in this case is the $6,000,000 grant award," Sarah said during the meeting.
The lease ties both parties to commitments made in the grant award application. According to Sarah, SafeGage committed under the grant to create 84 jobs and make a minimum capital investment of $10,000,000; the contract includes provisions for financial penalties if those metrics are not met. (An earlier executive report referenced the grant as expected to bring "over 184 new jobs," a separate speaker said; the lease discussion cites the 84-job commitment within the grant award application.)
To help the IDA monitor performance, the lease requires SafeGage to provide quarterly financial statements and quarterly employer return reports. The agreement also includes a personal guarantee from SafeGage to secure any penalties tied to the grant award; that guarantee becomes effective 45 days after a certificate of occupancy is issued.
Because the state holds an interest in the property for the first five years of the grant, the option to purchase the property will not be available to SafeGage until after that five-year period. If, after five years, SafeGage demonstrates it met the job and investment metrics, it may exercise an option to purchase; lease payments may be applied to the purchase price and the purchase price would be based on an appraisal at the time of sale, Sarah said.
Board members asked about build and reimbursement timelines. Sarah said the authority had not begun detailed design and estimated a roughly 24-month buildout, subject to design and permitting. She also described the state's reimbursement schedule: design and engineering costs are reimbursable in 30% increments; construction is reimbursable in 10% increments.
A motion to approve the SafeGage lease with option to purchase passed by voice vote.
Votes at the meeting were taken by voice; the board recorded the motion as approved in the meeting minutes.
