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Home My WebLink About2005-047 Tax Agrmt - Geppetto's TAX OBLIGATION SETTLEMENT AGREE:MENT BETWEEN, MacRoth, Inc., an Oregon Corporation dba Geppetto's, and Ronald Roth and Kathleen MacMichael, individual shareholders and officers of MacRoth, Inc., Geptoo, Inc, and Oregon Corporation dba Plaza Cafe, and Ronald Roth, Kathleen MacMichael and Mark Rosenkranz, individual shareholders and officers of Geptoo, Inc., hereinafter collectively referred to as "Taxpayers" AND The City of Ashland, an Oregon Municipal Corporation, hereinafter referred to as "City." DATED This "3/ day of March, 2005. Premises: 1. Taxpayers operate two local restaurants within the City of Ashland. 2. City imposes a tax on the sale of prepared foods and bt::verages. 3. Kathleen MacMichael suffered an accidental injury to her knee in March 2001, that resulted in financial hardship for Taxpayers. 4. As a result of the financial hardships, Taxpayers have been delinquent in payment 5. Prior to January 6, 2004, payments received were applied first to outstanding penalties and interest, then to the underlying taxes. This would result in continued delinquencies and the additional imposition of penalties unless a covered entity paid all delinquent taxes, penalties in interest in full. 6. On January 6, 2004, the City of Ashland adopted Ordinance No. 2903, which changed the Ashland Municipal Code to allow a covered entity to make period specific payments, thus limiting the penalties to only those periods in which a covered entity did not pay their tax on time. 7. Taxpayers currently have outstanding, unsatisfied judgments with a balance as of January 31, 2005 as follows: a. Geppetto' s b. Plaza Cafe $22,721.24 $15,860.52 In addition, taxpayers are currently delinquent on the D)llowing periods with amounts current to January 31,2005 for which suit has: been filed: Settlement Agreement G:\legal\Mike\Food & Beverage Tax\TAX OBLIGATION SETTLEMENT AGREEMENT-l.doc Page - 1 a. Geppetto's April 2004 $2,916.81 Oct/Nov 2004 $ 750.25 b. Plaza Cafe Mar/ Apr 2004 $3,195.38 August 2004 $2,706.67 Sept/Oct 2004 $4,002.46 Also in addition, Taxpayers have not paid the food and beverage tax for the months of November 2004 and December 2004 for the Plaza Cafe. Taxpayer has submitted returns for the tax due for these periods of$397.83 for the month of November 2004 and $831.29 for the month of December 2004. 8. Since the accident in 2001, Taxpayers have incurred late penalties on delinquent food and beverage tax payments that have either been paid, included in a court judgment against Taxpayers or are still owing in the following amounts: a. Geppetto's $12,879.65 b. Plaza Cafe $ 4,697.72 9. Taxpayers desire to propose a settlement to take care of the outstanding taxes, penalties and interest. NOW THEREFORE, THE PARTIES AGREE 1. The premises are deemed true and are herein incorporated by reference. 2. So long as Taxpayers comply with the terms and conditions of this agreement, City agrees to stay collection of an amount equivalent to the total amount of penalties assessed against Geppetto' s and Plaza Cafe for a period of five years from the date hereof. 3. So long as Taxpayers comply with the terms and conditions of this agreement, City agrees to stay collection of $1,900.00 for a period of five years from the date hereof. Said amount is an estimated adjustment to accommodate some periods in which estimates of taxes owed for particular tax periods may have exceeded the actual amount of taxes collected for those: periods 4. In the event that Taxpayers fulfill all of the terms and conditions of this agreement, at the end of the five year term of this agret::ment, City will forgive the deferred collection amounts set forth in paragraphs 2 and 3 above. 5. After the deferral of the amounts set forth in paragraphs 2 and 3 above, Taxpayers still owe $33,905.08 in unpaid taxes and int,erest. This amount shall hereinafter be referred to as the base amount. Taxpayers agree to pay the base amount with interest at the rate of three fourths of one percent (0.75%) per month as follows: Settlement Agreement G:\legal\Mike\Food & Beverage Tax\TAX OBLIGATION SETTLEMENT AGREEMENT-l.doc Page - 2 6. a. In the event Taxpayers sell the Plaza Cafe, Taxpayt~rs shall, from the proceeds of the sale, pay the total outstanding base amount plus any accrued interest within 15 days of the date the sale doses. b. Until such time as the Plaza Cafe is sold, if at all, Taxpayers agree to pay the base amount plus accrued interest, by making payments as follows: $703.81 per month, beginning July 1, 2005, until all amounts, including principal and interest are paid. Payments shall be applied first to accrued interest, then to the principal amount. There shall be no penalty for early payments. Any full payments rec.eived early may be used to offset future \ payments due. 11 2S'\J wt f()rv bD ~t; A ~ dafo, ~reJ>Dj ,,:\}J) To secure Taxpa~f"~bligation to comply with the terms and provisions of ..-'" \ this agreement,~p~;ers agree to execute a mortgage in the favor of the City ~ j} of Ashland against the real property located at 7024 Old Highway 99 South, f~ :1' \ Ashland, Oregon, Township 40 South, Range 2 East of the Willamette ' Meridian, Section 20, Tax Lot 800, more particularly described in the attached Exhibit A and hereinafter referred to as the "Security Property." When all obligations under the terms of this agreement have been paid, City will execute a release of mortgage for the Security Property. 7. Taxpayers agree to remain current on all Food and Beverage Tax payments coming due from the date of this agreement for a period five years from the date hereof for both Geppetto' s and Plaza Cafe. In the event Taxpayers sell either/or both restaurants and retain no ownership intenest, either individually or corporately, Taxpayers shall be excused from compliance with this paragraph for the particular restaurant sold for any tax reporting periods after the date of the sale. 8. Time is of the essence in this agreement. 9. In the event Taxpayers default on any of Taxpayers' obligations pursuant to the terms and conditions of this agreement, all sums due and owing under this agreement, including the amounts deferred under paragraphs 2 and 3, shall become immediately due and payable and the City may pursue any remedies under this agreement, at law, or in equity to collect such sums. 10. In the event the City must file suit in a court of law due: to a default in the payment or performance of any of its terms, the defaulting party shall pay, the prevailing party's actual fees and expenses together with reasonable attorney fees. 11. This agreement shall be governed and interpreted in accordance to the laws of the State of Oregon. Settlement Agreement G:\legal\Mike\Food & Beverage Tax\T AX OBLIGATION SETTLEMENT AGREEMENT -l.doc Page - 3 12. All remedies under this Agreement are cumulative and not exclusive. Any election to pursue one remedy shall not preclude the exercise of any other remedy. No delay or omission in exercising any right or remedy shall impair the full exercise of that or any other right or remedy or constitute a waiver of the default. The terms and conditions of this agreement may only be waived in writing, signed by the party waiving. Any waiver of any default in any term or condition shall not be construed to be a waiver of any additional defaults of that term or condition or of any other term or condition of this agreement. IN WITNESS WHEREOF, the parties hereby agree. City of Ashland TAXPAYERS ~ j ~ A- I~ Z~~--- Ronald Roth k~ tf&~c~/ Kathleen MacMichad ~"'V-\- W. Morrison, ayor ;tbA~48(/~47?~ Mark Rosenkranz STATE OF OREGON ) COUNTY OF JACKSON ) This instrument was acknowledged before me on 3 -3 ;-.. D ~~ by Ro Notar P:~l~t~------ My commission expires: OFFICIAL SEAL o FENSTERMAKER NOTARY PUBLIC OREGON COMMISSION NO 377699 MY COMMISSION EXPIRES FEBRUARY 23 2008 ",- -~ ~ !'~.... C'-- STATE OF OREGON ) COUNTY OF JACKSON ) This instrument was acknowledged before me on 3 ~ 3/- ~)S: by Kathleen MacMichael. ........, ... ~- ..~ c:: ____-::: OFFICIAL SEAL o FENSTERMAKER NOTARY PUBLIC OREGON COMMISSION NO 377699 MY COMMiSSION PPIRES FEBRUARY 23 2008 "'"--- "- Settlement Agreement G:\legal\Mike\Food & Beverage Tax\TAX OBLIGATION SETTLEMENT AGREEMENT-I.doc Page - 4 ~ NOTAA .. COM~ MY COMMISSION STATE OF OREGON ) COUNTY OF JACKSON ) This instrument was acknowledged before me on~(Jc..11 3J liJJ.)--by Mark Rosenkranz. ~J~dfl( <-Notary Public for Oregon My commission expires: .. OFFICIAL SEAL ,- . JANET SMITH \""ir) NOTARY PUBLIC - OREGON ...... '..... COMMISSION NO. 380669 MY COMMISSION EXPIRES JULY 17. 2008 Settlement Agreement G:\legal\Mike\Food & Beverage Tax\TAX OBLIGATION SETTLEMENT AGREEMENT-l.doc -.- I /'>-J Y /" I () )FFICIAL SEAL IANET SMITH Y PUBLIC - OREGON 11SSION NO. 380669 EXPIRES JULY 17.2008 Page - 5 EXHIBIT A A parcel of Property in Jackson County Oregon more particularly described as: Beginning at the Northeast corner of the North Half of the Southeast Quarter of Sec. 20, Twp. 40 South, Range 2 East of the W.M., in JCO; thence South on the East line of said Section, 808 feet to the center line of the Pacific Highway; thence following courses and distances down said center line, North 700 21' West 64 feet; thence North 850 02' West 253 feet; thence on the arc of a 36 degree curve to the right, the chord of which curve bears North 330 42' West 235.3 feet; thence leaving the Pacific Highway North 370 42' West 753 feet to the North line of said North Half of the Southeast Quarter; thence East 860 feet, more or less, to the point of beginning. EXCEPTING therefrom the following described premises, to-wit: Beginning at a point on the East and West center line of Sec. 20, Twp. 40 South, Range: 2 East of the W.M., in JCO, said point being 295 feet west of the East Quarter corner of said Section 20; said point also being 100 feet distant Southeasterly from (when measured at right angles to) the relocated center line of the Pacific Highway at Engineer's Station 519+32.6; thence South 360 19 feet East, a distance of 30 feet; thence South 530 41 ' West, parallel to and 130 feet distant from said center line, a distance of 167.4 feet; thence North 360 19' West, a distance of30 feet; thence South 530 41' West, parallel to and 100 feet distant from, said center line a distance of 282.3 feet to the Southwesterly line of said property; said point being opposite and 100 feet distant from Engineer's Center Station 523+82.3; thence North 370 42' West, along said property line, a distance of330.8 feet to the Northwest corner of said property; thence South 890 32' East along the North line of said property, 564.6 feet to the point of beginning, being land described in Vol. 210, page 406, Deed Records of JCO. Settlement Agreement G:\legal\Mike\Food & Beverage Tax\TAX OBLIGATION SETTLEMENT AGREEMENT-I.doc Page - 6