For City Council Meeting [October 12, 2021]
TO: Honorable City Council
APPROVAL: Marcus Fuller, City Manager
FROM: Marcus Fuller, City Manager
Title
Request City Council to Approve a First Amendment to the Location Agreement with Medline Industries, LP.
Body
BACKGROUND:
The City and Medline entered into a Location Agreement, dated as of December 8, 2015 ("Agreement"), pursuant to which the City provided incentives for Medline's establishment, location, and operation of a Sales Office (as defined in the Agreement) in the City. At the time the Agreement was approved Medline was organized as an Illinois corporation. Medline has now converted into a limited partnership under Illinois state law.
As a result of the conversion, the legal entity name of Medline has changed from Medline Industries, Inc. to Medline Industries, LP. Neither Medline's federal identification number nor its California Department of Tax and Fee sales tax account number will change because of the conversion to a Limited Partnership. This is an important fact and the basis for the recommendation to approve the First Amendment recognizing the change in ownership - according to Medline and the City Attorney's review, the point-of-sale and sales tax generator at the Rialto location will not change as a result of this action.
The Agreement requires the City's written approval to amend the Agreement (i) to reflect Medline's new name and form of organization, and (ii) because the conversion results in limited partners having an ownership interest in Medline.
ANALYSIS/DISCUSSION:
Medline previously sold and distributed products in California through a subsidiary located in Ontario, California. In 2015, Medline reorganized its California sales and distribution by establishing its California sales office in Rialto. Pursuant to the Agreement the City provides economic assistance to Medline as consideration for locating in Rialto and the City benefits from being the point of sale for Medline'...
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