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HomeMy WebLinkAboutContract 48535 CITY SECmmy CONTRMT NO, \ STATE OF TEXAS § COUNTY OF TARRANT § TAX ABATEMENT AGREEMENT This TAX ABATEMENT AGREEMENT ("Agreement") is entered into by and between the CITY OF FORT WORTH, TEXAS (the "City"), a home rule municipality organized under the laws of the State of Texas, and ANDREWS DISTRIBUTING COMPANY OF NORTH TEXAS, LLC, a Texas limited liability company ("Company"). RECITALS A. On May 20, 2014, the City Council adopted Resolution No. 4322-05-2016, stating that the City elects to be eligible to participate in tax abatement and setting forth guidelines and criteria governing tax abatement agreements entered into between the City and various parties, entitled "General Tax Abatement Policy" (the "Policy"), which is incorporated herein by reference and hereby made a part of this Agreement for all purposes. B. The Policy contains appropriate guidelines and criteria governing tax abatement agreements to be entered into by the City as contemplated by Chapter 312 of the Texas Tax Code, as amended (the"Code"). C. On April 12, 2016 the City Council adopted Ordinance No. 22163-04-2016 (the "Ordinance") establishing Tax Abatement Reinvestment Zone No. 92, City of Fort Worth, Texas (the"Zone"). D. Company owns or is under contract to purchase approximately 30.446 acres of real property at 100 580 Northeast Loop 820, which is located within the Zone and more specifically described in Exhibit "A" (the "Land"), attached hereto and hereby made a part of this Agreement for all purposes. Contingent upon receipt of the tax abatement herein, Company intends to construct a beverage distribution center, with office space and a sign shop (more specifically defined herein as the "Required Improvements"), and to install certain taxable business personal property on the Land, all as more specifically set forth in this Agreement. E. On January 7, 2016 Company submitted an application for tax abatement (the "Application") to the City concerning Company's plans for development of the Land, including construction of the Required Improvements, which Applicaf3 96 7 $9 0 Page 1 OFFICIAL RECORD Tax Abatement Agreement between CITY SECRETARY -� City of Fort Worth and Andrews Distributing Company of North Tex is,LLC .WORTH,TX a N � attached hereto as Exhibit "B" and hereby made a part of this Agreement for all purposes. F. The contemplated use of the Land and the terms of this Agreement are consistent with encouraging development of the Zone and generating economic development and increased employment opportunities in the City, in accordance with the purposes for creation of the Zone, and are in compliance with the Policy, the Ordinance and other applicable laws, ordinances,rules and regulations. G. The provisions of this Agreement, and the proposed use of the Land and nature of the proposed Required Improvements, as defined herein, satisfy the eligibility criteria for commercial/industrial tax abatement pursuant to Section 4.2 of the Policy. Although the Effective Date of this Agreement may postdate the expiration of the Policy, the City Council has taken all action legally required to grant the Abatement set forth herein, and the terms and conditions of the Policy in place at that time govern this Agreement. H. Written notice that the City intends to enter into this Agreement, along with a copy of this Agreement, has been furnished in the manner prescribed by the Code to the presiding officers of the governing bodies of each of the taxing units that have jurisdiction over the Land. NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: AGREEMENT 1. INCORPORATION OF RECITALS. The City Council has found, and the City and Company hereby agree, that the recitals set forth above are true and correct and form the basis upon which the parties have entered into this Agreement. 2. DEFINITIONS. In addition to terms defined in the body of this Agreement, the following terms shall have the definitions ascribed to them as follows: Abatement means the abatement of a percentage (not to exceed fifty percent (50%) in any year of the Abatement Term) of the City's incremental ad valorem real property taxes on any improvements located on the Land (but not on the Land itself, which taxes shall not be subject to Abatement hereunder) and of the City's incremental Page 2 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC ad valorem taxes on New Taxable Tangible Personal Property, all calculated in accordance with this Agreement. Abatement Term means the term of five (5) consecutive years, commencing on January 1 of the second full calendar year following the year in which the Completion Date occurred and expiring on December 31 of the fifth (5th) year thereafter, in which Company will receive the Abatement in accordance with this Agreement. Affiliate means all entities, incorporated or otherwise, under common control with, controlled by or controlling Company. For purposes of this definition, "control" means fifty percent(50%) or more of the ownership determined by either value or vote. Application has the meaning ascribed to it in Recital E. Central City means that area in the corporate limits of the City within Loop 820 (i) consisting of all Community Development Block Grant ("CDBG") eligible census block groups; (ii) all state-designated enterprise zones; and (iii) all census block groups that are contiguous by seventy-five percent (75%) or more of their perimeter to CDBG- eligible block groups or enterprise zones, as well as any CDBG-eligible block in the corporate limits of the City outside Loop 820, as more specifically depicted in the map of Exhibit "C", attached hereto and hereby made a part of this Agreement for all purposes. Central City Employment Commitment has the meaning ascribed to it in Section 4.7. Central City Employment Percentage has the meaning ascribed to it in Section 6.6. Central City Resident means an individual whose primary residence is at a location within the Central City. Certificate of Completion has the meaning ascribed to it in Section 5. Code has the meaning ascribed to it in Recital B. Completion Date means the date as of which all occupiable space within the Required Improvements have received a temporary or permanent certificate of occupancy. Completion Deadline means December 31, 2017, subject to extension due to delays directly attributable to Force Majeure Events. Compliance Auditing Term means the term of five (5) consecutive years, commencing on January 1 of the first full calendar year following the year in which the Completion Date occurred and expiring on December 31 of the fifth (5th) year thereafter, in which the City will verify and audit Company's compliance with the various Page 3 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC commitments set forth in Section 4 that form the basis for calculation of the amount of each annual Abatement percentage hereunder. Construction Costs means Hard Construction Costs, plus costs of supplies and materials, engineering fees, architectural and design fees, third party consultants, including attorneys and environmental consultants, and zoning and permit fees. Construction Costs specifically excludes any property acquisition costs. Director means the director of the City's Economic Development Department. Effective Date has the meaning ascribed to it in Section 3. Event of Default means a breach of this Agreement by a party, either by act or omission, as more specifically set forth in Section 7 of this Agreement. Force Maieure Events means causes and events that are beyond Company's control, including, but not limited to, strikes, lockouts or labor shortages, embargo, riot, war, revolution, terrorism, rebellion, insurrection, fire, flood, natural disaster, interruption of utilities, acts of God, or delays by the City (based on the then-current workload of the City department(s) responsible for undertaking the activity in question) in issuing any permits, consents or certificates of occupancy or conducting any inspections of or with respect to the Land; provided, however, that in no event will delays caused by Company's failure to obtain adequate financing to complete the Required Improvements in accordance with this Agreement by the Completion Deadline be deemed to be a Force Majeure Event. Fort Worth Certified M/WBE Company means a minority or woman-owned business that has received certification as either a minority business enterprise (MBE), a woman business enterprise (WBE) or a disadvantaged business enterprise (DBE) by the North Central Texas Regional Certification Agency (NCTRCA) and that has a principal business office located within the corporate limits of the City that performs a commercially useful function and that provides services for which Company is seeking credit under this Agreement. Fort Worth Company means a business that has a principal office located within the corporate limits of the City that performs a commercially useful function and that provides the services for which Company is seeking credit under this Agreement. Fort Worth Construction Commitment has the meaning ascribed to it in Section 4.3. Fort Worth Construction Percentage has the meaning ascribed to it in Section 6.2. Fort Worth Employment Commitment has the meaning ascribed to it in Section 4.6. Page 4 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC Fort Worth Employment Percentage has the meaning ascribed to it in Section 6.5. Fort Worth Resident means an individual whose principal place of residence is at a location within the corporate limits of the City. Fort Worth Supply and Service Spending Commitment has the meaning ascribed to it in Section 4.8. Fort Worth Supply and Service Percentage has the meaning ascribed to it in Section 6.7. Full-time Equivalent Job means a job provided to one(1) or more individuals by Company on or in support of the Land for, collectively, at least 1820 hours per year. For example, in a case where one individual works on or in support of the Land for 1000 hours per year and another individual works on or in support of the Land for 820 hours per year, that work will be counted under this Agreement as one (1) Full-time Equivalent Job. For the avoidance of doubt, "in support of the Land" means the specific employee hours being coded in the "Company" payroll system to the "Land", as defined in Recital D. Hard Construction Costs means actual site development and construction costs, including directly-related contractor fees, green/energy efficient building enhancements and costs of supplies and materials. Land has the meaning ascribed to it in Recital D. Legal Requirements means federal, state and local laws, ordinances, rules and regulations, including, but not limited to, all provisions of the City's charter and ordinances, as amended, as of the Effective Date. M/WBE Construction Commitment has the meaning ascribed to it in Section 4.4. M/WBE Construction Percentage has the meaning ascribed to it in Section 6.3. M/WBE Supply and Service Spending Commitment has the meaning ascribed to it in Section 4.9. M/WBE Supply and Service Percentage has the meaning ascribed to it in Section 6.8. New Taxable Tangible Personal Property means any personal property other than inventory or supplies that (i) is subject to ad valorem taxation by the City; (ii) is located on the Land; (iii) is owned or leased by Company and used by Company for the Page 5 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC f business purposes outlined in this Agreement; and (iv) was not located in the City prior to the Effective Date of this Agreement. Ordinance has the meaning ascribed to it in Recital C. Overall Employment Commitment has the meaning ascribed to it in Section 4.5. Overall Employment Percentage has the meaning ascribed to it in Section 6.4. Overall Improvement Percentage has the meaning ascribed to it in Section 6.1 Personal Property Improvement Commitment has the meaning ascribed to it in Section 4.2. Policy has the meaning ascribed to it in Recital A. Real Property Improvement Commitment has the meaning ascribed to it in Section 4.1. Records has the meaning ascribed to it in Section 4.12. Required Improvements means a beverage distribution center, with office space and a sign shop, all constructed on the Land, as verified in the Certificate of Completion issued by the Director in accordance with Section 5 of this Agreement. Supply and Service Expenditures means all those discretionary expenditures made by Company directly for the operation and maintenance of the Land and any improvements thereon, excluding utility service costs. Term has the meaning ascribed to it in Section 3. Zone has the meaning ascribed to it in Recital C. 3. TERM. This Agreement shall take effect on the date as of which both the City and Company have executed this Agreement (the "Effective Date") and, unless terminated earlier in accordance with its terms and conditions, shall expire simultaneously upon expiration of the Abatement Term (the "Term"). Page 6 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC 4 4. COMPANY'S OBLIGATIONS AND COMMITMENTS. 4.1. Real Property Improvements. At least Thirty-five Million Dollars ($35,000,000.00) in Construction Costs for the Required Improvements must have been expended on or before the Completion Deadline (the "Real Property Improvement Commitment"). Notwithstanding anything to the contrary herein, if the Real Property Improvement Commitment is not met, an Event of Default will occur, as set forth in Section 7.1 of this Agreement. 4.2. Personal Property Improvements. New Taxable Tangible Personal Property having a value of at least Two Million Dollars ($2,000,000.00) must be in place on the Land by January 1 of the first full year following the year in which the Completion Date occurred, as determined solely by Tarrant Appraisal District or the appraisal district having jurisdiction over the Land at the time and reflected in the certified appraisal roll received by the City from such appraisal district in such year (the "Personal Property Improvement Commitment"). Notwithstanding anything to the contrary herein, if the Personal Property Improvement Commitment is not met, an Event of Default will occur, as set forth in Section 7.2 of this Agreement. 4.3. Construction Spending Commitment for Fort Worth Companies. By the Completion Date, the following amount must have been expended or caused to be expended with Fort Worth Companies: the greater of(i) Fourteen Million Dollars ($14,000,000.00) in Hard Construction Costs for the Required Improvements or (ii) at least forty percent (40%) of all Hard Construction Costs for the Required Improvements, regardless of the total amount of such Hard Construction Costs (the "Fort Worth Construction Commitment"). Construction Cost expenditures for the Land that are made to a general contractor which is a Fort Worth Company shall be counted toward the Fort Worth Construction Commitment, regardless of whether any subcontractors of such general contractor are themselves Fort Worth Companies. 4.4. Construction Spendine Commitment for Fort Worth Certified M/WBE Companies. By the Completion Date, Company must have expended or caused to be expended with Fort Worth Certified M/WBE Companies: the greater of(i) Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000.00) in Hard Construction Costs for the Required Improvements or (ii) at least twenty-five percent (25%) of all Hard Construction Costs for the Required Improvements, regardless of the total amount of such Construction Costs (the "M/WBE Construction Commitment"). Hard Construction Cost expenditures made with Page 7 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC Fort Worth Certified M/WBE Companies shall also be counted as Hard Construction Cost expenditures made with Fort Worth Companies for purposes of measuring the Fort Worth Construction Commitment, as set forth in Section 4.3. Construction Cost expenditures for the Land that are made to a general contractor which is a Fort Worth Certified M/WBE Company shall be counted toward the M/WBE Construction Commitment, regardless of whether any subcontractors of such general contractor are themselves Fort Worth Certified M/WBE Companies. 4.5. Overall Employment Commitment. Beginning in the first full calendar year following the year in which the Completion Date occurs, and in each year thereafter for the remainder of the Compliance Auditing Term, Company continuously must provide and fill at least four hundred sixty (460) Full-time Equivalent Jobs (the "Overall Employment Commitment"). 4.6. Employment Commitment for Fort Worth Residents. Beginning in the first full calendar year following the year in which the Completion Date occurs, and in each year thereafter for the remainder of the Compliance Auditing Term, Company continuously must provide and fill at least fifty percent (50%) of all Full-time Equivalent Jobs, regardless of the total number of such Full-time Equivalent Jobs, with Fort Worth Residents (the "Fort Worth Employment Commitment"). Full-time Equivalent Jobs held by Fort Worth Residents will also be counted as Full-time Equivalent Jobs for purposes of measuring the Overall Employment Commitment outlined in Section 4.5. 4.7. Employment Commitment for Central City Residents. Beginning in the first full calendar year following the year in which the Completion Date occurs, and in each year thereafter for the remainder of the Compliance Auditing Term, Company continuously must provide and fill at least twenty-five percent (25%) of all Full-time Equivalent Jobs, regardless of the total number of such Full-time Equivalent Jobs, with Central City Residents (the "Central City Employment Commitment"). Full-time Equivalent Jobs held by Central City Residents will also be counted as Full-time Equivalent Jobs for purposes of measuring the Overall Employment Commitment outlined in Section 4.5 and the Fort Worth Employment Commitment outlined in Section 4.6. 4.8. Supply and Service Spending Commitment for Fort Worth Companies. Beginning in the first full calendar year following the year in which the Completion Date occurs, and in each year thereafter during the Compliance Auditing Term, at least the greater of(i) One Hundred Thousand Eight Hundred Dollars ($100,800.00) or (ii) thirty percent (30%) of its Supply and Service Page 8 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC Expenditures, regardless of the total amount of such Supply and Service Expenditures must be expended with Fort Worth Companies (the "Fort Worth Supply and Service Spending Commitment"). 4.9. Supply and Service Spending Commitment for Fort Worth Certified M/WBE Companies. Beginning in the first full calendar year following the year in which the Completion Date occurs, and in each year thereafter during the Compliance Auditing Term, at least the greater of (i) Eighty-four Thousand Dollars ($84,000.00) or (ii) twenty-five percent (25%) of its Supply and Service Expenditures, regardless of the total amount of such Supply and Service Expenditures must be expended with Fort Worth Certified M/WBE Companies (the "M/WBE Supply and Service Spending Commitment"). 4.10. Reports and Filings. 4.10.1. Construction Spending Reports. 4.10.1.1. Ouarterly Reports. From the Effective Date until the Completion Date, Company must provide the Director with a quarterly report in a form reasonably acceptable to the City that specifically outlines the then-current aggregate Construction Costs expended for the Required Improvements, together with the then-current aggregate Construction Costs for the Required Improvements expended with Fort Worth Companies and with Fort Worth Certified M/WBE Companies. Company agrees to meet with the City's M/WBE Office as reasonably necessary for assistance in meeting or exceeding M/WBE Construction Commitment and to address any related concerns that the City may have. 4.10.1.2. Final Construction Reports. Within sixty (60) calendar days following the Completion Date, in order for the City to assess whether at least Thirty-five Million Dollars ($35,000,000.00) in Construction Costs was expended for the Required Improvements, and the extent to which the Fort Worth Construction Commitment and the M/WBE Construction Commitment were met, Company must provide the Director with a report in a form reasonably acceptable to the City that specifically outlines (i) the total Construction Costs and Hard Construction Costs expended for the Required Improvements, (ii) the total Hard Construction Costs expended with Fort Worth Companies for the Required Improvements, and (iii) the total Hard Page 9 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC Construction Costs expended with Fort Worth Certified M/WBE Companies for the Required Improvements, together with supporting invoices and other documents necessary to demonstrate that such amounts were actually paid, including, without limitation, final lien waivers signed by the general contractor regarding the improvements covered by the report. 4.10.2. Annual Employment Report. On or before February 1 of the second full calendar year following the year in which the Completion Date occurs, and of each year thereafter for the remainder of the Compliance Auditing Term, in order for the City to assess the degree to which the Overall Employment Commitment, the Fort Worth Employment Commitment and the Central City Employment Commitment were met in the previous year, Company must provide the Director with a report in a form reasonably acceptable to the City that sets forth the total number of individuals, the total number of Fort Worth Residents, and the total number of Central City Residents who held Full- time Equivalent Jobs, each as of December 1 (or such other date requested by Company and reasonably acceptable to the City) of the previous calendar year, together with reasonable supporting documentation. 4.10.3. Annual Supply and Service Spending Report. On or before February 1 of the second full calendar year following the year in which the Completion Date occurs, and of each year thereafter for the remainder of the Compliance Auditing Term, in order for the City to assess the degree to which the Fort Worth Supply and Service Spending Commitment and the M/WBE Supply and Service Spending Commitment were met in the previous calendar year, Company must provide the City with a report in a form reasonably acceptable to the City that sets forth the aggregate Supply and Service Expenditures made during such year with Fort Worth Companies and Fort Worth Certified M/WBE Companies, together with reasonable supporting documentation. 4.10.4. General. Company will supply any additional information reasonably requested by the City that is pertinent to the City's evaluation of compliance with each of the terms and conditions of this Agreement. 4.11. Inspections. At any time during Company's normal business hours throughout the Term and following reasonable notice to Company, the City will have the right to inspect and evaluate the Land, and any improvements thereon, and Company will Page 10 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC provide or cause to be provided reasonable access to the same, in order for the City to monitor compliance with the terms and conditions of this Agreement. Company will reasonably cooperate with the City during any such inspection and evaluation. Notwithstanding the foregoing, Company shall have the right to require that any representative of the City be escorted by a Company representative or security personnel during any such inspection and evaluation. 4.12. Audits. The City will have the right throughout the Term to audit the financial and business records of Company that relate to the Required Improvements and the Land and any other documents necessary to evaluate compliance with this Agreement or with the commitments set forth in this Agreement, including, but not limited to construction documents and invoices (collectively "Records"). Company shall make all Records available to the City on the Land or at another location in the City acceptable to both parties following reasonable advance notice by the City and shall otherwise reasonably cooperate with the City during any audit. 4.13. Use of Land. The Land and any improvements thereon, including, but not limited to, the Required Improvements, must be used at all times during the Term of this Agreement for Company's lawful business operations, as set forth in this Agreement, and otherwise in a manner that is consistent with the general purposes of encouraging development or redevelopment of the Zone. 4.14. Abatement Application Fee. The City acknowledges receipt from Company of the required Application fee of Five Thousand Dollars ($5,000.00). Of such amount, Two Thousand Dollars ($2,000.00) is nonrefundable and shall be used by the City for the purposes set forth in the Policy. If construction work on the Required Improvements begins within one (1) year from the date of the Application, the remaining Three Thousand Dollars ($3,000.00) of such fee shall be credited to Company's benefit against any permit, impact, inspection, platting or other lawful fee required by the City in connection with the Required Improvements. If construction work for the Required Improvements does not begin within one (1) year from the date of the Application, Company will not receive a credit or refund of any portion of the fee. Any unused fee credit balance upon the Completion Date will be refunded by City to Company provided that Company request such refund in writing within ninety(90) calendar days following the Completion Date. Page I I Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC 5. CERTIFICATE OF COMPLETION. Within ninety (90) calendar days following receipt by the City of the final construction spending report for the Required Improvements submitted in accordance with Section 4.10.1.2, and assessment by the City of the information contained therein, if the City is able to verify that Construction Costs of at least Thirty-five Million Dollars ($35,000,000.00) were expended for Required Improvements by the Completion Date and that the Completion Date occurred on or before Completion Deadline, the Director will issue Company a certificate stating the aggregate amount of Construction Costs and Hard Construction Costs expended for the Required Improvements, as well as the amount of Hard Construction Costs expended specifically with Fort Worth Companies and Fort Worth Certified M/WBE Companies (the "Certificate of Completion"). The Certificate of Completion will serve as the basis for determining the extent to which the Fort Worth Construction Commitment and the M/WBE Construction Commitment were met. If the City determines, after receipt and assessment of the final construction spending report, that at least Thirty-five Million Dollars ($35,000,000.00) were not expended for the Required Improvements, the City shall notify Company in writing, in which case Company may file supplemental construction reports in accordance with Section 4.10.1 for the City's consideration at any time prior to the later of (i) the Completion Deadline or(ii) thirty(30) calendar days following notification by the City in accordance with this paragraph that at least Thirty-five Million Dollars ($35,000,000.00) were not expended for the Required Improvements (provided that such supplemental construction reports will be considered only for Construction Costs expended on or prior to the Completion Deadline), and the City will reassess whether at least Thirty-five Million Dollars ($35,000,000.00) were expended for the Required Improvements. So long as the City is able to verify that, on the basis of the construction reports filed hereunder, that at least Thirty-five Million Dollars ($35,000,000.00) were expended for the Required Improvements on or before the Completion Deadline, the City will issue a Certificate of Completion in accordance with this Section 5.1. 6. TAX ABATEMENT. Subject to the terms and conditions of this Agreement, provided that (i) Company expended at least Thirty-five Million Dollars ($35,000,000.00) in Construction Costs for the Required Improvements by the Completion Date, as confirmed in the Certificate of Completion issued by the Director in accordance with Section 5; (ii) the Completion Date occurred on or before the Completion Deadline, as confirmed in the Certificate of Completion issued by the Director in accordance with Section 5; and (iii) New Taxable Tangible Personal Property having a value of at least Two Million Dollars ($2,000,000.00) was in place on the Land by January 1 of the year following the year in which the Completion Date occurred, as determined solely by the appraisal district having jurisdiction over the Land at that time and reflected in the certified appraisal roll received by the City from such appraisal district in such year, Company will be entitled to Page 12 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC receive an Abatement in the first year of the Abatement Term and in each year thereafter for the remainder of the Abatement Term. The amount of each Abatement that Company is entitled to receive during such years will be a percentage of the City's ad valorem taxes on any improvements located on the Land (but not on the Land itself, which taxes shall not be subject to Abatement hereunder) and on New Taxable Tangible Personal Property attributable to increases in the value of such improvements and New Taxable Tangible Personal Property over their values for the 2016 tax year, which percentage will equal the sum of the Overall Improvement Percentage, the Fort Worth Construction Percentage, the M/WBE Construction Percentage, the Overall Employment Percentage, the Fort Worth Employment Percentage, the Central City Employment Percentage, the Fort Worth Supply and Service Percentage, and the M/WBE Supply and Service Percentage, as defined in Sections 6.1 through 6.8 (not to exceed fifty percent(50%), as follows: 6.1. Completion of Required Improvements (10%). Company will be entitled to receive a percentage of the Abatement equal to ten percent (10%) (the "Overall Improvement Percentage") on account of having met the Real Property Improvement Commitment in accordance with Section 4.1 and the Personal Property Improvement Commitment in accordance with Section 4.2. 6.2. Fort Worth Construction Cost Spending (Up to 5%). A percentage of the Abatement will be based on the extent to which the Fort Worth Construction Commitment, as outlined in Section 4.3, was met (the "Fort Worth Construction Percentage"). The Fort Worth Construction Percentage will equal the product of five percent (5%) multiplied by the percentage by which the Fort Worth Construction Commitment was met, which will be calculated by dividing the actual Hard Construction Costs expended for the Required Improvements by the Completion Date with Fort Worth Companies by the number of dollars comprising the Fort Worth Construction Commitment, as determined in accordance with Section 4.3. For example, if Company expends $38,000,000.00 in Hard Construction Costs, the Fort Worth Construction Commitment would be $15,200,000.00. If Company only expended $14,000,000.00 in Hard Construction Costs with Fort Worth Companies by the Completion Date, the Fort Worth Construction Percentage would be 4.6% instead of 5% (or .05 x [$14 million/$15.2 million], or .05 x .92' or .046). If the Fort Worth Construction Commitment was met or exceeded, the Fort Worth Construction Percentage will be five percent(5%). 6.3. Fort Worth M/WBE Construction Cost Spending(Up to 5%). A percentage of the Abatement will be based on the extent to which the M/WBE Construction Commitment, as outlined in Section 4.4 was met (the "NMBE Construction Percentage"). The M/WBE Construction Percentage will equal the product of five percent (5%)multiplied by the percentage by which Page 13 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC the M/WBE Construction Commitment was met, which will be calculated by dividing the actual Hard Construction Costs expended for the Required Improvements by the Completion Date with Fort Worth Certified M/WBE Companies by the number of dollars comprising the M/WBE Construction Commitment, as determined in accordance with Section 4.4. If the M/WBE Construction Commitment was met or exceeded, the M/WBE Construction Percentage will be five percent (5%). 6.4. Overall Employment(Up to 10%). A percentage of the Abatement will be based on the extent to which the Overall Employment Commitment, as outlined in Section 4.5, was met (the "Overall Employment Percentage"). The Overall Employment Percentage in a given year will equal the product of ten percent (10%) multiplied by the percentage by which the Overall Employment Commitment was met in the previous calendar year, which will be calculated by dividing the actual number of Full-time Equivalent Jobs provided on the Land in the previous year by four hundred sixty (460), which is the number of Full-time Equivalent Jobs constituting the Overall Employment Commitment. For example, if only 345 Full-time Equivalent Jobs were provided on the Land in a given year, the Overall Employment Percentage for the following year would be 7.5% instead of 10% (or .lox [345/460]), or .10 x .75, or .075. If the Overall Employment Commitment is met or exceeded in a given year, the Overall Employment Percentage for the following year will be ten percent (10%). 6.5. Fort Worth Employment(Up to 5%). A percentage of the Abatement will be based on the extent to which the Fort Worth Employment Commitment, as outlined in Section 4.6, was met (the "Fort Worth Employment Percentage"). The Fort Worth Employment Percentage for a given year will equal the product of five percent (5%) multiplied by the percentage by which the Fort Worth Employment Commitment was met in the previous calendar year, which will be calculated by dividing the actual number of Full-time Equivalent Jobs provided on the Land to Fort Worth Residents in the previous year by the number of Full-time Equivalent Jobs constituting the Fort Worth Employment Commitment in that year. For example, if Company provides and fills 500 Full-time Equivalent Jobs in a given year, the Fort Worth Employment Commitment for that year will, in accordance with Section 4.6, be 250 Full-time Equivalent Jobs (50% of 500 Full-time Equivalent Jobs). If in that year only 200 Full-time Equivalent Jobs were provided to Fort Worth Residents, the Fort Worth Employment Percentage for the following year would be 4% instead of 5% (or .05 x [200/250]), or .05 x .80, or .04. If the Fort Worth Employment Commitment is met or exceeded in a given year, the Fort Worth Employment Percentage for the following year will be five percent (5%). Page 14 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC 6.6. Central City Employment(Up to 5%). A percentage of the Abatement will be based on the extent to which the Central City Employment Commitment, as outlined in Section 4.7, was met (the "Central City Employment Percentage"). The Central City Employment Percentage for a given year will equal the product of five percent (5%) multiplied by the percentage by which the Central City Employment Commitment was met in the previous year, which will be calculated by dividing the actual number of Full-time Equivalent Jobs provided on the Land to Central City Residents in the previous year by the number of Full-time Equivalent Jobs constituting the Central City Employment Commitment in that year. If the Central City Employment Commitment is met or exceeded in a given year, the Central City Employment Percentage for the following year will be five percent (5%). 6.7. Fort Worth Supply and Service Spending (Up to 5%). A percentage of the Abatement will be based on the extent to which the Fort Worth Supply and Service Spending Commitment, as outlined in Section 4.8, was met (the "Fort Worth Supply and Service Percentage"). The Fort Worth Supply and Service Percentage for a given year will equal the product of five percent (5%) multiplied by the percentage by which the Fort Worth Supply and Service Spending Commitment was met in the previous calendar year, which will be calculated by dividing the actual Supply and Service Expenditures made in the previous calendar year with Fort Worth Companies by the Fort Worth Supply and Service Spending Commitment for that year. For example, if Company's Supply and Service Expenditures in a given year were $90,720.00, Company would not have met the minimum Fort Worth Supply and Service Spending Commitment for that year, which would be $100,800.00. Therefore, the Fort Worth Supply and Service Percentage for the following year would be 4.5% instead of 5% (or .05 x [$90,720/$100,800], or .05 x .90, or .045). If the Fort Worth Supply and Spending Commitment is met or exceeded in any given year, the Fort Worth Supply and Service Percentage for the following year will be five percent (5%). 6.8. Fort Worth M/WBE Supply and Service Spending (Up to 5%1. A percentage of the Abatement will be based on the extent to which the M/WBE Supply and Service Spending Commitment, as outlined in Section 4.9, was met (the "M/WBE Supply and Service Percentage"). The M/WBE Supply and Service Percentage for a given year will equal the product of five percent (5%) multiplied by the percentage by which the M/WBE Supply and Service Spending Commitment was met in the previous year, which will be calculated by dividing the actual Supply and Service Expenditures made in the previous calendar year with Fort Worth Certified M/WBE Companies by the M/WBE Supply and Service Spending Commitment for that year. If the M/WBE Supply and Spending Commitment is met or exceeded in any given year, the M/WBE Supply and Service Percentage for the following year will be five percent (5%). Page 15 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC 6.9. No Offsets. A deficiency in attainment of one commitment may not be offset by exceeding attainment in another commitment. For example, if Company failed to meet the M/WBE Construction Commitment by $5,000.00, but exceeded the Fort Worth Construction Commitment by $5,000.00, the percentage of Abatement available hereunder would still be reduced in accordance with Section 6.3 on account of Company's failure to meet the M/WBE Construction Commitment. 6.10. Abatement Limitations. In accordance with Section 11.5 of the Policy and notwithstanding anything to the contrary herein, Company's Abatement in any given year of the Abatement Term will be based (i) on the increase in the real property value of improvements on the Land over their value as of January 1, 2016, if any, up to a maximum increase of Fifty-two Million Five Hundred Thousand Dollars ($52,500,000.00) and (ii) on the increase in the value of New Taxable Tangible Personal Property located on the Land since January 1, 2016, if any, up to a maximum increase of Three Million Dollars ($3,000,000.00). In other words, with regard to the real property tax Abatement, in any year in which the taxable value of improvements on the Land exceeds (i) any value of improvements on the Land as of January 1, 2016 plus (ii) $52,500,000.00, Company's real property tax Abatement for that tax year will be capped and calculated as if the increase in the value of improvements on the Land since January 1, 2016 had only been $52,500,000.00. For example, and as an example only, if in a given year of the Abatement Term the value of improvements on the Land is $60,000,000.00 over their value as of January 1, 2016, Company would receive a maximum real property tax Abatement of fifty percent (50%) of$52,500,000.00 in valuation for that year and would pay full taxes on the $7,500,000.00 difference over the cap. Along the same lines, if the value of New Taxable Tangible Personal Property located on the Land in a given year of the Abatement Term is $4,000,000.00 over the value of that Property as of January 1, 2016, Company would receive a maximum Abatement on New Taxable Tangible Personal Property of fifty percent (50%) of$3,000,000.00 in valuation for that year and would pay full taxes on the $1,000,000.00 difference over the cap. 7. DEFAULT, TERMINATION AND FAILURE BY COMPANY TO MEET VARIOUS DEADLINES AND COMMITMENTS. 7.1. Failure to Meet Real Property Improvement Commitment. Notwithstanding anything to the contrary herein, if the Real Property Improvement Commitment, as outlined in Section 4.1, is not met, meaning that (i) at least Thirty-five Million Dollars ($35,000,000.00) in Construction Costs for the Page 16 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC Required Improvements were not expended by the Completion Date, or (ii) the Completion Date did not occur by the Completion Deadline, an Event of Default will occur and the City will have the right to terminate this Agreement, effective immediately, by providing written notice to Company without further obligation to Company hereunder. 7.2. Failure to Meet Personal Property Improvement Commitment. Notwithstanding anything to the contrary herein, if the Personal Property Improvement Commitment, as outlined in Section 4.2, is not met, meaning that New Taxable Tangible Personal Property having a value of at least Two Million Dollars ($2,000,000.00) was not in place at the Land by January 1 of the first full year following the year in which the Completion Date occurred, as determined solely by Tarrant Appraisal District or the appraisal district having jurisdiction over the Land at that time and reflected in the certified appraisal roll received by the City from such appraisal district in such year, an Event of Default will occur and the City will have the right to terminate this Agreement, effective immediately, by providing written notice to Company without further obligation to Company hereunder. 7.3. Knowing Employment of Undocumented Workers. Company acknowledges that the City is required to comply with Chapter 2264 of the Texas Government Code, enacted by House Bill 1196 (80th Texas Legislature), which relates to restrictions on the use of certain public subsidies. Company hereby certifies that Company, and any branches, divisions, or departments of Company, does not and will not knowingly employ an undocumented worker, as that term is defined by Section 2264.001(4) of the Texas Government Code. In the event that Company, or any branch, division, or department of Company, is convicted of a violation under 8 U.S.0 Section 1324a(l) (relating to federal criminal penalties and injunctions for a pattern or practice of employing unauthorized aliens) and such violation occurs during the Term of this Agreement: • if such conviction occurs during the Term of this Agreement, and if such conviction is not overturned after the exercise or expiration of any appellate rights that may lawfully be available to Company, this Agreement shall terminate contemporaneously upon such conviction and Company shall repay, within one hundred twenty (120) calendar days following receipt of written demand from the City, the aggregate amount of Abatement received by Company hereunder, if any, plus Simple Interest at a rate of two percent (2%)per annum based on the amount of Abatement received in each previous year as of December 31 of the tax year for which the Abatement was received, or Page 17 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC • if such conviction occurs after expiration or termination of this Agreement, and if such conviction is not overturned after the exercise or expiration of any appellate rights that may lawfully be available to Company, Company shall repay, within one hundred twenty (120) calendar days following receipt of written demand from the City, the aggregate amount of Abatement received by Company hereunder, if any, plus Simple Interest at a rate of two percent(2%)per annum based on the amount of Abatement received in each previous year as of December 31 of the tax year for which the Abatement was received For the purposes of this Section 7.3, "Simple Interest" is defined as a rate of interest applied only to an original value, in this case the aggregate amount of Abatement. This rate of interest can be applied each year,but will only apply to the aggregate amount of Abatement and is not applied to interest calculated. For example, if the aggregate amount of Abatement is $10,000 and it is required to be paid back with two percent(2%)interest five years later, the total amount would be $10,000 + [5 x ($10,000 x 0.02)], which is $11,000. This Section 7.3 does not apply to convictions of any subsidiary or affiliate entity of Company, by any franchisees of Company, or by a person or entity with whom Company contracts. Notwithstanding anything to the contrary herein, this Section 7.3 shall survive the expiration or termination of this Agreement. 7.4. Foreclosure on Land or Required Improvements. Subject to Section 11, the City will have the right to terminate this Agreement immediately upon provision of written notice to Company of any of the following events: (i) the conveyance of the Land or the Required Improvements pursuant to an action to foreclose or otherwise enforce a lien, mortgage or deed of trust on the Land or the Required Improvements; (ii) the involuntary conveyance to a third party of the Land or the Required Improvements; (iii) execution of any assignment of the Land or Required Improvements for the benefit of creditors or deed in lieu of foreclosure to the Land or Required Improvements; or (iv) appointment of a trustee or receiver for the Land or Required Improvements and such appointment is not terminated within one hundred twenty(120) calendar days after the appointment occurs. 7.5. Failure to Pay Taxes or Non-Compliance with Other Legal Requirements. An Event of Default will occur if any ad valorem taxes owed to the City by Company become delinquent and Company does not timely and properly follow the legal procedures for protest and/or contest of any such ad valorem taxes, or Company is in violation of any material Legal Requirement due to any act or omission connected with Company's operations on the Land; provided, however, that an Event of Default shall not exist under this sentence unless Company fails to cure the applicable failure or violation within thirty (30) calendar days (or such Page 18 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC additional time as may be reasonably required) after Company receives written notice of such failure or violation. 7.6. General Breach. In addition to Sections 7.1, 7.2, 7.3, 7.4, and 7.5, an Event of Default under this Agreement will occur if either party breaches any of its material obligations under this Agreement, in which case the non-defaulting party must provide the defaulting party with written notice specifying the nature of the Default. Subject to Sections 7.1, 7.2 and 7.4, in the event that any Event of Default hereunder remains uncured after thirty (30) calendar days following receipt of such written notice (or, if the defaulting party has diligently and continuously attempted to cure following receipt of such written notice but reasonably requires more than thirty (30) calendar days to cure, then such additional amount of time as is reasonably necessary to effect cure, as determined by both parties mutually and in good faith), the non-defaulting party will have the right to terminate this Agreement, effective immediately, by providing written notice to the defaulting party. 7.7. Failure to Meet Construction Cost Spending, Employment, or Supply and Service Spending Commitments. The failure to meet the Fort Worth Construction Commitment, the M/WBE Construction Commitment, the Overall Employment Commitment, the Fort Worth Employment Commitment, the Central City Employment Commitment, the Fort Worth Supply and Service Spending Commitment, or the M/WBE Supply and Service Spending Commitment in any year in which such Commitments apply, will not constitute an Event of Default hereunder or provide the City with the right to terminate this Agreement, but, rather, shall only cause the percentage or amount of Abatement available to Company pursuant to this Agreement to be reduced in accordance with this Agreement. 7.8. Statutory Damages. Company acknowledges and agrees that termination of this Agreement due to an Event of Default by Company will (i) harm the City's economic development and redevelopment efforts on the Land and in the vicinity of the Land; (ii) require unplanned and expensive additional administrative oversight and involvement by the City; and (iii) be detrimental to the City's general economic development programs, both in the eyes of the general public and by other business entities and corporate relocation professionals, and Company agrees that the exact amounts of actual damages sustained by the City therefrom will be difficult or impossible to ascertain. Therefore, upon termination of this Agreement for any Event of Default, and as authorized by Section 312.205(b)(6) of the Code, Company must pay the City, as liquidated damages authorized by the Code, an amount equal to all taxes that were abated in accordance with this Page 19 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC Agreement for each year in which an Event of Default existed and which otherwise would have been paid to the City in the absence of this Agreement. The City and Company agree that this amount is a reasonable approximation of actual damages that the City will incur as a result of an uncured Event of Default and that this Section 7.8 is intended to provide the City with compensation for actual damages, as authorized by the Code, and is not a penalty. This amount may be recovered by the City through adjustments made to Company's ad valorem property tax appraisal by the appraisal district that has jurisdiction over the Land and over any taxable tangible personal property located thereon. Otherwise, this amount will be due, owing and paid to the City within sixty (60) days following the effective date of termination of this Agreement. In the event that all or any portion of this amount is not paid to the City within sixty(60) days following the effective date of termination of this Agreement, Company shall also be liable for all penalties and interest on any outstanding amount at the statutory rate for delinquent taxes, as determined by the Code at the time of the payment of such penalties and interest (currently, Section 33.01 of the Code). The damages provided for in this Section and the termination rights provided for in this Agreement shall be the City's only remedies for a breach or default by Company hereunder. 8. INDEPENDENT CONTRACTOR. It is expressly understood and agreed that Company shall operate as an independent contractor in each and every respect hereunder and not as an agent, representative or employee of the City. Company shall have the exclusive right to control all details and day-to-day operations relative to the Land and any improvements thereon and shall be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors, subcontractors, licensees and invitees. Company acknowledges that the doctrine of respondeat superior will not apply as between the City and Company, its officers, agents, servants, employees, contractors, subcontractors, licensees, and invitees. Company further agrees that nothing in this Agreement will be construed as the creation of a partnership or joint enterprise between the City and Company. 9. INDEMNIFICATION. COMPANY, AT NO COST TO THE CITY, AGREES TO DEFEND, INDEMNIFY AND HOLD THE CITY, ITS OFFICERS, AGENTS SERVANTS AND EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS, ACTIONS, COSTS AND EXPENSES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO COMPANY'S BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING DEATH, THAT MAY RELATE TO, ARISE OUT OF OR BE OCCASIONED BY (i) COMPANY'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS Page 20 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC AGREEMENT OR (ii) ANY NEGLIGENT ACT OR OMISSION OR INTENTIONAL MISCONDUCT OF COMPANY, ITS OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE CITY) OR SUBCONTRACTORS, RELATED TO THE REQUIRED IMPROVEMENTS, THE LAND AND ANY OPERATIONS AND ACTIVITIES THEREON, OR THE PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT OTHERWISE. THIS SECTION SHALL SURVIVE ANY TERMINATION OR EXPIRATION OF THIS AGREEMENT. 10. NOTICES. All written notices called for or required by this Agreement shall be addressed to the following, or such other party or address as either party designates in writing, by certified mail,postage prepaid, or by hand delivery: City: Company: City of Fort Worth Andrews Distributing Company of North Attn: City Manager Texas, LLC 200 Texas St. Attn: Fort Worth, TX 76102 500 Northeast Loop 820 Fort Worth,Texas with copies to: the City Attorney and Economic Development Department Director at the same address 11. EFFECT OF SALE OF LAND AND/OR REQUIRED IMPROVEMENTS; ASSIGNMENT AND SUCCESSORS. Company may assign this Agreement and all or any of the benefits provided hereunder to (a) an Affiliate that owns or takes title to the Land or any New Taxable Tangible Personal Property or(b) a successor to Company by a sale of all or substantially all of Company's assets only if(i) prior to or contemporaneously with the effectiveness of such assignment, Company provides the City with written notice of such assignment, which notice must include the name of the Affiliate or successor and a contact name, address and telephone number for the Affiliate or successor, and (ii) the Affiliate or successor, as the case may be, agrees in writing to assume all terms and conditions of Company under this Agreement. Otherwise, Company may not assign, transfer or otherwise convey any of its rights or obligations under this Agreement to any other person or entity without the prior consent of the City Council, which consent will not be Page 21 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC unreasonably withheld or delayed, conditioned on (i) the proposed assignee or successor agrees to take title to the Land and any New Taxable Tangible Personal Property; (ii) the proposed assignee or successor is financially capable of meeting the terms and conditions of this Agreement; and (iii) prior execution by the proposed assignee or successor of a written agreement with the City under which the proposed assignee or successor agrees to assume and be bound by all covenants and obligations of Company under this Agreement. Any attempted assignment without the City Council's prior consent shall constitute an Event of Default under this Agreement. Any lawful assignee or successor in interest of Company of all rights under this Agreement shall be deemed "Company" for all purposes under this Agreement. 12. COMPLIANCE WITH LAWS, ORDINANCES,RULES AND REGULATIONS. This Agreement will be subject to all applicable Legal Requirements. 13. GOVERNMENTAL POWERS. It is understood that by execution of this Agreement, the City does not waive or surrender any of it governmental powers or immunities. 14. SEVERABILITY. If any provision of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. 15. NO WAIVER. The failure of either party to insist upon the performance of any term or provision of this Agreement or to exercise any right granted hereunder shall not constitute a waiver of that party's right to insist upon appropriate performance or to assert any such right on any future occasion. 16. VENUE AND JURISDICTION. If any action, whether real or asserted, at law or in equity, arises on the basis of any provision of this Agreement, venue for such action shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas —Fort Worth Division. This Agreement shall be construed in accordance with the laws of the State of Texas. Page 22 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC 17. NO THIRD PARTY RIGHTS. The provisions and conditions of this Agreement are solely for the benefit of the City and Company, and any lawful assign or successor of Company, and are not intended to create any rights, contractual or otherwise, to any other person or entity. 18. INTERPRETATION. In the event of any dispute over the meaning or application of any provision of this Agreement, this Agreement shall be interpreted fairly and reasonably, and neither more strongly for or against any party, regardless of the actual drafter of this Agreement. In the event of any conflict between the body of this Agreement and the Application, the body of this Agreement shall control. 19. CAPTIONS. Captions and headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement. 20. ENTIRETY OF AGREEMENT. This Agreement, including any exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the City and Company, and any lawful assign and successor of Company, as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with any provision of this Agreement. Notwithstanding anything to the contrary herein, this Agreement shall not be amended unless executed in writing by both parties and approved by the City Council of the City in an open meeting held in accordance with Chapter 551 of the Texas Government Code. 21. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall be considered an original,but all of which shall constitute one instrument. Page 23 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC 22. BONDHOLDER RIGHTS. The Required Improvements will not be financed by tax increment bonds. This Agreement is subject to the rights of holders of outstanding bonds of the City. 23. CONFLICTS OF INTEREST. Neither the Land nor any improvements thereon are owned or leased by any member of the City Council, any member of the City Plan or Zoning Commission or any member of the governing body of any taxing unit with jurisdiction in the Zone. EXECUTED as of the last date indicated below: [SIGNATURES IMMEDIATELY FOLLOW ON NEXT TWO (2) PAGES] Page 24 Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC CITY OF FORT WORTH: By: ohn Robert Carman Acting Assistant City Manager Date: FOS APPROVED AS TO FORM AND LEGALITY: _ By: �'�cA►S Peter Vaky A08dW by! Deputy City Attorney M&C: C-27686 04-19-16 ser,rity Secretary Form 1295: 2016-30540 STATE OF TEXAS § COUNTY OF TARRANT § BEFORE ME, the undersigned authority, on this day personally appeared John Robert Carman, Acting Assistant City Manager of the CITY OF FORT WORTH, a municipal corporation organized under the laws of the State of Texas, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of the CITY OF FORT WORTH, that he was duly authorized to perform the same by appropriate resolution of the City Council of the City of Fort Worth and that he executed the same as the act of the CITY OF FORT WORTH for the purposes and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this .3d4'k day of fj— ,2016. CL Notary ublic in and for the State of Texas , JULIE A. GEHO Notary Public,state of Texas o •"j,� Comm.Expires 07-09-2020 Notary's Printed Name "�rnm„'` Notary ID 124983447 Page 25 Tax Abatement Agreement between OFFICIAL RECORD City of Fort Worth and Andrews Distributing Company of North Texas,LLC CITY SECRETARY. FT.WORTHS TX ANDREWS DISTRIBUTING COMPANY OF NORTH TEXAS, LLC, a Texas limited liability company: By: N e: To 9-ERNt��N Title: C Fo Date: 1 Z /Z9 I-j—� /6 STATE OF § COUNTY OF \Do1\QS § BEFORE ME, the undersigned authority, on this day personally appeared s� CFS—of ANDREWS DISTRIBUTING COMPANY OF NORTH TEXAS, LLC, a Texas limited liability company, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that s/he executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of ANDREWS DISTRIBUTING COMPANY OF NORTH TEXAS,LLC. GIVEN UNDER MY HAND AND SEAL OF OFFICE this coftb day of 52016. Qu"iyu %,C�-Mco L) Notary Public in and for the State of Pc�.��,��cAc�c es�.Yo�2-ev�cz Notary's Printed Name PAULINE FRANCES JARCSZEWICZ Notary Public, State of Texas N•, rac My Commission Expires March 10, 2017 Page 26 Tax Abatement Agreement between City of Foil Worth and Andrews Distributing Company of North Texas,LLC EXHIBITS "A"—Description and Map Depicting the Land "B"—Company's Tax Abatement Application "C"—Map of Central City Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC Exhibit "A" - Description and Map Depicting the Development Site T r z r<r x � � K m S+ v k �Y N Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC EXHIBIT A TRACT 1: DESCRIPTION,of a 30.446 acre tract of land situated in the John Hibbins Survey,Abstract No.638 Tarrant County,Texas;said tract being all of Tract 1 described in Special Warranty Deed to Zephyr Rail Industrial,L.P. recorded in Instrument No.D204360997 of the Deed Records of Tarrant County,Texas;said 30.446 acre tract being more particularly described as follows(bearing system is based on a bearing of South 63 degrees, 10 minutes,36 seconds West for the south line of Tract 1 of Zephyr Rail Industrial,L.P.,recorded in Instrument No.D204360997, Deed Records of Tarrant County,Texas): BEGINNING,at a 1/2-inch iron rod with"PACHECO KOCH"cap set in the south line of Oncor Electric Delivery Company,LLC. tract recorded in Volume 2039,Page 163;said point being the northwest corner of Tract 2 described in said Special Warranty Deed to Zephyr Rail Industrial,L.P.and the east corner of a tract of land described in General Warranty Deed to Texas Electric Service Company recorded in Volume 4915,Page 630 of the said Deed Records; THENCE,South 26 degrees,49 minutes,24 seconds East,along the west line of said Tract 2,passing at a distance of 354.87 feet a 5/8-inch iron rod with"PATE"cap found for the southwest corner of said tract 2,continuing in all a total distance of 571.92 feet to a 5/8-inch iron rod with"PATE"cap found for corner;said point being an ell corner of a tract of land described in Special Warranty Deed to A&G Investment Group,Inc.,recorded in Instrument No. D201282766 of said Deed Records; THENCE,South 63 degrees, 10 minutes,36 seconds West,along the north line of said A&G Investment,Inc.tract, a distance of 1,958.45 feet to a 1/2-inch iron rod with cap found for an angle corner; THENCE,South 83 degrees,46 minutes,36 seconds West,continuing along the said north line of the A&G Investment,Inc,tract,a distance of 195.67 feet to a 1/2-inch iron rod with"PACHECO KOCH"cap found for corner in the east line of Railhead Road(a 68 foot wide right-of-way); THENCE,departing the said north line of the A&G Investment,Inc.tract and along the said east line of Railhead Road the following(3)three calls: North 06 degrees, 13 minutes,24 seconds West,a distance of 275.84 feet to a 5/8-inch iron rod with"C AND B" cap found for corner;said point being the beginning of a tangent curve to the left; along said curve to the left,having a central angle of 26 degrees,00 minutes,47 seconds,a radius of 434.00 feet,a chord bearing and distance of North 19 degrees, 13 minutes,48 seconds West, 195.35 feet,an are distance of 197.04 feet to a 5/8-inch iron rod with"C AND B"cap found for at the end of said curve to the left; North 32 degrees, 14 minutes, 11 seconds West,a distance of 119.20 feet to a 1/2-inch iron rod with"PACHECO KOCH"cap set for corner in the south line of State Highway No. 820; THENCE,departing the said east line of Railhead Road and along the said south line of State Highway No. 820,the following(3)three calls: North 57 degrees,45 minutes,35 seconds East,a distance of 485.98 feet to a 5/8-inch iron rod with"PATE"cap found for an angle corner; North 61 degrees,40 minutes,35 seconds East,a distance of 391.15 feet to a 5/8-inch iron rod with"PATE"cap found for an angle comer; North 65 degrees,39 minutes,04 seconds East a distance of 399.95 feet to a Much iron rod found for an angle comer;said point being the west corner of said Texas Electric Service Company Tract; THENCE,South 56 degrees,20 minutes,48 seconds East,departing the said south line of State Highway No. 820 and along the west line of said Texas Electric Service Company tract,a distance of 88.46 feet to a 5/8-inch iron rod with"PATE"cap found for comer; THENCE,North 65 degrees,32 minutes,03 seconds East,departing the west line of said Texas Electric Service Company tract and along the south line of the said Texas Electric Service Company Tract,a distance of 712.60 feet to the POINT OF BEGINNING; CONTAINING: 1,326,208 square feet or 30.446 acres of land,more or less. TRACT 2: DESCRIPTION,of a 3.322 acre tract of land situated in the John Hibbins Survey,Abstract No.638;said tract being part of Lot 2A,Block B-R,Fort Worth Phase I Addition,an addition to the City of Fort Worth,Texas according to the plat recorded in Cabinet A,Slide 6896 of the Plat Records of Tarrant County Texas;said tract also being all of Tract 2 described in Special Warranty Deed to Zephyr Rail Industrial,L.P.recorded in Instrument No.D204360997 of the Deed Records of Tarrant County Texas;said 3.322 acre tract being more particularly described as follows (bearing system is based on a bearing of South 63 degrees, 10 minutes,36 seconds West for the south line of Tract 1 of Zephyr Rail Industrial,L.P.,recorded in Instrument No.D204360997,Deed Records of Tarrant County,Texas): BEGINNING,at a 1/2-inch iron rod with"PACHECO KOCH"cap set in the south line of a tract of land described in General Warranty Deed to Texas Electric Service Company recorded in Volume 2039,Page 163 of the said Deed Records;said point being the northeast corner of Tract 1 described in said Special Warranty Deed to Zephyr Rail Industrial,L.P.and the east comer of a tract of land described in General Warranty Deed to Texas Electric Service Company recorded in Volume 4915,Page 630 of the said Deed Records; THENCE,South 89 degrees,44 minutes,40 seconds East,along the said south line of the Texas Electric Service Company tract recorded in Volume 2039,Page 163 of said Deed Records,a distance of 1284.74 to a 1/2-inch iron rod with"PACHECO KOCH"cap found for comer; THENCE,South 36 degrees,20 minutes,36 seconds East,departing the said south line of the Texas Electric Service Company tract,a distance of 37.37 feet to a 5/8-inch iron rod with"PATE"cap found for comer; THENCE,North 89 degrees,44 minutes,40 seconds West,a distance of 550.07 feet to a 1/2-inch iron rod with "PACHECO KOCH"cap found for comer; THENCE,South 64 degrees,36 minutes,05 seconds West,a distance of 660.52 feet to a 5/8-inch iron rod with "PATE"cap found for corner in the east line of said Tract 1; THENCE,North 26 degrees,49 minutes,24 seconds West,along the said east line of Tract 1,a distance of 354.87 feet to the POINT OF BEGINNING; CONTAINING: 144,686 square feet or 3.322 acres of land,more or less. Exhibit`B"—Company's Tax Abatement Application Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC FORTWORT- Economic Development IncentiveApplication Housing and Economic Development Business Development Division 1150 South Freeway Fort Worth, Texas 76104 (817) 212-2663 Incentive Application 1. COMPANY INFORMATION Date: January 7, 2016 Company Name:Andrews Distributing Company of North Texas, LLC Company Address: 2730 Irving Road City: Dallas State: Texas Zip: 75207 Contact Person: Ms. Melissa Munoz Title/Position: Manager, Credits and Incentives Telephone Number: 505.503.4987 Mobile Telephone Number: 512.569.3545 Fax Number: 512.476.0033 E-Mail Address: melissa.munoz@ryan.com Company Ownership (check one): E] Public Traded Stock ✓i Privately Held Form of Business (choose one): How long has the company been in operation (Years)? 40 Describe the company's principal business (attach additional sheets as necessary): Wholesale beer distributor. 2. PROJECT INFORMATION For real estate projects, please include below the project concept, project benefits and how the project relates to existing community plans. A real estate project is one that involves the construction or renovation of real property that will be either for lease or for sale. Any incentives given by the City should be considered only "gap"financing and should not be considered a substitute for debt and equity. However, the City is under no obligation to provide gap financing just because a gap exists. In order for a property owner/developer to be eligible to receive incentives and/or tax abatement for a project, the property owner/developer.- A. Must complete and submit this application and the application fee to the City. B. Owner/developer or owner/developer's principals must not be delinquent in paying property taxes for any property owned in Fort Worth; C. Owner/developer or owner/developer's principals must not have ever been subject to the City of Fort Worth's Building Standards Commission's Review; D. Owner/developer or owner/developer's principals must not have any City of Fort Worth liens files against any other property owned by the applicant property owner/developer. "Liens" including, but not limited to, weed liens, demolition liens, board-up/open structure liens and paving liens. For business expansions projects, please include below services provided or products manufactured, major customers and locations, etc. For business expansion project involving the purchase and/or construction of real estate, please answer all that apply. Type of Project(choose one): Commercial/Industrial Describe the company's plans for expanding or locating in Fort Worth (attach additional sheets as necessary): Andrews Distributing Company of North Texas, LLC, a wholesale beer distributor, plans to build a new distribution center at 580 N.E. Loop 820, Fort Worth, Texas 76112.The space is necessary to fulfill expanding business operations. Page 2 of 5 Describe the specific operations to be performed at the proposed Fort Worth facility(attach additional sheets as necessary): The proposed Fort Worth facility will allow Andrews Distributing Company of North Texas, LLC to fulfill expanding business operations.The "Office" building will provide sales support and administrative services. The distribution center, notated as "Warehouse" below, will be used for inbound and outbound shipments of beer, storage, and fulfillment. The "Other"area is allocated for a truck wash, sign shop, and storage of point of sale and special event items. Area (Square Feet) Requirements: (a) Office 58,869 (b) Manufacturing (c)Warehouse 422,361 (d) Showroom/Retail (e) Other 39,113 Total Area (a+b+c+d+e): 520,343 SF Is the company expanding its existing local operations or relocating its operations from somewhere else to our area? E Expansion F; Relocation If relocation, where is the company currently located? 1701 Pharr,2550 McMillan Parkway, 560 N Beach St. Does the company plan to lease or own the facility in Fort Worth? F] Lease fv7,,,Own If the company is planning to lease space in Fort Worth,what is the lease term? Will the facility be built or does the facility already exist? ✓1 New C Existing If the company is occupying an existing facility, what is the address? 1701 Pharr,2550 McMillan Parkway, 560 N Beach S If the company is constructing a new facility, what is the approximate location or address of the site? 580 N.E.Loop 820,Fort Worth Texas 76112 If the company is constructing a new facility, what is the anticipated date for commencement of construction?Q2 2016 Anticipated date for company to move into the facility: August 2017 Development requests that will be sought for the project(select all that apply): Ci Replat 17, Rezoning Current Zoning:K Requested Zoning: F1 Variances If yes, please describe: C Downtown Design Review Board Landmark Commission Real Estate Development 1. Current Assessed Valuation of: Land$2,980,968 Improvements$ Total Size of Project: 520,343 SF Total Capital Investment: $ 40MM Hard'Construction Costs: $35MM 2. For mixed-use projects, please list square footage for each use: Page 3 of 5 Business Personal Property and Inventory 1. Business Personal Property Total investment on equipment, machinery,furnishing, etc.: $6.3 MM E4 Lease (✓ Purchase *Estimated taxable value of equipment, machinery, furnishing, etc.: $ 2MM not including *This is the value that will be on the tax rolls which includes all tangible property. 2. Inventory and Supplies Value of Inventory: $25MM Value of Supplies: $ Immaterial Percent of inventory eligible for Freeport Exemption (inventory, exported from Texas within 175 days) 0 % 3. EMPLOYMENT AND JOB CREATION From Development 1. How many persons are currently employed? 460 2.What percent of current employees above are Fort Worth residents?62 oho 3. What percent of current employees above are Central City residents? 30 4. Please complete the following table for new jobs to be created from direct hire by applicant. First Year By Fifth Year By Tenth Year Toalob�to be Creat d 19 49 PON= Less Transfers* 17 37 37 NetJobs ' 2 72 Fal� 42 %of Net Jobs to be filled by 62 62 62 Fort Worth Residents Qb ofNet lobs to be filletl by00134 30: * If any employees will be transferring, please describe from where they will be transferring. Transfer positions will be delivery route employees and managers moved from our Dallas and Allen distribution centers to our Fort Worth distribution center. Please attach a description of the jobs to be created, tasks to be performed for each and wage rate for each classification. 5. Does the company provide the following benefits: F Retirement F Health y✓ Dental 17,1 Domestic Partner 6.Average wage paid to employees to be located at Fort Worth facility: $24.09 4. INCENTIVES REQUEST Incentive(s) Requested: C Tax Abatement [ J Chapter 380 Economic Development Program Grant Do you intend to pursue abatement of County taxes? 17i Yes r No What level of abatement will you request: Years? 10 Percentage?65 % 5. LOCAL COMMITMENTS During Construction What percent of the construction costs described under Real Estate Development will be committed to: Fort Worth businesses? Fort Worth Certified Minority and Women Business Enterprises? Page 4of5 For Annual Supply and Service Needs Regarding discretionary supply and service expenses(i.e landscaping,office or manufacturing supplies,janitorial services, etc;no utilities): 1. What is the annual amount of discretionary supply and service expenses? $ 336,000 2.What percentage will be committed to Fort Worth businesses? 3.What percentage will be committed to Fort Worth Certified Minority and Women Business Enterprises? Provide company contact information for the purchasing representative if known. Greg Swing, 214.525.9432 DISCLOSURES Is any person or firm receiving any form of compensation, commission or other monetary benefit based on the level of incentive obtained by the applicant from the City of Fort Worth? If yes, please explain and/or attach details. No. Ryan, LLC will receive an hourly rate from Andrews Distributing for services rendered. These documents must be submitted with the application, otherwise the application will be deemed incomplete and will not be reviewed: a.)Attach a site plan of the project. b.) Explain why incentives are necessary for the success of this project. Include a business pro-forma or other documentation to substantiate your request. c.) Describe any environmental impacts associated with this project. d.) Describe the infrastructure improvements (water, sewer, streets, etc.)that will be constructed as part of this project. e.) Describe any direct benefits to the City of Fort Worth as a result of this project. f.)Attach a legal description or surveyor's certified metes and bounds description. g.)Attach a copy of the most recent property tax statement from the appropriate appraisal district for all parcels involved in the project. h.)Attach a description of the jobs to be created (technician, engineer, manager, etc.), tasks to be performed for each, and wage rate for each classification. I.)Attach a brief description of the employee benefit package(s)offered (i.e. health insurance, retirement, public transportation assistance, day care provisions, etc.) including portion paid by employee and employer respectively. j.)Attach a plan for the utilization of Fort Worth Certified M/WBE companies. k.)Attach a listing of the applicant's Board of Director's, if applicable. I.)Attach a copy of Incorporation Papers noting all principals, partners, and agents and all Fort Worth properties owned by each. The company is responsible for paying $5,000 as an application fee. If the application is withdrawn before the project is presented to City Council in Executive Session, the fee is refunded. Upon presentation to City Council in Open Session, $2,000 is non-refundable and is applied to offset costs incurred by the Housing and Economic Development Department. Upon approval by City Council, the balance of $3,000 can be credited towards required building permits, inspections fees, replatting fees, and other costs of doing business with the City related to the development. Any unused credit balance upon completion of the project will be refunded upon request from the company. On behalf of the applicant, I certify the information contained in this application, including all attachments to be true and correct. I further certify that, on behalf of the applicant, I have read the current Incentive Policy and all other pertinent City of Fort Worth policies and I agree with the guidelines and criteria state therein. Printed Name: Title: Signature: Date: Page 5 of 5 Exhibit "C"—Map of Central City (y 77 6 6 76 51 (� 00760 2 y ( r Q 76092 - �A 624' � 76248 2 L 7 r— u 6051 la L HCrI 76131 76 76182 7603 .�� 76148 7 3 760 76021 J 180 76135 76022 l 761 6 � 7 53 � 761 8 55 •1 � ,r t 76164,, 1 1 rT' 610 J 7612 " a- 76 40 76012 1 76112 76 07 w f `i 61 761 5 760 760 ,i 7 +`714 09 9 76016 76015 TM 11 i 7 76017 7601 f, l �\ % .7.6133 76 34 7 60 761 ; \ /76123 76001 760 7 36 � 78\0\63 _1 28� t c MEN Legend FORT WORTH Updated 08/27/2014 O Central City Boundary O ZipCodes CD CDBG Eligible Area Economic Development N O City unnil CDBG Eligible Areas & Central City Tax Abatement Agreement between City of Fort Worth and Andrews Distributing Company of North Texas,LLC M&C Review Page 1 of 2 Official site of the City of Fort Worth,Texas CITY COUNCIL AGENDA FORT COUNCIL ACTION: Approved on 4/19/2016 DATE: 4/19/2016 REFERENCE NO.: C-27686 LOG NAME: 17ED_ANDREWS CODE: C TYPE: NON- PUBLIC CONSENT HEARING: NO SUBJECT: Authorize Execution of a Tax Abatement Agreement with Andrews Distributing Company of North Texas, LLC, for the Construction of a Distribution Center to be Located at 100 Northeast Loop 820 (COUNCIL DISTRICT 2) RECOMMENDATION: It is recommended that the City Council authorize the City Manager to execute a Tax Abatement Agreement with Andrews Distributing Company of North Texas, LLC, for the construction of a 400,000 square foot distribution center to be located at 100 Northeast Loop 820. DISCUSSION: Andrews Distributing Company of North Texas, LLC (Company), will construct a 400,000 square foot distribution center to be used for inbound and outbound shipments of beer, storage and fulfillment, along with a new office and sign shop, to be located at 100 Northeast Loop 820. The Company intends to invest at least $37 million dollars in real property improvements and business personal property by December 31, 2017. The Company must also maintain a minimum of 460 full-time equivalent jobs at the site as of December 31, 2017. A minimum of 225 of those jobs must be held by Fort Worth residents and 127 of those must be held by Fort Worth Central City residents. Failure to meet the real property investment is a condition of default and will result in immediate termination of the Agreement. M/WBE OFFICE: Under the terms of the Agreement, the Company must spend a minimum amount of$14 million dollars of its hard construction costs with Fort Worth contractors and a minimum amount of$8.75 million dollars of its hard construction costs with contractors that are Fort Worth certified Minority/Women-Owned Business Enterprises (M/WBE). In addition, the Company must spend at least $100,800.00 in annual discretionary service and supply expenditures with Fort Worth contractors and a minimum amount of$84,000.00 of annual discretionary service and supply with contractors that are Fort Worth certified M/WBEs. In return, the City will grant a 50 percent tax abatement on the incremental increase in value of real and personal property improvements (above a base year value) for a period of five years. The Company must meet specific construction spending, annual employment and annual supply and service spending commitments in order to achieve the maximum amount of potential incentive for each abatement year. The weighted values for each of the commitments is as follows: Property Owner or Company Commitment Potential Abatement Real and Personal Property Investment Base Commitment 10 percent Fort Worth Contractors 5 percent Fort Worth M/WBE Contractors 5 percent Overall Employment 10 percent Employment of Fort Worth Residents 5 percent Employment of Fort Worth Central City Residents 5 percent Utilization of Fort Worth Companies for Services and Supplies 5 percent Utilization of Fort Worth M/WBE Companies for Services and Supplies 5 percent TOTAL 50 percent This project is located in COUNCIL DISTRICT 2. http://apps.cfwnet.org/council_packet/Me_review.asp?ID=22203&councildate=4/19/2016 1/3/2017 M&C Review Page 2 of 2 FISCAL INFORMATIONXERTIFICATION: The Director of Finance certifies that approval of this Agreement will have no material effect on the Fiscal Year 2016 Budget. While no current year impact is anticipated from this action, any effect on expenditures and revenues will be budgeted in future fiscal years and will be included in the long- term financial forecast. TO Fund Department Account Project Program Activity Budget Reference# Amount ID ID Year Chartfield 2 FROM Fund Department Account Project Program Activity Budget Reference# Amount ID ID Year Chartfield 2 Submitted for City Manager's Office by: Jay Chapa (5804) Originating Department Head: Robert Sturns (212-2663) Additional Information Contact: Ossana Hermosillo (212-2665) ATTACHMENTS Andrews Distributing Map 4-9-16.pdf Form 1295 - ADCNT -City of Fort Worth.pdf http://apps.cfwnet.org/council_packet/mc review.asp?ID=22203&councildate=4/19/2016 1/3/2017 to CERTIFICATE OF INTERESTED PARTIES O RM m . 2 FO295 lofl Complete Nos.1-4 and 6 if there are interested parties. OFFICE USE ONLY Complete Nos.1,2,3.5,and 6 if there are no interested parties. CERTIFICATION OF FILING 1 Name of business entity filing form,and the city,state and country of the business entity's place Certificate Number: of business. 2016-30540 Andrews Distributing Company of North Texas, LLC Dallas,TX United States Date Filed: 2 Name of governmental entity or state agency that is a party to the contract for which the form is 03/24/2016 being filed. City of Fort Worth Date Ackn 1 dged: 3 Provide the identification number used by the governmental entity or state agency to track or identify the contract,and provide a description of the goods or services to be provided under the contract. PENDING Tax Abatement Agreement with Andrews Distributing for development of a new distribution facility 4Nature of interest(check applicable) Name of Interested Party City,State,Country(place of business) Controlling Intermediary Ryan, LLC Dallas,TX United States X 5 Check only if there is NO Interested Party. ❑ 6 AFFIDAVIT I swear,or affirm,under penalty of perjury,that the above disclosure is true and correct. gnature of prized agent ofo tracting business entity AFFIX NOTARY STAMP/SEAL ABOVE Sworn to and subscribed before me,by the said i th day of 1 YJl\C 20 _,to certify which,witness my hand and seal of office. PAULINE FRANCES JAROSZEWIC2 Notary Public,State of Texas .,4 My Commission Expires 0 March 10, 2017 Signature of officer administering ath rinted na e officer administering oath Title of officer administering oath Forms provided by Texas Ethics Commission www.ethics.state.tx.us Version V1.0.312