HomeMy WebLinkAboutContract 46495-A1 4 5 g � CITY SECRETARY
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a IIAY 2 3117 ', AMENDMENT NO. 1 TO
CV OFFomWORTH ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
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(CITY SECRETARY CONTRACT NO. 46495)
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This AMENDMENT NO. 1 TO ECONOMIC DEVELOPMENT PROGRAM
AGREEMENT ("Amendment") is made and entered into by and between the CITY OF
FORT WORTH ("City"), a home rule municipality organized under the laws of the State
of Texas, and FORT WORTH HERITAGE DEVELOPMENT, LLC ("Developer"), a
Texas limited liability company.
The City and Developer hereby agree that the following statements are true and
correct and constitute the basis upon which the City and Developer have entered into this
Amendment:
A. On or about March 4, 2015, the City and Developer entered into that certain
Economic Development Program Agreement on file in the City Secretary's Office as City
Secretary Contract No. 46495 (the "Agreement"). Under the Agreement, Developer has
agreed to construct a mixed-use development on certain real property in the City in the
Historic Stockyards area in stages at three potential levels of investment, all as set forth in
the Agreement. In return, the City agreed to pay Developer certain economic development
Program Grants, as more specifically provided in the Agreement.
B. The Agreement requires that the first phase of the Development, defined in
the Agreement as the Level 1 Development, must be completed by December 31, 2018; the
Level 2 Development must be completed by December 31, 2022; and the Level 3
Development must be completed by December 31,2024. Further,the Agreement establishes
deadlines to provide a specified number of Full-time Jobs(the"Employment Commitment").
Section 18 of the Agreement provides that deadlines established by the Agreement shall be
extended on account of events that cause delays and that are beyond the control of the
performing party (identified in the Agreement as events of force majeure).
C. Since the Agreement was approved, the City established the Stockyards
Design Overlay District and the Stockyards Historic and Cultural Landmarks District
including the Development Property after a lengthy public process. The City is currently
engaged in a process to adopt a form-based code and historic district standards and guidelines
that will affect the Development Property. Because development of the Development
Property has been delayed by these actions, the City and Developer have agreed to extend
the Level 1 Completion Deadline and the effective date of the Employment Commitment by
one year. In order to avoid the creation of any doubt concerning the extension of the
deadlines, the parties wish to amend the Agreement to memorialize the extension of such
dates on account of the events of force majeure occurring between March 4,2015,and March
1, 2017.
Amendment No. 1 to CSC No. 46495
Economic Development Program Agreement with FW Heritage Development,LLC—PageEFT
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SECRETARY
OgTH, TX
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the City and Developer agree as follows:
1. Section 2 of the Agreement (Definitions) is hereby amended as follows:
The following terms and their definitions are hereby amended to read as follows:
Level 1 Completion Deadline means December 31, 2019.
2. Section 4.4 of the Agreement (Employment Commitment) is hereby amended by
replacing "January 1, 2018" in the first line of such section with "January 1, 2019", so that
the Employment Commitment shall begin on the earlier of January 1, 2019 or January 1 of
the First Operating Year (or, if Developer elects to receive its first Program Grants in the
First Operating Year in accordance with Section 6.6,then January 1 of the year in which the
Level 1 Development occurs).
3. Section 4.8.4 of the Agreement(Annual Employment Report) is hereby amended by
replacing "February 1, 2019" in the first line of such section with
February 1, 2020" and by amending the last sentence to read as follows:
If the Employment Commitment was not met in 2019, and the First
Operating Year is not 2019 or before, Developer must also include in the
2020 employment report submitted under this Section 4.8.4 a statement as
to why Developer believes the Employment Commitment was not met.
4. All terms in this Amendment that are capitalized but not defined have the meaning
assigned to them in the Agreement.
5. All terms and conditions of the Agreement that are not expressly amended pursuant
this Amendment remain in full force and effect.
6. This Amendment shall be effective on the later date as of which all parties have
executed it. This Amendment may be executed in any number of duplicate originals, and
each duplicate original shall be deemed to be an original.
Amendment No. I to CSC No. 46495
Economic Development Program Agreement with FW Heritage Development,LLC—Page 2
EXECUTED as of the last date indicated below.
CITY OF FORT WORTH: APPROVED AS TO FORM AND
LEGALITY:
By: By: /
Jesus J. Chapa Peter Vaky
Assistant City Manager Deputy City Attorney
Date: f/7 M&C: C-27995 11-15-16
Form 1295 Certificate No. 2016-129143
Attested by:
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`Mary J. Kayser, City Secret
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OFFICIAL RECORD
CITY SECRETARY
FT.WORTH,TX
Amendment No. 1 to CSC No. 46495 -J
Economic Development Program Agreement with FW Heritage Development,LLC—Page 3
FORT WORTH HERITAGE DEVELOPMENT, LLC,
a Texas limited liability company
By: Majestic-Stockyards Investor, LLC,
a Delaware limited liability company
and its Manager:
By:
Edward P. Roslci,
its authorized representative
Date:
Approved by:
Hickman Investments, Ltd.,
as an additional Member in Fort Worth Heritage Development, LLC
By: BBH GENPAR, LLC,
a Texas limited liability company
and its general partner:
By: rpt
Brad Hickman
Executive Vice President
Date:
Amendment No. 1 to CSC No. 46495
Economic Development Program Agreement with FW Heritage Development,LLC—Page 4
M&C Review Page 1 of 4
Official site of the City of Fort Worth,Texas
CITY COUNCIL AGENDA FORTH
COUNCIL ACTION: Approved As Amended on 11/15/2016 -Ordinance No. 22505-11-2016
DATE: 11/15/2016 REFERENCE C-27995 LOG NAME: 17RMGEDPAEXCHANGECFA
NO.:
CODE: C TYPE: NON- PUBLIC NO
CONSENT HEARING:
SUBJECT: Authorize Execution of an Economic Development Program Agreement with Rural Media
Group, LLC, for the Relocation of Its Corporate Headquarters and Broadcasting
Operations to the Fort Worth Stockyards, Authorize Execution of a Community Facilities
Agreement with Fort Worth Heritage Development, LLC, for Public Improvements to E.
Exchange Avenue and Mule Alley, Authorize Amendment to Economic Development
Program Agreement with Fort Worth Heritage Development, LLC, City Secretary Contract
No. 46495, to Secure Performance Obligations Under the Economic Development
Program Agreement and the Community Facilities Agreement, Authorize Execution of a
Tax Increment Financing Development Agreement with the Board of Directors of Tax
Increment Reinvestment Zone No. 15 for Reimbursement to the City for Costs of Those
Public Improvements, Authorize Advance Funding by the City for Those Public
Improvements from TIF Revenues Collected Through the Remaining Life of the Zone as
the Receivable Estimated at $7,900,000.00 and Adopt Related Appropriation Ordinance
(COUNCIL DISTRICT 2)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to execute an Economic Development Program Agreement with Rural Media
Group, LLC, for the relocation of its corporate headquarters and broadcasting operations to the Fort Worth
Stockyards;
2. Find that the terms and conditions of the proposed Economic Development Program Agreement, as
outlined below, constitute a custom-designed Economic Development Program, as recommended by the
2016 Comprehensive Plan and authorized by Chapter 380 of the Texas Local Government Code;
3. Authorize the City Manager to execute a Community Facilities Agreement with Fort Worth Heritage
Development, LLC, for construction of public improvements to E. Exchange Avenue and Mule Alley;
4. Authorize the execution of amendment to Economic Development Program Agreement with Fort Worth
Heritage Development, LLC, City Secretary Contract No. 46495, in order to secure performance obligations
under the above-referenced Economic Development Program Agreement with Rural Media Group, LLC,
and the Community Facilities Agreement;
5. Authorize the execution of a Tax Increment Financing Development Agreement with the Board of
Directors of Tax Increment Reinvestment Zone No. 15 (Stockyards/Northside TIF) for funding of the public
improvements under the Community Facilities Agreement;
6. Authorize the advance funding by the City for costs of the public improvements under the Community
Facilities Agreement, with TIF funding collected through the remaining life of the Zone as a receivable,
estimated at $7,900,000.00; and
7. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
Developer Contribution Fund in the amount of$7,900,000.00.
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DISCUSSION:
On November 8, 2016, the City Council received a briefing on Staffs recommendation to enter into an
Economic Development Program Agreement (EDPA) with Rural Media Group (RMG) to secure the
relocation of its corporate headquarters and primary broadcasting studio to a location in the Stockyards. In
connection with this, Staff also proposes entering into a Community Facilities Agreement (CFA) with Fort
Worth Heritage Development, LLC (Heritage) in order to construct public improvements to streetscaping
along E. Exchange Avenue and waste water utilities extending through and beyond Mule Alley on an
accelerated schedule. Accelerating investment in these public improvements will help to minimize future
disruption to activity and development in the Stockyards, and will help to offset near-term costs to RMG in
its relocation to Fort Worth.
The City will be reimbursed for the costs of the public improvements for which it is responsible under the
CFA from future tax increment revenues received from properties in Tax Increment Reinvestment Zone No.
15 (Stockyards/Northside TIF), as provided in a Tax Increment Financing (TIF) Development Agreement
between the City and the TIF's board of directors. In order to secure performance under the EDPA and the
CFA, the City and Heritage will execute an amendment to the City's existing Economic Development
Program Agreement with Heritage (City Secretary Contract No. 46495). In the event that RMG does not
fulfill its primary obligations under the EDPA by relocating its corporate headquarters and primary
broadcasting studio to the Stockyards for at least a 10-year period, the City will have the right to be
reimbursed for certain public infrastructure costs under the CFA by deducting those sums from Program
Grants payable to Heritage under the EDPA.
Economic Development Program Agreement (EDPA) with Rural Media Group, LLC (RMG):
RMG is a leading provider of multimedia content dedicated to the rural and western lifestyle. RMG is the
parent company of RFD-TV, RURAL RADIO, FamilyNet, RFD-TV The Magazine, and RFD-TV The
Theatre. RMG produces, distributes, and broadcasts original content as well as licensed content to markets
throughout the United States and internationally.
Staff recommends entering into an EDPA with RMG under which RMG will relocate its corporate
headquarters to the Stockyards by no later than January 1, 2020. The proposed location of RMG's
corporate headquarters facility will be on property owned by Heritage and leased to RMG. RMG will occupy
at least 30,000 square feet of office space, of which a minimum 6,000 square feet must be used as the
primary broadcasting studio for RFD-TV.
Specifically, RMG must comply with the following minimum requirements:
- Invest a minimum $5 million in new taxable business personal property in the site as of January 1, 2020;
- Employ a minimum 90 full-time employees (FTEs) on the site by not later than January 1, 2021 and a
minimum 135 FTEs not later than January 1, 2023, of which at all times at least 15 percent must be Fort
Worth residents and 15 percent must be Fort Worth Central City residents;
- Pay wages of no less than $15.00 per hour to all FTEs;
- Spend a minimum 15 percent annual discretionary service and supply expenditures for Fort Worth-based
operations with contractors that are Fort Worth contractors;
- Spend a minimum 15 percent annual discretionary service and supply expenditures with contractors that
are Fort Worth Certified M/WBE companies;
- Maintain minimum average national half hour viewership of 100,000 viewers on the weekend and 12,000
viewers on weekdays, with jointly agreed upon methods for viewership verification;
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- Produce and broadcast a minimum 100 hours annually of live or original television content, unrepeated,
filmed in the City of Fort Worth, of which a minimum of 25 percent and a maximum of 90 percent will be
filmed in the Fort Worth Stockyards (substantiation and verification of this commitment will incorporated in
the Company's annual reporting requirements to the City, with penalty for not meeting this and other
broadcast-related minimums resulting in a reduction in the potential grant received).
Under the EDPA, RMG will be eligible to receive annual Economic Development Program grants equal to a
maximum of 50 percent of the City's incremental property tax revenue attributable to the business personal
property taxes paid by RMG in the previous tax year. Failure by RMG to locate its corporate headquarters
and primary broadcasting studio in the Stockyards by January 1, 2020, as described above, will constitute a
breach and will allow the City to terminate the EDPA. Failure by RMG to meet the broadcasting and
promotional commitments in any year will result in a reduction of the maximum potential grant from 50
percent to 45 percent.
Except for cases of default, the failure of RMG to meet any other particular commitment will result in a
reduction to the grant amount that RMG is entitled to receive in a given year based on the value assigned to
the commitment in accordance with the following table:
Property Owner or Company Commitment Potential Grant
Real and Personal Property Investment(Base Commitment) 15 Percent
Minimum$15.00 Hourly Wage for Employees(Wage Commitment) 10 Percent
Overall Employment Commitment 5 Percent
15 Percent Employment of Fort Worth Residents 5 Percent
15 Percent Employment of Fort Worth Central City Residents 5 Percent
15 Percent Utilization of Fort Worth Companies for Services and Supplies 5 Percent
15 Percent Utilization of Fort Worth M/WBE Companies for Services and 5 Percent
Supplies
TOTAL 50 Percent
Community Facilities Agreement (CFA) with Fort Worth Heritage Development, LLC (Heritage):
Heritage will execute a CFA for construction of streetscape improvements along East Exchange Avenue
beginning at North Main Street and continuing to approximately Packers Avenue as well as the upsizing
and rerouting of a wastewater line generally located along Mule Alley and continuing southeast to Northeast
23rd Street. The cost of these public improvements are expected to total approximately $7,900,000.00. The
City will be responsible for paying the costs of these improvements. Heritage will also have the right to
construct additional public improvements that Heritage wishes to pay for. The entire project under the CFA
will be bid in accordance with competitive bidding statutes applicable to the City.
Advance Funding of Public Improvements and TIF Development Agreement:
As previously referenced, in order to accelerate construction of the public improvements along East
Exchange Avenue and Mule Alley, Staff recommends that the City provide advance funding for these
improvements. However, the Board of Directors of Tax Increment Reinvestment Zone No. 15
(Stockyards/Northside TIF) has approved execution of a Tax Increment Financing Development Agreement
with the City for the reimbursement of those costs, which will be booked as a receivable by the City.
Amendment to Economic Development Program Agreement with Fort Worth Heritage Development,
LLC (Heritage):
RMG will be receiving a $5,000,000.00 rent credit from Heritage under its lease. This rent credit comprises
part of the overall Economic Development incentive that the City has concluded is necessary for RMG to
relocate its corporate headquarters and broadcasting studio to the Stockyards. Rather than providing either
Heritage or RMG a direct$5,000,000.00 Economic Development grant to cover the rent credit, the City has
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elected to cover this portion of its Economic Development incentive for the RMG project by advance funding
the East Exchange Avenue and Mule Alley public infrastructure under the CFA.
In the event that RMG ceases using the Stockyards site as its
consolidated corporate headquarters and primary broadcasting site at any time during the 10-year EDPA
term, Heritage will be required to reimburse or pay the City the
difference between $5,000,000.00 of CFA infrastructure costs and any sums received by the City at that
time from the TIF under the TIF Development Agreement.
In order to secure Heritage's obligations, and thus preserve the public purposes behind the funding of the
infrastructure covered by the CFA, the existing Economic Development Program Agreement between the
City and Heritage (City Secretary Contract No. 46495) will be amended to allow the City to deduct any
sums that Heritage may be obligated to reimburse to the City under the CFA from the annual Program
Grants that the City would otherwise make to Heritage under its Economic Development Program
Agreement.
This project is located in COUNCIL DISTRICT 2, Mapsco 62G.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendations, funds will be available
in the current capital budget, as appropriated, of the Developer Contributions Fund. Repayment of the cash
advance will begin when the improvements are completed, which is expected to be late Fiscal Year 2017 or
early Fiscal Year 2018. The TIF will make annual payments to the City equal to 100 percent of the TIF
revenues, less administration expenses. Repayment to the City for the cash advance will be the first
priority for all revenues generated by the TIF and the City shall be first in line to receive reimbursement
before the TIF utilizes any revenues outside of this Agreement. The TIF will not be charged interest on the
cash being forwarded by the City and repayment in full is anticipated to occur in Fiscal Year 2027 based
upon the current 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 i ID Year (Chartfield 2)
Submitted for City Manager's Office by: Jay Chapa (5804)
Originating Department Head: Robert Sturns (212-2663)
Additional Information Contact: Michael Hennig (871-6024)
ATTACHMENTS
AppropriationOrd.docx
Form1295.pdf
Ft Worth Form 1295.pdf
http://apps.cfwnet.org/council packet/mc_review.asp?ID=24046&councildate=11/15/2016 6/1/2017
CERTIFICATE OF INTERESTED PARTIES
FORM 1295
10f1
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. 2016-129143
fort worth heritage development Ilc
city of fort worth,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 10/26/2016
being filed.
city of fort worth Date Acknowledged:
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 services,goods,or other property to be provided under the contract.
rmg edpa exchange cfa,exch av
community facilities agreement
4 Nature of interest
Name of Interested Party City,State,Country(place of business) (check applicable)
Controlling I Intermediary
hickman investments limited fort worth,TX United States X
majestic-stockyards investor Ilc city of industry, CA 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.
Signa re of authorized agent of contracting business entity
AF NOTARY STAMP/SEAL ABOVE
Sworn to and subscribed before mby the - this the day of
20 to certify which,witness my hand and seal of o ice.
Signature of officer administering oath Printed name of officer administering oath Title o fficer_aZln istering oath
Forms provided by Texas Ethics Commission www.ethics.state.tx.us Version V1.0.277
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of -, X
Subscribed and sworn to (or affirmed) before me on this day of
2010, by (AA1[4 (�Vr/ ,
proved to me on the basis of satisfactory evidenc�to be the person�sj who
appeared before me.
(seal)
Signature
LAURIE JENKINS
Commission #2077754
z ;'� Notary Public -California z
Los Angeles County D
My Comm.Expires sep 10,2018