HomeMy WebLinkAboutContract 50019 CITY SECRETARY
CONTRACT NO.
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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 SMITH & NEPHEW, INC., a
Delaware corporation("Company").
RECITALS
A. On June 28, 2016, the City Council adopted Resolution No. 4647-06-2016,
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 June 13, 2017 the City Council adopted Ordinance No. 22765-06-2017
(the "Ordinance") establishing Tax Abatement Reinvestment Zone No. 95, City of Fort
Worth,Texas(the"Zone").
D. Company owns the real property located at 4900 W. Vickery Blvd. (First
United Services Addition, Block 1, Lot 1) (the "Land"). Company currently operates a
medical products development facility on the Land and provides eighty-three(83)Full-time
Jobs there. Contingent upon receipt of the tax abatement herein, Company intends to
expand its operations on the Land, which will require certain capital improvements (more
specifically defined herein as the "Required Improvements"), as well as the installation of
certain new taxable business personal property on the Land, all as more specifically set
forth in this Agreement.
E. On April 14, 2017 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 Application is
attached hereto as Exhibit "A" and hereby made a part of this Agreement for all
purposes.
Page 1
Tax Abatement Agreement between FOFFICIALECORD
City of Fort Worth and Smith&Nephew,Inc. ETARY
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 Land is located in a Target Area (Other Central City), as those terms
are defined in the Policy. 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 3 of the
Policy.
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-five percent
(55%) 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
ad valorem taxes on New Taxable Tangible Personal Property, all calculated in
accordance with this Agreement.
Page 2
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
Abatement Term means the term of five (5) consecutive years, commencing on
January 1, 2019 and expiring on December 31, 2023, 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"B", 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 4.5.3,
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 31,2018.
Compliance Auditing Term means the term of five (5) consecutive years,
commencing on January 1, 2018 expiring on December 31, 2022, in which the City will
verify and audit Company's compliance with the various 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, and permit fees. Construction
Costs specifically excludes any property acquisition costs.
Page 3
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
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.
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 the 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 4.5.2.
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 4.6.
Fort Worth Supply and Service Percentage has the meaning ascribed to it in
Section 6.7
Full-time Job means a job provided to one (1) individual by Company on the
Land for at least forty(40)hours per week.
Hard Construction Costs means actual site development and construction costs,
including directly-related contractor fees.
Page 4
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
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.
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.
MIWBE Supply and Service Spending Commitment has the meaning ascribed
to it in Section 4.7.
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
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
4.5.1.
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 4.10.
Required Improvements means construction, interior demolition, and renovation
of the existing structure at 4900 W. Vickery Blvd., as verified in the Certificate of
Completion issued by the Director in accordance with Section 5 of this Agreement.
Page 5
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
Supply and Service Expenditures means those local 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").
4. COMPANY'S OBLIGATIONS AND COMMITMENTS.
4.1. Real Property Improvements.
Company must expend or cause to be expended at least Four Million Seven
Hundred Thousand Dollars ($4,700,000.00) in Construction Costs for the Required
Improvements by the Completion Date, and the Completion Date for the Required
Improvements must occur 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 Twenty
One Million Dollars ($21,000,000.00) must be in place on the Land by January 1,
2019, 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, Company must have expended with Fort Worth
Companies at least the greater of(i) One Million Two Hundred Twenty-five
Thousand Dollars ($1,225,000.00) in Hard Construction Costs for the Required
Page 6
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
Improvements or (ii) thirty-five percent (35%) of all Hard Construction Costs for
the Required Improvements, regardless of the total amount of such Hard
Construction Costs(the "Fort Worth Construction Commitment").
4.4. Construction Spending 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 at least the greater of(i)
Eight Hundred Seventy-five Thousand Dollars ($875,000.00) in Hard
Construction Costs for the Required Improvements or (ii) 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 Fort Worth
Certified M/WBE Companies will 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.
4.5. Employment Commitments.
Determination each year of compliance with the following employment
commitments will be based on the employment data provided to the City pursuant
to Section 4.8.2 for the year under evaluation.
4.5.1. Overall Employment.
Company must meet or exceed the following levels of overall
employment for the calendar years specified below (for each year below,
the "Overall Employment Commitment").
4.5.1.1. 2018-2019.
In calendar years 2018 and 2019, Company will
meet the Overall Employment Commitment if in the year under
evaluation Company provided and filled at least one hundred
thirteen(113) Full-time Jobs on the Land.
4.5.1.2. 2020-2021.
In calendar years 2020 and 2021, Company will
meet the Overall Employment Commitment if in the year under
evaluation Company provided and filled at least one hundred forty-
one(141) Full-time Jobs on the Land.
Page 7
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
4.5.1.3. 2022.
Company will meet the Overall Employment
Commitment in calendar year 2022 if in that year Company
provided and filled at least one hundred eighty-three (183) Full-
time Jobs on the Land.
4.5.2. Employment of Fort Worth Residents.
Company must meet or exceed the following levels of employment
of Fort Worth Residents for the calendar years specified below (for each
year below, the "Fort Worth Employment Commitment"). Full-time
Jobs held by Fort Worth Residents will also be counted as Full-time Jobs
for purposes of measuring the Overall Employment Commitment outlined
in Section 4.5.1.
4.5.2.1. 2018-2019.
In calendar years 2018 and 2019, Company will
meet the Fort Worth Employment Commitment if in the year under
evaluation Company provided and filled at least the greater of(i)
forty-six (46) Full-time Jobs on the Land or (ii) forty percent
(40%) of all Full-time Jobs on the Land, regardless of the total
number of such Full-time Jobs,with Fort Worth Residents.
4.5.2.2. 2020-2021.
In calendar years 2019 and 2020, Company will
meet the Fort Worth Employment Commitment if in the year under
evaluation Company provided and filled at least the greater of(i)
fifty-seven (57) Full-time Jobs on the Land or (ii) forty percent
(40%) of all Full-time Jobs on the Land, regardless of the total
number of such Full-time Jobs,with Fort Worth Residents.
4.5.2.3. 2022.
Company will meet the Fort Worth Employment
Commitment in calendar year 2022 if in that year Company
provided and filled at least the greater of (i) seventy-four (74)
Full-time Jobs on the Land or (ii) forty percent (40%) of all Full-
time Jobs on the Land, regardless of the total number of such Full-
time Jobs,with Fort Worth Residents.
Page 8
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
4.5.3. Employment of Central City Residents.
Company must meet or exceed the following levels of employment
of Central City Residents for the calendar years specified below (for each
year below, the "Central City Employment Commitment'). Full-time
Jobs held by Central City Residents will also be counted as Full-time Jobs
for purposes of measuring the Overall Employment Commitment outlined
in Section 4.5.1 and the Central City Employment Commitment outlined
in Section 4.5.2.
4.5.3.1. 2018-2019.
In calendar years 2018 and 2019, Company will
meet the Central City Employment Commitment if in the year
under evaluation Company provided and filled at least the greater
of (i) thirty-four (34) Full-time Jobs on the Land or (ii) thirty
percent (30%) of all Full-time Jobs on the Land, regardless of the
total number of such Full-time Jobs,with Central City Residents.
4.5.3.2. 2020-2021.
In calendar years 2020 and 2021, Company will
meet the Central City Employment Commitment if in the year
under evaluation Company provided and filled at least the greater
of (i) forty-three (43) Full-time Jobs on the Land or (ii) thirty
percent (30%) of all Full-time Jobs on the Land, regardless of the
total number of such Full-time Jobs,with Central City Residents.
4.5.3.3. 2022.
Company will meet the Central City Employment
Commitment in calendar year 2022 if in that year Company
provided and filled at least the greater of(i) fifty-five (55) Full-
time Jobs on the Land or (ii) thirty percent (30%) of all Full-time
Jobs on the Land, regardless of the total number of such Full-time
Jobs,with Central City Residents.
4.6. Supply and Service Spending Commitment for Fort Worth
Companies.
In 2018 and in each year thereafter during the Compliance Auditing Term,
Company must expend at least the greater of (i) Five Million Dollars
($5,000,000.00) in Supply and Service Expenditures or (ii) thirty-five percent
(35%) of its Supply and Service Expenditures, regardless of the total amount of
Page 9
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
such Supply and Service Expenditures, with Fort Worth Companies (the "Fort
Worth Supply and Service Spending Commitment").
4.7. Supply and Service Spending Commitment for Fort Worth Certified
M/WBE Companies.
In 2018 and in each year thereafter during the Compliance Auditing Term,
Company must expend at least the greater of (i) Three Million Five Hundred
Seventy-five Thousand Dollars ($3,575,000.00) in Supply and Service
Expenditures or (ii) twenty-five percent (25%) of its Supply and Service
Expenditures, regardless of the total amount of such Supply and Service
Expenditures, with Fort Worth Certified M/WBE Companies (the "NMBE
Supply and Service Spending Commitment").
4.8. Reports and Filings.
4.8.1. Final Construction Report.
Within sixty (60) calendar days following the Completion Date, in
order for the City to assess whether Company expended or caused to be
expended at least Four Million Seven Hundred Thousand Dollars
($4,700,000.00) in Construction Costs for the Required Improvements,
and the extent to which Company met the Fort Worth Construction
Commitment and the M/WBE Construction Commitment, 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 by Company for the Required
Improvements, (ii) the total Hard Construction Costs expended with Fort
Worth Companies by Company for the Required Improvements, and (iii)
the total Hard Construction Costs expended with Fort Worth Certified
M/WBE Companies by Company for the Required Improvements,
together with supporting invoices and other documents necessary to
demonstrate that such amounts were actually paid by Company, including,
without limitation, final lien waivers signed by Company's general
contractor.
4.8.2. Annual Employment Report.
On or before February 1, 2019 and February 1 of each year
thereafter for the remainder of the Compliance Auditing Term, in order for
the City to assess the degree to which Company met in the previous year
the Overall Employment Commitment, the Fort Worth Employment
Commitment and the Central City Employment Commitment, 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
Page 10
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
held Full-time Jobs on the Land, each as of December 31 (or such other
date requested by Company and reasonably acceptable to the City) of the
previous calendar year, together with reasonable supporting
documentation.
4.8.3. Annual Supply and Service Spending Report.
On or before February 1, 2019, and February 1 of each year
thereafter for the remainder of the Compliance Auditing Term, in order for
the City to assess the degree to which Company met the Fort Worth
Supply and Service Spending Commitment and the M/WBE Supply and
Service Spending Commitment 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.
4.8.4. 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.
4.9. 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
provide full access to the same, in order for the City to monitor compliance with
the terms and conditions of this Agreement. Company will cooperate fully 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.
4.10. 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 Company's 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 cooperate fully with the City during any
audit.
Page 11
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
4.11. 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.
4.12. 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 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. If any Application Fee funds are remaining after the
development project covered in the Application has received a final Certificate of
Occupancy (CO) from the City, the applicant must submit a letter to the director
of the City's Economic Development Department requesting a refund of the
remaining funds. The request must be made within three (3)months from the date
of the final CO.
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 4.8.1.2, and assessment by the City of the information contained therein
pursuant to Sections 4.9 and 4.10, if the City is able to verify that Construction Costs of
at least Four Million Seven Hundred Thousand Dollars ($4,700,000.00) 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.
Page 12
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
6. TAX ABATEMENT.
Subject to the terms and conditions of this Agreement,provided that(i) Company
expended at least Four Million Seven Hundred Thousand Dollars ($4,700,000.00) 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 Twenty-one Million
Dollars ($21,000,000.00) was in place on the Land by January 1, 2019, 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 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 based on the incremental taxable appraised
value of any improvements located on the Land (but not on the Land itself, which taxes
shall not be subject to Abatement hereunder) over their taxable appraised value for the
2017 tax year (which is Three Million Eight Hundred Forty-nine Thousand Six Hundred
Two Dollars ($3,849,602.00)) and on the incremental taxable appraised value of New
Taxable Tangible Personal Property over its taxable appraised value for the 2017 tax year
(which is Zero Dollars ($0.00), 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-five percent(55%), as follows:
6.1. Completion of Required Improvements (10%).
Company will be entitled to receive a percentage of the Abatement equal
to ten percent (101/o) (the "Overall Improvement Percentage") on account of
Company's 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,
Page 13
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
as determined in accordance with Section 4.3. For example, if Company expends
$3,800,000.00 in Hard Construction Costs, the Fort Worth Construction
Commitment would be $1,330,000.00 (35% of$3,800,000.00). If Company only
expended $1,130,000.00 in Hard Construction Costs with Fort Worth Companies
by the Completion Date, the Fort Worth Construction Percentage would be 4.25%
instead of 5% (or .05 x [$1.13 million/$1.33 million], or .05 x .85, or .0425). 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
"M/WBE Construction Percentage"). The M/WBE Construction Percentage
will equal the product of five percent (5%)multiplied by the percentage by which
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 5%).
A percentage of the Abatement will be based on the extent to which the
applicable Overall Employment Commitment, as outlined in Section 4.5.1, was
met (the "Overall Employment Percentage"). The Overall Employment
Percentage in a given year will equal the product of five percent (51/6) multiplied
by the percentage by which the applicable Overall Employment Commitment was
met in the previous calendar year, which will be calculated by dividing the actual
number of Full-time Jobs provided on the Land in the previous year by the
number of Full-time Jobs constituting the Overall Employment Commitment for
that year. For example, if in 2020 only 130 Full-time Jobs were provided on the
Land instead of 141, the Overall Employment Percentage for the following year
would be 4.6% instead of 5% (or .05 x [130/141]), or .05 x .9219, or .046. If the
Overall Employment Commitment is met or exceeded in any given year, the
Overall Employment Percentage for the following year will be five percent(5%).
6.5. Fort Worth Employment(Up to 10%).
A percentage of the Abatement will be based on the extent to which the
applicable Fort Worth Employment Commitment, as outlined in Section 4.5.2,
was met (the "Fort Worth Employment Percentage"). The Fort Worth
Employment Percentage for a given year will equal the product of ten percent
(10%) multiplied by the percentage by which the Fort Worth Employment
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Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
Commitment was met in the previous calendar year, which will be calculated by
dividing the actual number of Full-time Jobs provided on the Land to Fort Worth
Residents in the previous year by the number of Full-time Jobs constituting the
Fort Worth Employment Commitment for that year. For example, if Company
provides and fills 150 Full-time Jobs on the Land in 2020, the Fort Worth
Employment Commitment for that year will, in accordance with Section 4.5.2, be
60 Full-time Jobs (40% of 150 Full-time Jobs). If in that year only 48 Full-time
Jobs on the Land were provided to Fort Worth Residents, the Fort Worth
Employment Percentage for the following year would be 8% instead of 10% (or
.10 x [48/60]), or .10 x .80, or .08. If the Fort Worth Employment Commitment is
met or exceeded in any given year, the Fort Worth Employment Percentage for
the following year will be ten percent(10%).
6.6. Central City Employment(Up to 10%).
A percentage of the Abatement will be based on the extent to which the
applicable Central City Employment Commitment, as outlined in Section 4.5.3,
was met (the "Central City Employment Percentage"). The Central City
Employment Percentage for a given year will equal the product of ten percent
(10%) 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 Jobs provided on the Land to Central City
Residents in the previous year by the number of Full-time Jobs constituting the
Central City Employment Commitment for 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 ten percent(10%).
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 4.6,
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 in a given year
Company only expended $4,500,000.00 in Supply and Service Expenditures with
Fort Worth Companies, the Fort Worth Supply and Service Percentage for the
following year would be 4.5% instead of 5% (or .05 x [$4.5 million/$5 million],
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%).
Page 15
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
6.8. Fort Worth M/WBE Supply and Service Spending(Up to 5%).
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 4.7,
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%).
6.9. No Offsets.
A deficiency in attainment of one commitment may not be offset by the
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 8.5 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 taxable appraised value of
improvements on the Land over their value as of January•1, 2017, if any, up to a
maximum increase of Seven Million Fifty Thousand Dollars ($7,050,000.00) and
(ii) on the increase in the taxable appraised value of New Taxable Tangible
Personal Property located on the Land since January 1, 2017, if any, up to a
maximum increase of Thirty-one Million Five Hundred Thousand Dollars
($31,500,000.00). 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, 2017 plus (ii)
$7,050,000.00, 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, 2017 had only been $7,050,000.00. For example, and as an
example only, if in a given year of the Abatement Term the value of
improvements on the Land is $10,000,000.00 over their value as of January 1,
2017, Company would receive a maximum real property tax Abatement of fifty-
five percent (55%) of$7,050,000.00 in valuation for that year and would pay full
taxes on the $2,950,000.00 difference over the cap. Along the same lines, if the
taxable appraised value of New Taxable Tangible Personal Property located on
the Land in a given year of the Abatement Term is $35,000,000.00 over the value
Page 16
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
of that Property as of January 1, 2017, Company would receive a maximum
Abatement on New Taxable Tangible Personal Property of fifty-five percent
(55%) of$31,500,000.00 in valuation for that year and would pay full taxes on
the $3,500,000.00 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)
Company failed to expend at least Four Million Seven Hundred Thousand Dollars
($4,700,000.00) in Construction Costs for the Required Improvements by the
Completion Date, or (ii) the Completion Date did not occur on or before 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 Twenty-one
Million Dollars ($21,000,000.00)was not in place at the Land by January 1,2019,
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.C. 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:
Page 17
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
• if such conviction occurs during the Term of this Agreement, this
Agreement shall terminate contemporaneously upon such conviction
(subject to any appellate rights that may lawfully be available to and
exercised by Company) 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
• if such conviction occurs after expiration or termination of this
Agreement, subject to any appellate rights that may lawfully be available
to and exercised by 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(21/o) 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 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.
Page 18
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
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
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 term or condition of
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.
If Company fails 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, any such event 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.
Page 19
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
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
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).
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.
Page 20
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
• b
9. INDEMNIFICATION.
COMPANY, AT NO COST TO THE CITY, AGREES TO DEFEND,
INDEMNIFY AND HOLD THE CITY, ITS OFFICERS, AGENTS SER VANTS 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
AGREEMENT OR (ii)ANY NEGLIGENT ACT OR OMISSION OR INTENTIONAL
MISCONDUCT OF COMPANY, ITS OFFICERS, AGENTS, ASSOC14 TES,
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 Smith&Nephew, Inc.
Attn: City Manager Attn: Michael R. Gilson
200 Texas St. 1450 Brooks Road
Fort Worth, TX 76102 Memphis, TN
with copies to:
the City Attorney and
Economic Development Department
Director at the same address
Page 21
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
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 merger or consolidation
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 and a contact name, address and telephone number for
the Affiliate, and (ii) the Affiliate 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
unreasonably withheld, 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 is 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.
Page 22
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
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.
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. FORCE MAJEURE.
It is expressly understood and agreed by the parties to this Agreement that if the
performance of any obligations hereunder is delayed by reason of war, civil commotion,
acts of God, strike, inclement weather, shortages or unavailability of labor or materials,
unreasonable 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 Required Improvements, or other circumstances which are reasonably beyond the
control of the party obligated or permitted under the terms of this Agreement to do or
perform the same, regardless of whether any such circumstance is similar to any of those
enumerated or not, the party so obligated or permitted shall be excused from doing or
performing the same during such period of delay, so that the time period applicable to
such design or construction requirement shall be extended for a period of time equal to
the period such party was delayed. Notwithstanding anything to the contrary herein, it is
specifically understood and agreed that Company's failure to obtain adequate financing
to complete the Required Improvements by the Completion Deadline shall not be deemed
to be an event of force majeure and that this Section 18 shall not operate to extend the
Completion Deadline in such an event.
Page 23
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
19. 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.
20. CAPTIONS.
Captions and headings used in this Agreement are for reference purposes only and
shall not be deemed a part of this Agreement.
21. 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.
22. 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.
23. 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.
24. 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.
Page 24
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
EXECUTED as of the last date indicated below:
CONTRACT COMPLIANCE MANAGER:
By signing below, I hereby acknowledge that I
am the person responsible for the monitoring
and administration of this contract, including
ensuring all performance and reporting
requirements:
By:
Name of City Employee: P,aj,- S}",.,,o
Title: Do,,&hr•—
[SIGNATURES CONTINUE IMMEDIATELY FOLLOW ON NEXT TWO (2)PAGES]
Page 25
FICIAL RECORD
Tax Abatement Agreement between CITY SECRETARY
City of Fort Worth and Smith&Nephew,Inc.
FT.WORTH,TX
CITY OF FORT WORTH:
By:
Jesus J. Chapa
Assistant City Manager IFOR7
Date: �l a,�- 7 -•: .'�
APPROVED AS TO FORM AND LEGALITY: A by
pS
Mary J. Gi Se-="I
By:
Peter Vaky
Deputy City Attorney
M&C: C-28287
Form 1295: 2017-216455
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, on this day personally appeared Jesus J.
Chapa, 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 j-4*ay of
017.
Notaky Public in and for raB< ; MARIA S.SANCHEZ
t tae of T as My Notary ID#2256490
', )� j )c)C �_ >F p.t�+' Expires December 19,2021
Notary's Printed Name
Page 26
Tax Abatement Agreement between OFFICIAL RECORD
City of Fort Worth and Smith&Nephew,Inc.
CITY SECRETARY
FT.w'ORTH,TX
SMITH & NEPHEW,INC.
a Texas corporation:
By:_,W/L' �'
Name: 0- ,,,Q p
Title: \j P ✓-'1 -F-.
Date: 1 �`"� "-3 6y ,)-z t �--
STATE OF.iL2 §
COUNTY OF� §
MBEFOI�k ME,the undersigned authority,on this day personally appeared
ap. IvLa of SMITH & NEPHEW, INC., a Delaware
corporation, 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
SMITH & NEPHEW,INC.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this
day of , (1{ C� ,201 T
Publi d for /411
•,,",",, CINDI J.WALL
the State of dlexa5
p= =Notary Public.State of Texas
* �' 1 -mt '+�: Comm.Expires 06-06-2018
(�
�'�:;°F':�� Nalary ID 1257T559-1
Notary's Printed Name
Page 27 OFFICIAL RECORD
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew.Inc. CITY SECRETARY
FT.WORTH9 TX
EXHIBITS
"A"—Company's Tax Abatement Application
"B"—Map of Central City
Tax Abatement Agreement between
City of Fort Worth and Smith&Nephew,Inc.
EXHIBIT "A"
TAX ABATEMENT APPLICATION
FORT WORTH..
Economic Development
Incentive Application
Economic Development Department
1150 South Freeway
Fort Worth, Texas 76104
(817) 871-6021
Incentive Application
1.APPLICANT INFORMATION _ . . . . .} : ., s....,. . .ra �,. ;. .,w...., , .
Alli
a
Date: April 26,2017
Company Name: Smith&Nephew Biotherapeutics
Company Address: 4900 W.Vickery Blvd.
City: Fort Worth State: Texas Zip: 76107
Contact Person: Renae Dill Title/Position: Vice President, Manufacturing
Telephone Number: (817)302-3991
Mobile Telephone Number: (817)600-6437 Fax Number: N/A
E-Mail Address: renae.dill@smith-nephew.com
1. If the applicant represents a Company.(If a Developer and not a Company,proceed to#2.)
A. Company Ownership(check one): r Publicly Traded Stock _7; Privately Held
B. Form of Business(choose one): Corporation
C. How long has the company been in operation (Years)?162
D. Company Industry: Diversified Advanced Medical Technologies
E. Describe the Company's principal business:
Smith & Nephew(S&N) is a public limited company, incorporated and headquartered in the UK, with approx. 15k employees
worldwide and sales of$4.613 in 2016. S&N designs and manufactures advanced medical products and healthcare services
for orthopedics reconstruction, advanced wound management, sports medicine, and trauma&extremities applications.
S&N's pioneering approach to products/services widens access for patients and improves outcomes for healthcare systems.
F. Describe the Company's international presence, if any:
S&N's medical technology business supports healthcare professionals in over 100 countries and S&N has manufacturing
facilities in the UK, USA, Germany, Switzerland, India, China, Russia, and Costa Rica. S&N's Wound Management HQ in
Hull, England is a cornerstone site and from it they develop some of the highest-tech wound care products on the market.
G. Describe the Company's corporate citizenship practices:
Operating honestly and fairly has earned S&N a strong reputation for integrity and ethical conduct. Their name and products
are trusted in life-saving applications around the world. S&N contributes to local communities around their facilities through
grants, donations, and volunteering. In 2015, $11.5M of philanthropic spend was distributed, or 1.1%of pre-tax profits.
2. /f the applicant represents a Developer.
A. Describe the Developer's experience and background. Please include similar projects that you have constructed including
the project type and location (attach additional sheets as necessary):
N/A
B. Development Partners (Architect, Engineering Team, Interior Design, General Contract, etc.)
N/A
Page 2 of 6
II, PROJECT INFORMATION
Please include below the project description, project benefits and how the project positively impacts the community. 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
Company or Developer to be eligible to receive incentives for a project,the Company/Developer:
A. Must complete and submit this application and the application fee to the City;
B. Company/Developer or Company/Developer's principals must not be delinquent in paying property taxes for any
property owned in Fort Worth;
C. Company/Developer or Company/Developer's principals must not have ever been subject to the City of Fort
Worth's Building Standards Commission's Review;
D. Company/Developer or Company/Developer's principals must not have any City of Fort Worth liens filed against
any other property owned by the applicant property owner/developer. "Liens" includes, but is not limited to, weed
liens, demolition liens, board-up/open structure liens and paving liens.
1. Project Description (attach additional sheets as necessary):
S&N can reduce its outsourcing costs and supply chain risks by insourcing the manufacture and fill/finish of two key brands
in its portfolio. S&N is considering the consolidation/relocation of these processes to one of its existing facilities/sites in the
U.S. The proposed expansion would create up to 100 net new jobs over 4 years, at an average annual wage of approx.
$70k, and include a capital investment of approx. $5M in real property and $24M in personal property improvements(M&E).
2. In what way will the project benefit the surrounding area or serve as a catalyst for additional development and/or business
opportunities for the local economy(i.e. attract suppliers or customers)?
S&N's proposed project would stimulate economic activity in Fort Worth and Tarrant County through net new full-time job
creation at above county average wages, new construction/renovation general and subcontracts, increased local annual
supply&service spending, and new materials contracts with local manufacturing suppliers.
3. Describe how the project positively impacts the community.
With a proposed capital investment of approx. $29M, S&N would create a local property tax liability of more than $6.3M over
10 years(at current rates). S&N's expansion would create direct manufacturing jobs and payroll,which would create
indirect and ancillary jobs, increasing local sales& use tax revenues. S&N would also retain approx. existing 189 jobs at
their current facilities. S&N's proposed project could further expand the biotech industry profile of Greater Fort Worth.
III. PROJECT DETAILS
1. Proposed Project Site Address: 4900 W.Vickery Blvd., Fort Worth, TX 76107(existing facility)
2. Proposed Project Site Land Size(Acres): 9.85(current site acreage; no additional acreage necessary)
3. Will environmental remediation be required?No
4. Is this an existing facility or will a new facility be constructed? [ Newr;Existing
A. If new, what is the construction:Anticipated Start Date:Q2 2017 Anticipated Completion Date: Q2 2018
B. If existing, is this an adaptive reuse?Yes
5. Type of Project(choose one): Commercial/Industriz
6. Building Area(Square Feet) Requirements:
(a) Office 0
(b) Manufacturing 0
(c)Warehouse 0
(d) Showroom/Retail 0
(e) Other 0
Total Area(a+b+c+d+e): 0 SF
7. Will this facility be LEED certified, and if so, at what level? N/A
8. Public open space included within the proposed project site: N/A SF/Acres
Page 3 of 6
Ili. PROJECT DETAILS(Continued) r.
9. If the applicant represents a Company.(if a Developer and not a Company,proceed to#10.)
A. Is the Company expanding its existing local operations or relocating its operations from somewhere else to our area?
r- Expansion r Relocation
B. If a relocation, where is the company currently located? Lakewood, NJ, Whippany, NJ, and Willemstad, Curacao
C. Does the company plan to lease or own the facility in Fort Worth? C Lease r Own
D. If the company is planning to lease space in Fort Worth,what is the lease term? N/A Years
E. Describe the specific operations and services to be provided or products to be manufactured at the proposed Fort Worth
facility(attach additional sheets as necessary):
S&N's proposed project would build end-to-end manufacturing capabilities for Santyl and allow S&N the ability to assume
full control of the filling and finishing processes for Regranex at its existing facility in Fort Worth. Santyl is an ointment used
to treat wounds and burns and Regranex is a medication used to treat ulcers.
10. Development requests that will be sought for the project(select all that apply):
Replat
Rezoning Current Zoning: PD Requested Zoning: N/A
Variances If yes, please describe:
Downtown Design Review Board
[- Landmark Commission
Public Infrastructure Assistance
11. Real Estate Investment
A. Current Assessed Valuation of:Land $627,509 Improvements$ 3,586,327
B. Total Construction Costs: $5.3M
C. Hard Construction Costs: $3.9M
12. Business Personal Property and Inventory
A. Business Personal Property
Total investment on equipment, machinery, furnishing, etc.: $ 23.8M (- Lease i✓ Purchase
*Estimated taxable value of equipment, machinery, furnishing, etc.: $ 22.OM
*This is the value that will be on the tax rolls which includes all tangible property.
B. Inventory and Supplies
Value of Inventory: $ 0 Value of Supplies: $ 0
Percent of inventory eligible for Freeport Exemption(inventory, exported from Texas within 175 days) 0 %
13. Total Capital Investment(Real Estate and Business Personal Property):$ 29.1M
IV.EMPLOYMENT AND JOB CREATION
On the Project Site
1. How many persons are currently employed? 83 at 4900 Vickery facility
2. What percent of current employees above are Fort Worth residents?27 %
3. What percent of current employees above are Central City residents? 16 %
Page 4 of 6
IV. EMPLOYMENT AND JOB CREATION (Continued)
:. .
4. Please complete the following table for new jobs to be created from direct hire by applicant.
Currently At Completion Estimated By Estimated By
Fifth Year Tenth Year
Retained Jobs 83 83 83 IM 83
New Jobs to be Created 30 100 100
Total Jobs at Project Site 83 113 183 183
%of Net Jobs to be filled by
Fort Worth Residents 2'° 27% 27% 27%
%of Net Jobs to be filled by
Central City residents 16% 16% 16°l0 16%
5. Please attach a description of the jobs to be created, tasks to be performed for each and wage rate for each classification.
6. Does the applicant provide the following benefits: I✓ Retirement F&,_ Health f✓ Dental i✓ Domestic Partner
7. Average wage paid to employees to be located at the project site: $ $63,354 (Year 4; at full projected employment)
8. Describe the Company's talent recruitment efforts:
S&N relies heavily on highly-skilled, highly-knowledgeable employees in virtually every aspect of its business, from research
&development to manufacturing operations. S&N competes with its industry peers for the best talent in each discipline,
including engineers, technicians, and machine operators. S&N distinguishes itself from its competitors by creating a
corporate culture that values employee contributions and provides upward mobility and career advancement.
V. INCENTIVES REQUEST
Incentive(s) Requested: Iv Tax Abatement I✓ Chapter 380 Economic Development Program Grant
Do you intend to pursue abatement of County taxes? I✓Yes F_ No
If requesting a Tax Abatement,please refer to the Tax Abatement Policy for a comprehensive explanation of eligibility requirements.
VI.LOCAL COMMITMENTS
During Construction
1. What percent of the total construction costs described in Section III, Question 11 will be committed to:
A. Fort Worth businesses?TBD %
B. Fort Worth Certified Minority and Women Business Enterprises?TBD %
For Annual Supply and Service Needs
Regarding discretionary supply and service expenses (i.e landscaping, office or manufacturing supplies,janitorial services,
etc., excluding utilities):
2. What is the annual amount of discretionary supply and service expenses? $ 14.3M
3. What percentage will be committed to Fort Worth businesses? 37%
4. What percentage will be committed to Fort Worth Certified Minority and Women Business Enterprises? TBD
VII. DISCLOSURES 7
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.
Yes; S&N has engaged Duff& Phelps(D&P)to represent their business incentive interests with local&state governments
pertaining to their proposed relocation & expansion. D&P will receive compensation from S&N for services rendered in
identifying, securing, and implementing state& local economic development incentives for the project.
Page 5 of 6
A.,x
_
: .....-...:a....v:'..:.,iii
mss,
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.)Attach a talent recruitment plan, if applicable.
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 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.
,i.)Attach a plan for the utilization of Fort Worth Certified M/WBE companies.
j.)Attach a listing of the applicant's Board of Director's, if applicable.
k.)Attach'a copy of Incorporation Papers noting all principals, partners,and agents and all Fort Worth properties
owned by each.
1.)Attach the purchasing representative's company contact information if known.
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 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: Renee DN
Title: Vice President, Manufacturing
Date: April 26,2017 r _
Signature: ..�
4
Index of Attachments
a) Site plan
b) Explanation of incentives request and business pro-forma
c) Environmental impacts
d) Infrastructure improvements
e) Talent recruitment plan
f) Legal description
g) Property tax statements
h) Employee benefits package
i) Fort Worth Certified M/WBE companies utilization plan
j) Board of Directors
k) Incorporation Papers
t) Purchasing representative's company contact information
r
Attachment A—Project Site Plan
Smith &Nephew's project would not include the construction of any new real property improvements
at the proposed site,4900 W.Vickery Blvd. The project would only include interior demolition and
renovation of the existing structure,at an approximate total cost of$5.3M,$3.9M (74%)of which would
be hard costs.
Without the addition of any square footage to the existing facility,S&N's project would not require a
project site plan. Below is a floor plan and aerial view of the existing facility,to which the proposed
changes would be made:
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Attachment B—Incentives Request Explanation
Smith &Nephew's situation concerning the manufacture of two of its key products has initiated a
review of the existing supply chain. That manufacturing process is currently outsourced and single-
sourced,creating high levels of risk for supply continuity. S&N also faces regular technical challenges
with suppliers,which often requires company management travel to supplier facilities to resolve issues.
S&N's proposed project would allow them to reduce costs, mitigate supply risks,and assume full
internal control of the entire manufacturing process for one of those two key brands in their
portfolio. S&N's project pro-forma lays out several scenarios,all of which present unique cost and/or
risk mitigation advantages. The primary scenarios for the manufacture of the two key products in
question include:fully outsourcing to another contract manufacturing organization, insourcing
manufacturing at a newly constructed plant, purchasing a new plant to insource manufacturing, partially
insourcing to the S&N Fort Worth facility,or fully insourcing at another S&N plant.
S&N's option to partially insource manufacturing to their Fort Worth facility, proposes the following real
and personal property improvements,including cost detail for the approximately$29M capital
investment:
Description Type Investment
Shell& Fit Out RP $3,918,000
Equipment BPP $7,108,000
Other Directs BPP $1,004,000
Construction Management RP $1,383,450
Services BPP $1,690,000
Contingency BPP $2,326,000
Escalation BPP $302,000
PPQ Lots BPP $4,054,626
PPQ Lots Salaries(capitalized) BPP $3,351,375
Equipment Validation BPP $1,000,000
Software/Systems BPP $1,000,000
Renaissance Tech Transfer BPP $2,000,000
Total $29,137,451
A more detailed description of the business personal property is included below:
Description Quantity
Air Handling Unit 1
Autoclave 1
Bag Sealer 1
Balance 2
Ball mill 1
Centrifuge 1
Clean Steam Generator 1
Cold Room 2
Conductivity and UV transmitters 1
Cone blender 1
Dialysis Holder w/6 bag holders 2
Drum Oven 1
Filter housing 5
Filter Integrity Tester 2
Freezer 1
Fume Hood 1
Glass ware storage cabinets 1
Glass wares 1
Glasswasher 1
Glove Box Isolator 1
Heat block for vial thaw 1
Heat Exchanger 7
Heating Hot Water Skid 1
Hydrogen peroxide gas generator 1
Krieger Batch Mixer 1
Laminar Flow Booth 1
Laminar Flow Hood 3
Lyophilizer 1
Magnetic Stir plates 1
Microscopes 1
Mixer 3
pH meter 1
Pipet aids 1
Plant Steam Boiler 1
Portable CIP skid 1
Pump,Centrifugal 4
Pump, Diaphragm 1
Pump, Peristaltic 3
Pump, Rotary Lobe 3
Quadro Mill 1
Racks for warm room 1
Refrigerator 1
Scale 2
Sifter 1
Spectrophotometer 1
Stir plate 1
Strainer 1
Submersible Pump 1
Tank Skid 2
Temperature Control Unit 4
TOC Analyzer 2
Tube Filler 2
USP Water generator 1
Vessel 4
Vessel 3
Vessel, Polypropylene 10
Warm Room 1
Total 103
Among the existing facilities in Smith& Nephew's global operations footprint,several are suitable for
accommodating the proposed relocation and expansion of manufacturing operations. The
manufacturing operations being considered for relocation are currently based in Lakewood, NJ and
Whippany, NJ (neither operated by S&N),and Willemstad,Curacao(operated by S&N).
AN must carefully evaluate a variety of costs at the sites under consideration, including, but not limited
to full and part-time labor,real estate,taxes, insurance, utilities,and transportation costs. S&N has
engaged Duff&Phelps(D&P)to provide site selection& business incentive advisory services for the
proposed investment,including a cost-benefit analysis for sites under consideration. For sites that have
similar operational and fixed cost profiles,economic development incentives will be an important part
of the final decision.
As the financial stewards of the company,S&N's executive management and Board of Directors are
interested in several aspects of economic development incentives. Incentives would assist the company
in reducing their cost of capital for the new investment, relocating production to mitigate risk and cost
volatility in their supply chain,and achieving a sufficient return on investment. Incentives would also
create a financial partnership with the community that encourages cooperation and ensures the success
of the expansion.
Healthpoint Biotherapeutics,the company that Smith & Nephew acquired in 2012, is featured
prominently in the Fort Worth Chamber of Commerce's Life Sciences regional industry cluster brochure.
S&N's Fort Worth facility exemplifies the type of operations that help make the DFW metroplex a
hotbed of biomedical innovation. S&N helps Fort Worth maintain a critical mass of biomedical
companies,healthcare R&D, and top-ranked labs,schools,and hospital infrastructure.
Encouraging S&N's expansion in the region is important not only to local residents seeking biomedical
job opportunities, but regional initiatives,such as TECH Fort Worth, BioDFW,and the DFW Regional
Workforce Leadership Council. Additionally,the biotechnology, life sciences and medical device
industries are top job creation and capital investment priorities for the State of Texas,with funding
preferences and special incentives consideration given to companies that develop those technologies.
Smith &Nephew conducts business fairly,ethically,and with a civic-mindedness that shows their
commitment to the Fort Worth community. Only taking into account direct monetary contributions,
S&N made charitable donations of more than$51,000 to local groups and non-profits in the Fort Worth
area last year. Beneficiaries included the Forth Worth Business Press($10k),the Fort Worth Stock Show
Syndicate($10k),the Forth Worth Zoo($7,500),the Jewel Charity($20k),Schoolkids.com ($2k) and
Trinity Habitat for Humanity($2k). S&N sees their role in Fort Worth as more than just an employer, but
a part of the community fabric as well.
In addition to the donations to local charities above,S&N Fort Worth carried out the following activities
in the community:
• Developed a scholarship program for local high school seniors at Arlington Heights and will
award three$1,000 scholarships in May 2017
• Collects money each quarter as part of their Denim Wednesday perk(relaxed dress code for
employees),which is then donated to local charities. In Q1,S&N donated $1,260 to WestAid,a
regional food pantry serving one of the most culturally diverse areas of Southwest Tarrant
County(the only five-day-a-week pantry on Fort Worth's west side).
• Participated in the 2016 Fort Worth Brush Up event,an initiative that makes basic home
improvements for residents in the community
• Volunteered through several employee groups at the North Texas Food Bank
• Participating for a second year in the Kitz for Kids program
• Collected canned foods for the North Texas Food Bank's 2016 Holiday Season drive
• Participated in the 2016 DFW Salvation Army Angel Tree program
r46
Attachment C—Environmental Impacts
There are no significant environmental impacts associated with the project,as there would be no
additional acreage to acquire or square footage increase to the existing facility(the proposal contains
only demolition and renovation aspects).
Any new personal property improvements, including machinery&equipment used in the manufacturing
process,would be compliant with all federal,state&local air and water quality standards.
Attachment D—Infrastructure Improvements
There would be no appreciable increase in building or site infrastructure requirements as a result of the
project.
o-
Attachment E—Talent Recruitment
Smith&Nephew relies heavily on highly-skilled, highly-knowledgeable employees in virtually every
aspect of its business,from R&D to manufacturing operations. S&N competes with its industry peers for
the best talent in each discipline, including engineers,technicians,and machine operators.
S&N distinguishes itself from its competitors by creating a corporate culture that values employee
contributions and provides upward mobility and career advancement. S&N recognizes the need to
create an environment where talented people have an opportunity to develop and continue to grow. By
creating a career development process and growth platform that provides opportunities for people of all
skill levels and positions,from diverse cultures, beliefs,and backgrounds,S&N positively impacts
employee engagement and retains its top performers.
Global talent acquisition, retention and development is a top priority for S&N and the following are
aspects of their strategy:
• Develop strategic partners to attract, retain,develop and enable talent
• Utilize practical solutions that are both realistic and effective to engage and enable talent to
achieve results and career goals
• Recommend talent processes and solutions that are global and scalable
• Develop a sustainable,self-reinforcing talent pipeline(both internally&externally)that aligns
with S&N's strategic business needs
• Create and embed a talent development philosophy that promotes S&N as a great place to work
• Deliver leadership development strategies to inspire leaders to adopt behaviours that drive the
success of the business
• Provide leadership and direction across a performance management framework to support the
achievement of S&N's strategic priorities
• Develop organisational change readiness capability for a sustainable future
Attachment F—Legal Description of Property
Per Tarrant County Appraisal District records,the legal description for the property located at 4900 W.
Vickery Blvd., Fort Worth,Texas 76107 is as follows:
First United Services Addition-Block:1 Lot.1
Attachment G—Property Tax Statement
See attached tax certificates.
Attachment H—Employee Benefit Package
Smith &Nephew offers a rewarding benefits package. S&N's packages vary according to roles within the
company, but typically include a competitive base salary,healthcare coverage,dental and vision benefits,
FSA/HSA accounts,the opportunity for some employees to earn an annual incentive bonus,an employee
stock purchase program,and a company pension/retirement plan for all employees.
S&N pays approximately 70% of the cost of their employee's healthcare plans, with 30% paid by their
employees. Additional benefits include an employee assistance and work-life program, basic life and
accidental death&disability insurance,short and long-term disability insurance, business travel accident
insurance, adoption assistance, tuition reimbursement, fitness/wellness reimbursement, and global
welfare programs encouraging employees to participate in activities and challenges for wellbeing.
Attachment I—Utilization Plan of Fort Wort M/WBE Companies
In order to achieve the broadest level of diversity among its subcontractors,suppliers and vendors,
Smith &Nephew would work with their general contractor to identify City of Fort Worth-certified
minority and women-owned business enterprises(M/WBEs)for work related to their proposed
improvements to real and personal property, including demolition and renovation services.
S&N is committed to the utilization,where financially and logistically feasible,of qualified M/WBEs for
project-related expenditures. The various forms of employee and business diversity are a crucial part of
S&N's success in recruiting the best talent,developing the best products and services,establishing the
best possible business partner networks,and maintaining their industry position with regard to
competitiveness and innovation.
Attachment J—Board of Directors
• Roberto Quarta—Chairman
• Olivier Bohuon—Chief Executive Officer
• Graham Baker—Chief Financial Officer
• Vinita Bali—Independent Non-Executive Director
• Ian Barlow—Independent Non-Executive Director
• Virginia Bottomley—Independent Non-Executive Director
• Erik Engstrom—Independent Non-Executive Director
• Robin Freestone—Independent Non-Executive Director
• Michael A Friedman—Independent Non-Executive Director
• Joseph Papa—Independent Non-Executive Director
• Susan Swabey—Company Secretary
Attachment K—Articles of Incorporation
See attached articles of incorporation.
s
Pages 26-63 of the Application contain public documents that are available on the Texas Secretary of
State's website.
s
Attachment L—Purchasing Representatives Contact Information
This is not applicable, as Smith& Nephew currently owns the property under consideration for the
project(4900 W.Vickery Blvd., Fort Worth,TX 76107).
Section IV-Employment and Job Creation
Below is a description of jobs to be created,tasks to be performed for each,and wage rate for each
classification:
Occupational Title Net New lobs Annual Salary Annual Bonus Total Annual Salary+ Cumulative Employment:
Bonus 2017 2018 2019 202D 2021
Operators/Packers 58 $47,500 50 $47,500 12 20 20 58 58
Team Lead 4 5100,000 $10,000 $110,000 1 4 4 4 4
Operations Manager 1 $150,000 522,500 $172,500 1 1 1 1 1
En ineers/NLS&T 4 5100,000 $10,000 $110,000 2 4 4 4 4
Technicians 8 $50,000 1 $0 $50,000 3 6 1 8 8 8
Health&Safety Specialist 1 $70,000 $3,500 $73,500 1 1 1 1 1
Materials M mt. 7 $60,000 $3,000 $63,000 3 5 7 7 7
Supply Chain Director I $150,000 $22,500 $172,500 1 1 1 1 1
Quality/Regulatory Specialist 10 $75,000 $7,500 $82,500 5 6 6 10 10
Quality Assurance Manager 1 $100,000 510,000 $110,000 0 1 1 1 1
ITSpecialist 2 1 $75,000 $7,500 1 $82,500 1 2 2 2 1 2
HR Specialist 1 $75,000 $7,500 $82,500 0 1 1 1 1
Finance Analyst 1 $75,000 $7,500 $82,500 0 1 1 1 1
Program Manager 1 $75,000 57,500 $82,500 0 0 1 1 1
Total 100 30 53 58 100 100
Notes: Cumulative Pa roll(Sala On ) $2,020,000$3,641,400 $4,021,146 $6,335,412 $6,462,120
Salaryassumes a2%increase eachyear Cumulative Pa II(Sala +Bonus)11$2,152,5001$3,874,470 $4,272,9231$6,624,060 $6,756,542
Weighted Average Salary 1 $67,333 $68,706 $69,3301 $63,3541564,621
Weighted Ave rae5ala +Bonus $71,750 $73,103 573,671 $66,241 $67,565
EXHIBIT "B"
MAP OF CENTRAL CITY
CDBG Eligible Areas & Central City
7 2
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76148 n
76180
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76021
76135 76022
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ar $ 0 1 2 4 6 8 Planning Department FORTWORTH
Miles 10/21/04- BK *
M&C Review Page I of 2
Official site of the City of Fort Worth,Texas
CITY COUNCIL AGENDA FSRIr—
TWoRm
COUNCIL ACTION: Approved on 6/20/2017
DATE: 6/20/201; REFERENCE NO.. C-28287 LOG NAME: 17ED—
SMITHNEPHEW
CODE: C TYPE: NOW PUBLIC CONSENT HEARING:
NO
SUBJECT: Authorize Execution of a Tax Abatement Agreement with Smith Nephew Inc., or an Affiliate
for the Expansion of an Existing Medical Manufacturing Facility Located at 4900 W.Vickery
Boulevard (COUNCIL DISTRICT 3)
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to execute a Tax Abatement
Agreement with Smith & Nephew, Inc. or an affiliate thereof, for the expansion of an existing medical
manufacturing facility at 4900 W. Vickery Boulevard.
DISCUSSION:
Smith & Nephew, Inc. (Company), a global leader in the medical technology industry, with a presence in
more than 90 countries around the world, is looking to expand operations in Fort Worth to increase
manufacturing capabilities and assume full control of the filling and finishing processes for certain medical
products at its existing facility at 4900 W. Vickery Blvd. The Company plans to invest at least$4.7 million in
total construction costs (exclusive of land acquisition costs) and at least$21 million in new business
personal property by December 31, 2018. Hard construction costs for the project are estimated at$3.5
million. Failure to meet the minimum total construction cost and business personal property investment is
an event of default, which, subject to commercially reasonable notice and cure rights, will result in
immediate termination of the Agreement. The Company will spend or cause to be expended the greater of
35 percent or$1,225,000.00 of all hard construction costs with Fort Worth contractors and the greater of 25
percent or$875,000.00 of all hard construction costs with contractors that are Fort Worth Certified
Minority/Women Owned Business Enterprise companies.
As a result of the investment, the Company will create 30 new full time employees(FTEs) on the property
by December 31, 2018, another 28 new FTEs(for a total of 58) by December 31 2020 and an additional 42
new FTEs (for a total of 100) by December 31, 2022. A minimum of 40 percent of the new full time jobs will
be with Fort Worth residents and a minimum of 30 percent of the new full time jobs will be with Fort Worth
Central City residents. The average salary of the new FTEs is projected to be over$46,000.00 annually.
The Company will also spend the greater of 35 percent or$5,000,000.00 of annual discretionary service
and supply expenditures with Fort Worth companies and a minimum of 25 percent or$3,575,000.00 of
annual discretionary service and supply expenditures with contractors that are certified Fort Worth MMIBE
contractors.
In return for these commitments, the City will grant a 55 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:
Company Commitment Potential
Abatement
http://apps.cfwnet.org/council_packet/mc—review.asp?ID=24801&councildate=6/20/2017 11/20/2017
M&C Review Page 2 of 2
$4.7 million in'Real Property Investment and $21 million in 10 percent
Personal Property Investment (Base Commitment)
35 percent Construction Spending with FW Companies 5 percent
25 percent Construction Spending with FW Certified 5 percent
M/WBE Companies
t
verall New Employment of 30/58/100 Full Time
mployees 5 percent
40 percent New FTEs are Fort Worth Residents I percent
30 percent New FTEs are Fort Worth Central City 10 percent
Residents
35 percent annual with FW Companies for Services and 5 percent
Supplies
25 percent annual with FW Certified M/WBE Companies iur 5 percent
Services and Supplies
TOTAL 1 55 percent
Staff recommends entering into a Tax Abatement Agreement with the Company for the project.
This project is located in COUNCIL DISTRICT 3.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that approval of this Agreement will have no material effect on the Fiscal
Year 2017 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 l Department I Account Project Program Activity Budget Reference# Amount
I 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 (2663)
Additional Information Contact: Robert Sturns (2663)
ATTACHMENTS
170601 Form 1295 Smith Nephew Project Prince.pdf
170613 RIZ 95 Map.pdf
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=24801&councildate=6/20/2017 11/20/2017
CERTIFICATE OF INTERESTED PARTIES
FORM 2295
Nos.I-4 and 6 if there are interested parties OFFICE USE ONLY
"JS s there are no"+teres ea 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. 2017-216455
Smith and Nephew, Inc.
Ft 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 05/31/2017
being filed.
City of Ft Worth Date Acknowledge
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.
170517
Project Prince Economic Development Incentive Application
Nature of interest
4
Name of Interested Party City,State,Country(place of business) (check applicable)
Controlling I Intermediary
Smith and Nephew Holdings,Inc. Memphis,TN United States X
Duff and Phelps, LLC Austin,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 ano or-ect.
�a�`""""�• CINDI J,WALL
o��wv Pue'o
Notary Public,state of Texas
►,' , Comm.Expires 06.05-2018 `
'•,,,,,,,,,,o� Notary ID 12871559.1
Signa re of authorized agent of contracting business entity
AFFIX NOTARY STAMP/SEAL ABOVE
.,arom to and subscribed before me,by the said ` �_L 1. ,1 this the day of
20_1—
Z to certify which,witness my hand and seal of office.
7� watt
Si ature officer administering oath Printed name of officer administering oath Title of officer ad ministering oath
Forms provided by Texas Ethics Commission www.ethics.state.tx.us Version V1.0.883