HomeMy WebLinkAboutContract 52016-A1 5 AT
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2019 AMENDMENT NO. 1 TO
iFYFORT aRY ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
(CITY SECRETARY CONTRACT NO. 52016)
This AMENDMENT NO. 1 TO CITY SECRETARY CONTRACT NO. 52016
("Amendment") is made and entered into by and between the CITY OF FORT WORTH,
TEXAS ("City"), a home rule municipality organized under the laws of the State of Texas, and
PARKER-HANNIFIN CORPORATION, an Ohio corporation("Company").
The City and Company hereby agree that the following statements are true and correct
and constitute the basis upon which the City and Company have entered into this Amendment:
A. Company is a global diversified manufacturer of motion and control technology
systems. On or about March 8, 2019 the City and Company entered into that certain Economic
Development Program Agreement on file in the City Secretary's Office as City Secretary
Contract No. 52016 (the "Agreement"). Under the Agreement, Company agreed to, among
other things, renovate and expand an existing building located at 4701 Mercantile Drive into an
office and manufacturing facility of at least 242,400 square feet of occupiable space for
Company's Stratoflex Divisional Headquarters (the "Required Improvements"), as more
specifically set forth in the Agreement. In return for completing the Required Improvements by
March 31, 2019 (the "Completion Deadline") and installation of certain New Taxable Tangible
Personal Property as of January 1, 2020, the City agreed to pay Company ten (10) annual
economic development program grants, as authorized by Chapter 380, Texas Local Government
Code.
B. Company has undertaken significant work on the Required Improvements, but has
encountered delays in completing the Required Improvements due to strong customer demand
for its products and the resulting need for Company to redirect resources toward that initiative.
As a result, Company has requested the City to amend the Agreement to extend the Completion
Deadline from March 31, 2019 to December 31, 2021. This extension would also necessitate an
extension to the deadline for installation of related New Taxable Tangible Personal Property, as
well as the initial dates by which certain other obligations of Company under the Agreement are
to be performed. The City is willing to consent to this request in accordance with the terms and
conditions of this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the City and Company agree as follows:
Page 1 of 3 OFFICIAL RECORD
Amendment No. 1 to CSC No. 52016 CITY SECRETARY
Economic Development Program Agreement with Parker-Hannifin Corporation
FT. WORTH,TX
1. Section 2 of the Agreement (Definitions) is hereby amended to change the definition of
the following term:
Completion Deadline means December 31, 2021.
2. Section 4.3 of the Agreement (Personal Property Improvements) is hereby amended to
read as follows:
4.3. Personal Property Improvements.
Company covenants and agrees that New Taxable Tangible Personal
Property having a value of at least Three Million Eight Hundred Thousand
Dollars ($3,800,000.00) must be in place on the Development Site by January 1,
2022, as determined solely by the appraisal district having jurisdiction over the
Development Site at that time(the "Personal Property Commitment").
3. Section 4.5 of the Agreement (Employment Commitments) and Section 4.6 of the
Agreement (Supply and Service Spending Commitments) are hereby amended to change each
reference to the year "2019" therein to "2021", so that the first year in which the Fort Worth
Employment Commitment; the Central City Employment Commitment; the Wage Rate
Commitment; the Salary Commitment; the Fort Worth Supply and Service Spending
Commitment; and the M/WBE Supply and Service Spending Commitment must be met is 2021
instead of 2019.
4. Section 4.7.3 (Annual Employment Report) and Section 4.7.4 (Annual Supply and
Service Spending Report) are hereby amended to change both references to the year "2020"
therein to "2022", so that the deadline for the first reports required thereunder will be February 1,
2022 instead of February 1, 2020.
5. The first sentence of the introductory paragraph to Section 6 of the Agreement (Program
Grants) is hereby amended to read as follows:
As more specifically set forth herein, if both the Real Property
Commitment set forth,in Section 4.2 and the Personal Property Commitment set
forth in Section 4.3 were met, Company will be entitled to receive ten (10) annual
Program Grants, payment of which will begin in 2022 and end in 2031.
Page 2 of 3
Amendment No. 1 to CSC No. 52016
Economic Development Program Agreement with Parker-Hannifin Corporation
6. The first sentence of Section 6.11 of the Agreement (Deadline for Payments and Source
of Funds) is hereby amended to read as follows:
The first Program Grant payable hereunder will be paid by the City on or
before June 1, 2022.
7. All terms in this Amendment that are capitalized but not defined herein shall have the
meanings assigned to them in the Agreement.
8. All terms and conditions of the Agreement that are not expressly amended pursuant to
this Amendment shall remain in full force and effect.
9. This Amendment shall be effective as of March 26, 2019, which is the date on which the
City Council approved Mayor and Council Communication C-29075 authorizing execution of
this Amendment.
EXECUTED in multiples to be effective as of March 26, 2019:
CITY OF FORT WORTH: PARKER-HANNIFIN CORPORATION:
By 1 By:
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Assistant City Manager Title: 5A • eqGR s747s lf Go'r-+- 7)¢-K
APPROVED AS TO FORM AND LEGALITY:
Attested b • n
By: 7
Peter Vaky y,{
Deputy City Attorney M- 3• , City Secrete T�.,`� LL
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M&C: C-29075 03-26-2019
Form 1295: 2019-459329
OFFICIAL RECORD
Page 3 of 3 CITY SECRETARY
Amendment No. 1 to CSC No. 52016
Economic Development Program Agreement with Parker-Hannifin Corporation Ff. WORTH,TX
10/28/2019 M&C Review
CITY COUNCIL AGENDA FORT�ORTII
COUNCIL ACTION: Approved on 3/26/2019
DATE: 3/26/2019 REFERENCE * C-29075 LOG NAME: 17ED
NO.: AMENDPARKERHANNIFIN2019
CODE: C TYPE: CONSENT PUBLIC NO
HEARING:
SUBJECT: Authorize Execution of Amendment No. 1 to Economic Development Program Agreement
with Parker-Hannifin Corporation (City Secretary Contract No. 52016)to Extend the
Deadline for Completion of a Manufacturing and Office Consolidation Located at 4701
Mercantile Drive(COUNCIL DISTRICT 4)
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to execute Amendment No. 1 to
Economic Development Program Agreement with Parker-Hannifin Corporation (City Secretary Contract No.
52016)to extend the deadline for completion of a manufacturing facility and office consolidation located at
4701 Mercantile Drive from March 31, 2019 to December 31, 2021.
DISCUSSION:
On October 25, 2016,the City Council authorized the execution of an Economic Development Program
Agreement with Parker-Hannifin Corporation (Company)for the consolidation of its existing business
operation into a 242,000 square foot expansion at 4701 Mercantile Drive to support increasing business
needs (City Secretary Contract No.52016, M&C C-27976). Under the Agreement,the Company must
invest at least$25.5 million in real and business personal property improvements(exclusive of land costs)
and have at least 525 full-time equivalent jobs filled on the property by a date certain (defined as the
Completion Deadline). In return, as authorized by Chapter 380,Texas Local Government Code,the City will
pay Company 10 annual economic development program grants in an amount not to exceed 60 percent of
incremental real and personal property taxes.
Due to delays in finalizing development plans upon conducting an environmental assessment on the site,
the construction schedule had to be pushed out. In order to fulfill the commitments of the Agreement,the
Company had requested a revised completion deadline of March 31, 2019. On December 12, 2017,the
City Council authorized an amendment to extend the completion deadline from December 31, 2018 to
March 31, 2019 (M&C C-28501).
The company has currently expended approximately$12.0 million on the demolition and renovation portion
of the project, but the expansion project has moved slower than anticipated due to strong customer demand
and the need for company resources to be focused on meeting the demand. It is anticipated that the
renovations will be completed later this year and that the construction of the office facility will begin shortly
thereafter with an estimated completion in 2021. As such, the company has requested an additional
extension of the completion deadline from March 31, 2019 to December 31, 2021.The adjustment of the
completion deadline would also extend the deadline for having New Taxable Tangible Personal Property
valued at least$3.8 million to January 1, 2022.The current deadline is January 1, 2020. Staff has no
objection to this request.
All other terms and conditions outlined out in the Agreement will remain the same.The Company will spend
or cause to be expended the greater of 20 percent or$4,340,000.00 of all hard construction costs with Fort
Worth companies, and will spend or cause to be expended the greater of 15 percent or$3,255,000.00 of all
hard construction costs with companies that are Fort Worth Certified Minority/Women Owned Business
Enterprise companies.The Company will fill a minimum of 40 percent of all FTEs with Fort Worth residents
and a minimum of 20 percent of all FTEs with Fort Worth Central City residents.
The Company will also spend the greater of 35 percent or$1,400,000.00 in annual discretionary service
and supply expenses with Fort Worth companies and the greater of 20 percent or$800,000.00 in annual
discretionary service and supply expenses with companies that are Fort Worth Certified Minority/Women
Owned Business Enterprise companies. The maximum annual program grant will be equal to 60 percent of
the incremental value of real and business personal property taxes on the development.
The project is located in Council District 4.
FISCAL INFORMATION/CERTIFICATION:
apps.fortworthtexas.gov/council_packet/mc_review.asp?I D=26895&counciIdate=3/26/2019 1/2
10/28/2019 M&C Review
The Director of Finance certifies that approval of this Agreement will have no material effect on the Fiscal
Year 2019 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 longterm financial forecast.
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Submitted for City Manager's Office by_ Susan Alanis(8180)
Originating Department Head: Robert Sturns(2663)
Additional Information Contact: Brenda Hicks-Sorensen (2606)
ATTACHMENTS
2019 Form 1295Certiflcate ParkerHannifin.pdf
apps.fortworthtexas.gov/council_packet/mc_review.asp?ID=26895&councildate=3/26/2019 2/2