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HomeMy WebLinkAboutContract 39287 (2)• � '�/• _ � v ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Agreement") is entered into by and between the CITY OF FORT WORTH, TEXAS (the "City"), a home rule municipal corporation organized under the laws of the State of Texas, and FW MASON HEIGHTS, L.P. ("Developer"), a Texas limited partnership, acting by and through Happy Baggett, Manager of FW Mason Heights Genpar, L.L.C., a Texas limited liability company and Developer's general partner. RECITALS The City and Developer hereby agree that the following statements are true and correct and constitute the basis upon which the City and Developer have entered into this Agreement: A. Developer owns approximately sixty-three (63) acres of real property in the TIF District, as more specifically depicted and described in Exhibit "A" (the "Development Property"), which is attached hereto and hereby made a part of this Agreement for all purposes. Developer intends to cause construction on the Development Property of a retail shopping center comprising at least 300,000 square feet of occupiable space, generally as depicted in the renderings attached hereto as Exhibit "B", which is hereby made a part of this Agreement for all purposes (the "Development"). Developer has represented to the City that the Development will not be feasible financially without public assistance due to, among other things, infrastructure challenges associated with the Development Property and marketing challenges associated with the area. B. The 2009 Comprehensive Plan, adopted by the City Council on February 24, 2009 pursuant to Ordinance No. 18492-02-2009 (the "Comprehensive Plan") recommends that the City promote Central City locations in the City for business development and that the City establish incentives to promote the redevelopment or reuse of underdeveloped or deteriorated properties in the City's commercial districts. C. As recommended by the Comprehensive Plan and in accordance with Resolution No. 3716, adopted by the City Council on March 10, 2009, the City has established an economic development program pursuant to which the City will, on a case - by -case basis, offer economic incentive packages authorized by Chapter 380 of the Texas Local Government Code that include monetary loans and grants of public money, as well as the provision of personnel and services of the City, to businesses and entities that the City Council determines will promote state or local economic development and stimulate business and commercial activity in the City in return for verifiable commitments from such businesses or entities to cause specific employment and other pub�enefits to be made or invested in the City (the " 380 Program"). oFFrcrA� REcoRD Page I crTX SECRETARY` Economic Development Program Agreement ��Yn between City of Fo�4 Worth and FW Iv(ason Heights, L.P. ; 5 ��• mxieRT�s T� D. The City Council has determined that by entering into this Agreement, the potential economic benefits that will accrue to the City under the terms and conditions of this Agreement are consistent with the City's economic development objectives and that promoting retail development in the area of the Central City where the Development Property is located will further the goals espoused by the Comprehensive Plan for positive growth in the City. In addition, the City Council has determined that the 380 Program is an appropriate means to achieve the construction of the Development, which the City Council has determined is necessary and desirable, and that the potential economic benefits that will accrue to the City pursuant the terms and conditions of this Agreement are consistent with the City's economic development objectives as outlined in the Comprehensive Plan. This Agreement is authorized by Chapter 380 of the Texas Local Government Code. E. The City has determined that the feasibility of the Development is contingent on Developer's receipt of the Program Grants, as provided in this Agreement. The City's analysis is specifically based on financial information provided by Developer. 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 Developer 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 tei-�ns shall have the definitions ascribed to them as follows: 380 Program has the meaning ascribed to it in Recital C. Affiliate means all entities, incorporated or otherwise, under common control with, controlled by or controlling Developer. For purposes of this definition, "control" means fifty percent (50%) or more of the ownership determined by either value or vote. Page 2 Economic Development Program Agreement behveen City of Fort Worth and FW Mason Heights, L.P. Base Program Source Funds means the maximum amount of City funds available for inclusion in all Program Grants payable in accordance with this Agreement, as follows: (a) If the Development comprises between 300,000 and 399,999 square feet of occupiable space as of the Completion Date, as reflected in the certificate or certificates of occupancy issued for the Development by the Completion Date and verified in the Certificate of Completion issued by the City in accordance with Section 5.1, the Base Program Source Funds for each Program Grant payable hereunder shall equal fifty percent (50%) of the Development Personal Property Tax Revenues plus fifty percent (50%) of the Development Sales Tax Revenues which were received by the City during the Twelve -Month Period ending in the same Program Year in which the Program Grant for that Program Year is payable. (b) If the Development comprises between 400,000 and 499,999 square feet of occupiable space as of the Completion Date, as reflected in the certificate or certificates of occupancy issued for the Development by the Completion Date and verified in the Certificate of Completion issued by the City in accordance with Section 5.1, the Base Program Source Funds for each Program Grant payable hereunder shall equal seventy-five percent (75%) of the Development Personal Property Tax Revenues plus seventy-five percent (75%) of the Development Sales Tax Revenues which were received by the City during the Twelve -Month Period ending in the same Program Year in which the Program Grant for that Program Year is payable. (c) If the Development comprises 500,000 or more square feet of occupiable space as of the Completion Date, as reflected in the certificate or certificates of occupancy issued for the Development by the Completion Date and verified in the Certificate of Completion issued by the City in accordance with Section 5.1, the Base Program Source Funds for each Program Grant payable hereunder shall equal one hundred percent (100%) of the Development Personal Property Tax Revenues plus one hundred percent (100%) of the Development Sales Tax Revenues which were received by the City during the Twelve -Month Period ending in the same Program Year in which the Program Grant for that Program Year is payable. Certificate of Completion has the meaning ascribed to it in Section 5.1. Completion Date means the date as of which certificates of occupancy, whether final or temporary, have been issued by the City for all of the improvements comprising the Development. Completion Deadline means December 31, 2012. Comprehensive Plan has the meaning ascribed to it in Recital B. Page 3 >Jconomic Development Program Agreement between City of Fort Worth and FW Mason Fleights, L.P. Construction Costs means actual site development and construction costs, including directly -related contractor fees, costs of supplies and materials, engineering fees, architectural and design fees, and permit fees, and specifically excludes property acquisition costs. Development has the meaning ascribed to it in Recital A. Development Personal Property Tax Revenues means ad valorem taxes on Tangible Personal Property located on the Development Property that are received by the City, minas taxes payable on Tangible Personal Property located on the Development Property for the 2009 tax year, based on the taxable appraised value of Tangible Personal Property located on the Development Property for the 2009 tax year. With respect to Tangible Personal Property leased by a Development Property User, Development Personal Property Tax Revenues will include that portion of annual property tax paid by the Development Property User, prorated on a daily basis, which is attributable to the period during which the Development Property User was the lessee of such property. The taxable appraised value of such Tangible Personal Property for any given tax year will be established solely by the appraisal district that has jurisdiction over the Development Property at the time. Development Property has the meaning ascribed to it in Recital A. Development Property User means any person or entity that has the legal right to use all or any portion of the Development for retail or other lawful purposes, including without limitation, Developer and third party retail and commercial businesses. Development Sales Tax Revenues means a one percent (1%) available sales tax, such as that presently in effect pursuant to Texas Tax Code §§ 321.101(a) and 321.103, resulting from sales taxes received by the City and collected by Developer and other Developer Property Users on Sales transacted on the Development Property. Development Sales Tax Revenues specifically excludes all revenues from (i) the Crime Control District Sales Tax imposed by the City pursuant to Texas Tax Code § 323.105 and Texas Local Government Code § 363.005, as may be amended, and (ii) the Transit Authority Sales Tax paid to the City by the Fort Worth Transportation Authority pursuant to City Secretary Contract No. 19689, as previously or subsequently amended or restated, from the sales tax imposed by the Fort Worth Transportation Authority pursuant to Texas Fax Code Chapter 322. Notwithstanding anything to the contrary herein, in no event shall Development Sales Tax Revenues ever exceed a one percent (1 %) sales tax imposed by the City, even if the City at any point in the future charges more than a one percent (1%) sales tax. If the City's sales tax rate is ever decreased to the extent that the City receives available sales tax revenues based on less than a one percent (1 %) sales tax, then the meaning of Development Sales Tax Revenues shall automatically be adjusted to equal that lesser percentage. If the City's sales tax rate is ever decreased as provided in the preceding sentence and the City then subsequently adds a sales tax that increases such lower percentage and whose use is not controlled or regulated, in whole or in part, by another governmental entity or authority or otherwise dedicated to a specific use by the Page 4 Econornic Development Program Agreement behveen City of Fort Worth and FW Mason Heights, L.P. City, then Development Sales Tax Revenues shall be computed to reflect that increased percentage up to a maximum aggregate of one percent (1 %). Director means the director of the City's Housing and Economic Development Department. Effective Date has the meaning ascribed to it in Section 3. Employment Commitment has the meaning ascribed to it in Section 4.4. Employment Pereenta�e has the meaning ascribed to it in Section 5.2.1.4. First Full Operating Year means the first full year following the year in which the Completion Date occurs. 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 Texas Regional Certification Agency (NTRCA) 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 Developer 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 Developer is seeking credit under this Agreement. Fort Worth Construction Commitment has the meaning ascribed to it in Section 4.2. Fort Worth Construction Percentage has the meaning ascribed to it in Section 5.2.1.2. Fort Worth Supply and Service Percentage has the meaning ascribed to it in Section 5.2.1.5. Fort Worth Supply and Service Spending Commitment has the meaning ascribed to it in Section 4.5. Full-time Job means a job provided to one individual by a Development Property User on the Development Property for at least forty (40) hours per week. M/WBE Construction Commitment has the meaning ascribed to it in Section 4.3. Page 5 Economic Development Program Agreement behveen City of Fort Worth and FW Mason Heights, L.P. M/WBE Construction Percentage has the meaning ascribed to it in Section 5.2.1.34 IVUWBE Supply and Service Percentagne has the meaning ascribed to it in Section 5.2.1.6. M/WBE Supply and Service Spending Commitment has the meaning ascribed to it in Section 4.6. Overall Construction Percentage has the meaning ascribed to it in Section 5.2.1.1. Program Cap means the maximum number of gross dollars comprising all Program Grants that the City is required to pay Developer pursuant to this Agreement, based on the amount of Construction Costs expended for the Development by the Completion Date, as follows: (a) If the Development comprises between 300,000 and 399,999 square feet of occupiable space as of the Completion Date, as reflected in the certificate or certificates of occupancy issued for the Development by the Completion Date and verified in the Certificate of Completion issued by the City in accordance with Section 5.1, the Program Cap shall equal $6,250,708.50, gross, less the aggregate amounts of any reductions factored into the calculation of all Program Grants in accordance with the provisions of Section 5.2.1. (b) If the Development comprises between 400,000 and 499,999 square feet of occupiable space as of the Completion Date, as reflected in the certificate or certificates of occupancy issued for the Development by the Completion Date and verified in the Certificate of Completion issued by the City in accordance with Section 5.1, the Program Cap shall equal $9,376,062.75, gross, less the aggregate amounts of any reductions factored into the calculation of all Program Grants in accordance with the provisions of Section 5.2.1. (c) If the Development comprises 500,000 or more square feet of occupiable space as of the Completion Date, as reflected in the certificate or certificates of occupancy issued for the Development by the Completion Date and verified in the Certificate of Completion issued by the City in accordance with Section 5.1, the Program Cap shall equal $12,501,417.00, gross, less the aggregate amounts of any reductions factored into the calculation of all Program Grants in accordance the provisions of Section 5.2.1. Program Grants means the annual economic development grants paid by the City to Developer in accordance with this Agreement and as part of the 380 Program. Program Year means a calendar year in which the City is obligated pursuant to this Agreement to pay Developer a Program Grant, beginning with the first full calendar Page 6 Economic Development Program Agreement between City of Fort Worth and FW Mason F{eights, L.P. year following the Completion Date (Program Year 1) (also known as the First Full Operating Year). Records has the meaning ascribed to it in Section 4.8. Sales means all sales of merchandise (including gift and merchandise certificates), services and other receipts whatsoever of all business conducted in, on or from the Development Property, whether cash or credit, including mail, telephone, telefax, telegraph, internet or catalogue orders received or filled at or from the Development Property, deposits not refunded to purchasers, orders taken (although such orders may be filled elsewhere), sales to employees, sales through vending machines or other devices. Sales will not include (i) any sums collected and paid for any sales or excise tax imposed by any duly constituted governmental authority, (ii) the exchange of merchandise purchased on and returned to the Development Property, (iii) the amount of returns to shippers and manufacturers or (iv) the sale of any Development Property User's fixtures. Second Full Operating Year means the second full year following the year in which the Completion Date occurs. Supply and Service Expenditures means all expenditures by Developer, whether pursuant to a written contract or on an ad hoc basis, expended directly for the operation and maintenance of the Development, including amounts paid to third parties for the provision of personnel services, but excluding amounts paid for electric, gas, water and any other utility services. Tangible Personal Property means personal property that is located on the Development Property and is owned or leased by any Development Property User, including, without limitation, inventory, fixtures, store signage, checkout stands, computers, cash registers and security and communications systems. Term has the meaning ascribed to it in Section 3. Twelve -Month Period means the period between February 1 of a given year and January 31 of the following year. 3. TERM. This Agreement shall be effective as of the date of execution by both parties (the "Effective Date") and, unless terminated earlier in accordance with this Agreement, shall expire on the earlier of (i) the date as of which the City has paid all Program Grants required hereunder or (ii) the date as of which the amount of aggregate Program Grants paid by the City hereunder equals the applicable Program Cap (the "Term"). Page 7 Economic Development Program Agreement between Cily of Fort Worth and FW Mason Heights, L.P. 4. DEVELOPER OBLIGATIONS, GOALS AND COMMITMENTS. 4.1. Real Property Improvements. In accordance with the terms and conditions of this Agreement, by the Completion Date Developer shall have expended at least Forty-six Million Dollars ($46,000,000.00) in Construction Costs for the Development. The Completion Date must occur on or before the Completion Deadline. 4.2. Construction Spending Commitment for Fort Worth Companies. By the Completion Date, Developer shall have expended or caused to be expended with Fort Worth Companies the greater of at least (i) $11,500,000.00 in Construction Costs for the Development or (ii) twenty-five percent (25%) of all Construction Costs for the Development, regardless of the total amount of such Construction Costs (the "Fort Worth Construction Commitment"). 4.3. Construction Spending Commitment for Fort Worth Certified M/WBE Companies. By the Completion Date, Developer shall have expended or caused to be expended with Fort Worth Certified M/WBE Companies the greater of at least (1) $11,500,000.00 in Construction Costs for the Development or (ii) twenty-five percent (25%) of all Construction Costs for the Development, regardless of the total amount of such Construction Costs (the "M/WBE Construction Commitment"). Dollars spent with Fort Worth Certified M/WBE Companies shall also count as dollars spent with Fort Worth Companies for purposes of the Fort Worth Construction Commitment outlined in Section 4.2. 4.4. Employment Commitment. In the First Full Operating year and each calendar year thereafter, Developer will use commercially reasonable efforts to cause at least fifty (50) Full-time Jobs to be provided on the Development Property (the "Employment Commitment"). 4.5. Supply and Service Spending Commitments for Fort Worth Companies. In the First Full Operating year and each calendar year thereafter, Developer shall spend at least $100,000.00 in annual Supply and Service Expenditures with Fort Worth Companies (the "Fort Worth Supply and Service Spending Commitment"). Page 8 Economic Development Program Agreement between City of Fort Worth and FW Mason Heights, L.P. 4go* Supply and Service Spending Commitment for Fort Worth Certified M/WBE Companies. In the First Full Operating year and each calendar year thereafter, Developer shall spend at least $50,000.00 in annual Supply and Service expenditures with Fort Worth Certified M/WBE Companies (the "M/WBE Supply and Service Spending Commitment"). Dollars spent with Fort Worth Certified M/WBE Companies shall also count as dollars spent with Fort Worth Companies for purposes of the Fort Worth Supply and Service Spending Commitment outlined in Section 4.5. 4.7. Reports and Filings. 4.7.1. Plan for Use of Fort Worth Certified M/WBE Companies. Within thirty (30) calendar days following the Effective Date or prior to the submission of an application by or on behalf of Developer for a permit from the City to initiate any work on the Development (including demolition work), whichever is earlier, Developer will file a plan with the Director as to how Developer intends to meet the M/WBE Construction Commitment and the M/WBE Supply and Service Spending Commitment. Developer agrees to meet with the City's M/WBE Office and Minority and Women Business Enterprise Advisory Committee as reasonably necessary for assistance in implementing such plan and to address any concerns that the City may have with such plan. 4.7.2. Construction Spending Reports. 4.7.2.1. Monthly Reports. From the Effective Date until the Completion Date, Developer will provide the Director with a monthly report in a form reasonably acceptable to the City that specifically outlines the then -current aggregate Construction Costs expended by and on behalf of Developer for the Development as well as the then - current aggregate Construction Costs expended by and on behalf of Developer for the Development with Fort Worth Companies and with Fort Worth Certified M/WBE Companies. Developer agrees to meet with the City's M/WBE Office and Minority and Women Business Enterprise Advisory Committee as reasonably necessary for assistance in meeting or exceeding the M/WBE Construction Commitment and to address any related concerns that the City may have. Page 9 Economic Development Program Agreement between City of For[ Worth and FW Mason Heights, L.P. 4.7.2.2. Final Construction Report. Within thirty (30) calendar days following the Completion Date, in order for the City to assess whether Developer satisfied the requirements of Section 4.1 and the extent to which Developer met the Fort Worth Construction Commitment and the M/WBE Construction Commitment, and to establish the Program Cap under this Agreement, Developer will provide the Director with a report in a form reasonably acceptable to the City that specifically outlines (i) the total Construction Costs expended by and on behalf of Developer for the Development, (ii) the total Construction Costs expended with Fort Worth Companies by and on behalf of Developer for the Development, and (iii) the total Construction Costs expended with Fort Worth Certified M/WBE Companies by and on behalf of Developer for the Development together with supporting invoices and other documents necessary to demonstrate that such amounts were actually paid by Developer, including, without limitation, final lien waivers signed by Developer's general contractor. 4.7.3. Annual Employment Report. On or before February 1 of the Second Full Operating Year and of each year thereafter, in order for the City to assess the degree to which Developer met the Employment Commitment in the previous calendar year, Developer shall provide the Director with a report in a form reasonably acceptable to the City that sets forth the total number of individuals who held Full-time Jobs on the Development Property, all as of December 1 (or such other date requested by Developer and reasonably acceptable to the City) of the previous year, together with reasonable supporting documentation. 4.7.4. Quarterly Supply and Service Spending Report. Beginning with the first calendar quarter of the Second Full Operating Year, within thirty (30) calendar days following the end of each calendar quarter, Developer will provide the Director with a report in a form reasonably acceptable to the City that sets forth the then -aggregate Supply and Service Expenditures made during such calendar year as well as the then -aggregate Supply and Service Expenditures made during such calendar year with Fort Worth Companies and with Fort Worth Certified M/WBE Companies. The City will use each year's fourth quarter report to assess the degree to which Developer met the Fort Worth Supply and Service Spending Commitment and the M/WBE Supply and Service Spending Commitment for that year. Page 10 Economic Development Program Agreement between City of Fort Worth and FW Mason Heights, L.P. 4.8. Audits. The City will have the right throughout the Term to audit the financial and business records of Developer that relate to the Development and any other documents necessary to evaluate Developer'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"). Developer shall make all Records available to the City on the Development Property 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. 5. CITY OBLIGATIONS. 5.1. Issuance of Certificate of Completion for Development. Within sixty (60) calendar days following receipt by the City of the final construction spending report for the Development, as required by Section 4.7.2.2, and assessment by the City of the information contained therein pursuant to Section 4.8, if the City is able to verify that Developer expended at least Forty-six Million Dollars ($46,000,000.00) in Construction Costs for the Development by the Completion Date and that the Completion Date occurred on or before the Completion Deadline, the Director will issue Developer a certificate stating (i) the aggregate amount of Construction Costs expended on the Development, including amounts expended specifically with Fort Worth Companies and Fort Worth Certified M/WBE Companies, and (ii) the number of square feet of occupiable space comprising the Development as of the Completion Date, as reflected in the certificate or certificates of occupancy issued for the Development by the Completion Date, which will determine both the specific Base Program Source Funds available for each Program Grants payable hereunder as well as the amount of the Program Cap, as more specifically set forth in the respective definitions of "Base Program Source Funds" and "Program Cap" in Section 2 (the "Certificate of Completion"). 5.2. Program Grants. Subject the terms and conditions of this Agreement, provided that (i) Developer expended at least Forty-six Million Dollars ($46,000,000.00) in Construction Costs for the Development by the Completion Date; (ii) the Development comprised at least 300,000 square feet of occupiable space as of the Completion Date, as reflected in the certificate or certificates of occupancy issued for the Development by the Completion Date and verified in the Certificate of Completion issued by the City in accordance with Section 5.1; and (iii) the Completion Date occurred on or before the Completion Deadline, Developer will Page i i Economic Development Program Agreement between City of Fort Worth and FW Mason Heights, L.P. be entitled to receive from the City up to twenty (20) annual Program Grants, subject to the applicable Program Cap. The amount of each Program Grant shall equal a percentage of the Base Program Source Funds available for that Program Grant. The amount of Base Program Source Funds shall depend upon the amount of square footage of occupiable space that existed within the Development as of the Completion Date, as more specifically set forth in the definition of "Base Program Source Funds" in Section 2. The percentage of Base Program Source Funds shall be based on the extent to which Developer meets the various construction and operational expenditures for the Development, as more specifically set forth in Section 5.2.1. Notwithstanding anything to the contrary herein, aggregate Program Grants payable under this Agreement shall be subject to and shall not exceed the applicable Program Cap, as defined in Section 2. 5.2.1. Calculation of Each Program Grant Amount. Subject to the terms and conditions of this Agreement, the amount of a given Program Grant shall equal the sum of the Overall Construction Percentage, the Fort Worth Construction Percentage, and the M/WBE Construction Percentage, as defined in Section 5.2.1.1, 5.2.1.2, and 5.2.1.3, respectively, plus, to the extent applicable, the Employment Percentage, the Fort Worth Supply and Service Percentage, and the M/WBE Supply and Service Percentage, as defined in Sections 5.2.1.4, 5.2.1.5, and 5.2.1.6, respectively, multiplied by the applicable Base Program Source Funds, as defined in Section 2. 5.2.1.1. Completion of Development (70% for Program Year 1; 50% Thereafter). If Developer expended or caused to be expended at least Forty-six Million Dollars ($46,0003000.00) in Construction Costs for the Development by the Completion Date and the Completion Date occurred on or before the Completion Deadline, as confirmed by the City in the Certificate of Completion issued by the Director in accordance with Section 5.1, each annual Program Grant shall automatically include a percentage of the Base Program Source Funds (the "Overall Construction Percentage"). The Overall Construction Percentage for the Program Grant payable in Program Year 1 will equal seventy (70%). The Overall Construction Percentage for Program Grants payable in all subsequent Program Years will equal fifty (50%). In no event will the Overall Construction Percentage exceed seventy percent (70%) for the Program Grant payable in Program Year 1 or fifty (50%) for the Program Grants payable in all subsequent Program Years. Notwithstanding anything to the contrary herein, if Developer failed to expend or cause to be expended at least Forty-six Million Dollars ($46,000,000.00) in Construction Costs for the Page 12 Economic Development Program Agreement behveen City of Fort Worth and FW Mason Heights, L.P. Development by the Completion Date, or the Development did not comprise at least 300,000 square feet of occupiable space as of the Completion Date, or the Completion Date did not occur by the Completion Deadline, an Event of Default, as more specifically set forth in Section 6.1, will occur and the City shall have the right to terminate this Agreement without the obligation to pay Developer any Program Grants hereunder. 5.2.1.2. Fort Worth Construction Cost Spending (Up to 15% for Program Year 1; Up to 10% Thereafter). Each annual Program Grant shall include an amount that is based on the percentage by which the Fort Worth Construction Commitment, as outlined in Section 4.2, was met (the "Fort Worth Construction Percentage"). The Fort Worth Construction Percentage for the Program Grant payable in Program Year 1 will equal the product of fifteen percent (15%) multiplied by the percentage by which the Fort Worth Construction Commitment was met, which will be calculated by dividing the actual Construction Costs expended for the Development by the Completion Date with Fort Worth Companies by the number of dollars comprising the Fort Worth Construction Commitment, as determined in accordance with Section 4.2. The Fort Worth Construction Percentage for all subsequent Program Grants will equal the product of ten percent (10%) multiplied by the percentage by which the Fort Worth Construction Commitment was met, calculated in accordance with the preceding sentence. For example, if the Fort Worth Construction Commitment is $12,000,000.00 and only $9,600,000.00 in Construction Costs were expended with Fort Worth Companies by the Completion Date, the Fort Worth Construction Percentage for the Program Grant payable in Program Year 1 would be 12% instead of 15% (or 15 x [$9.6 million/$12 million], or .15 x .80, or .12), and the Fort Worth Construction Percentage for all subsequent Program Grants would be 8% instead of 10% (or .08 x [$9.6 million/$12 million], or .10 x .80, or .08). If the Fort Worth Construction Commitment is met or exceeded, the Fort Worth Construction Percentage will be fifteen percent (15%) for the Program Grant payable in Program Year 1 and ten percent (10%) for all subsequent Program Grants. In no event will the Fort Worth Construction Percentage exceed those percentages for the respective Program Year in which a Program Grant is payable. Page 13 Economic Development Program Agreement behveen City of Fort Worth and FW Mason F{eights, L.P. 5.2.1.3. Fort Worth M/WBE Construction Cost Spending (Up to 15% for Program Year 1; Up to 10% Thereafter). Each annual Program Grant shall include an amount that is based on the percentage by which the M/WBE Construction Commitment, as outlined in Section 4.3, was met (the "M/WBE Construction Percentage"). The M/WBE Construction Percentage for the Program Grant payable in Program Year 1 will equal the product of fifteen percent (15%) multiplied by the percentage by which the M/WBE Construction Commitment was net, which will be calculated by dividing the actual Construction Costs expended for the Development 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 4.3. The M/WBE Construction Percentage for all subsequent Program Grants will equal the product of ten percent (10%) multiplied by the percentage by which the M/WBE Construction Commitment was met, calculated in accordance with the preceding sentence. For example, if the M/WBE Construction Commitment is $12,000,000.00 and only $9,000,000.00 in Construction Costs were expended with Fort Worth Certified M/WBE Companies by the Completion Date, the M/WBE Construction Percentage for the Program Grant payable in Program Year 1 would be 11.25% instead of 15% (or .15 x [$9 million/$12 million], or .15 x .75, or .1125), and the M/WBE Construction Percentage for all subsequent Program Grants would be 7.5% instead of 10% (or .10 x [$9 million/$12 million], or .10 x 75, or .075). If the M/WBE Construction Commitment is met or exceeded, the M/WBE Construction Percentage will be fifteen percent (15%) for the Program Grant payable in Program Year 1 and ten percent (10%) for all subsequent Program Grants, 5.2.1.4. Employment (Up to 10% after Program Year 1). Except for the Program Grant payable in Program Year 1, each annual Program Grant shall include an amount that is based on the percentage by which the Employment Commitment, as outlined in Section 4.4, was met (the "Employment Percentage"). The Employment Percentage will equal the product of ten percent (10%) multiplied by the percentage by which the Employment Commitment was met, which will be calculated by dividing the actual number of Full-time Jobs provided on the Development Property in the previous calendar year by fifty (50), which is the number of Full-time Jobs constituting the Employment Commitment. For example, if only forty (40) Full - Page i a Economic Development Program Agreement between City of Fort Worth and FW Mason Heights, L.P. time Jobs were provided on the Development Property in the previous calendar year, the Employment Percentage payable in the following Program Year (other than Program Year 1) would be 8% instead of 10% (or .10 x [40/50]), or .10 x .80, or .08. If the Employment Commitment is met or exceeded in any given year, the Employment Percentage payable in the following Program Year will be ten percent (10%). 5.2.1.5. Fort Worth Supply and Service Spending (Up to 10% after Program Year 1). Except for the Program Grant payable in Program Year 1, each annual Program Grant shall include an amount that is based on the percentage by which the Fort Worth Supply and Service Spending Commitment, as outlined in Section 4.5, was met he "Fort Worth Supply and Service Percentage"). The Fort Worth Supply and Service Percentage will equal the product of ten percent (10%) multiplied by the percentage by which the Fort Worth Supply and Service Spending Commitment was met, which will be calculated by dividing the actual Supply and Service Expenditures made in the previous calendar year with Fort Worth Companies by $100,000.00, which is the Fort Worth Supply and Service Spending Commitment. For example, if only $80,000.00 in Supply and Service Expenditures were made with Fort Worth Companies in the previous calendar year, the Fort Worth Supply and Service Percentage for the Program Grant payable in the following Program Year (other than Program Year 1) would be 8% instead of 10% (or .10 x [$80,000/$100,000], or .10 x .80, or .08). If the Fort Worth Supply and Service Spending Commitment is met or exceeded in any given year, the Fort Worth Supply and Service Percentage for the Program Grant payable in the following Program Year will be ten percent (10%). 5.2.1.6. Fort Worth M/WBE Supply and Service Spending (Up to 10% after Program Year 1). Except for the Program Grant payable in Program Year 19 each annual Program Grant shall include an amount that is based on the percentage by which the M/WBE Supply and Service Spending Commitment, as outlined in Section 4.6, was met (the "M/WBE Supply and Service Percentage"). The M/WBE Supply and Service Percentage will equal the product of ten percent (10%) multiplied by the percentage by which the M/WBE Supply and Service Spending Commitment was met, which will be calculated by dividing the actual Supply and Service Expenditures made in the previous calendar year with Fort Worth Certified Page 15 Economic Development Program Agreement between City of Fort Worth and FW Mason Heights, L.P. M/WBE Companies by $50,000.00, which is the M/WBE Supply and Service Spending Commitment. For example, if only $25,000.00 in Supply and Service Expenditures were made with Fort Worth Certified M/WBE Companies in the previous calendar year, the M/WBE Supply and Service Percentage for the Program Grant payable in the following Program Year (other than Program Year 1) would be 5% instead of 10% (or .10 x [$25,000/$50,000], or .10 x .50, or .05). If the M/WBE Supply and Service Spending Commitment is met or exceeded in any given year, the M/WBE Supply and Service Percentage for the Program Grant payable in the following Program Year will be ten percent (10%). 5.2.1.7. No Offsets. A deficiency in attainment of one commitment may not be offset by the exceeding attainment in another commitment. For example, if in a given year Developer failed to meet the M/WBE Supply and Service Spending Commitment by $5,000.00, but exceeded the Fort Worth Supply and Service Spending Commitment by $5,000.00, all Program Grants payable in the following year would still be reduced in accordance with Section 5.2.1.6 on account of Developer's failure to meet the M/WBE Supply and Service Spending Commitment. 5.2.2. Program Cap. Once the City has paid Developer aggregate Program Grants equal to the applicable Program Cap, as set forth in Section 2, this Agreement will terminate. If in any Program Year the amount of a Program Grant would cause the aggregate Program Grants paid by the City pursuant to this Agreement to exceed the Program Cap, the amount of the Program Grant payable in that Program Year shall equal the difference between the aggregate of all Program Grants paid by the City as of the previous Program Year and the Program Cap, and this Agreement shall terminate upon payment of such Program Grant. 5.2.3. Deadline for Payments and Source of Funds. The first Program Grant payable hereunder (in other words, the Program Grant payable for Program Year 1) shall be paid by the City on or before June 1 of (i) the Second Full Operating Year or (ii) the First Full Operating Year if requested by Developer in writing within sixty (60) calendar days following the Completion Date and the City, taking into consideration its current fiscal year budget and following fiscal year budget planning, provides Developer with written consent to such request. Each subsequent annual Program Grant payment will be made by the City Page 16 Economic Development Program Agreement between City of Fort Worth and FW Mason Heights, L.P. to Developer on or before June 1 of the Program Year in which such payment is due. It is understood and agreed that all Program Grants paid pursuant to this Agreement shall come from currently available general revenues of the City and not directly from Development Personal Property Tax Revenues or Development Sales Tax Revenues. Developer understands and agrees that any revenues of the City other than those dedicated for payment of a given annual Program Grant pursuant to this Agreement may be used by the City for any lawful purpose that the City deems necessary in the carrying out of its business as a home rule municipality and will not serve as the basis for calculating the amount of any future Program Grant or other obligation to Developer. 6. DEFAULT. TERMINATION AND FAILURE BY DEVELOPER TO MEET VARIOUS DEADLINES AND COMMITMENTS. 6.1. Failure to Complete Development. If (i) Developer fails to expend or cause to be expended at least Forty-six Million Dollars ($46,000,000.00) in Construction Costs for the Development by the Completion Date, or (ii) the Development does not contain at least 300,000 square feet of occupiable space as of the Completion Date, as reflected in the certificate or certificates of occupancy issued for the Development by the Completion Date and verified in the Certificate of Completion issued by the City in accordance with Section 5.1, or (iii) the Completion Date does not occur by the Completion Deadline, the City shall have the right to terminate this Agreement by providing written notice to Developer without further obligation to Developer hereunder. 6.2. Failure to Pay City Taxes. An event of default shall occur under this Agreement if any City taxes we on the Development Property by Developer or an Affiliate or arising on account of Developer's or an Affiliate's operations on the Development Property become delinquent and Developer or the Affiliate does not either pay such taxes or properly follow the legal procedures for protest and/or contest of any such taxes. In this event, the City shall notify Developer in writing and Developer shall have thirty (30) calendar days to cure such default. If the default has not been fully cured by such time, the City shall have the right to terminate this Agreement immediately by providing written notice to Developer and shall have all other rights and remedies that may be available to it under the law or in equity. 6.3. Violations of City Code, State or Federal Law. An event of default shall occur under this Agreement if any written citation is issued to Developer or an Affiliate due to the occurrence of a violation Page 17 Economic Development Program Agreement between City of Fort Worth and FW Mason Heights, L.P. of a material provision of the City Code on the Development Property or on or within any improvements thereon (including, without limitation, any violation of the City's Building or Fire Codes and any other City Code violations related to the environmental condition of the Development Property; the environmental condition other land or waters which is attributable to operations on the Development Property; or to matters concerning the public health, safety or welfare) and such citation is not paid or the recipient of such citation does not properly follow the legal procedures for protest and/or contest of any such citation. An event of default shall occur under this Agreement if the City is notified by a governmental agency or unit with appropriate jurisdiction that Developer or an Affiliate, or any successor in interest thereto; any third party with access to the Development Property pursuant to the express or implied permission of Developer or an Affiliate, or any a successor in interest thereto; or the City (on account of the Development or the act or omission of any party other than the City on or after the effective date of this Agreement) is in violation of any material state or federal law, rule or regulation on account of the Development Property, improvements on the Development Property or any operations thereon (including, without limitation, any violations related to the environmental condition of the Development Property; the environmental condition other land or waters which is attributable to operations on the Development Property; or to matters concerning the public health, safety or welfare). Upon the occurrence of such default, the City shall notify Developer in writing and Developer shall have (i) thirty (30) calendar days to cure such default or (ii) if Developer has diligently pursued cure of the default but such default is not reasonably curable within thirty (30) calendar days, then such amount of time that the City reasonably agrees is necessary to cure such default. If the default has not been fully cured by such time, the City shall have the right to terminate this Agreement immediately by providing written notice to Developer and shall have all other rights and remedies that may be available to under the law or in equity. 6.4. Knowing Employment of Undocumented Workers. Developer acknowledges that effective September 1, 2007, 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. Developer hereby certifies that Developer, and any branches, divisions, or departments of Developer, does not and will not knowingly employ an undocumented worker, as that term is defined by Section 2264.00](4) of the Texas Government Code. In the event that Developer, or any branch, division, or department of Developer, is convicted of a violation under 8 U.S.C. Section 1324a(g (relating to federal criminal penalties and injunctions for a pattern or practice of employing unauthorized aliens): • if such conviction occurs during the Term of this Agreement, this Agreement shall terminate contemporaneously upon st►c{r conviction (subject to any appellate rights that may lawfully be available to and Page 18 Economic Development Program Agreement behveen City of Fort Worth and FW Mason Heights, L.P. exercised by Developer) and Developer shall repay, within one hundred twenty (120) calendar days following receipt of written demand from the City, the aggregate amount of all Program Grants received by Developer hereunder, if any, plus Simple Interest at a rate of four percent (4Yo) per annum based on the amount of each Program Grant paid in each previous Program Year as of the date on which each such Program Grant was paid, or • if suctr conviction occurs after �rpiration or termination of this Agreement, subject to any appellate rights that may lawfully be available to and exercised by Developer, Developer shall repay, within one hundred twenty (120) calendar days following receipt of written demand front the City, , the aggregate amount of all Program Grants received by Developer hereunder, if any, plus Simple Interest at a rate of four percent (4lo) per annum based on the amount of each Program Grant paid in each previous Program Year as of the date on which each such Program Grant was paid. For the purposes of this Section 6.4, "Simple Interest" is defined as a rate of interest applied only to an original value, in this case the aggregate amount of a Program Grant. This rate of interest can be applied each year, but will only apply to the aggregate amount of a particular Program Grant and is not applied to interest calculated. For example, if the aggregate amount of a Program Grant is $10,000 and it is required to be paid back with four percent (4%) interest five years later, the total amount would be $10,000 + [5 x ($10,000 x 0.04)], which is $12,000. This Section 6.4 does not apply to convictions of any Affiliate of Developer, any franchisees of Developer, any person or entity with whom Developer contracts, or to any Developer Property User other than Developer itself and any branches, divisions, or departments of Developer. Notwithstanding anything to the contrary herein, this Section 6.4 shall survive the expiration or termination of this Agreement. 6.5. Failure to Meet Construction Cost Spending, Supply and Service Spendin& and/or Employment Commitments. If Developer fails to meet the Fort Worth Construction Commitment or the M/WBE Construction Commitment, or if Developer fails to meet the Employment Commitment, the Fort Worth Supply and Service Spending Commitment, or the M/WBE Supply and Service Spending Commitment in any given year, such event shall not constitute a default hereunder or provide the City with the right to terminate this Agreement, but, rather, shall only cause the amount of the Program Grants that the City is required to pay pursuant to this Agreement to be reduced in accordance with this Agreement. Page 19 Economic Development Program Agreement between City of Port Worth and FW Mason Heights, L.P. 6.6. Failure to Submit Reports. Without limiting the application of Section 6.71 if Developer fails to submit any report required by and in accordance with Section 4.7, the City's obligation to pay any Program Grants at the time, if any, shall be suspended until Developer has provided all required reports. 6.7. General Breach. Unless stated elsewhere in this Agreement, Developer shall be in default under this Agreement if Developer breaches any term or condition of this Agreement. In the event that such breach remains uncured after thirty (30) calendar days following receipt of written notice from the City referencing this Agreement (or, if Developer 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 City shall have the right to terminate this Agreement immediately by providing written notice to Developer. 7. INDEPENDENT CONTRACTOR. It is expressly understood and agreed that Developer shall operate as an independent contractor in each and every respect hereunder and not as an agent, representative or employee of the City. Developer shall have the exclusive right to control all details and day-to-day operations relative to the Development Property 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. Developer acknowledges that the doctrine of respondeat superior will not apply as between the City and Developer, its officers, agents, servants, employees, contractors, subcontractors, licensees, and invitees. Developer further agrees that nothing in this Agreement will be construed as the creation of a partnership or joint enterprise between the City and Developer. 8. INDEMNIFICATION. DEVELOPER, AT NO COST TO THE CITY, AGREES TO DEFEND, INDEMNIFYAND HOLD THE CITY, ITS OFFICERS, AGENTS SERVANTS AND EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS, ACTIONS, COSTS AND EXPENSES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO DEVELOPER'S BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING Page 20 Economic Development Program Agreement behreen City of Fort Worth and FW Mason Heights, L,.P. DEA TH, THA T MA Y RELA TE TO, ARISE OUT OF OR BE OCCASIONED B Y (1) DEVELOPER'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT OR (Y) ANY NEGLIGENT ACT OR OMISSION OR INTENTIONAL MISCONDUCT OF DEVELOPER, ITS OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE CITY) OR SUBCONTRACTORS, RELATED TO THE DEVELOPMENT AND ANY OPERATIONS AND ACTIVITIES THEREON OR OTHERWISE TO THE PERFORMANCE OF THIS AGREEMENT. 9. 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: City of Fort Worth Attn: City Manager 1000 Throckmorton Fort Worth, TX 76102 ►vit/t copies to: the City Attorney and Housing/Economic Development Dept. Director at the same address 10. ASSIGNMENT AND SUCCESSORS. Developer: FW Mason Heights, L.P. Attn: Happy Baggett 300 Burnett St., Suite 150 Fort Worth, TX 76102 Developer may at any time assign, transfer or otherwise convey any of its rights oI obligations under this Agreement to an Affiliate without the approval of the City so long as Developer, the Affiliate and the City first execute an agreement under which the Affiliate agrees to assume and be bound by all covenants and obligations of Developer under this Agreement. Developer may also assign its rights and obligations under this agreement to a financial institution or other lender for purposes of granting a security interest in the Development and/or Development Property, provided that such financial institution or other lender first executes a written agreement with the City governing the rights and obligations of the City, Developer and the financial institution or other lender with respect to such security interest. Otherwise, Developer 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 shall not be unreasonably withheld, conditioned on (i) the prior approval of the assignee or successor and a finding by the City Council that the proposed assignee or successor is financially Page 21 Economic Development Program Agreement behveen City of Port Worth and FW Mason Heights, L.P. a capable of meeting the terms and conditions of this Agreement and (ii) 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 Developer under this Agreement. Any attempted assignment without the City Council's prior consent shall constitute grounds for termination of this Agreement and following ten (10) calendar days of receipt of written notice from the City to Developer. Any lawful assignee or successor in interest of Developer of all rights under this Agreement shall be deemed "Developer" for all purposes under this Agreement. ll. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND REGULATIONS. This Agreement will be subject to all applicable 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. 12. 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. 13. NO WAIVER. The failure of either party to insist upon the performance of any term or provision oI 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. 14. 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. 15. NO THIRD PARTY RIGHTS. The provisions and conditions of this Agreement are solely for the benefit of the City and Developer, and any lawful assign or successor of Developer, and are not intended to create any rights, contractual or otherwise, to any other person or entity. Page 22 Economic Development Program Agreement behveen City of Fort Worth and FW Mason Heights, L.P. 16. FORCE MAJEUREa 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, inclement weather, 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 Developer's failure to obtain adequate financing to complete the Development by the Completion Deadline shall not be deemed to be an event of force majeure and that this Section 16 shall not operate to extend the Completion Deadline in such an event. 17. 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. 18. CAPTIONS. Captions and headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement. 19. 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 Developer, and any lawful assign and successor of Developer, 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, Page 23 Economic Development Program Agreement between City of Foi4 Worth and FW Mason Heights, L.P. 20. 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. ENEC�171'IC� as of the last date indicated below: CITY OF FORT WORTH: Tom Higgins Assistant City Manager APPROVED AS TO FORM AND LEGALITY: FW MASON HEIGHTS, L.P.: By: FW Mason Heights Genpar, L.L.C., a Texas limited liability company and its sole general partner: By: By' AN Z . Peter Vaky n Assistant City Attorney "" / M&C: C- 2 3 q" 3-2 -a qffia4 Hendrix, City Page 2d Economic Development Program Agreement beriveen City of Fort Worth and FW Mason Heights, L.P. Lt i EXHIBITS —Description and Map Depicting the Development Property —Depiction and Description of Development Economic Development Program Agreement between City of Fort Worth and FW Mason Heights, L.P. 1 BLVD. i MC. wo 4111 ►�Q�LLLL L, J 0 0 Q L Q .cu mo cu �U L 0 U L `0 T wo 0 Q _0 0 0 0 U M� W X W l ILM le a Q _ F� 4 �- ;E pr 1 Ar r '\ - LL City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 3/24/2009 DATE: Tuesday, March 24, 2009 REFERENCE NO.: C-23400 LOG NAME: 17RENN SQUARE SUBJECT: Authorize an Economic Development Program Agreement with Mason Heights, LP, Related to the Development of Retail and Commercial Buildings to be Constructed at the Southwest Corner of US Highway 287 and East Berry Street RECOMMENDATION: It is recommended that the City Council authorize the City Manager to: 1. Enter into and execute an Economic Development Program Agreement with Mason Heights, LP, subject to subsequent non —material changes agreed to by the parties related to the development of a retail and commercial project at the southwest corner of US Highway 287 and East Berry Street; and 2. Find the terms and conditions of the Economic Development Program Agreement, as outlined below and in the Agreement, constitute a custom —designed economic development program as outlined in the 2008 Comprehensive Plan and as authorized by Chapter 380 of the Texas Local Government Code, DISCUSSION: On February 23, 2009, the proposed Renaissance Square Project (Development) located on a 200 acre site of the former Masonic Home and School of east Fort Worth at the southwest corner of US Highway 287 and East Berry Street was presented to the City Council. Under the proposed Economic Development Program Agreement, Mason Heights, LP, (Developer) has committed to develop a retail/restaurant project of up to 500,000 square feet on the northern portion of the 200 acre property. The project is scheduled to start in the summer of 2009 and be completed by December 2012. In exchange for completion of the Development, (see attached Development site map) the Developer will be eligible to receive up to 20 annual economic development grants equal up to 100 percent of incremental business personal property taxes paid to the City from this Development site; and up to 100 percent of the City's percent incremental sales tax paid to the City from this Development site. The first grant will be payable in the first calendar year following completion of the project. The minimum investment and uses for the project and maximum grant are summarized as follows: • Minimum Investment — $46,000,000.00 • Maximum Cumulative Grant Program Grant — $12,501,417.00 ($7,169,513.00 Net Present Value) earned as follows: Development Size Percentage of Tax Increment Eligible for Grant 300,000 to 399,000 Occupiable Square Feet 50 Percent of Tax Increment 400,000 to 499,999 Occupiable Square Feet 75 Percent of Tax Increment 500,000 Occupiable Square Feet and Above 100 Percent of Tax Increment To earn the maximum incentive, the Developer must meet all commitments for utilizing Fort Worth and certified Fort Worth M/WBE contractors during construction and for services and supplies during operation. • Spend the greater of $11,500,000.00 or 25 percent of construction costs with Fort Worth Companies; • Spend the greater of $11,500,000.00 or 25 percent of construction costs with certified Fort Worth M/WBE Companies; • Spend $100,000.00 of annual discretionary services and supplies with Fort Worth Contractors; • Spend $50,000.00 of annual discretionary services and supplies with Certified Fort Worth M/WBE Contractors; and • Cause the creation of 50 full time jobs in the Development within 365 days of being issued the first Certificate of Occupancy for the Development. Not meeting the above commitments will result in a proportional reduction of the incentive granted. The East Berry Renaissance Tax Increment Financing District (TIF) has approved up to $5.6 million reimbursement for the TIF for eligible activities. The Renaissance Square Development is located in COUNCIL DISTRICT 8. FISCAL INFORMATION: The Financial Management Services Director certifies that the available incentive will be less than the additional revenue received from incremental taxes paid to the City. FUND CENTERS: TO Fund/Account/Centers CERTIFICATIONS: Submitted for Citv Manager's Office bv: Originating Department Head: Additional Information Contact: ATTACHMENTS 1. 17RENN SOUARE Map.pdf FROM Fund/Account/Centers Thomas Higgins (6140) Jay Chapa (5804) Cynthia Garcia (8187) Dolores Garza (2639)