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HomeMy WebLinkAboutContract 42727-A1CITY SECRETARY CONTRACT NO. 12,1 Z " a 1 STATE OF TEXAS § COUNTY OF TARRANT § AMENDMENT NO. 1 TO CITY SECRETARY CONTRACT NO. 42727 TAX ABATEMENT AGREEMENT BETWEEN CITY OF FORT WORTH AND BELL HELICOPTER TEXTRON, INC. This AMENDMENT NO. 1 TO CITY SECRETARY CONTRACT NO. 42727 ("Amendment") is entered into by and between the CITY OF FORT WORTH (the "City"), a home rule municipality organized under the laws of the State of Texas, and BELL HELICOPTER TEXTRON, INC. ("Company"), a Delaware corporation. 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 owns approximately 157.675 acres of property in the City in the vicinity of Highway 10 and Trinity Boulevard, which is currently the location of Company's corporate headquarters, as more specifically described in Exhibit "A", mmmmmmmm attached hereto and hereby made a part of this Agreement for all purposes (collectively, the "Land"). Company intends to consolidate its various plant and warehouse operations in the Dallas -Fort Worth Metroplex on the Land in four (4) phases (the "Project"). B. On December 13, 2011 the City Council adopted Mayor and Council Communication ("M&C") C-25367, which authorized execution of a one (1)-year Tax Abatement Agreement and a nineteen (19)-year Economic Development Program Agreement to provide economic incentives for completion of the Project on the Land. The Tax Abatement Agreement, a public document on file in the City Secretary's Office as City Secretary Contract No. 42727 (the "Agreement"), covers Phase I of the Project. The Economic Development Program Agreement that has been authorized will cover Phases II, III and IV of the Project. C. In order to be eligible to receive the maximum incentives available under both documents, Company must cause New Taxable Tangible Personal Property having certain minimum aggregate costs to be in place on the Land by the Completion Deadline of each Phase, with a total aggregate cost upon completion of all four (4) Phases of One Hundred Sixty Million Dollars ($160,000,000.00). D. For Phase I, the Agreement requires Company to cause New Taxable Tangible Personal Property having a cost of at least Twenty-sev n i ion oars ($27,000,000,00) to be in place on the Land by the Phase I Comy 1Gffi0&ddZ%;W(1U Page I G(A 1( SV CRNTARY Amendment No. 1 to CSC No. 42727 Tax Abatement Agreement between City of Fort Worth and Bell Helicopter Textron, Inc. FT W®�2`t�G�a 4 12-18-12 December 31, 2012. Company has requested that this requirement be reduced so that Company is required to cause New Taxable Tangible Personal Property of only Sixteen Million Dollars ($16,000,000.00) to be in place on the Land by the Phase I Completion Deadline, with the understanding that M&C C-25367 will be amended to adjust the minimum aggregate costs of New Taxable Tangible Personal Property that must be in place on the Land by the Completion Deadlines for Phases II, III and IV so that total aggregate cost upon completion of all four (4) Phases remains One Hundred Sixty Million Dollars ($16050005000.00). E. The City and Company wish to further amend the Agreement to reflect the City's agreement to waive certain development fees related to the Project, as outlined in M&C C-25367. F. This Amendment is authorized under § 312.208 of the Texas Tax Code because (i) the provisions of this Amendment could have been included in the original Agreement and (ii) this Amendment has been entered into following the same procedure in which the Agreement was approved and executed. NOW, THEREFORE, the City and Company, for and in consideration of the terms and conditions set forth herein, do hereby contract, covenant and agree as follows. 1. Section 4.2 of the Agreement (Installation of Tangible Personal Property) is hereby amended to read as follows: 4.2. Installation of Tan;:ible Personal Property. Company shall cause New Taxable Tangible Personal Property having a cost of at least Sixteen Million Dollars ($16,000,000.00) to be in place on the Land by the Phase I Completion Deadline. 2. The first sentence of Section 5.1 of the Agreement (Issuance of Certificate of Completion for Phase I of the Project) is hereby amended to read as follows: 5.1. Issuance of Certificate of Completion for Phase I of the Project. Within sixty (60) calendar days following receipt by the City of both the final construction spending report for Phase I of the Project, as required by Section 4.7.2.2, and the personal property report, as required by Section 4.7.3, and assessment by the City of the information contained therein pursuant to Sections 4.8 and 4.9, if the City is able to verify that Company expended at least Five Million Dollars ($5,000,000.00) in Construction Costs for Phase I of the Project between May 31, 2011 and the Phase I Completion Date; that the Phase I Completion Date occurred Page 2 Amendment No. 1 to CSC No. 42727 Tax Abatement Agreement between City of Fort Worth and Bell Helicopter Textron, Inc. on or before the Phase I Completion Deadline; and that New Taxable Tangible Personal Property having a cost of at least Sixteen Million Dollars ($16,000,000.00) was in place on the Land by the Phase I Completion Deadline, the Director will issue Company a certificate stating the aggregate amount of Construction Costs expended on Phase I of the Project between May 31, 2011 and the Phase I Completion Date; the aggregate amount of Hard Construction Costs expended on Phase I of the Project between May 31, 2011 and the Phase I Completion Date; the aggregate Hard Construction Costs expended specifically with Fort Worth Companies and Fort Worth Certified M/WBE Companies between May 31, 2011 and the Phase I Completion Date; and the aggregate cost of New Taxable Tangible Personal Property installed on the Land by the Phase I Completion Deadline (the "Certificate of Completion"). 3. The first sentence of Section 5.2 of the Agreement (Tax Abatement) is hereby amended to read as follows: Subject to the terms and conditions of this Agreement, provided that (i) Company expended at least Five Million Dollars ($5,000,000.00) in Construction Costs for Phase I of the Project between May 31, 2011 and the Phase I Completion Date; (ii) the Phase I Completion Date occurred on or before the Phase I Completion Deadline, both as confirmed by the City in the Certificate of Completion issued by the Director in accordance with Section 5.19 and (iii) New Taxable Tangible Personal Property having a cost of at least Sixteen Million Dollars ($16,000,000.00) was in place on the Land by the Phase I Completion Deadline, Company will be entitled to receive an Abatement for the 2013 tax year. 4. Section 5.2.1 of the Agreement (Completion of Phase I (30%)) is hereby amended to read as follows: If (i) Company expended at least Five Million Dollars ($5,000,000.00) in Construction Costs for Phase I of the Project between May 31, 2011 and the Phase I Completion Date, and the Phase I Completion Date occurred on or before the Phase I Completion Deadline, as confirmed by the City in the Certificate of Completion issued by the Director in accordance with Section 5.1, and (ii) New Taxable Tangible Personal Property having a cost of at least Sixteen Million Dollars ($16,000,000.00) was in place on the Land by the Phase I Completion Deadline, Company shall be entitled to receive a percentage of the Abatement equal to thirty percent (30%) (the "Overall Construction Percentage"). Notwithstanding anything to the contrary herein, if (i) Company failed to expend at least Five Million Dollars ($5,000,000.00) in Construction Costs for Phase I of the Project between May 31, 2011 and Page 3 Amendment No. 1 to CSC No. 42727 Tax Abatement Agreement between City of Fort Worth and Bell Helicopter Textron, Inc, the Phase I Completion Date; (ii) the Phase I Completion Date did not occur on or before the Phase I Completion Deadline; or (iii) New Taxable Tangible Personal Property having a cost of at least Sixteen Million Dollars ($16,000,000.00) was not in place on the Land by the Phase I Completion Deadline, the City shall have the right to terminate this Agreement in accordance with Section 6.1. 5. The Agreement is hereby amended to add Section 5.3, as follows: 5.3. Waiver of Certain Fees. Company and its contractors will be required to apply for and receive all permits and other licenses and certificates required by the City with respect to construction of the Project. However, as further consideration for the public purposes that will be achieved from construction of the Project and use of the Land in accordance with this Agreement, and unless otherwise prohibited by applicable law, ordinance, rule or regulation, the City agrees to waive the following fees related to the Project that would otherwise be charged by the City at any time prior to the Phase I Completion Deadline: (i) all building permit, plan review, inspection, and re -inspection fees; (ii) all zoning fees; (iii) all temporary encroachment fees; (iv) all platting fees; and (v) all fire, sprinkler, and alarm permit fees. All other fees charged or assessed by the City in accordance with federal, state and local laws, ordinances, rules and regulations, including, but not limited to, transportation impact fees and water and sewer impact fees, are not waived hereunder and shall be fully payable by Company and its contractors. 6. Section 6.1 of the Agreement (Failure to Complete Phase I) is hereby amended to read as follows: 6.1. Failure to Complete Phase I. If (i) Company failed to expend at least Five Million Dollars ($550005000.00) in Construction Costs for Phase I of the Project between May 31, 2011 and the Phase I Completion Date; (ii) the Phase I Completion Date did not occur on or before the Phase I Completion Deadline; or (iii) New Taxable Tangible Personal Property having a cost of at least Sixteen Million Dollars ($16,000,000.00) was not in place on the Land by the Phase I Completion Deadline, the City shall have the right to terminate this Agreement by providing written notice to Company without further obligation to Company hereunder. Page 4 Amendment No. 1 to CSC No. 42727 Tax Abatement Agreement between City of Fort Worth and Bell Helicopter Textron, Inc. 7. Capitalized terms used but not identified in this Amendment shall have the same meanings assigned to them in the Agreement. 8. Except as otherwise specifically amended in this Amendment, the Agreement shall remain in full force and effect. 9. This Amendment contains the final written expression of the City and Company with respect to the subject matter hereof. This Amendment may be executed in multiple counterparts, each of which shall be considered an original, but all of which shall constitute one instrument. 10. All provisions of this Amendment shall take effect on the date as of which both the City and Company have executed this Amendment, except for Section 5 of this Amendment (adding Section 5.3 to the Agreement governing the waiver of certain fees), which shall be effective as of the Effective Date of the Agreement (December 23, 2011). EXECUTED as of the last date indicated below: [SIGNATURES IMMEDIATELY FOLLOW ON NEXT PAGE] Page 5 Amendment No. I to CSC No. 42727 Tax Abatement Agreement between City of Fort Worth and Bell Helicopter Textron, Inc. CITY OF FORT WORTH: Fernando Costa Assistant City Manager Date.. APPROVED AS TO FORM AND LEGALITY: By: / Peter Vaky Deputy City Attorney STATE OF TEXAS § COUNTY OF TARRANT § ATTEST: By: Date: BEFORE ME, the undersigned authority, on this day personally appeared Fernando Costa, Assistant City Manager of the CITY OF FORT WORTH, a municipality 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 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 Z;q day of 2012. Notary Public in and for th State of Te s =77 .y, a / I Q /2' DANIELS EXPIRESotary's Printed Name ots Page 6 Amendment No. 1 to CSC No. 42727 Tax Abatement Agreement between City of Fort Worth and Bell Helicopter Textron, Inc. t� � BELL HELICOPTER TEXTRON, INC., a Delaware corporation, By: Anthony A. Viotto Title: Executive Vice President and CFO Date: / 2 4//4/Z �T STATE OF TEXAS § COUNTY OF TARRANT § BEFORE M�, the undersigned authority, on this day personally appeared of BELL HELICOPTER TEXTRON, INC., 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 BELL HELICOPTER TEXTRON, INC. GIVEN UNDER MY HAND AND SEAL OF OFFICE this �� day of D e Cebn)3er , 2012. Notary Public in and for'' U the State of � T)A'E(L�k M G���AEi+ER- Notary's Printed Name THERESA M GALLAGHER My Commission Expires September 30, 2014 Page 7 Amendment No. 1 to CSC No. 42727 Tax Abatement Agreement between City of Fort Worth and Bell Helicopter Textron, Inc. Official site of the City of Fort Worth, Texas COUNCIL ACTION: Approved on 9/11/2012 DATE: 9/11/2012 REFERENCE NO.. C-25823 LOG NAME, 17BELLAMEND1 NON� PUBLIC CODE: C TYPE: CONSENT HEARING: NO SUBJECT: Authorize Execution of an Amendment to the Tax Abatement Agreement with Bell Helicopter Textron, Inc., and Authorize Amendment of Mayor and Council Communication C-25367 Authorizing Execution of Economic Development Program Agreement with Bell Helicopter Textron, Inc., to Modify the Requirements for the Purchase of New Personal Property in Each Phase of the Expansion and Consolidation of Its Main Headquarters Operations and Associated Facilities in the Vicinity of Interstate Highway 10 and Trinity Boulevard (COUNCIL DISTRICT 5) RECOMMENDATION: It is recommended that the City Council: 1. Authorize the execution of an amendment to the Tax Abatement Agreement with Bell Helicopter Textron, Inc., (City Secretary Contract No. 42727) to reduce the minimum amount of New Taxable Tangible Personal Property that must be purchased for Phase I of the expansion and consolidation of its main headquarters operations and associated facilities in the vicinity of Interstate Highway 10 and Trinity Boulevard; and 2. Authorize the amendment of Mayor and Council Communicator C-25367 authorizing execution of an Economic Development Program Agreement with Bell Helicopter Textron, Inc., to adjust the minimum amount of New Taxable Tangible Personal Property that must be purchased for each subsequent phase of the expansion and consolidation of its main headquarters operations and associated facilities. DISCUSSION: Background: On December 13, 2011, (M&C C-25367) the City Council approved execution of a one-year Tax Abatement Agreement and anineteen-year Chapter 380 Economic Development Program Agreement (EDPA) with Bell Helicopter Textron, Inc. (Bell), for the expansion and consolidation of its main headquarters operations and associated facilities in the vicinity of Interstate Highway 10 and Trinity Boulevard (the Project). The Project is expected to be completed in four phases. As specified in Mayor and Council Communication (M&C) C-25367, Bell is required to have purchased a minimum amount of New Taxable Tangible Personal Property by the completion deadline of each phase. The New Taxable Tangible Personal Property is defined as any taxable personal property other than inventory or supplies that is owned or leased by Bell and that was not located in the City prior to May 31, 20111 the date of Bell's application for economic incentives from the City for the Project. The Tax Abatement Agreement covers only Phase I of the Project and requires that a minimum amount of $27 million in New Taxable Tangible Personal Property be located on the headquarters site by the Phase I completion deadline of December 31, 2012. The EDPA covers the remaining phases of the Project and specifies minimum amounts of New Taxable Tangible Personal Property that must be located on the headquarters site by the completion deadlines of those Phases, as explained in the table below. In order to establish 2011 as the base year for the Tax Abatement Agreement, the City and Bell executed the Tax Abatement Agreement (City Secretary Contract No. 42727) on December 23, 2011. At the same time, however, Bell notified the City that it would need to revise its schedule for installing new business personal property at the site, therefore, facilitating the need to modify the requirements specified by each phase. As a result, the parties held off on executing the EDPA until that issue was finalized. Although Bell's plans to expend the amount of $75 million in real property improvements and the amount of $160 million in non -inventory personal property improvements by December 31, 2015 will remain the same, the minimum and aggregate investment numbers for the personal property investment in each phase needs to be more in order to reflect the company's revised purchasing schedule. Proposed Modifications: Staff recommends amending the Tax Abatement Agreement and M&C C-25367 authorizing execution of the EDPA in accordance with the following table: Ori inall A roved Pro osed Amendment Phase 1 $27 million in business Reduction of BPP investment personal property (BPP) from $27 million to $16 million December 31, 2012 improvements Tax Abatement only) Phase 11 $34 million in BPP Reduction of BPP investment from $34 million to $32 million; December 31, 2014 Aggregate BPP investment of (EDPA only) $48 million Phase 111 $32 million in BPP $32 million in BPP investment December31, 2014 remains unchanged; Aggregate BPP investment of (EDPA only) $80 million Phase IV $67 million in BPP BPP investment increase from $67 million to $80 million; December 31, 2015 Aggregate BPP investment of (EDPA only) $160 million TOTAL BPP INVESTMENT $160 Million $160 Million All other terms and definitions of the Agreements, as specified by M&C C-25367, will remain the sameI FISCAL INFORMATION/CERTIFICATION: The Financial Management Services Director certifies that this action will have no material effect on City funds. TO Fund/AccountlCenters FROM Fund/Account/Centers Submitted for City Manager's Office bv: Originating Department Head: Fernando Costa (6122) Additional Information Contact: ATTACHMENTS Jay Chapa (5804) Robert Sturns (8003) Marguerite Allen (2235)