HomeMy WebLinkAboutContract 27982-A1 CITY SECRETARY
CONTRACT NO.,.Q-7Z.-Al
AMENDMENT NO. 1 TO
CITY SECRETARY CONTRACT NO. 27982
ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
WITH RADIOSHACK CORPORATION
This AMENDMENT NO. 1 TO CITY SECRETARY CONTRACT NO.
29095 ("Amendment") is made and entered into by and between the CITY OF FORT
WORTH (the "City"), a home rule municipal corporation organized under the laws of
the State of Texas, and RADIOSHACK CORPORATION ("RadioShack"), a
Delaware corporation.
RECITALS
The City and RadioShack hereby agree that the following statements are true and
correct and constitute the basis upon which the City and RadioShack have entered into
this Amendment:
A. The City and RadioShack entered into that certain Economic Development
Program Agreement ("Agreement") dated on or about September 11, 2002. The
Agreement is a public document on file in the City Secretary's Office as City Secretary
Contract No. 27982.
B. The Agreement calls for the City to make certain economic development
Program Grants, as authorized by Chapter 380 of the Texas Local Government Code and
City Council Resolution No. 2704, and other lawful concessions to RadioShack in return
for RadioShack's construction of a corporate campus (defined more specifically in the
Agreement as the "Required Improvements") in downtown Fort Worth (the
"Downtown Site"), and specific commitments for construction spending and annual
supply and service spending with Fort Worth Companies and Certified M/WBEs and for
employment of Fort Worth Residents and Central City Residents, all of which the City
Council previously determined would promote state and local economic development and
stimulate business and commercial activity in the City.
C. RadioShack previously sold the Downtown Site, which is now owned by
Tarrant County College District ("TCCD"), and currently leases a portion of the
Downtown Site for its corporate headquarters offices and desires to extend such lease
through June 30, 2016, pursuant to and in accordance with a lease amendment between
RadioShack and TCCD that contains the specific terms and conditions set forth in
Exhibit "A-1", attached hereto and hereby made a part of this Amendment for all
purposes (collectively, the "Lease"). The reduction in the amount of square footage at
the Downtown Site used by RadioShack is commensurate with a reduction at the
Downtown Site in the number of Full-time Jobs provided there and the amount of
discretionary funds expended for supplies and services connected to the operation of the
Page 1 .t
Ameo l", bl(t. � 44 , Development Program Agreement
between City o*rt orth and RadioShack Corporation - - ° - p I ;
Required Improvements. In return for RadioShack's commitment to enter into the Lease,
as proposed to be amended, and continue to use the Downtown Site as its corporate
headquarters during the remainder of the lease term, the City is willing to reduce the
levels of certain commitments of RadioShack under the Agreement, solely in accordance
with this Amendment. In addition, given the reduction in the scope and term of
RadioShack's use of the Downtown Site, it is necessary to reduce the term of the
Agreement and to cap the amount of Program Grants payable by the City, solely in
accordance with this Amendment.
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained in the Agreement and this Amendment and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties
agree as follows:
AGREEMENT
1. Section 3 of the Agreement (Definitions) is hereby amended so that the
definitions of the following terms read as follows:
Affiliate means all entities, incorporated or otherwise, under
common control with, controlled by or controlling RadioShack. For
purposes of this definition, "control"means fifty percent (50%) or more of
the ownership determined by either value or vote.
Casualty Event means the complete or partial destruction of
RadioShack's Corporate Headquarters at the Downtown Site resulting
from an identifiable event of a sudden, unexpected, or unusual nature,
such as flood, windstorm, or fire, that prevents RadioShack from using the
Downtown Site as its Corporate Headquarters in its ordinary and
customary manner, in which case substantial completion of the restoration
of the Downtown Site shall be undertaken in accordance with the Lease,
and RadioShack shall recommence use of the Downtown Site as its
Corporate Headquarters within such time as is reasonably practical.
Page 2
Amendment No. I to Economic Development Program Agreement
between City of Fort Worth and RadioShack Corporation
RadioShack Incentive Agreements means, collectively, this
Agreement, as amended; the TIF Agreements; and any other Economic
Development Program Agreement authorized by Chapter 380, Texas
Local Government Code, between the City and RadioShack, TE
Electronics LP, and/or another Affiliate of RadioShack.
RadioShack Property means real and personal property owned or
leased by RadioShack (i) on which real and/or personal property taxes are
required to be paid to the City and (ii) that is located on the Downtown
Site.
RadioShack Properties means the amount of real and personal
property tax paid to and received by the City in a given year based on the
lesser of(i) the entire taxable appraised value of RadioShack Property or
(ii) the Capped Taxable Appraised Value. The entire taxable appraised
value of RadioShack Property will be established solely by the appraisal
district that has jurisdiction of the TIF at the time, with the understanding
that all rights to protest and contest any such appraisals shall be retained
by any person or entity with such standing. With respect to property
leased by RadioShack, RadioShack Property Taxes include that portion of
annual property tax, prorated on a daily basis, which is attributable to the
period during which RadioShack was the lessee of such property.
TIF Agreements means (i) that certain Development Agreement
between RadioShack and the Board of Directors of Tax Increment
Reinvestment Zone Number Six, City of Fort Worth, Texas, dated on or
Page 3
Amendment No. 1 to Economic Development Program Agreement
between City of Fort Worth and RadioShack Corporation
about September 13, 2004, as amended, and (ii) that certain Development
Agreement between RadioShack and the Board of Directors of Tax
Increment Reinvestment Zone Number Six, City of Fort Worth, Texas,
dated on or about July 15, 2005, as amended.
2. Section 4 of the Agreement(Term) is hereby amended to read as follows:
This Agreement shall be effective as of September 11, 2002 and,
unless terminated earlier in accordance with this Agreement, shall expire
on the earlier of December 31, 2016 or the date as of which the gross sum
of Ten Million Seven Hundred Sixty-six Thousand Five Hundred Fourteen
and No/100 Dollars ($10,766,514.00) has been paid pursuant to the
RadioShack Incentive Agreements (the "Program Cap"), beginning with
any payments made during calendar year 2010 (the "Term"). Any
payments made to RadioShack pursuant to the RadioShack Incentive
Agreements in calendar years prior to 2010 shall not be considered for
purposes of this Section 4. Notwithstanding anything to the contrary
herein, any obligation of a party arising prior to expiration or termination
of this Agreement shall survive the expiration or termination.
3. Section 5.2 of the Agreement (Employment Commitments) is hereby amended to
read as follows:
5.2. Employment Commitments.
Determination of compliance with this Section 5.2 shall be based
on RadioShack's employment data as of August 1 of each year of the
Term.
Page 4
Amendment No. 1 to Economic Development Program Agreement
between City of Fort Worth and RadioShack Corporation
5.2.1. Fort Worth Residents.
At all times during the Term, RadioShack will provide at
least four hundred (400) Full-time Jobs on the Downtown Site to
Fort Worth Residents.
5.2.2. Central City Residents.
At all times during the Term, RadioShack will provide at
least one hundred fifty (150) Full-time Jobs on the Downtown Site
to Central City Residents.
4. Section 5.3.2 of the Agreement (Supply and Service Expenditures/Certified
M/WBEs) is hereby amended to read as follows:
Beginning with calendar year 2005, and each year for a period of
ten (10) years thereafter, RadioShack will expend with Certified M/WBEs
at least One Hundred Thousand Dollars ($100,000.00) in local
discretionary funds for supplies and services directly provided in
connection with the operation of the Required Improvements.
5. The Agreement is hereby amended to add Section 5.6, as follows:
5.6. Use of Required Improvements for Corporate Headquarters.
Beginning with calendar year 2010 and until June 30, 2016,
RadioShack shall continually use the Downtown Site as its Corporate
Headquarters. For purposes of this Agreement, "Corporate
Headquarters" means RadioShack's primary administrative office at
which the Chief Executive Officer, Chief Financial Officer, and other
Page 5
Amendment No. I to Economic Development Program Agreement
between City of Fort Worth and RadioShack Corporation
senior staff overseeing RadioShack's strategic planning, corporate
communications, tax and legal, marketing, finance, human resources, and
information technology matters are located.
6. The first sentence of Section 6 of the Agreement (Program Grants) is hereby
amended to read as follows:
Beginning in calendar year 2006 and subject to the Program Cap,
the City will pay to RadioShack Program Grants calculated in accordance
with this Section 6.
7. In order to reflect the amendment to the Agreement set forth in Section 4 of this
Amendment, Section 6.3.5 of the Agreement (Program Grants During 2006-
2015/Discretionary Spending with Certified M/WBEs (5%)) is hereby amended to read
as follows:
If during the previous calendar year RadioShack has complied with
its commitment to expend with Certified M/WBEs at least One Hundred
Thousand Dollars ($100,000.00) in local discretionary funds for supplies
and services directly provided in connection with the operation of the
Required Improvements, RadioShack's Program Grant for the next
calendar year shall be increased by an amount equal to five percent (5%)
of the applicable Base Benefit.
8. In order to reflect the amendment to the Agreement set forth in Section 4 of this
Amendment, the last sentence of Section 6.3.6 (Program Grants During 2006-2015/No
Offsets) is hereby amended to read as follows:
In other words, if in a given year RadioShack exceeded its commitment, as
set forth in Section 5.3.1, to spend at least $1.2 million in discretionary
funds for supplies and services with Fort Worth Companies by $75,000,
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Amendment No. I to Economic Development Program Agreement
between City of Fort Worth and RadioShack Corporation
but spent only $75,000 in discretionary funds for supplies and services
with Certified M/WBEs instead of$100,000, as required by Section 5.3.2,
RadioShack's Program Grant would still be reduced in the next calendar
year by five percent (5%) for its failure to meet its commitment under
Section 5.3.2.
9. The heading and introductory paragraph of Section 6.4 of the Agreement
(Program Grants During 2016-2035) is hereby amended to read as follows:
6.4. Program Grants During 2016.
Subject to the Program Cap, the City shall pay RadioShack two (2)
Program Grants in calendar year 2016: the first attributable to the 2015 tax
year and the second attributable to the 2016 tax year. RadioShack agrees
to use reasonable efforts to cause Tarrant County College District, as
owner of the Downtown Site, to pay any taxes attributable to the 2016 tax
year on or before December 31, 2016. Any Program Grants paid by the
City to RadioShack during calendar year 2016 or otherwise attributable to
the 2016 tax year shall be based on a combination of the Base Benefit and
RadioShack's compliance with its commitments under Sections 5.2.1 and
5.2.2, as follows:
10. Section 6.4.1 of the Agreement (Base Benefit Component (50%)) is hereby
amended to read as follows:
RadioShack shall automatically receive fifty percent (50%) of the
applicable Base Benefit as part of any Program Grant paid during calendar
year 2016 or otherwise attributable to the 2016 tax year.
Page 7
Amendment No. 1 to Economic Development Program Agreement
between City of Fort Worth and RadioShack Corporation
11. Section 8.3 of the Agreement (Other City Obligations/Enterprise Zone) is hereby
amended to add the following sentence:
The City will use reasonable efforts to obtain a second Enterprise Zone
designation for the Downtown Site once the term of the initial Enterprise
Zone originally approved for the Downtown Site expires.
12. Section 9 of the Agreement (Termination) is hereby amended to add the following
paragraphs to follow the existing paragraph of such Section:
Notwithstanding anything to the contrary herein, if RadioShack
fails to use the Downtown Site as its Corporate Headquarters (other than a
temporary cessation of use due to a Casualty Event) for seven (7) calendar
days or more in any calendar year during the Term of this Agreement
other than 2016, or for seven (7) calendar days or more during the period
between January 1, 2016 and June 30, 2016, the City will have the right to
terminate this Agreement immediately by providing written notice to
RadioShack. In this event, the City shall have no further duty or
obligation to RadioShack other than, if applicable, to pay any Program
Grants attributable to RadioShack's compliance with applicable
commitments in a previous year. In other words, if the City terminates
this Agreement in 2014, the City would remain obligated to pay
RadioShack a Program Grant in calendar year 2014, which would be
attributable to RadioShack's compliance with applicable commitments in
2013, but would not be required to pay any Program Grant attributable to
RadioShack's performance in 2014 or thereafter.
Page 8
Amendment No. 1 to Economic Development Program Agreement
between City of Fort Worth and RadioShack Corporation
In addition, RadioShack recognizes that a portion of the
consideration under this Agreement is the economic benefit brought to the
City by virtue of RadioShack's operation of its Corporate Headquarters in
the City. Accordingly, RadioShack understands and agrees that the failure
of RadioShack to use a location or locations within the corporate limits of
the City as RadioShack's Corporate Headquarters, and the resulting loss of
jobs, will harm and have a negative economic impact on the City, and
RadioShack agrees that the amount of actual damages resulting therefrom
are speculative in nature and will be difficult or impossible to ascertain.
Therefore, upon termination of this Agreement for failure by RadioShack
to use the Downtown Site as its Corporate Headquarters, unless
RadioShack is using another location or locations within the corporate
limits of the City as its Corporate Headquarters on the effective date of
termination and continually uses another location or locations within the
corporate limits of the City as its Corporate Headquarters through June 30,
2015, RadioShack agrees to reimburse the City, as liquidated damages and
not as a penalty, the following amounts:
(a) If RadioShack fails to use a location or locations in the City as
RadioShack's Corporate Headquarters for seven (7) calendar days at any
time between and including June 9, 2010 and June 30, 2012, RadioShack
shall reimburse the City one hundred percent (100%) of all Program
Grants paid pursuant to this Agreement after January 1, 2010.
Page 9
Amendment No. 1 to Economic Development Program Agreement
between City of Fort Worth and RadioShack Corporation
(b) If RadioShack fails to use a location or locations in the City as
RadioShack's Corporate Headquarters for seven (7) calendar days at any
time between and including July 1, 2012 and June 30, 2013, RadioShack
shall reimburse the City seventy-five percent (75%) of all Program Grants
paid pursuant to this Agreement after January 1, 2010.
(c) If RadioShack fails to use a location or locations in the City as
RadioShack's Corporate Headquarters for seven (7) calendar days at any
time between and including July 1, 2013 and June 30, 2014, RadioShack
shall reimburse the City fifty percent (50%) of all Program Grants paid
pursuant to this Agreement after January 1, 2010.
(c) If RadioShack fails to use a location or locations in the City as
RadioShack's Corporate Headquarters for seven (7) calendar days at any
time between and including July 1, 2014 and June 30, 2015, RadioShack
shall reimburse the City twenty-five percent (25%) of all Program Grants
paid pursuant to this Agreement after January 1, 2010.
The City and RadioShack agree that such amounts are a reasonable
approximation of actual damages that the City will incur as a result of
RadioShack's failure to use a location or locations in the City as
RadioShack's Corporate Headquarters throughout the Term of this
Agreement and that this provision is intended to provide compensation for
actual damages and is not a penalty. The provisions of this Section 9 shall
survive any termination of this Agreement.
Page 10
Amendment No. 1 to Economic Development Program Agreement
between City of Fort Worth and RadioShack Corporation
13. Section 15 of the Agreement (Successors and Assigns) is hereby amended to read
as follows:
This Agreement shall be binding on and inure to the benefit of the
parties, their respective successors and assigns; provided, however, that
RadioShack may not convey, transfer or otherwise assign all or any part of
its rights and obligations hereunder without the advance written consent of
the City.
14. In order to correct a typographical error, the heading of the right column of the
chart set forth in Exhibit `B" of the Agreement is hereby amended to read "Maximum
Taxable Appraised Value" instead of"Maximum Taxable Assessed Value."
15. It is specifically understood and agreed that the reduction of the level of various
commitments by RadioShack set forth in this Amendment shall not be applied to or affect
any Program Grants paid to RadioShack in calendar years prior to 2010.
15. All capitalized terms used but not defined in this Amendment shall have the
meanings ascribed to them in the Agreement.
16. This Amendment contains the entire agreement between the parties with respect
to the matters set forth herein. All provisions of the Agreement that are not specifically
amended by this Amendment shall remain in full force and effect.
17. Notwithstanding anything to the contrary herein, this Amendment is conditioned
upon and shall not take effect until the later date as of which (i) both the City and
RadioShack have executed this Amendment and (ii) RadioShack has delivered a fully
executed copy of the Lease, in its entirety, including, but not limited to, the Lease
amendment that contains all terms and conditions set forth in Exhibit "A-1" (the
"Effective Date").
EXECUTED as of the last date indicated below, to take effect on the Effective
Date, as defined in Section 17 above:
Page 11
Amendment No. 1 to Economic Development Program Agreement
between City of Fort Worth and RadioShack Corporation
CITY OF FORT WORTH: RADIOSHACK CORPORATION:
By: G�? By:
T Tom Higgins Name: Robert C. Donohoo
Assistant City Manager Title: VP, General Counsel &
Corporate Secretary
Date: 6/3o%y Date:
APPROVED AS TO FORM AND LEGALITY:
By:
Peter Vaky
Assistant City Attorney
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Page 12
Amendment No. 1 to Economic Development Program Agreement
between City of Fort Worth and RadioShack Corporation -r..
Exhibit "A-1"
Lease Terms and Conditions
That certain Amended and Restated Lease between Tarrant County College
District and RadioShack, dated as of June 25, 2008, as previously amended by that
certain First Amendment to Lease, dated as of March 11, 2010, shall be further amended
(the "Second Amendment") as necessary to reflect the following terms and conditions:
1. RadioShack shall lease the Clear Fork Building and the West Fork Building (as
those terms are defined in the Amended and Restated Lease) for an extended term
expiring on June 30, 2016.
2. RadioShack may not terminate the Lease as of a date prior to June 30, 2015. If
the Lease is terminated prior to June 30, 2015, RadioShack will be liable for payment of
all Basic Rent, Additional Rent, and any other sums owed to Tarrant County College
District under the Lease through June 30, 2015.
3. Annual Basic Rent for both the Clear Fork Building and the West Fork Building
shall be $5,200,000.00.
4. Within thirty (30) days following the effective date of the Second Amendment,
Tarrant County College District shall cause that certain lawsuit brought by Tarrant
County College District in Cause No. 096-242929-10, styled Tarrant County College
District, Plaintiff v. Tarrant Appraisal District, Defendant, whereby Tarrant County
College District is seeking a judicial determination that all or part of the Premises (as that
term is defined in the Amended and Restated Lease) is exempt from ad valorem taxes, to
be dismissed with prejudice.
Amendment No. 1 to Economic Development Program Agreement
between City of Fort Worth and RadioShack Corporation
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 6/15/2010
DATE: Tuesday, June 15, 2010 REFERENCE NO.: C-24273
LOG NAME: 17RADIOSRACK380AMEND
SUBJECT:
Authorize the Execution of Amendment No. 1 to City Secretary Contract No. 27982, an Economic
Development Program Agreement with RadioShack Corporation (COUNCIL DISTRICT 9)
RECOMMENDATION:
DISCUSSION:
FISCAL INFORMATION:
FUND CENTERS:
TO Fund/Account/Centers FROM Fund/Ac ount/Centers
CERTEFICATIONS:
Submitted for City Manager's Offlce by: Thomas Higgins (6192)
Originating Department Head: Jay Chapa (5804)
Additional Information Contact: Guy Brown (7313)
ATTAC.lu I NTS
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