HomeMy WebLinkAboutOrdinance 22505-11-2016 ORDINANCE NO. 22505-11-2016
AN ORDINANCE INCREASING THE ESTIMATED RECEIPTS AND
APPROPRIATIONS IN THE DEVELOPER CONTRIBUTION FUND IN THE AMOUNT
OF $7,900,000.00, FOR THE PURPOSE OF CONSTRUCTION OF PUBLIC
IMPROVEMENTS TO EAST EXCHANGE AVENUE AND MULE ALLEY UTILITIES;
PROVIDING FOR A SEVERABILITY CLAUSE; MAKING THIS ORDINANCE
CUMULATIVE OF PRIOR ORDINANCES; REPEALING ALL ORDINANCES IN
CONFLICT HEREWITH; AND PROVIDING AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS:
SECTION 1.
That in addition to those amounts allocated to the various City departments for Fiscal Year 2016-2017 in the
Budget of the City Manager, there shall also be increased estimated receipts and appropriations in the Developer
Contribution Fund in the amount of$7,900,000.00, from available funds, for the purpose of the construction of
public improvements to East Exchange Avenue and Mule Alley utilities.
SECTION 2.
That should any portion, section or part of a section of this ordinance be declared invalid, inoperative or void for
any reason by a court of competent jurisdiction, such decision, opinion or judgment shall in no way impair the
remaining portions, sections, or parts of sections of this ordinance, which said remaining provisions shall be and
remain in full force and effect.
SECTION 3.
That this ordinance shall be cumulative of Ordinance No. 22393-09-2016 and all other ordinances and
appropriations amending the same except in those instances where the provisions of this ordinance are in direct
conflict with such other ordinances and appropriations, in which instance said conflicting provisions of said prior
ordinances and appropriations are hereby expressly repealed.
SECTION 4.
This ordinance shall take effect upon adoption.
APPROVED AS TO FORM AND LEGALITY:
r �
Peter Vaky, Deputy ' Attorney ary J. r, it ecretary
ADOPTED AND EFFECTIVE: November 15, 2016
Ordinance No.22505-11-2016
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City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved As Amended on 11/15/2016 - Ordinance No. 22505-11-2016
DATE: Tuesday, November 15, 2016 REFERENCE NO.: C-27995
LOG NAME: 17RMGEDPAEXCHANGECFA
SUBJECT:
Authorize Execution of an Economic Development Program Agreement with Rural Media Group, LLC, for
the Relocation of Its Corporate Headquarters and Broadcasting Operations to the Fort Worth Stockyards,
Authorize Execution of a Community Facilities Agreement with Fort Worth Heritage Development, LLC, for
Public Improvements to E. Exchange Avenue and Mule Alley, Authorize Amendment to Economic
Development Program Agreement with Fort Worth Heritage Development, LLC, City Secretary Contract
No. 46495, to Secure Performance Obligations Under the Economic Development Program Agreement
and the Community Facilities Agreement, Authorize Execution of a Tax Increment Financing Development
Agreement with the Board of Directors of Tax Increment Reinvestment Zone No. 15 for Reimbursement to
the City for Costs of Those Public Improvements, Authorize Advance Funding by the City for Those Public
Improvements from TIF Revenues Collected Through the Remaining Life of the Zone as the Receivable
Estimated at$7,900,000.00 and Adopt Related Appropriation Ordinance (COUNCIL DISTRICT 2)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to execute an Economic Development Program Agreement with Rural
Media Group, LLC, for the relocation of its corporate headquarters and broadcasting operations to the Fort
Worth Stockyards;
2. Find that the terms and conditions of the proposed Economic Development Program Agreement, as
outlined below, constitute a custom-designed Economic Development Program, as recommended by the
2016 Comprehensive Plan and authorized by Chapter 380 of the Texas Local Government Code;
3. Authorize the City Manager to execute a Community Facilities Agreement with Fort Worth Heritage
Development, LLC, for construction of public improvements to E. Exchange Avenue and Mule Alley;
4. Authorize the execution of amendment to Economic Development Program Agreement with Fort Worth
Heritage Development, LLC, City Secretary Contract No. 46495, in order to secure performance
obligations under the above-referenced Economic Development Program Agreement with Rural Media
Group, LLC, and the Community Facilities Agreement;
5. Authorize the execution of a Tax Increment Financing Development Agreement with the Board of
Directors of Tax Increment Reinvestment Zone No. 15 (Stockyards/Northside TIF) for funding of the public
improvements under the Community Facilities Agreement;
6. Authorize the advance funding by the City for costs of the public improvements under the Community
Facilities Agreement, with TIF funding collected through the remaining life of the Zone as a receivable,
estimated at $7,900,000.00; and
7. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
Logname: 17RMGEDPAEXCHANGECFA Page 1 of 4
Developer Contribution Fund in the amount of$7,900,000.00.
DISCUSSION:
On November 8, 2016, the City Council received a briefing on Staffs recommendation to enter into an
Economic Development Program Agreement (EDPA) with Rural Media Group (RMG) to secure the
relocation of its corporate headquarters and primary broadcasting studio to a location in the
Stockyards. In connection with this, Staff also proposes entering into a Community Facilities Agreement
(CFA) with Fort Worth Heritage Development, LLC (Heritage) in order to construct public improvements to
streetscaping along E. Exchange Avenue and waste water utilities extending through and beyond Mule
Alley on an accelerated schedule. Accelerating investment in these public improvements will help to
minimize future disruption to activity and development in the Stockyards, and will help to offset near-term
costs to RMG in its relocation to Fort Worth.
The City will be reimbursed for the costs of the public improvements for which it is responsible under the
CFA from future tax increment revenues received from properties in Tax Increment Reinvestment Zone
No. 15 (Stockyards/Northside TIF), as provided in a Tax Increment Financing (TIF) Development
Agreement between the City and the TIF's board of directors. In order to secure performance under the
EDPA and the CFA, the City and Heritage will execute an amendment to the City's existing Economic
Development Program Agreement with Heritage (City Secretary Contract No. 46495). In the event that
RMG does not fulfill its primary obligations under the EDPA by relocating its corporate headquarters and
primary broadcasting studio to the Stockyards for at least a 10-year period, the City will have the right to
be reimbursed for certain public infrastructure costs under the CFA by deducting those sums from
Program Grants payable to Heritage under the EDPA.
Economic Development Program Agreement(EDPA) with Rural Media Group, LLC (RMG):
RMG is a leading provider of multimedia content dedicated to the rural and western lifestyle. RMG is the
parent company of RFD-TV, RURAL RADIO, FamilyNet, RFD-TV The Magazine, and RFD-TV The
Theatre. RMG produces, distributes, and broadcasts original content as well as licensed content to
markets throughout the United States and internationally.
Staff recommends entering into an EDPA with RMG under which RMG will relocate its corporate
headquarters to the Stockyards by no later than January 1, 2020. The proposed location of RMG's
corporate headquarters facility will be on property owned by Heritage and leased to RMG. RMG will
occupy at least 30,000 square feet of office space, of which a minimum 6,000 square feet must be used
as the primary broadcasting studio for RFD-TV.
Specifically, RMG must comply with the following minimum requirements:
- Invest a minimum $5 million in new taxable business personal property in the site as of January 1,
2020;
- Employ a minimum 90 full-time employees (FTEs) on the site by not later than January 1, 2021 and a
minimum 135 FTEs not later than January 1, 2023, of which at all times at least 15 percent must be Fort
Worth residents and 15 percent must be Fort Worth Central City residents;
- Pay wages of no less than $15.00 per hour to all FTEs;
- Spend a minimum 15 percent annual discretionary service and supply expenditures for Fort Worth-based
operations with contractors that are Fort Worth contractors;
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-Spend a minimum 15 percent annual discretionary service and supply expenditures with contractors that
are Fort Worth Certified M/WBE companies;
- Maintain minimum average national half hour viewership of 100,000 viewers on the weekend and 12,000
viewers on weekdays, with jointly agreed upon methods for viewership verification;
- Produce and broadcast a minimum 100 hours annually of live or original television content, unrepeated,
filmed in the City of Fort Worth, of which a minimum of 25 percent and a maximum of 90 percent will be
filmed in the Fort Worth Stockyards (substantiation and verification of this commitment will incorporated in
the Company's annual reporting requirements to the City, with penalty for not meeting this and other
broadcast-related minimums resulting in a reduction in the potential grant received).
Under the EDPA, RMG will be eligible to receive annual Economic Development Program grants equal to
a maximum of 50 percent of the City's incremental property tax revenue attributable to the business
personal property taxes paid by RMG in the previous tax year. Failure by RMG to locate its corporate
headquarters and primary broadcasting studio in the Stockyards by January 1, 2020, as described above,
will constitute a breach and will allow the City to terminate the EDPA. Failure by RMG to meet the
broadcasting and promotional commitments in any year will result in a reduction of the maximum potential
grant from 50 percent to 45 percent.
Except for cases of default, the failure of RMG to meet any other particular commitment will result in a
reduction to the grant amount that RMG is entitled to receive in a given year based on the value assigned
to the commitment in accordance with the following table:
Property Owner or Company Commitment Potential Grant
Real and Personal Property Investment(Base Commitment) 15 Percent
Minimum$15.00 Hourly Wage for Employees(Wage Commitment) 10 Percent _
10verall Employment Commitment 5 Percent
15 Percent Employment of Fort Worth Residents 5 Percent
15 Percent Employment of Fort Worth Central City Residents 5 Percent
15 Percent Utilization of Fort Worth Companies for Services and Supplies 5 Percent
1 15 Percent Utilization of Fort Worth M/WBE Companies for Services and 5 Percent
Supplies
OTAL 50 Percent
Community Facilities Agreement(CFA)with Fort Worth Heritage Development, LLC (Heritage):
Heritage will execute a CFA for construction of streetscape improvements along East Exchange Avenue
beginning at North Main Street and continuing to approximately Packers Avenue as well as the upsizing
and rerouting of a wastewater line generally located along Mule Alley and continuing southeast to
Northeast 23rd Street. The cost of these public improvements are expected to total approximately
$7,900,000.00. The City will be responsible for paying the costs of these improvements. Heritage will also
have the right to construct additional public improvements that Heritage wishes to pay for. The entire
project under the CFA will be bid in accordance with competitive bidding statutes applicable to the City.
Advance Funding of Public Improvements and TIF Development Agreement:
As previously referenced, in order to accelerate construction of the public improvements along East
Exchange Avenue and Mule Alley, Staff recommends that the City provide advance funding for these
improvements. However, the Board of Directors of Tax Increment Reinvestment Zone No. 15
(Stockyards/Northside TIF) has approved execution of a Tax Increment Financing Development
Agreement with the City for the reimbursement of those costs, which will be booked as a receivable by the
City.
Amendment to Economic Development Program Agreement with Fort Worth Heritage
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Development. LLC (Heritage):
RMG will be receiving a $5,000,000.00 rent credit from Heritage under its lease. This rent credit
comprises part of the overall Economic Development incentive that the City has concluded is necessary
for RMG to relocate its corporate headquarters and broadcasting studio to the Stockyards. Rather than
providing either Heritage or RMG a direct $5,000,000.00 Economic Development grant to cover the rent
credit, the City has elected to cover this portion of its Economic Development incentive for the RMG
project by advance funding the East Exchange Avenue and Mule Alley public infrastructure under the
CFA. ,
umder the EE.)PA foi releestion of its eerperste headquarters, them I leritage will be required to Feirnburse o
pay the Gity $5,000,000.00 for the eest of the Wrestructure umder the G In the event that RMG ceases
using the Stockyards site as its consolidated corporate headquarters and primary broadcasting site at any
time during the 10-year EDPA term, Heritage will be required to reimburse or pay the City the
difference between $5,000,000.00 of CFA infrastructure costs and any sums received by the City at that
time from the TIF under the TIF Development Agreement.
In order to secure Heritage's obligations, and thus preserve the public purposes behind the funding of the
infrastructure covered by the CFA, the existing Economic Development Program Agreement between the
City and Heritage (City Secretary Contract No. 46495) will be amended to allow the City to deduct any
sums that Heritage may be obligated to reimburse to the City under the CFA from the annual Program
Grants that the City would otherwise make to Heritage under its Economic Development Program
Agreement.
This project is located in COUNCIL DISTRICT 2, Mapsco 62G.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendations, funds will be available
in the current capital budget, as appropriated, of the Developer Contributions Fund. Repayment of the
cash advance will begin when the improvements are completed, which is expected to be late Fiscal Year
2017 or early Fiscal Year 2018. The TIF will make annual payments to the City equal to 100 percent of
the TIF revenues, less administration expenses. Repayment to the City for the cash advance will be the
first priority for all revenues generated by the TIF and the City shall be first in line to receive
reimbursement before the TIF utilizes any revenues outside of this Agreement. The TIF will not be
charged interest on the cash being forwarded by the City and repayment in full is anticipated to occur in
Fiscal Year 2027 based upon the current forecast.
FUND IDENTIFIERS (FIDs):
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CERTIFICATIONS:
Submitted for City Manager's Office by: Jay Chapa (5804)
Originating Department Head: Robert Sturns (212-2663)
Additional Information Contact: Michael Hennig (871-6024)
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