HomeMy WebLinkAboutResolution 3720-03-2009A Resolution
WO 3720-03-2009
APPROVING EXECUTION OF
AN ECONOMIC INCENTIVE AGREEMENT
BETWEEN THE CITY OF IRVING, TEXAS AND
FLIGHTSAFETY INTERNATIONAL, INC.
RELATED TO AN ECONOMIC DEVELOPMENT PROJECT AT
DALLAS/FORT WORTH INTERNATIONAL AIRPORT
WHEREAS, as of December 21 1998 the Crty of Fort Worth ("Fort Worth"), the City of
Dallas ("Dallas"), the City of Irving, Texas ("Irving") and the Dallas/Fort Worth International Airport
Board ("DFW") each entered Into that certain Interlocal Agreement (the "Interlocal Agreement")
pursuant to which Irving agreed to share with Fort Worth and Dallas certain tax revenues received by
Irving from economic development projects at any portion of Dallas/Fort Worth International Airport
located within the corporate limits of Irving (the Affected Airport Property"), and
WHEREAS, Section III of the Interlocal Agreement provides that Irving will not grant any tax
abatement agreements or create any tax increment reinvestment zones or public Improvement dlstncts,
or grant or create any slrnllar types of incentive plans, without the written consent of Fort Worth, Dallas,
and DFW and
WHEREAS, in order to clanfy that tax revenues which fall within the definition of `Increased
Revenues" under Section II of the Interlocal Agreement and are used by Irving to calculate the amount
of any economic development grants authorized by Chapter 380 of the Texas Local Government Code
("380 Grants") may be exempted from the tax sharing requirements of the Interlocal Agreement if
approved by Fort Worth, Dallas, and DFW in accordance with Section III of the Interlocal Agreement,
Fort Worth, Dallas, Irving, and DFW have each executed or Intend to execute an amendment to the
Interlocal Agreement in the form attached hereto as Exhibit "A", and
WHEREAS, Irving and F11ghtSafety International, Inc. ("FSI") wish to enter into that certain
Economic Incentive Agreement attached hereto as Exhibit "B" (the "Irving Incentive Agreement")
pursuant to which Irving well pay certain 380 Grants to FSI In return for FSI s leasing of improvements
constructed on the Affected Airport Property for certain business operations (the `FSI Facility"), which
will cause employment and other economic benefits to occur thereon, and
WHEREAS, because the amount of each 380 Grant paid by Irving under the Irving Incentive
Agreement well be based on a percentage of annual ad valorem tax revenues generated by tangible
personal property located In the FSI Faculty and such revenues fall within the definition of 'Increased
Revenues" under Section II of the Interlocal Agreement, Irving has requested that Fort Worth,
ZIT WO
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RESOLUTION NO 3720-03-2009
Dallas and DFW each approve the Irving Incentive Agreement for purposes of exempting from the tax
shanng requirements of the Interlocal Agreement those ad valorem tax revenues used to calculate the
amount of any 380 Grants paid pursuant to the Irving Incentive Agreement; and
WHEREAS, the Fort Worth City Council is willing to approve the Irving Incentive Agreement
for purposes of exempting those ad valorem tax revenues generated by tangible personal property on the
FSI Facility from the revenue shanng requirements of the Interlocal Agreement, as amended, solely m
accordance with the terms and conditions of this Resolution,
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FORT WORTH, TEXAS THAT
1 The Irving Incentive Agreement attached hereto as Exhibit `B is hereby approved, subject
to the following:
1.1 That the only revenues defined m the Interlocal Agreement as `Increased
Revenues" that Fort Worth agrees to exempt from the tax sharing obligations of the Interlocal
Agreement are those ad valorem tax revenues generated from tangible personal property
located in the FSI Facility which are used to calculate the amount of a 380 Grant paid by
Irving to FSI pursuant to and m accordance with the Irving Incentive Agreement (the
"Exempted Revenues")
1.2. That, as a condition precedent to the effectiveness of this Resolution, Irving will
enter into a written agreement with Fort Worth, in a form reasonably acceptable to Fort
Worth, that if FSI pays Irving, as liquidated damages on account of default under Section
VII.B of the Irving Incentive Agreement, or otherwise reimburses Irving all or any portion of
any 380 Grant(s) paid pursuant to the Irving Incentive Agreement, plus any interest thereon,
Irving will, within thirty (30) calendar days following receipt thereof, pay Fort Worth a
percentage of all such sums, calculated in accordance with Section II of the Interlocal
Agreement.
1.3. That if the Irving Incentive Agreement is amended to extend the term or number
of 380 Grants payable thereunder or is otherwise amended or restated, or if any other
agreement between Irving and FSI ~s executed, so that the amount of the 380 Grants payable
thereunder and calculated on the basis of tax revenues that are deemed `Increased Revenues"
under the Interlocal Agreement are greater than those anticipated m the Irving Incentive
Agreement attached hereto as Exhibit `B such additional `Increased Revenues" will not be
exempted from the tax shanng obligations of the Interlocal Agreement unless the Fort Worth
City Council, the Dallas City Council and DFW each approve such amendment or other
agreement by resolution.
1 4 That if Irving withholds any Exempted Revenues from its payment to Fort Worth
of revenues subject to the tax sharing obligations of the Interlocal Agreement, Irving will, if
requested by Fort Worth, provide reasonably adequate documentation that allows Fort Worth
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RESOLUTION NO 3720-03-2009
to verify that the amounts withheld as Exempted Revenues were actually paid by Irving to
FSI as a 380 Grant under the Irving Incentive Agreement.
1.5. That the Irving Incentive Agreement attached hereto as Exhibit `B" is approved
only for purposes of Fort Worth s consent to exempt the Exempted Revenues from the tax
sharing obltgattons of the Interlocal Agreement, and that Fort Worth does not ratify or
approve any particular provtsion of the [ruing tncenttve Agreement for any other purpose
1.6. That, as a condttton precedent to the effectiveness of this Resolution, (i) the Irving
Incenttve Agreement attached hereto as Exhibit `B must be approved by resolution of the
Dallas City Counctl on substanttally the same conditions as those set forth herein, and (ii) the
amendment to the Interlocal Agreement m the form attached hereto as Exhibit A must be
executed by Fort Worth, Dallas, Irving, and DFW
2. Subject to the condittons set forth to Section 1 above, this Resolutton shall take effect on the
date of its adoption.
Adopted this ?4TH day of _~~ MARCH ~ 2009
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Exhibit A -Amendment No 1 to Interlocal Agreement
Exhibit B -Irving Incentive Agreement
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City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 3/24/2009 -Resolution No. 3720-03-2009
~-~ -
DATE Tuesday March 24 2009
LOG NAME 171RVDFWILAAMEND
REFERENCE NO G-16504
SUBJECT
Authorize Execution of Amendment to Interlocal Agreement with D/FW Airport Board the City of Dallas and
the City of Irving Regarding City of Irving Tax Revenue Sharing Obligations at D/FW Airport and Adopt
Related Resolution Approving Execution of Economic Incentive Agreement between City of Irving and
FlightSafety International Inc.
RECOMMENDATION
It is recommended that the City Council
1 Authorize the City Manager to execute an Amendment to the Interlocal Agreement between the Cities
of Fort Worth Dallas and Irving and the D/FW Airport Board of Directors dated as of December 21 1998
to clarify that the parties may by agreement of the parties exempt certain economic development grants
made by Irving from Irving's tax revenue sharing obligations under the Interlocal Agreement; and
2. Adopt the attached resolution approving execution of an Economic Incentive Agreement between the
City of Irving and FlightSafety International Inc. related to an economic development project within
Irving's corporate limits on D/FW International Airport property
DISCUSSION
On December 21 1998 the City executed an Interlocal Agreement (Agreement) with the D/FW Airport
Board (the Board), the City of Dallas and the City of Irving This Agreement provides that specified tax
revenues attributable to property located within Irving's corporate limits within the fence at D/FW Airport
(the Irving Airport Property) will be shared between the City of Irving (1/3) and the Cities of Fort Worth and
Dallas (2/3 collectively with that amount divided between the City of Fort Worth [4/11] and the City of
Dallas [7/11]) The Agreement prohibits the City of Irving from granting tax abatements or authorizing tax
increment reinvestments zones (TIFs) enterprise zones or other similar incentives that would exempt or
abate tax revenue that would otherwise be subject to the tax sharing obligations of the Agreement.
All parties to the Agreement wish to clarify through an amendment to the Agreement that economic
development grants authorized by Chapter 380 of the Texas Local Government Code (380 Grants) may
also be exempted from the tax sharing obligations of the Agreement with the specific consent of the
parties on a case-by-case basis Typically 380 Grants incentivize economic development projects where
taxes are actually paid to the municipality making the Grants but are paid from the municipality's general
fund in an amount equal to certain actual tax receipts The proposed amendment provides that 380 Grants
will be treated in the same manner as incentives such as tax abatements or TIFs where tax revenues
either are not collected or are lawfully diverted for a specific purpose per State law
Consistent with this Amendment, the parties have been asked to consent to Irving's execution of an
Economic Incentive Agreement with FlightSafety International Inc. (FlightSafety) pursuant to which
FlightSafety will construct a 215 000 square foot expansion to its existing pilot training and flight simulator
Logname 17IRVDFWILAAMEND Page 1 of 2
facility with at least 120 new jobs on the Irving Airport Property and in return Irving will pay FlightSafety
annual 380 Grants equal to a maximum of 45 percent of the new business personal property taxes
collected from the FlightSafety facility (the Irving Incentive Agreement). Any personal property tax
revenues used as the basis of any 380 Grant under the Irving Incentive Agreement would be exempted
from the tax sharing obligations of the Interlocal Agreement.
The current Agreement also contains a provision that allows Irving to declare the Agreement null and void
if the original FlightSafety facility proposed in 1998 was not constructed Because that facility was
constructed the proposed amendment deletes that provision
City staff recommends that the City Council authorize the City Manager to execute the proposed
Amendment to the Agreement, which is Exhibit A to the attached resolution and that the City Council
adopt the attached resolution approving the Irving Incentive Agreement, which is Exhibit 'B" to the
resolution subject to execution by all parties of the amendment to the Interlocal Agreement and approval
by all parties of the Irving Incentive Agreement.
FISCAL INFORMATION /CERTIFICATION
The Financial Management Services Director certifies that this action will have no material effect on City
funds
FUND CENTERS
TO Fund/Account/Centers
FROM Fund/Account/Centers
CERTIFICATIONS
Submitted for City Manager's Office by Tom Higgins (6140)
Originating Department Head. Jay Chapa (6192)
Additional Information Contact: Mark Folden (8634)
Logname• 17IRVDFWILAAMEND
Page 2 of 2
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FIR5T AMENDMENT TO INTERLOCAL AGREEMENT
STATE OF TEXAS
COUNTIES OF DALLAS AND TARRA.NT
WHEREAS, the Dallas /Fort Worth International Auport Board, a point board of the
Cities of Dallas, Texas, and Fort Worth, Texas (hereinafter `the Board"), the City of Dallas,
Texas (hereinafter "Dallas"), the City of Fort Worth, Texas (hereinafter `Fort Worth"), and the
City of Irving, Texas (hereinafter `Irving"), entered into an mterlocal agreement in 1998
(hereinafter `the Agreement") for the shanng of `Increased Revenues" (as defined in the
Agreement) generated from that portion of Irving located within the geographical boundaries of
the Dallas /Fort Worth International Airport (hereinafter "the Property"), and
WHEREAS, Section III of the Agreement requires the consent of all the parties to the
Agreement for the creation of tax abatement agreements, Tax Increment Finance (TIF) districts,
Enterprise Zones, Public Improvement Zones or any similar type special incentive plans which
would impact any revenues due Dallas or Fort Worth under the Agreement, but the Agreement
does not specifically address the treatment of economic development grants authorized by Texas
Local Government Code, Chapter 380 ("380 Grants"); and
WHEREAS, Dallas, Fort Worth, Irving, and the Board (collectively the "Parties") wish
to amend the Agreement to clarify that certain 380 Grants are included as special incentive plans
that will be exempted from Irving's revenue sharing obligation under the Agreement if approved
by all Parties and to address certain other administrative matters, all as more specifically set forth
in this First Amendment to Interlocal Agreement ("Amendment"),
NOW, THEREFORE, for and m consideration of the mutual consideration, terms, and
provisions contained herein, Dallas, Fort Worth, Irving, and the Board hereby further agree as
follows.
1. Section III of the Agreement is hereby amended to read as follows:
Irving agrees that, with respect to all or any portion of the Property or any
person, corporation, or entity using or occupying all or any portion of the
Property rt will not grant, enter into, or authorize any tax abatement agreements,
tax increment reinvestment zones (also known as `TIFs" or `T1RZs"), enterprise
zones, public improvement districts, or any other special incentive plan pursuant
to which (i) taxes that would be collected by Irving but, in accordance with state
law are not required to be collected or (ii) taxes collected by Irving are, in
accordance with state law requued to be used for a specific purpose stipulated by
such law unless all Parties agree in writing in advance to such plan, as evidenced
by duly adopted resolutions of the governing bodies of the parties hereto If
Irving grants, enters into, or authorizes any economic development program grant
pursuant to Chapter 380 of the Texas Local Government Code with respect to all
or any portion of the Property or any person, corporation, or entity using or
occupying all or any portion of the Property and the amount of any such grant ~s
based, in whole or in part, on the receipt of certain taxes that are included within
the definition of `Increased Revenues" under this Agreement, such taxes shall
nevertheless be payable to Dallas and Fort Worth in accordance with this
Agreement unless all Parties agree in writing in advance of Irving's authorization
of the grant to exempt such taxes from that obligation, as evidenced by duly
adopted resolutions of the governing bodies hereto. Irving also agrees to levy and
take all necessary action to collect all taxes, fees, etc., which would be applicable
against all properties, persons, individuals, and corporations affected by this
Agreement.
It is understood and agreed that the parties hereto have approved the following four (4)
economic development grant agreements to which Irving is a party Accordingly the amounts of
grants paid by Irving pursuant to those agreements shall continue to be exempt from the tax
sharing obligations of Section II of the Agreement to the extent that those grants are based on the
receipt of taxes that are included in the definition of `Increased Revenues" under the Agreement:
x... j ~
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City; of Irvieg Re~alutloe:
~..,~, .
City of Dailas Itesnlat#on , ;City s ort, o
_
Rtaol
Company Date No. Date No. Date No.
Avian Services, 010825
Inc Mar. 8, 2001 3-8-01 119 Feb. 28, 2001 (concurrent Feb. 27 2001 2710
resolution)
Network
Logistics, Inc. Jun. 5, 2003 6-5-03-196 Jun. 25, 2003 031929 Jul. 8, 2003 2972
Dallas
Cowboys
Merchandising, May 6, 2004 5-6-04-145 Jun. 23, 2004 042067 Jun. 29 2004 3099
Ltd.
DPF Trade
Center 1 L.P May 26, 2005 5-26-OS-170 Jun. 22, 2005 051975 Jul. 19 2005 3237
(Amazon)
2. Because the pilot training/simulator facility owned and operated by FhghtSafety
International Inc., is located on the Property Section XIX of the Agreement is hereby deleted in
rts entirety
3. All terms and provisions of the Agreement that are not specifically amended herein shall
remain unchanged and in full force and effect.
4. All capitalized terms that are used but not defined herein shall have the definitions
ascribed to them m the Agreement.
5. This Amendment shall become effective on the last date as of which this Amendment has
been executed by Dallas, Fort Worth, Irving, and Board.
2
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EXECUTED on the dates set forth below
THE CITY OF IRVING, TEXAS
H bert A. Gears, Mayor
Date• 3 " ~ D
Irving City
THE CITY OF DALL XAS
By.
Mary S Manager
Date• ~ ~ ~
THE CITY OF FORT WORTH, TEXAS
By.
Dale A. Fis eler City Manager
Date:
3/a¢/o9
as to form.
Approved as to form:
Dallas Assistant City Atto y
,~~• Xn o~ arre
Approved as to form.
Fort Worth Assis ity Attorney
G-/bSay~ 3-2'~•-09
DALLAS /FORT WORTH INTERNATIONAL AIRPORT BOARD
By. /
y P egan, Chi Executive Officer
Date: ~ ~ ~
Approved as to form.
l V
DFW Airport General Counsel
P,pproved .3 5 ~~
3 ~osolution # ~v~ ~~
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COUNCIL CHAMBER
09-0778
March 25. 2009
WHEREAS, the City of Dallas pursuant to Resolution No. 98-3297 on November 11
1998 authorized an Interlocal Agreement with the Airport Board the City of Fort Worth,
Texas and the City of Irving, Texas for sharing revenue generated within the boundaries
of DFW and
WHEREAS, Section III of the lnterlocal Agreement dated December 21 1998, between
the Ciry of Irving, the City of Dallas, the Ciry of Fort Worth and the Airport Board
provides that Irving will not authorize tax abatement agreements, Tax Increment
Finance (TIF) districts, Enterprise Zones, Public Improvement Districts or any similar
type of special incentive plan unless all Parties agree in writing in advance to such
transactions, and
WHEREAS, the City of Irving and the DFW Airport Board has requested the Cities of
Dallas and Fort Worth approve resolutions consenting to the City of Irving providing a
tax abatement and a Chapter 380 Economic Development Grant (Economic Incentive
Agreement) to FlightSafery Intemational Inc. to expand its training facility at DFW and
WHEREAS, the Interlocal Agreement does not specifically enumerate Chapter 380
Economic Development Grant agreements as economic development incentives that
may be exempted from Irving's revenue sharing obligations subject to the approval of all
parties, and
WHEREAS, the inability of the City of Irving to provide Chapter 380 Economic
Development Grants may prevent future economic benefits accruing to the parties
identified in the Interlocal Agreement; and
WHEREAS, the City of Dallas desires to amend the Interiocal Agreement entered into
pursuant to Resolution No. 98-3297 approved on November 11 1998, with the
Dallas/Fort Worth International Airport Board and the Cities of Irving and Fort Worth to
clarify that certain Chapter 380 Economic Development Grants are included as special
incentive plans that may be exempted from Irving's revenue sharing obligation subject
to the approval of all parties and to address certain other administrative matters
NOW THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DALLAS:
Section 1 That the Ciry Manager upon approval as to form by the City Attorney is
hereby authorized to execute an amendment (Exhibit A) to the Interlocal Agreement
entered into pursuant to Resolution No. 98-3297 previously approved on November 11
1998, with the Dallas/Fort Worth International Airport Board and the Cities of Irving and
Fort Worth to clarify that certain Chapter 380 Economic Development Grants are
induded as special incentive plans that may be exempted from Irving's revenue sharing
obligation subject to the approval of all parties and to address certain other
administrative matters.
,A.
COUNCIL CHAMBER
09-0778
March 25. 2009
Section 2. That the amendment authorized in this resolution is conditioned upon similar
approval by the City Council of Fort Worth.
Section 3. That this resolution shall take effect immediately from and after its passage
in accordance with the provisions of the Charter of the City of Dallas and it is
accordingly so resolved.
Distribution: Office of Economic Development Tenna Kirk, 5CS
Office of Economic Development Sajid Safdar 2CN
Intergovernmental Services, Brett Wilkinson 2BN
City Attorney's Office Gwen Satterthwaite
APPROVED BY
CITY COUNCIL
MAR 2 5 x009
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City Secretary