HomeMy WebLinkAboutContract 33286 CITY SECRETARY
CONTRACT NO.
STATE OF TEXAS §
COUNTY OF TARRANT §
TAX ABATEMENT AGREEMENT
This TAX ABATEMENT 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 acting by and through Dale
Fisseler, its duly authorized Assistant City Manager, and ALLIED ELECTRONICS, INC.
("Owner"), a Delaware corporation acting by and through Greg Nickell, its duly authorized Vice
President.
The City Council of the City of Fort Worth ("City Council") hereby finds and the City and
Owner hereby agree that the following statements are true and correct and constitute the basis upon
which the City and Owner have entered into this Agreement:
A. On June 15, 2004, the City Council adopted Resolution No. 3092, stating that the
City elects to be eligible to participate in tax abatement and including guidelines and criteria
governing tax abatement agreements entered into between the City and various third parties,
entitled "Tax Abatement Policy Statement for Qualifying Development Projects" (the "Policy
Statement"), which is attached hereto as Exhibit "A" and hereby made a part of this Agreement
for all purposes.
B. The Policy Statement contains appropriate guidelines and criteria governing tax
abatement agreements to be entered into by the City as contemplated by Chapter 312 of the Texas
Tax Code, as amended(the "Code").
C. On November 1, 2005, the City Council adopted Ordinance No. 16683-11-2005
(the "Ordinance") establishing Tax Abatement Reinvestment Zone No. 53, City of Fort Worth,
Texas (the "Zone").
D. Owner owns certain real property located entirely within the Zone and that is more
particularly described in Exhibit "B", attached hereto and hereby made a part of this Agreement
for all purposes (the "Land").
E. Owner plans to construct the Required Improvements, as defined in Section 1.1 of
this Agreement, on the Land for the use as and operation of an electronics distribution center, with
supporting office space (the "Project").
F. On September 13, 2005 Owner submitted an application for tax abatement to the
City concerning the contemplated use of the Land (the "Application"), attached hereto as Exhibit
"C" and hereby made a part of this Agreement for all purposes.
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Tax Abatement Agreement between C!U f t� f fild V
City of Fort Worth and Allied Electronics,Inc. F9, IWINTHI YEN,
G. The contemplated use of the Land, the Required Improvements, as defined in
Section 1.1, and the terms of this Agreement are consistent with encouraging development of the
Zone and generating economic development and increased employment opportunities in the City,
in accordance with the purposes for creation of the Zone, and are in compliance with the Policy
Statement, the Ordinance and other applicable laws, ordinances,rules and regulations.
H. The terms of this Agreement, and the Land and Required Improvements, satisfy the
eligibility criteria of the Policy Statement.
I. Written notice that the City intends to enter into this Agreement, along with a copy
of this Agreement, has been furnished in the manner prescribed by the Code to the presiding
officers of the governing bodies of each of the taxing units in which the Land is located.
NOW, THEREFORE, the City and Owner, for and in consideration of the terms and
conditions set forth herein,do hereby contract,covenant and agree as follows:
1. OWNER'S COVENANTS.
1.1. Real Property Improvements.
Owner shall expend at least $18,000,000 in Construction Costs by the Completion
Deadline, as defined in Section 1.2, to construct on the Land an electronics distribution
center and supporting office facilities (collectively, the "Required Improvements") and
shall cause new taxable tangible personal property with an aggregate cost of at least
$10,000,000 to be placed on the Land by not later than the Completion Deadline. The
Required Improvements are more particularly described and depicted in Exhibit "D",
attached hereto and hereby made a part of this Agreement for all purposes. Minor
variations in the Required Improvements from the depiction and/or description provided in
Exhibit "D" shall not constitute an Event of Default, as defined in Section 4.1. For
purposes of this Agreement, "Construction Costs" shall mean site development costs,
actual construction costs, including contractor fees, the costs of supplies and materials,
engineering fees, architectural fees and other professional, development and permitting fees
expended directly in connection with the construction of the Required Improvements. The
City recognizes that Owner will request bids from various contractors in order to obtain the
lowest reasonable Construction Costs for the Required Improvements. In the event that
bids for the Required Improvements are below$18,000,000 for work substantially the same
as that outlined and depicted in Exhibit"D"and otherwise described in this Agreement,the
City will meet with Owner to negotiate in good faith an amendment to this Agreement so
that Owner is not in default for its failure to expend at least $18,000,000 in Construction
Costs for the Required Improvements, with the understanding that the City's staff will
recommend,but cannot guarantee, approval of such amendment by the City Council.
Paget
Tax Abatement Agreement between
City of Fort Worth and Allied Electronics,Inc.
1.2. Completion Date of Required Improvements.
The Required Improvements shall be deemed complete on the date as of which the
City has issued a final certificate of occupancy for all Required Improvements (the
"Completion Date"). Owner covenants and agrees that the Completion Date shall occur
by December 31, 2007, as may be extended on account of any event of Force Majeure that
delays completion of the Required Improvements in accordance with this Agreement (the
"Completion Deadline"). If any event of Force Majeure requires that the Completion
Deadline be extended, such extension shall not exceed the aggregate number of days
comprising the applicable events of Force Majeure. For purposes of this Agreement,
"Force Majeure" shall mean an event beyond Owner's reasonable control, including,
without limitation, acts of God, fires, strikes, national disasters, wars, riots, material or
labor restrictions, and unreasonable delays by the City in issuing any permits with respect
to the Required Improvements or inspecting any of the Required Improvements, but shall
not include construction delays caused due to purely financial matters involving Owner,
such as, without limitation, delays in the obtaining of adequate financing.
1.3. Use of Land.
Owner covenants that the Required Improvements shall be constructed and the
Land shall be used for the purpose of Owner's operation of an electronics distribution
center and supporting office facilities. In addition, Owner covenants that throughout the
Term of this Agreement, as defined in Section 2.8, the Required Improvements shall be
operated and maintained for the purposes set forth in this Agreement and in a manner that
is consistent with the general purposes of encouraging development or redevelopment of
the Zone.
2. ABATEMENT AMOUNTS, TERMS AND CONDITIONS.
The City will grant to Owner annual real property tax abatement on the Land and any
improvements thereon and annual personal property tax abatement on taxable tangible personal
property located on the Land for a period of ten (10) years, as specifically provided in this Section
2 and subject to and in accordance with this Agreement (collectively, the "Abatement"). The
actual amount of the Abatement granted under this Agreement shall be based upon the increase in
taxable value of the Land and any improvements thereon, if any, and taxable tangible personal
property located on the Land over their values for the 2006 tax year, which is the year in which
this Agreement was entered into, and upon attainment by Owner of certain employment,
contracting and spending commitments set forth in this Section 2.
2.1. Amount of Abatement in Years 1-3 of the Abatement Term.
Subject to Section 2.6 of this Agreement, during each of the first three (3) years of
the Abatement Term, as defined in Section 2.8, the Abatement granted hereunder may
range up to a maximum of(i) one hundred percent (100%) of the increased taxable value
Page 31M�.�Ititi` �C� �
Tax Abatement Agreement between
City of Fort Worth and Allied Electronics,Inc.
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of the Land and any improvements thereon and (ii) one hundred percent (100%) of the
increased value of taxable tangible personal property located on the Land, and shall be
calculated as follows:
2.1.1. Abatement Based on Construction Cost Expenditures (25%).
Owner shall receive a twenty-five percent (25%) Abatement if as of the
Completion Date (i) the greater of at least $4,500,000 in Construction Costs for
the Required Improvements or twenty-five percent (25%) of all Construction
Costs for the Required Improvements, regardless of the total amount of such
Construction Costs, were expended with Fort Worth Companies, as defined in
Exhibit "A", and (ii) the greater of $4,500,000 in Construction Costs for the
Required Improvements or at least twenty-five percent (25%) of the total
Construction Costs for the Required Improvements, regardless of the total amount
of such Construction Costs, were expended with Fort Worth Certified M/WBE
Companies. Notwithstanding the definition provided in the Policy Statement, for
purposes of this Agreement a "Fort Worth Certified M/WBE Company" shall
mean a minority-owned or woman-owned business that (i) has received
certification as either a minority business enterprise (MBE) or a woman business
enterprise (WBE) by the North Texas Central Regional Certification Agency
(NCTRCA) or the Texas Department of Transportation, Highway Division, and
(ii) has a principal office located within the corporate limits of the City that
performs a commercially useful function and that provides the services that are
being counted toward the applicable commitment under this Agreement. Dollars
spent with a Fort Worth Certified M/WBE Company shall also count as dollars
spent with a Fort Worth Company.
Determination of compliance with the spending requirements of this
Section 2.1.1 shall be based on spending during the period of time prior to and
including the Completion Date. The maximum percentage of Abatement available
to Owner under this Section 2.1.1 is twenty-five percent (25%). Owner shall not
be eligible for any of the twenty-five percent (25%) Abatement under this Section
2.1.1 unless Owner meets the minimum requirements set forth in both subsections
(i) and (ii) of the paragraph above. In other words, Owner may not offset a
deficiency in one subsection by exceeding its commitment in another subsection.
In addition, if the total Construction Costs expended for the Required
Improvements as of the Completion Date are less than as provided in Section 1.1
of this Agreement, not only will Owner be ineligible to receive the twenty-five
percent (25%) Abatement under this Section 2.1.1, but an Event of Default, as
defined and addressed in Section 4, shall also occur.
2.1.2. Abatement Based on Employment Commitments (Up to 50%).
Owner shall receive a fifty percent (50%) Abatement if during the
previous calendar year (i) at least 305 Full-time Jobs are provided and filled on
the Land (the "Initial Base Number of Jobs"); and(ii) the greater of thirty-eight
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City of Fort Worth and Allied Electronics,Inc. NTY a �,
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percent (38%) of all Full-time Jobs on the Land, regardless of the total number of
Full-time Jobs on the Land, or 116 Full-time Jobs on the Land were held by Fort
Worth Residents, as defined in Exhibit "A" (the "Initial Base Number of Fort
Worth Jobs"), and (iii) the greater of nineteen percent (19%) of all Full-time
Jobs on the Land, regardless of the total number of Full-time Jobs on the Land, or
58 Full-time Jobs on the Land were held by Central City Residents, as defined in
Exhibit"A" (the "Initial Base Number of Central City Jobs"). For purposes of
this Agreement, a "Full-time Job" shall mean a job filled by one (1) individual
for a period of not less than forty (40) hours per week. A Full-time Job held by a
Central City Resident shall also count as a Full-time Job held by a Fort Worth
Resident.
If any of the employment commitments set forth above were not met in the
previous calendar year, the maximum fifty percent (50%) Abatement available in
the following year pursuant to this Section 2.1.2 shall be reduced by (i) one (1)
percentage point for each Full-time Job by which the commitment for the Initial
Base Number of Jobs was not met,plus (ii)two (2)percentage points for each Full-
time Job by which the commitment for the Initial Base Number of Fort Worth Jobs
was not met, plus (iii) three (3) percentage points for each Full-time Job by which
the commitment for the Initial Base Number of Central City Jobs was not met. In
other words, if in a given calendar year Owner only provided 300 Full-time Jobs on
the Land, 110 of which were held by Fort Worth Residents and 56 of which were
held by Central City Residents, then the percentage of Abatement available
pursuant to this Section 2.1.2 would equal 50% — [5 x 1%] — [6 x 2%] — [2 x 3%],
or 50% — [5% - 12% - 6%], or 50% - 23%, or 27%. Determination of compliance
with the employment requirements of this Section 2.1.2 shall be based on Owner's
employment data on August 1 of each year during the Compliance Auditing Term,
as defined in Section 2.7. The maximum percentage of Abatement available to
Owner under this Section 2.1.2 is fifty percent (50%).
2.1.3. Abatement Based on Supply and Service Expenditures (25%).
Owner shall receive a twenty-five percent (25%) Abatement if during the
previous calendar year (i) Owner expends at least $1,000,000 in local
discretionary funds for supplies and services directly in connection with Owner's
operation of the Required Improvements ("Supply and Service Expenditures"),
and (ii) Owner expends the greater of$250,000 or twenty-five percent (25%) of
all Supply and Service Expenditures, regardless of the total amount of such
expenditures, with Fort Worth Companies, as defined in Exhibit "A", and (iii)
Owner expends the greater of $250,000 or twenty-five percent (25%) of all
Supply and Service Expenditures, regardless of the total amount of such
expenditures, with Fort Worth Certified M/WBE Companies, as defined in
Section 2.1.1. Dollars expended with a Fort Worth Certified M/WBE Company
shall also count as dollars spent with a Fort Worth Company.
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Tax Abatement Agreement between
City of Fort Worth and Allied Electronics,Inc. � j
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Determination of compliance with the spending requirements of this
Section 2.1.3 shall be based on spending for an entire calendar year. The
maximum percentage of Abatement available to Owner under this Section 2.1.3 is
twenty-five percent (25%). Owner shall not be eligible for any of the twenty-five
percent (25%) Abatement under this Section 2.1.3 unless Owner meets the
minimum requirements set forth in subsections (i), (ii) and (iii) of the paragraph
above. In other words, Owner may not offset a deficiency in one subsection by
exceeding its commitment in another subsection.
2.2. Amount of Abatement in Years 4-6 of the Abatement Term.
Subject to Section 2.6 of this Agreement, during each of the fourth (4th), fifth
(5th) and sixth (6th) years of the Abatement Term, as defined in Section 2.8, the
Abatement granted hereunder may range up to a maximum of (i) seventy-five percent
(75%) of the increased taxable value of the Land and any improvements thereon and (ii)
seventy-five percent (75%) of the increased value of taxable tangible personal property
located on the Land, and shall be calculated as follows:
2.2.1. Abatement Based on Employment Commitments (Up to 50%).
Owner shall receive a fifty percent (50%) Abatement if during the
previous calendar year (i) at least 395 Full-time Jobs are provided and filled on
the Land (the "First Mid-term Base Number of Jobs"); and (ii) the greater of
thirty-eight percent (38%) of all Full-time Jobs on the Land, regardless of the total
number of Full-time Jobs on the Land, or 150 Full-time Jobs on the Land were
held by Fort Worth Residents, as defined in Exhibit "A" (the "First Mid-term
Base Number of Fort Worth Jobs"), and (iii) the greater of nineteen percent
(19%) of all Full-time Jobs on the Land, regardless of the total number of Full-
time Jobs on the Land, or 75 Full-time Jobs on the Land were held by Central
City Residents, as defined in Exhibit "A" (the "First Mid-term Base Number of
Central City Jobs"). A Full-time Job held by a Central City Resident shall also
count as a Full-time Job held by a Fort Worth Resident.
If any or all of the employment commitments set forth above were not met
in the previous calendar year, the maximum fifty percent (50%) Abatement
available in the following year pursuant to this Section 2.2.1 shall be reduced by (i)
one (1) percentage point for each Full-time Job by which the commitment for the
First Mid-Term Base Number of Jobs was not met, plus (ii) two (2) percentage
points for each Full-time Job by which the commitment for the First Mid-Term
Base Number of Fort Worth Jobs was not met, plus (iii) three (3) percentage points
for each Full-time Job by which the commitment for the First Mid-Term Base
Number of Central City Jobs was not met. Determination of compliance with the
employment requirements of this Section 2.2.1 shall be based on Owner's
employment data on August 1 of each year during the Compliance Auditing Term,
as defined in Section 2.7. The maximum percentage of Abatement available to
Owner under this Section 2.2.1 is fifty percent (50%).
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Tax Abatement Agreement between C_I1 Y 41EI [pI �V
City of Fort Worth and Allied Electronics,Inc. lU l6 1
2.2.2. Abatement Based on Supply and Service Expenditures (25%).
Owner shall receive a twenty-five percent (25%) Abatement if during the
previous calendar year (i) Owner expends at least $1,000,000 in Supply and
Service Expenditures, and(ii) Owner expends the greater of$250,000 or twenty-
five percent (25%) of all Supply and Service Expenditures, regardless of the total
amount of such expenditures, with Fort Worth Companies, as defined in Exhibit
"A", and (iii) Owner expends the greater of $250,000 or twenty-five percent
(25%) of all Supply and Service Expenditures, regardless of the total amount of
such expenditures, with Fort Worth Certified M/WBE Companies, as defined in
Section 2.1.1. Dollars expended with a Fort Worth Certified M/WBE Company
shall also count as dollars spent with a Fort Worth Company.
Determination of compliance with the spending requirements of this
Section 2.2.2 shall be based on spending for an entire calendar year. The
maximum percentage of Abatement available to Owner under this Section 2.2.2 is
twenty-five percent (25%). Owner shall not be eligible for any of the twenty-five
percent (25%) Abatement under this Section 2.2.2 unless Owner meets the
minimum requirements set forth in subsections (i), (ii) and (iii) of the paragraph
above. In other words, Owner may not offset a deficiency in one subsection by
exceeding its commitment in another subsection.
2.3. Amount of Abatement in Years 7-9 of the Abatement Term.
Subject to Section 2.6 of this Agreement, during the seventh (7th), eighth (8th)
and ninth (9th) years of the Abatement Term, as defined in Section 2.8, the Abatement
granted hereunder may range up to a maximum of(i) fifty percent (50%) of the increased
taxable value of the Land and any improvements thereon and (ii) fifty percent (50%) of
the increased value of taxable tangible personal property located on the Land, and shall
be calculated as follows:
2.3.1. Abatement Based on Employment Commitments (Up to 30%).
Owner shall receive a thirty percent (30%) Abatement if during the
previous calendar year (i) at least 485 Full-time Jobs are provided and filled on
the Land(the "Second Mid-term Base Number of Jobs"); and(ii) the greater of
thirty-eight percent (38%) of all Full-time Jobs on the Land, regardless of the total
number of Full-time Jobs on the Land, or 184 Full-time Jobs on the Land were
held by Fort Worth Residents, as defined in Exhibit "A" (the "Second Mid-term
Base Number of Fort Worth Jobs"), and (iii) the greater of nineteen percent
(19%) of all Full-time Jobs on the Land, regardless of the total number of Full-
time Jobs on the Land, or 92 Full-time Jobs on the Land were held by Central
City Residents, as defined in Exhibit "A" (the "Second Mid-term Base Number
of Central City Jobs"). A Full-time Job held by a Central City Resident shall
also count as a Full-time Job held by a Fort Worth Resident.
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Tax Abatement Agreement between
City of Fort Worth and Allied Electronics,Inc. CiR`�� �, �n
CITY e 5�� �r.A
If any or all of the employment commitments set forth above were not met
in the previous calendar year, the maximum thirty percent (30%) Abatement
available in the following year pursuant to this Section 2.3.1 shall be reduced by (i)
one (1) percentage point for each Full-time Job by which the commitment for the
Second Mid-term Base Number of Jobs was not met, plus (ii) two (2) percentage
points for each Full-time Job by which the commitment for the Second Mid-term
Base Number of Fort Worth Jobs was not met, plus (iii) three (3) percentage points
for each Full-time Job by which the commitment for the Second Mid-term Base
Number of Central City Jobs was not met. Determination of compliance with the
employment requirements of this Section 2.3.1 shall be based on Owner's
employment data on August 1 of the previous calendar year, as defined in Section
2.8. The maximum percentage of Abatement available to Owner under this
Section 2.3.1 is thirty percent(30%).
2.3.2. Abatement Based on Supply and Service Expenditures (20%).
Owner shall receive a twenty percent (20%) Abatement if during the
previous calendar year (i) Owner expends at least $1,000,000 in Supply and
Service Expenditures, and(ii) Owner expends the greater of$250,000 or twenty-
five percent (25%) of all Supply and Service Expenditures, regardless of the total
amount of such expenditures, with Fort Worth Companies, as defined in Exhibit
"A", and (iii) Owner expends the greater of $250,000 or twenty-five percent
(25%) of all Supply and Service Expenditures, regardless of the total amount of
such expenditures, with Fort Worth Certified M/WBE Companies, as defined in
Section 2.1.1. Dollars expended with a Fort Worth Certified M/WBE Company
shall also count as dollars spent with a Fort Worth Company.
Determination of compliance with the spending requirements of this
Section 2.3.2 shall be based on spending for an entire calendar year. The
maximum percentage of Abatement available to Owner under this Section 2.3.2 is
twenty percent (20%). Owner shall not be eligible for any of the twenty percent
(20%) Abatement under this Section 2.3.2 unless Owner meets the minimum
requirements set forth in subsections (i), (ii) and (iii) of the paragraph above. In
other words, Owner may not offset a deficiency in one subsection by exceeding
its commitment in another subsection.
2.4. Amount of Abatement in Year 10 of the Abatement Term.
Subject to Section 2.6 of this Agreement, during the tenth (10th) year of the
Abatement Term, as defined in Section 2.8, the Abatement granted hereunder may range
up to a maximum of(i) fifty percent (50%) of the increased taxable value of the Land and
any improvements thereon and (ii) fifty percent (50%) of the increased value of taxable
tangible personal property located on the Land, and shall be calculated as follows:
2.4.1. Abatement Based on Employment Commitments (Up to 30%).
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Tax Abatement Agreement between N r •� r+
City of Fort Worth and Allied Electronics,Inc. tiv ° I � AW
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Owner shall receive a thirty percent (30%) Abatement if during the
previous calendar year (i) at least 575 Full-time Jobs are provided and filled on
the Land (the "Final Base Number of Jobs"); and(ii) the greater of thirty-eight
percent (38%) of all Full-time Jobs on the Land, regardless of the total number of
Full-time Jobs on the Land, or 219 Full-time Jobs on the Land were held by Fort
Worth Residents, as defined in Exhibit "A" (the "Final Base Number of Fort
Worth Jobs"), and (iii) the greater of nineteen percent (19%) of all Full-time
Jobs on the Land, regardless of the total number of Full-time Jobs on the Land, or
109 Full-time Jobs on the Land were held by Central City Residents, as defined in
Exhibit "A" (the "Final Base Number of Central City Jobs"). A Full-time Job
held by a Central City Resident shall also count as a Full-time Job held by a Fort
Worth Resident.
If any or all of the employment commitments set forth above were not met
in the previous calendar year, the maximum thirty percent (30%) Abatement
available in the following year pursuant to this Section 2.4.1 shall be reduced by (i)
one (1) percentage point for each Full-time Job by which the commitment for the
Final Base Number of Jobs was not met,plus (ii)two (2)percentage points for each
Full-time Job by which the commitment for the Final Base Number of Fort Worth
Jobs was not met, plus (iii) three (3) percentage points for each Full-time Job by
which the commitment for the Final Base Number of Central City Jobs was not
met. Determination of compliance with the employment requirements of this
Section 2.4.1 shall be based on Owner's employment data on August 1 of the
previous calendar year. The maximum percentage of Abatement available to
Owner under this Section 2.4.1 is thirty percent (30%).
2.4.2. Abatement Based on Supply and Service Expenditures (20%).
Owner shall receive a twenty percent (20%) Abatement if during the
previous calendar year (i) Owner expends at least $1,000,000 in Supply and
Service Expenditures, and(ii) Owner expends the greater of$250,000 or twenty-
five percent (25%) of all Supply and Service Expenditures, regardless of the total
amount of such expenditures, with Fort Worth Companies, as defined in Exhibit
"A", and (iii) Owner expends the greater of $250,000 or twenty-five percent
(25%) of all Supply and Service Expenditures, regardless of the total amount of
such expenditures, with Fort Worth Certified M/WBE Companies, as defined in
Section 2.1.1. Dollars expended with a Fort Worth Certified M/WBE Company
shall also count as dollars spent with a Fort Worth Company.
Determination of compliance with the spending requirements of this
Section 2.4.2 shall be based on spending for an entire calendar year. The
maximum percentage of Abatement available to Owner under this Section 2.4.2 is
twenty percent (20%). Owner shall not be eligible for any of the twenty percent
(20%) Abatement under this Section 2.4.2 unless Owner meets the minimum
requirements set forth in subsections (i), (ii) and (iii) of the paragraph above. In
3 SS
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Tax Abatement Agreement between N -� �q��
City of Fort Worth and Allied Electronics,Inc. vI u l ' }t5 /X U'U
H. ei.1.[.M EK.
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other words, Owner may not offset a deficiency in one subsection by exceeding
its commitment in another subsection.
2_5. Effect of Failure to Meet Section 2.12.2,2.3 and 2.4 Commitments.
Unless specifically identified as an Event of Default, the failure to meet any or all
of the numerical commitments or percentages, as the case may be, for Construction Cost
expenditures, employment levels and Supply and Service Expenditures, as set forth for the
first three (3) years in Sections 2.1.1, 2.1.2 and 2.1.3, for the fourth, fifth and sixth years in
Sections 2.2.1 and 2.2.2, for the seventh, eighth and ninth years in Sections 2.3.1 and 2.3.2,
and for the tenth year in Sections 2.4.1 and 2.4.2 shall result only in the reduction of the
percentage of Abatement available to Owner for a given year, and shall not constitute an
Event of Default as defined in Section 4.1 of this Agreement or trigger the cure periods and
remedies set forth in that Section 4.
2.6. Abatement Limitation.
Notwithstanding anything that may be interpreted to the contrary in this Agreement,
Owner's Abatement in a given year shall be based on the increase in the taxable value of
the Land and any improvements thereon, if any, and the value of taxable tangible personal
property located on the Land over their values for the 2006 tax year, up to a maximum of
(i) $27,000,000 for the Land and any improvements thereon and (ii) $15,000,000 for
taxable tangible personal property. In other words, if the value of the Land and any
improvements thereon in any given year exceeds (i) the value of the Land and any
improvements thereon, if any, for the 2006 tax year plus (ii) $27,000,000, Owner's
Abatement on the Land and any improvements thereon for that tax year shall be capped as
if the increase in the value of the Land and any improvements thereon had only been
$27,000,000. For example, if the value of the Land and any improvements thereon in a
given year is $30,000,000 over the value of the Land and any improvements thereon for the
2006 tax year, Owner's Abatement on the Land and improvements for that tax year would
apply only to $27,000,000 of value in the Land and improvements, and Owner would be
required to pay the City real property taxes on the remaining $3,000,000 of value in the
Land and any improvements thereon.
2.7. Protests Over Appraisals or Assessments.
Owner shall have the right to protest and contest any or all appraisals or
assessments of the Land and/or improvements or taxable tangible personal property
thereon.
2.8. Terms.
This Agreement shall take effect on the date as of which both the City and Owner
have executed this Agreement and, unless terminated earlier in accordance with its terms
and conditions, shall expire simultaneously upon expiration of the Abatement Term, as
defined below (the "Term"). The percentage of overall Abatement available to Owner in
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Tax Abatement Agreement between
City of Fort Worth and Allied Electronics,Inc.
any given year will be based in part on Owner's compliance in the entire previous calendar
year with commitments for employment levels and Supply and Service Expenditures, as
outlined in Sections 2.1.2, 2.1.3, 2.2.1, 2.2.2, 2.3.1, 2.3.2, 2.4.1 and 2.4.2, as the case may
be. The term during which the City will audit Owner's compliance with such
commitments shall commence in the same calendar year in which the Completion Date
occurs (the "Compliance Auditing Term"). The term during which Owner may receive
an Abatement shall begin on January 1 of the year following the first year of the
Compliance Auditing Term (the "Abatement Term"). In other words, taxes will not be
abated until the first full tax year following the calendar year in which the Completion Date
occurs. For example, if the Completion Date occurs in 2007, the Compliance Auditing
Term will have commenced on January 1, 2007 and the Abatement Term will begin
January 1, 2008, meaning that the first Abatement granted hereunder would be for the 2008
tax year and the last Abatement would be for the 2017 tax year. Unless this Agreement is
terminated earlier in accordance with its terms and conditions, the Compliance Auditing
Term and the Abatement Term shall end on the December 31 st immediately preceding
their respective tenth (10th) anniversaries. Information for the last year of the Compliance
Auditing Term shall be submitted as indicated in Section 3.3.
2.9. Abatement Application Fee.
The City acknowledges receipt from Owner of the required Application fee of one
percent (1%) of the total estimated cost of the Project, not to exceed $15,000. If Owner
diligently begins or causes to begin construction of the Required Improvements on the
Land within one (1) year from the date of the Application (whether or not Owner actually
receives any Abatement), this Application fee shall be creditable in full to the benefit of
Owner against any permit, impact, inspection or other lawful fee required by the City in
connection with the Project, and any remaining amounts shall be refunded to Owner.
3. RECORDS,AUDITS AND EVALUATION OF PROJECT.
3.1. Inspection of Property.
Throughout the Term of this Agreement, at any time during normal office hours
and following reasonable notice to Owner, the City shall have and Owner shall provide
access to the Land and any improvements thereon in order for the City to ensure
compliance with this Agreement. Owner shall cooperate fully with the City during any
such inspection and/or evaluation. Notwithstanding the foregoing, any representative of
the City must be escorted by Owner's security personnel and no such inspection shall
unreasonably interfere with Owner's operations.
Page 11 1' '1rI
Tax Abatement Agreement between � l 1i V V lj
City of Fort Worth and Allied Electronics,Inc. ITV
� 1
3.2. Audits.
Throughout the Term of this Agreement, the City shall have the right to audit the
financial and business records of Owner that relate to the Project and Abatement terms
and conditions (collectively, the "Records") in order to determine compliance with this
Agreement and to calculate the correct percentage of Abatement available to Owner.
Owner shall make all Records available to the City on the Land or at another location in
the City following reasonable advance notice by the City and shall otherwise cooperate
fully with the City during any audit. The City does not intend to audit Records pertaining
to a given year of the Term more than once unless additional information is brought to
the City's attention subsequently or the City reasonably questions the result of an audit
performed hereunder.
3.3. Reports and Filings.
3.3.1. Plan for Use of Fort Worth Certified M/WBE Companies.
Within ninety (90) calendar days following execution of this Agreement or
prior to the submission of an application by or on behalf of Owner for a building
permit to initiate construction of any of the Required Improvements, whichever is
earlier, Owner will file a plan with the City as to how the commitments for the
use of Fort Worth Certified M/WBE Companies outlined in this Agreement will
be attained. Owner 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.
3.3.2. Monthly Spending Reports.
From the date of execution of this Agreement until the Completion Date,
in order to enable the City to assist Owner in meeting its commitment for
construction spending with Fort Worth Certified M/WBE Companies, Owner will
provide the City 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 Owner with Fort Worth Certified M/WBE Companies for
construction of the Required Improvements. Owner 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.
3.3.3. Construction Spending Report.
Within ninety (90) calendar days following the Completion Date, Owner
will provide the City with a report in a form reasonably acceptable to the City that
specifically outlines the Construction Costs expended by and on behalf of Owner
Page 12
Tax Abatement Agreement between
City of Fort Worth and Allied Electronics,Inc.
, t
for construction of the Required Improvements, together with supporting invoices
and other documents necessary to demonstrate that such amounts were actually
paid by Owner, including, without limitation, final lien waivers signed by
Owner's general contractor. This report shall also include actual Construction
Costs expended by and on behalf of Owner for construction of the Required
Improvements with Fort Worth Companies and with Fort Worth Certified
M/WBE Companies, together with supporting invoices and other documents
necessary to demonstrate that such amounts were actually paid by or on behalf of
Owner to such contractors.
3.3.4. Employment Report.
On or before February 1 following the end of each year of the Compliance
Auditing Term, Owner shall provide the City with a report in a form reasonably
acceptable to the City that sets forth (i) the total number of individuals who held
Full-time Jobs on the Land; (ii) the total number of Fort Worth Residents who
held Full-time Jobs on the Land; and the total number of Central City Residents
who held Full-time Jobs on the Land, all as of December 31 of the previous year,
together with reasonable documentation regarding the residency of such
employees.
3.3.5. Quarterly Supply and Service Spending Report.
Beginning on the Completion Date and for the remainder of the Term,
within thirty (30) calendar days following the end of each calendar quarter Owner
will provide a report to the City in a form reasonably acceptable to the City that
specifically outlines the aggregate number of dollars expended in the same
calendar year with Fort Worth Certified M/WBE Companies for supplies and
services provided directly in connection with the operation of the Required
Improvements. Owner agrees to meet or cause a representative to meet with the
City's M/WBE Office and Minority and Women Business Enterprise Advisory
Committee as reasonably necessary to address any concerns arising from the
report. The City will use the fourth quarter report for each year of the
Compliance Auditing Term to determine the amount of Abatement earned for the
following year and attributable to the commitments for Supply and Service
Expenditures, as outlined in Sections 2.1.3, 2.2.2, 2.3.2 and 2.4.2.
3.3.6. General.
Owner shall supply any additional information requested by the City that is
pertinent to the City's evaluation of Owner's compliance with each of the terms and
conditions of this Agreement. Failure to provide all information required by this
Section 3.3 shall constitute an Event of Default, as defined and more specifically
outlined in Section 4.1. All of the foregoing shall be subject to applicable federal
and state privacy laws and regulations.
Page 13
Tax Abatement Agreement between
City of Fort Worth and Allied Electronics,Inc.
3.4. Determination of Compliance.
On or before August 1 of each year during the Abatement Term, the City shall
make a decision and rule on the actual annual percentage of Abatement available to Owner
for the following year of the Term based on the City's audit of the Records and any
inspections of the Land and/or the Required Improvements and shall notify Owner in
writing of such decision and ruling. If Owner reasonably disagrees with the City's decision
and ruling, Owner shall notify the City in writing within fourteen (14) calendar days of
receipt. In this event, Owner, at Owner's sole cost and expense, may request an
independent third party who is reasonably acceptable to the City to verify the findings of
the City within not more than thirty (30) calendar days following receipt of Owner's notice
to the City, and if any discrepancies are found, the City, Owner and the independent third
party shall cooperate with one another to resolve the discrepancy. If resolution cannot be
achieved, the matter may be taken to the City Council for consideration in an open public
meeting at which both City staff and Owner's representatives will be given an opportunity
to comment. The ruling and determination by the City Council shall be final.
The actual percentage of the Abatement granted for a given year of the Term is
therefore based upon Owner's compliance with the terms and conditions of this Agreement
during the previous year of the Compliance Auditing Term. Notwithstanding the
foregoing, if the City makes a decision and ruling that Owner is entitled to the twenty-five
percent (25%) Abatement for the first three (3) years of the Abatement Term pursuant to
Section 2.1.1, Owner shall be entitled to the benefits of such twenty-five percent (25%)
Abatement for such years without the necessity of providing any additional information
and documentation or obtaining any additional decision or ruling from the City.
4. EVENTS OF DEFAULT.
4.1. Defined.
Owner shall be in default of this Agreement if(i) any of the covenants set forth in
any portion or all of Sections 1.1, 1.2 and 1.3 of this Agreement are not met; or (ii) ad
valorem real property taxes with respect to the Land or the Project, or its ad valorem taxes
with respect to the tangible personal property located on the Land, become delinquent and
Owner does not timely and properly follow the legal procedures for protest and/or contest
of any such ad valorem real property or tangible personal property taxes; or (iii) subject to
Section 2.4 of this Agreement, Owner breaches any of the other terms or conditions of this
Agreement(collectively, each an "Event of Default").
4.2. Notice to Cure.
Subject to Section 5, if the City determines that an Event of Default has occurred,
the City shall provide a written notice to Owner that describes the nature of the Event of
Default. Owner shall have thirty (30) calendar days from the date of receipt of this written
notice to fully cure or have cured the Event of Default. If Owner reasonably believes that
Page 14
Tax Abatement Agreement between
City of Fort Worth and Allied Electronics,Inc.
Owner will require additional time to cure the Event of Default, Owner shall promptly
notify the City in writing, in which case (i) after diligently and continuously pursuing cure
and advising the City Council in an open meeting of Owner's efforts and intent to cure,
Owner shall have ninety (90) calendar days from the original date of receipt of the written
notice, or (ii) if Owner reasonably believes that Owner will require more than ninety (90)
days to cure the Event of Default, such additional time, if any, as may be offered by the
City Council in its sole discretion.
4.3. Termination for Event of Default and Payment of Liquidated Damages.
If an Event of Default has not been cured within the time frame specifically allowed
under Section 4.2, the City shall have the right to terminate this Agreement immediately
upon provision of written notice to Owner. Owner acknowledges and agrees that an
uncured Event of Default will (i) harm the City's economic development and
redevelopment efforts on the Land and in the vicinity of the Land; (ii) require unplanned
and expensive additional administrative oversight and involvement by the City; and (iii)
otherwise harm the City, and Owner agrees that the amounts of actual damages therefrom
are speculative in nature and will be difficult or impossible to ascertain. Therefore, upon
termination of this Agreement for any Event of Default, Owner shall pay the City, as
liquidated damages, all taxes that were abated in accordance with this Agreement for each
year when an Event of Default existed and which otherwise would have been paid to the
City in the absence of this Agreement. The City and Owner agree that this amount is a
reasonable approximation of actual damages that the City will incur as a result of an
uncured Event of Default and that this Section 4.3 is intended to provide the City with
compensation for actual damages and is not a penalty. This amount may be recovered by
the City through adjustments made to Owner's ad valorem property tax appraisal by the
appraisal district that has jurisdiction over the Land and over any taxable tangible personal
property located thereon. Otherwise, this amount shall be due, owing and paid to the City
within sixty (60) days following the effective date of termination of this Agreement. In the
event that all or any portion of this amount is not paid to the City within sixty (60) days
following the effective date of termination of this Agreement, Owner shall also be liable for
all penalties and interest on any outstanding amount at the statutory rate for delinquent
taxes, as determined by the Code at the time of the payment of such penalties and interest
(currently, Section 33.01 of the Code). If this Agreement is terminated on account of
Owner's failure to construct or to cause construction of the Required Improvements in
accordance with Sections 1.1 and/or 1.2 of this Agreement, no liquidated damages will be
owed to the City because taxes will not yet have been abated hereunder.
4.4. Termination at Will.
If the City and Owner mutually determine that the development or use of the Land
or the anticipated Required Improvements are no longer appropriate or feasible, or that a
higher or better use is preferable, the City and Owner may terminate this Agreement in a
written format that is signed by both parties. In this event, there shall be no recapture of
any taxes previously abated and neither party shall have any further rights or obligations
hereunder.
Page 15
Tax Abatement Agreement between
City of Fort Worth and Allied Electronics,Inc. t���C' ;�g$ i;2//11
5. EFFECT OF SALE OFLAND AND/OR REQUIRED IMPROVEMENTS.
The Abatement granted hereunder shall vest only in Owner and cannot be assigned to a
new owner of all or any portion of the Land and/or Required Improvements and/or tangible
personal property on the Land without the prior consent of the City Council, which consent shall
not be unreasonably withheld provided that (i) the City Council finds that the proposed assignee is
financially capable of meeting the terms and conditions of this Agreement and (ii) the proposed
assignee agrees in writing to assume all terms and conditions of Owner under this Agreement.
Owner may not otherwise assign, lease or convey any of its rights under this Agreement. Any
attempted assignment without the City Council's prior consent shall constitute grounds for
termination of this Agreement and the Abatement granted hereunder following ten (10) calendar
days of receipt of written notice from the City to Owner.
6. 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: Owner:
City of Fort Worth Allied Electronics
Attn: City Manager Attn: Greg Nickell, Vice President
1000 Throckmorton 7410 Pebble Drive
Fort Worth,TX 76102 Fort Worth, TX 76118
with copies to:
the City Attorney and
Economic/Community Development
Director at the same address
7. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND REGULATIONS;
ALL GRANTS SUBJECT TO APPROPRIATION.
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.
Page 16
Tax Abatement Agreement between
City of Fort Worth and Allied Electronics,Inc.
8. 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.
9. NO WAIVER.
The failure of either party to insist upon the performance of any term or provision of 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.
10. 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.
11. NO THIRD PARTY RIGHTS.
The provisions and conditions of this Agreement are solely for the benefit of the City and
Owner, and any lawful assign or successor of Owner, and are not intended to create any rights,
contractual or otherwise, in any other person or entity.
12. FORCE MAJEURE.
In addition to those instances where Force Majeure is addressed elsewhere in this
Agreement, it is expressly understood and agreed that if the performance by either party of any
obligation hereunder is delayed by reason of Force Majeure, the time period applicable to
performance of such obligation shall be extended for a period of time equal to the period of the
specific event of Force Majeure.
13. 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. In the event of any
conflict between the City's zoning ordinances, or other City ordinances and regulations, and this
Agreement, such ordinances or regulations shall control. In the event of any conflict between the
body of this Agreement and Exhibit"C",the body of this Agreement shall control.
Page 17
Tax Abatement Agreement between
City of Fort Worth and Allied Electronics,Inc.
14. BONDHOLDER RIGHTS.
The Required Improvements will not be financed by tax increment bonds. This
Agreement is subject to the rights of holders of outstanding bonds of the City.
15. CONFLICTS OF INTEREST.
Neither the Land or any of the Required Improvements covered by this Agreement are
owned or leased by any member of the City Council, any member of the City Plan or Zoning
Commission or any member of the governing body of any taxing unit with jurisdiction in the
Zone.
16. CAPTIONS.
Captions and headings used in this Agreement are for reference purposes only and shall
not be deemed a part of this Agreement.
17. SEVERABILITY.
If any provision of this Agreement is held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in any way be affected
or impaired.
18. 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
Owner, their assigns and successors in interest, 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. This Agreement shall not be amended unless
executed in writing by both parties and approved by the City Council. This Agreement may be
executed in multiple counterparts, each of which shall be considered an original, but all of which
shall constitute one instrument.
19. 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.
Page 18 � �,f °r
Tax Abatement Agreement between
City of Fort Worth and Allied Electronics,Inc.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed
as of the later date below:
CITY OF FORT WORTH: APPROVED AS TO FORM AND LEGALITY:
r
By: By: /
Dale Fisseler Peter Vaky
Assistant City Manager Assistant City Attorney
Date: � M & C: C-21/3D 11-1- 0-r.-
ATTEST:
/-/- OSATTEST:
By:
qty Secrgtar}—'
ALLIED ELECT——NICS, INC.:
By:
Greg Nickell
Vice President
Date: 2 2
ATTEST:
By:
Page 19
Tax Abatement Agreement between
City of Fort Worth and Allied Electronics,Inc. �p "vUQ ! QRS
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, on this day personally appeared Dale Fisseler,
Acting Assistant City Manager of the CITY OF FORT WORTH, a municipal corporation
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 same by appropriate
resolution of the City Council of the City of Fort Worth 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 day of
52006.
( t2o�"a'P•�' JONI R JACOBS
Notary ublic in an or I*fJ l*. NOTARY PUBLIC
the State of Texas �N� Q 1 State of Texas
<oF��i�Comm. Exp. 05-27-2007
2.
Notary's Printed Name
STATE OFJ&Q/, §
COUNTY OF JWvLaA §
BEFORE ME, the undersigned authority, on this day personally appeared Greg Nickell,
Vice President of ALLIED ELECTRONICS, 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 ALLIED ELECTRONICS, INC. - r
GIV N,UNDER MY HAND AND SEAL OF OFFICE this /+�U day
of , 2006.
Not Public 'n and for INDLIE
the State of a t�lEwwrr
Q My convnb a,E*6a
Sh el P. S4 e uz ( FgbPA V 7 2010
Notary's Printed Name
N
�,0, TEX
EXHIBITS
"A"—Tax Abatement Policy
"B" —Map and Legal Description of the Land
"C"—Owner's Tax Abatement Application
"D" —Depiction and Description of the Required Improvements
n
TEX,
Exhibit"A"
City Of.
RT . ORTH
Tax Abatement Policy
City of Fort Worth
General Tax Abatement Policy
Effective June 15,2004 through June 14,2006
1. GENERAL PROVISIONS.
1.1. Purpose.
Chapter 312 of the Texas Tax Code allows, but does not obligate or
require, the City to grant a tax abatement on the value added to a particular
property on account of a specific development project that meets the eligibility
requirements set forth in this Policy. In order for the City to participate in tax
abatement, the City is required to establish guidelines and criteria governing tax
abatement agreements. This Policy is intended to set forth those guidelines and
criteria for persons or entities interested in receiving a tax abatement from the
City. This Policy shall expire on June 14,2006.
1.2. General Eligibility Criteria.
A tax abatement can only be granted to persons or entities eligible for tax
abatement pursuant to Section 312.204(a) of the Texas Tax Code, which persons
or entities as of the effective date of this Policy are (i) the owner of taxable real
property located in a tax abatement reinvestment zone; or (ii) the owner of a
leasehold interest in real property located in a tax abatement reinvestment zone.
Although the City will consider all applications for tax abatement that meet the
eligibility requirements set forth in this Policy, it is especially interested in
development projects that:
• result in the creation of new full-time jobs for Fort Worth Residents and
Central City Residents; and
• are located in the Central City; and
• result in development with little or no additional cost to the City; and
• have a positive impact on Fort Worth Companies and Fort Worth Certified
M/WBE Companies.
1.3. General Exclusions and Limitations.
1.3.1. Lessees of Real Property.
A person or entity seeking tax abatement on real property that is
leased from a third party should be advised that, pursuant to state law, the-
City can only abate taxes on the increased value of the taxable leasehold
interest in the real property, if any, and the increase in value of taxable
improvements and tangible personal property located on the real property
and subject to the leasehold interest, if any. Before applying for a tax
abatement from the City, such persons or entities should seek professional
City�Fort Worth General Tax Abatement Policy
Page of 12
and legal guidance, and may wish to consult with the appraisal district
having jurisdiction over the property in question, as to whether their
development projects will result in a taxable leasehold interest in the
property and, if so, the anticipated value of that leasehold interest.
1.3.2. Property Located in Neighborhood Empowerment Zones
"NM19 .
The City Council has designated certain distressed areas of the
City needing affordable housing, economic development and expanded
public services as NEZs. Notwithstanding anything that may be
interpreted to the contrary, this Policy does not apply to property located
in a NEZ. A person or entity seeldng tax abatement on property owned or
leased in a NEZ should refer to the NEZ Policy in Appendix_.
1.3.3. Property Located in Tax Increment Reinvestment Zones
«mss» .
The City Council has designated certain areas of the City as TIFs.
This Policy does apply to property located in a TIF. However, a person or
entity seeking tax abatement on property owned or leased in a TIF should
be advised that state law requires a TIF's board of directors and the
governing bodies of all taxing jurisdictions contributing tax increment
revenue to a TIF to approve a City tax abatement agreement on property
located in that TIF before the agreement can take effect.
1.3.4. Property Located in Enterprise Zones.
The State of Texas has designated certain areas of the City with
high unemployment as enterprise zones. Various economic development
incentives are available to owners of property located in enterprise zones.
In accordance with state law, all property located within an enterprise zone
is automatically designated as a tax abatement reinvestment zone.
However, the City typically designates individual tax abatement
reinvestment zone overlays when it wishes to grant tax abatements on
property located in an enterprise zone.
2. DEFINITIONS.
Capitalized terms used in this Policy but not defined elsewhere shall have the
following meanings:
Abatement or Tax Abatement - A full or partial exemption from ad valorem taxes on
eligible taxable real and personal property located in a Reinvestment Zone for a specified
period on the difference between (i) the amount of increase in the appraised value (as
City of Fort Worth General Tax Abatement Policy
Page 2 of 12
reflected on the certified tax roll of the appropriate county appraisal district) resulting
from improvements begun after the execution of a written Tax Abatement Agreement and
(ii) the appraised value of such real estate prior to execution of a written Tax Abatement
Agreement (as reflected on the most recent certified tax roll of the appropriate county
appraisal district for the year prior to the date on which the Tax Abatement Agreement
was executed).
Abatement Benefit Term — The period of time specified in a Tax Abatement
Agreement, but not to exceed ten (10) years, that the recipient of a tax abatement may
receive the Abatement.
Abatement Compliance Term — The period of time specified in a Tax Abatement
Agreement during which the recipient of a tax abatement must comply with the
provisions and conditions of the Tax Abatement Agreement and file an annual report
with the City which outlines and documents the extent of the recipient's compliance with
such provisions and conditions.
Capital Investment - Only real property improvements such as, without limitation, new
facilities and structures, site improvements, facility expansion, and facility
modernization. Capital Investment does NOT include (i) land acquisition costs; (ii) any
improvements existing on the property prior to execution of a Tax Abatement
Agreement; or (iii) personal property such as, without limitation, machinery, equipment,
supplies and inventory.
Central City — A geographic area within the City, defined by the City Council and
shown in the map of Exhibit"A"of this Policy.
Central City Resident—An individual whose principle place of residence is at a location
in the Central City.
Commercial/Industrial Development Project — A development project in which a
facility or facilities will be constructed'or renovated on property that is or meets the
requirements to be zoned for commercial or industrial use pursuant to the City's Zoning
Ordinance.
CDBG Eligible Area—Any census tract in which fifty-one percent(51%) or more of the
residents in that census tract have low to moderate incomes, as defined by the United
States Department of Housing and Urban Development.
Fort Worth Certified M/WBE Company—A minority or woman-owned business that
has a principal office located within the corporate limits of the City and has received
certification as either a minority business enterprise (MBE) or a woman business
enterprise (WBE)by the North Texas Central Regional Certification Agency(NCTRCA)
or the Texas Department of Transportation(TxDOT), Highway Division.
City of Fort Worth General Tax Abatement Policy
Page 3 of 12
Fort Worth Company – A business that has a principal office located within the
corporate limits of the City.
Fort Worth Resident–An individual whose principal place of residence is at a location
within the corporate limits of the City.
Mixed-Use Development Project – A development project in which a facility or
facilities will be constructed or renovated such that (i) at least twenty percent (20%) of
the total gross floor area will be used as residential space and (ii) at least ten percent
(10%) of the total gross floor area will be used for office, restaurant, entertainment and/or
retail sales and service space.
M/WBE Ordinance–City Ordinance No. 15530, as may subsequently be amended, or a
successor ordinance thereto.
Reinvestment Zone – An area designated by the City as a tax abatement reinvestment
zone in accordance with Chapter 312 of the Texas Tax Code.
Residential Development Project – A development project in which a facility or
facilities will be constructed or'renovated as multi-family living units on property that is
or meets requirements to be zoned for multi-family or mixed-use pursuant to the City's
Zoning Ordinance.
Supply and Service Expenses – Discretionary expenses incurred as part of normal
business operations on the real property subject to tax abatement, such as, by way of
example only, office supplies,janitorial supplies and professional services.
Tax Abatement Agreement–A written Agreement that the recipient of a tax abatement
must enter into with the City and that outlines the specific terms and conditions
pertaining to and governing the tax abatement.
3. RESIDENTIAL DEVELOPMENT PROJECTS ELIGIBLE FOR TAX
ABATEMENT.
To be eligible for tax abatement under this Policy, a Residential Development
Project must meet all of the criteria set forth in one of the following paragraphs:
3.1. (i) Be located in the Central City; and (ii) Satisfythe CapitaLInvestment— —
�- =da�6rrdab- "i y_cntena necessary for a Residential Development Project to be eligible
for tax abatement under the NEZ Policy; and (iii) Meet all of the commitments set forth
in Section 6 of this Policy(Standard Requirements for Residential Development Projects
and Certain Commercial/Industrial and Mixed-Use Development Projects); or
3.2. (i) Be located in a CDBG Eligible Area; and(ii) Have a capital investment
of at least $5 million; and (iii) Cause no greater than 50% of the units be reserved as
City of Fort Worth General Tax Abatement Policy CIT
Page 4of12
affordable housing for persons with incomes at or below eighty percent (80%) of median
family income based on family size (as established and defined by the United States
Department of Housing and Urban Development); and (iv) Meet all of the commitments
set forth in Section 6 of this Policy(Standard Requirements for Residential Development
Projects and Certain Commercial/Industrial and Mixed-Use Development Projects); or
3.3. (i)Be located outside of the Central City; and(ii)Have a capital investment
of at least $5 million; and (iii) Cause no fewer than 20% of the units shall to be reserved
as affordable housing for persons with incomes at or below eighty percent (80%) of
median family income based on family size (as established and defined by the United
States Department of Housing and Urban Development); and (iv) Meet all of the
commitments set forth in Section 6 of this Policy(Standard Requirements for Residential
Development Projects and Certain Commercial/Industrial and Mixed-Use Development
Projects).
In addition,an applicant for a Residential Development Project tax abatement that
includes, in whole or in part, the renovation of one or more existing structures shall
provide, as part of the applicant's Tax Abatement Application, a detailed description and
the estimated costs of the renovations contemplated.
4. COMMERCIALX4DUSTRIA1L DEVELOPMENT PROJECTS ELIGIBLE
FOR TAX ABATEMENT.
To be eligible for tax abatement under this Policy, a Commercial/Industrial
Development Project must meet all of the criteria set forth in one of the following
paragraphs:
4.1. (i) Have a minimum Capital Investment of$500,000; and (ii) Be located in
the Central City or on property immediately adjacent to the major thoroughfares which
serve as boundaries to the Central City, or within a CDBG Eligible Area; and (iii) meet
all of the commitments of Section 6 of this Policy (Standard Requirements for
Residential Development Projects and Certain CommerciaUIndustrial and Mixed-Use
Development Projects); or
4.2. (i)Have a minimum Capital Investment of$10 million; and(ii)meet all of
the commitments of Section 6 of this Policy (Standard Requirements for Residential
Development Projects and Certain Commercial/Industrial and Mixed-Use Development
Projects); or
4.3. (i)Have a minimum Capital Investment of$100 million; and(ii) satisfy
additional requirements that may be set forth by the City on a project-specific basis.
In addition, an applicant for tax abatement on a Commercial/Industrial
Development Project that includes, in whole or in part, the renovation of one or more
Cityof Fol Worth General Tax Abatement Policy
Page 5ofL�
existing structures shall provide, as part of the applicant's Tax Abatement Application, a
detailed description and the estimated costs of the renovations contemplated.
5. M XED-USE DEVELOPMENT PROJECTS ELIGIBLE FOR TAX
ABATEMENT.
To be eligible for tax abatement under this Policy, a Mixed-Use Development
Project must meet all of the criteria set forth in one of the following paragraphs:
5.1. (i) Have a minimum Capital Investment of$500,000; and (ii) Be located in
the Central City or on property immediately adjacent to the major thoroughfares which
serve as boundaries to the Central City, or within CDBG Eligible Area; and (iii) meet all
of the commitments of Section 6 of this Policy (Standard Requirements for Residential
and Mixed-Use Development Projects and Certain Commercial/Industrial Development
Projects); or
5.2. (i) Have a minimum Capital Investment of$10 million; and (ii)meet all of
the commitments of Section 6 of this Policy (Standard Requirements for Residential and
Mixed-Use Development Projects and Certain Commercial/Industrial Development
Projects); or
5.3. (i)Have a minimum Capital Investment of$100 million; and(ii) consist of
multiple land uses, whereby no single land use would comprise greater than 40% of the
project's land area; and (iii) emphasize live/work/play opportunities with multi-modal
access; and, (iv) satisfy additional requirements that may be set forth by the City on a
project-specific basis.
In addition, an applicant for tax abatement on a Mixed-Use Development Project
that includes, in whole or in part, the renovation of one or more existing structures shall
provide, as part of the applicant's Tax Abatement Application, a detailed description and
the estimated costs of the renovations contemplated.
6. STANDARD REQUIREMENTS FOR RESIDENTIAL DEVELOPMENT
PROJECTS AND CERTAIN COMMERCIAL/INDUSTRLAL AND
MIXED-USE DEVELOPMENT PROJECTS.
To be eligible for property tax abatement,_ a Residential Development Project
meeting the requirements set forth in Sections 3.1, 3.2 or 3.3 of this Policy; a
Commercial/Industrial Development Project meeting the requirements set forth in
Sections 4.1 and 4.2 of this Policy; and a Mixed-Use Development Project meeting the
requirements set forth in Sections 5.1 and 5.2 shall meet all of the following
requirements:
City of Fort Worth General Tax Abatement Policy
Page 6 of 12
6.1. Commit to provide full-time employment to a set number and/or a
percentage of full-time jobs offered on the real property where the Development is
located to Central City Residents,which commitment will be agreed upon and set forth in
the Tax Abatement Agreement; and
6.2. Commit to provide full-time employment to a set number and/or a
percentage of full-time jobs offered on the real property where the Development is
located to Fort Worth Residents, which commitment will be agreed upon and set forth in
the Tax Abatement Agreement; and
6.3. Commit to spend a set amount or percentage of total construction costs
and annual Supply and Service Expenses with Fort Worth Companies, which
commitment will be agreed upon and set forth in the Tax Abatement Agreement; and
6.4. For the purposes outlined in the City's M/WBE Ordinance, agree, as a
base goal, to undertake a good faith effort to spend at least twenty-five percent (25%) of
total construction costs and at least twenty-five percent (25%) of annual Supply and
Service Expenses with Fort Worth Certified M/WBE Companies, which goal may be
increased or decreased by the City, after consultation with the Minority and Women
Business Enterprise Advisory Committee, considering all applicable factors with regard
to the specific Development Project, including, but not limited to, capacity, quality and
price, and otherwise in accordance with the process applicable pursuant to the City's
M/WBE Ordinance; and
6.5. As part of the base goal established pursuant to Section 6.4 above,commit
to spend a set amount or percentage of total construction costs and annual Supply and
Service Expenses with Fort Worth Certified M/WBE Companies, which commitments
will be agreed upon and set forth in the Tax Abatement Agreement and, if not met, will
serve to reduce the value of Abatement in accordance with specific terms and conditions
of the Tax Abatement Agreement; and
6.6. Commit to file a plan with the City as to how the goals and commitments
for use of Fort Worth Certified M/WBE Companies will be attained and, in order to
demonstrate compliance with that plan, (i) to file monthly reports with the City and the
Minority and Women Business Enterprise Advisory Committee throughout the
construction phase of any improvements required by the Tax Abatement Agreement
reflecting then-current expenditures made with Fort Worth Certified M/WBE Companies,
and (ii) from the start of the First Compliance Auditing Year (as defined in Section 8)
until expiration of the Tax Abatement Agreement, to file quarterly reports with the City
reflecting then-current expenditures made with Fort Worth Certified M/WBE Companies.
The City Council may, in its sole discretion, require a CommerciaM[ndustrial
Development Project meeting the criteria set forth in Section 4.3 of this Policy and a
Mixed-Use Development Project meeting the criteria set forth in Section 5.3 of this
Policy to satisfy some, all or none of the requirements set forth in this Section 6.
City of Fort Worth General Tax Abatement Policy
Page 7 of 12
7. TAX ABATEMENT CALCULATION.
All Tax Abatement Agreements shall require the recipient to construct or cause
construction of specific improvements on the real property that is subject to the
abatement. Failure to construct these specific improvements at the minimum Capital
Investment expenditure and by the deadline established in the Tax Abatement Agreement
shall give the City the right to terminate the Tax Abatement Agreement. The amount of a
particular tax abatement shall be negotiated on a case-by-case basis and specifically set
forth in the Tax Abatement Agreement. The calculation of tax abatement for a
Commercial/Industrial Project that meets the requirements of Section 4.3 of this Policy or
for a Mixed-Use Development Project that meets the requirements of Section 5.3 of this
Policy shall be negotiated on a case-by-case basis and governed solely by the terms and
conditions of the Tax Abatement Agreement. The calculation of tax abatement for any
other project shall be negotiated on a case-by-case basis,but shall be governed directly in
accordance with the degree to which the recipient meets the four (4) commitments set
forth in Sections 6.1, 6.2, 6.3 and 6.4 of this Policy, which will be outlined in the Tax
Abatement Agreement. A Tax Abatement Agreement may establish a base abatement
that is (i) reduced in accordance with the recipient's failure to meet one or more of such
commitments or (ii) increased in accordance with the recipient's meeting and/or
exceeding one or more of such commitments.
8. TAX ABATEMENT IMPLEMENTATION.
The term of a tax abatement shall be negotiated on a case-by-case basis and
specified in the Tax Abatement Agreement. The City will audit and determine the
recipient's compliance with the terms and conditions of the Tax Abatement Agreement
for a full calendar year prior to the first year in which the tax abatement is available (the
"First Compliance Auditing Year"). The Compliance Auditing Year shall either be the
full calendar year in which a final certificate of occupancy is issued for the improvements
required by the Tax Abatement Agreement for the real property subject to abatement or
the following calendar year, as negotiated and set forth in the Tax Abatement Agreement.
The first tax abatement will be available to the recipient for the tax year following the
Compliance Auditing Year. In other words, the degree to which the recipient meets the
commitments set forth in the Tax Abatement Agreement will determine the percentage of
taxes abated for the following tax year. The City will continue to audit and determine the
recipient's compliance with the terms and conditions of the Tax Abatement Agreement
for each subsequent calendar year, which findings shall gpvern —percentage,a�taxes-
-- abated or e o owing tax year,until expiration of the Tax Abatement Agreement.
9. TAX ABATEMENT APPLICATION PROCEDURES.
Each tax abatement application shall be processed in accordance with the
following standards and procedures:
City of Fort Worth General Tax Abatement Policy
Page 8 of 12
9.1. Submission of Application.
If a given development project qualifies for tax abatement pursuant to the
eligibility criteria detailed in Section 4, Section 5 or Section 6 of this Policy, as
the case may be, an applicant for tax abatement must complete and submit a City
of Fort Worth Tax Abatement Application (with required attachments) (the
"Application"). An Application can be obtained from and should be submitted
to the City's Economic and Community Development Department. In order to be
complete, the Application must include documentation that there are no
delinquent property taxes due for the property on which the development project
is to occur.
9.2. Application Fee.
Upon submission of the Application, an applicant must also pay an
application fee. This application fee shall be the lesser amount of(i) one percent
(1%) of the proposed project's Capital Investment and value of personal property
qualifying for Abatement or (ii) $15,000 ("Application Fee"). Regardless of
whether the City ultimately grants the applicant a Tax Abatement, if substantive
construction on the project, as determined by the City in its sole and reasonable
discretion,has been undertaken on the property specified in the application within
one (1) year following the date of its submission, this Application Fee shall be
credited to any permit, impact, inspection or other fee paid by the applicant and
required by the City directly in connection with the proposed project. Otherwise,
the Application Fee shall not be credited or refunded to any party for any reason.
9.3. Application Review and Evaluation.
The Economic and Community Development Department will review an
Application for accuracy and completeness. Once complete, the Economic and
Community Development Department will evaluate an Application based on the
perceived merit and value of the project, including, without limitation, the
following criteria:
• Types and number of new jobs created, including respective wage rates,
and employee benefits packages such as health insurance, day care
provisions, retirement packages, transportation assistance, employer-
sponsored training and education, and any other benefits;
• Percentage of new jobs committed to Fort Worth.Residents;
• Percentage of new jobs committed to Central City Residents;
• Percent of construction contracts committed to (i) Fort Worth Companies
and(ii)Fort Worth Certified M/WBE Companies;
City of Fort Worth General Tax Abatement Policy
Page 9 of 12
• Percentage of Supply and Service Contract expenses committed to (i) Fort
Worth Companies and(ii)Fort Worth Certified M/WBE Companies;
• Financial viability of the project;
• The project's reasonably projected increase in the value of the tax base;
• Costs to the City(such as infrastructure participation, etc.);
• Remediation of an existing environmental problem on the real property;
• The gender, ethnic background and length of employment of each member
of the applicant's board of directors, governing body or upper
management, as requested by the City; and
• Other items that the City may determine to be relevant with respect to the
project.
Based upon the outcome of the evaluation, the Economic and Community
Development Office will present the Application to the City Council's Central
City Revitalization and Economic Development Committee. In an extraordinary
circumstance, the Economic and Community Development Department may elect
to present the Application to the full City Council without initial input from the
Central City Revitalization and Economic Development Committee.
9.4. Consideration by Council Committee.
The City Council's Central City Revitalization and Economic
Development Committee will consider the Application in an open meeting or, if
circumstances dictate and the law allows, a closed meeting. The Committee may
either (i) recommend approval of the Application, in which case City staff will
incorporate the terms of the Application into a Tax Abatement Agreement for
subsequent consideration by the full City Council with the Central City
Revitalization and Economic Development Committee's recommendation to
approve the Agreement; (ii) request modifications to the Application, in which
case Economic Development Office staff will discuss the suggested modifications
with the applicant and, if the requested modifications are made, resubmit the
modified Application to the---Central--C-its--R-eviWization—and--Economic "---
Development Committee for consideration; or (iii) deny to recommend
consideration of the Application by the full City Council.
9.5. Consideration by the City Council.
A Tax Abatement Agreement will only be considered by the City Council
if the applicant has first executed the Tax Abatement Agreement. The City
City of Fort Worth General Tax Abatement Policy
Page 10 of 12
Council retains sole authority to approve or deny any Tax Abatement Agreement
and is under no obligation to approve any Application or Tax Abatement
Agreement.
10. GENERAL POLICIES AND REQUIREMENTS.
Notwithstanding anything that may be interpreted to the contrary herein, the
following general terms and conditions shall govern this Policy:
10.1. A tax abatement shall not be granted for any development project in which
a building permit application has been filed with the City's Development Department. In
addition, the City will not abate taxes on the value of real or personal property for any
period of time prior to the year of execution of a Tax Abatement Agreement with the
City.
10.2. The applicant for a tax abatement must provide evidence to the City that
demonstrates that a tax abatement is necessary for the financial viability of the
development project proposed.
10.3. In accordance with state law, the City will not abate taxes levied on
inventory, supplies or the existing tax base.
10.4. An applicant for tax abatement shall provide wage rates, employee benefit
information for all positions of employment to be located in any facility covered by the
Application.
10.5. Unless otherwise specified in the Tax Abatement Agreement, the amount
of real property taxes to be abated in a given year shall not exceed one hundred fifty
percent (150%) of the amount of the minimum Capital Investment expenditure,required
by the Tax Abatement Agreement for improvements to the real property subject to
abatement multiplied by the City's tax rate in effect for that same year, and the amount of
personal property taxes to be abated in a given year shall not exceed one hundred fifty
percent (150%) of the minimum value of personal property required by the Tax
Abatement Agreement to be located on the real property, if any, subject to abatement
multiplied by the City's tax rate in effect for that same year.
10.6. The owner of real property for which a Tax Abatement has been granted
shall properly maintain the property to assure the long-term economic viability of the
project. In addition, if a citation or citations for City Code violations are issued against a
project while a Tax Abatement Agreement is in effect, the amount of the tax abatement
benefit will be subject to reduction, as provided in the Tax Abatement Agreement.
10.7. If the recipient of a tax abatement breaches any of the terms or conditions
of the Tax Abatement Agreement and fails to cure such breach in accordance with the
Tax Abatement Agreement, the City shall have the right to terminate the Tax Abatement
City of Fort Worth General Tax Abatement Policy
Page 11 of 12
Agreement, In this event,the recipient will be required to pay the City any property taxes
that were abated pursuant to the Tax Abatement Agreement prior to its termination.
10.8. As part of the consideration under all Tax Abatement Agreements, the
City shall have, without limitation, the right to (i) review and verify the applicant's
financial statements and records related to the development project and the abatement in
each year during the term of the Tax Abatement Agreement prior to the granting of a tax
abatement in any given year and (ii) conduct an on-site inspection of the development
project in each year during the term of the Tax Abatement to verify compliance with the
terms and conditions of the Tax Abatement Agreement. Any incidents of non-
compliance will be reported to all taxing units with jurisdiction over the real property
subject to abatement.
10.9. The recipient of a tax abatement may not sell, assign, transfer or otherwise
convey its rights under a Tax Abatement Agreement unless otherwise specified in the
Tax Abatement Agreement. A sale, assignment, lease, transfer or conveyance of the real
property that is subject to the abatement and which is not permitted by the Tax
Abatement Agreement shall constitute a breach of the Tax Abatement Agreement and
may result in termination of the Tax Abatement Agreement and recapture of any taxes
abated after the date on which the breach occurred.
City of Fort Worth General Tax Abatement Policy �.�� ��,�'\- a; 0ljk?
Page 12 of 12 CRY b'NIC PZgi Y
FT. �W`°v iR A, 12f.
For additional information about this Tax Abatement Policy, contact the City of Fort
Worth's Economic &Community Development Department using the information below:
City of Fort Worth
Economic & Community Development Department
1000 Throckmorton Street
Fort Worth, Texas 76102
(817) 392-6103
bqp://fortworthgov.org/ecodev/
FORTWORTH,
Z
a• n
Exhibit "B"
Map and Legal Description of the Land
Lot 1 R, Block 7, Riverbend West Business Park, Fort Worth, Tarrant County, Texas, as shown by plat
recorded in Cabinet A, Slide 10587 of the Plat Records Tarrant County, Texas
Exhibit "C"
Incentive Program
General Information
1. Applicant Information:
Allied Electronics, Inc.
7410 Pebble Drive
Fort Worth, Texas 76118
Greg Nickell, Vice President
817-595-6409 (direct)
817-454-9494 (cell)
817-595-8508 (fax)
greg.nickell@alliedelec.com
2. Project Site Information (if different from Above):
Proposed Fort Worth site is 7101 Jack Newell Blvd, Fort Worth, Texas 76118
3. Development requests that will be sought for the project (check all that apply):
A. Replat: No
B. Rezoning: No Current zoning: J Requested zoning: NIA
C. Variances: No If yes, please describe:
4. Incentive(s) Requested:
Any and all incentives available.
5. Specify elements of project that make it eligible for the requested incentive(s):
Proposed
-Commercial/Industrial development
-Capital investment over$31,000,000.00
-Commitment to provide full-time employment and work with the city or its
designee on a percentage of that employment opportunity coming from the
Central City and/or Fort Worth residents that meet the business
requirements.
-Commitment to work with construction suppliers to abide with the City's
M/WBE ordinance and make a good faith effort to spend an agreed upon
percentage of total construction and annual supply costs with Fort Worth
proposed companies.
-Commitment to file a plan containing Allied goals and commitments for
the use of Fort Worth certified M/WBE companies.
6. Do you intend to pursue abatement of:
County Taxes? X Yes _No
7. What level of abatement will you request: Years? Percentage?
Year 1 through 3 = 100%
Year 4 through 6 = 75%
Year 7 through 10 = 50%
Project Information
For real estate projects, please include below the project concept, project benefits and
how the project relates to existing community plans. A real estate project is one that
involves the construction or renovation of real property that will be either for lease or for
sale. Any incentives given by the City should be considered only for"gap" financing and
should not be considered a substitute for dept and equity.
However, the city is under no obligation to provide gap financing just because a gap
exists.
For business expansion projects' please include below services provided or products
manufactured, major customers and locations, etc. For business expansion project
involving the purchase and/or construction of real estate, please answer all that apply.
8. Type of Project: _Residential X Commercial/Industrial _Mixed-Use
9. Will this be a relocation? No X Yes If yes, where is the
company currently located?
7410 Pebble Drive Fort Worth, Texas 76118
10. Please provide a brief description of the project. 2
Allied Electronics, Inc. is a 77 year old company. Its origin is in Chicago, IL. When its
parent company became The Tandy Corporation in 1970, Allied's headquarters moved to
Fort Worth. Its original Fort Worth location was on 8`h and Jones on the east side of
downtown. In 1990, Allied's headquarters and distribution center moved further east
within Fort Worth, now located at 7410 Pebble Drive in Riverbend Business Park.
Allied has grown significantly over the past 77 years and it continues to grow today. In
1996, Allied expanded its facility by more than doubling its size at the current location.
The time has come again to expand the Allied facility. Allied is looking to acquire
approximately 40 acres and build an office and distribution center, in multiple phases.
Phase I is estimated to be 365,000 sq. ft. in usable office and distribution space.
Subsequent phases will be added as needed to a maximum footprint of approximately
600,000 sq.ft.
11. Project Description
A. Real Estate Development
1. Current Assessed Valuation of: Unimproved land $1,233,619.00
2. New Development or Expansion:
Size: (Phase 1) appx. 295,000 usable sq.ft. Distribution Center
(Phase 1) appx. 70,000 usable sq.ft. Corporate Office
Land: $3,100,000.00
Cost of Construction: (Phase 1) $18,000,000.00
Equipment: (Phase 1) $10,000,000.00
Fees, Projects Costs and Construction Contingency: $3,400,000.00
Transfers, Labor, Logistic Consultants, Engineers, etc.: $1,400,000.00
3. For mixed-use projects, please list square footage for each use:
4. Site Development(parking, fencing, landscaping, etc.):
Type of work to be done— The site will be developed to meet all local codes
and deed requirements. Phase 1 will be built within the master plan, utilizing
the appropriate portion of the acreage. Car parking for 500-600 vehicles is
planned for Phase I. Car parking will be separated from truck areas and
dock areas. It is planned to have an enclosed campus, protected by security
guards and fencing. The overall campus will be landscaped and irrigated.
Besides access to safety vehicles around the facility, roadways will be
provided for separate car and truck access and egress.
Cost of Site Development: -Earthwork/site prep
-Storm drainage and Utilities
-Landscaping/Irrigation
- Concrete paving
-Electrical/Lighting
-In excess of$1,500,000.00
B. Personal Property and Inventory
1. Personal Property:
- Cost of equipment, machinery, furnishings, etc.: $10,000,000.00
- Purchase or Lease? Purchase
2. Inventory & Supplies:
-Value of: Inventory current$45,000,000.00 Supplies —$100,000.00
- Percent of inventory eligible for Freeport exemption (inventory
exported from Texas within 270 days) 80%
12. Employment and Job Creation:
A. During Construction
1. Anticipated date when construction will start? April 2006
2. How many construction jobs will be created? —400
3. What is the estimated payroll for these jobs? —510,000,000.00
B. From Development
1. How many persons are currently employed? 276 in Fort Worth
2. What percent of current employees above are Fort Worth residents?
See Attached
3. What percent of current employees above are Central City residents?
See Attached
4. Please complete the following table for new jobs to be created.
First By Fifth By Tenth
Year Year Year
Total Jobs to be -30 -150 -y300
Created
Less Transfers" 0 0 0
Net Jobs -30 -150 -300
% of Net Jobs to be
filled by Fort Worth 38%•• 38%•" 38%"•
Residents
% of Net Jobs to be
filled by Central City 19%** 719%** 19%'
Residents
* If any employees will be transferring, please describe from where they will be
transferring.
** Allied will make every attempt to work with the city of Fort Worth, Tarrant County
Workforce Solutions and the Minority Chambers in order to access qualified personnel
for each position required.
a •
Please attach a description of the jobs to be created, tasks to be performed for each, wage
rate for each classification, and a brief description of the employee benefit package(s)
offered including the portion paid by employee and employer respectively. See question
15 for more information.
Allied's Job listings:
Min Mid Max Job Title
8.00 10.75 13.50 Cycle Counter
12.00 13.50 15.25 Cycle Counter Lead
8.00 10.75 13.50 Consolidation Clerk
8.00 10.75 13.50 E-Mail desk Stock
8.00 10.75 13.50 Export Documentation Clerk
8.00 10.75 13.50 Export Packer
8.00 10.75 13.50 Light Packer
8.00 10.75 13.50 Maintenance Assistant
8.00 10.75 13.50 Order Puller
12.00 13.50 15.25 Pulling Lead
8.00 10.75 13.50 Pack/Hold Clerk
8.00 10.75 13.50 Receiving Clerk
12.00 13.50 15.25 Receiving Team Leader
8.00 10.75 13.50 Scanner-SH
12.00 13.50 15.25 Shipping Lead
8.00 10.75 13.50 Stocker
8.00 10.75 13.50 Bin Check Desk-ST
12.00 13.50 15.25 Stock Lead
7.50 9.25 11.80 Mailroom/Supply Clerk
8.00 9.95 12.75 Switchboard Oper/Receptionist
8.00 9.95 12.75 Expense Clerk
8.00 9.95 12.75 Marketing Administrator
8.00 9.95 12.75 Office Clerk
8.50 10.55 13.50 Administrative Clerk
8.50 10.55 13.50 Collector/Credit Rep.
8.50 10.55 13.50 Senior Credit Rep
8.50 10.55 13.50 Special Accounts Clerk
8.50 10.55 13.50 Photographer Asst
8.50 10.55 13.50 Cash Posting Clerk
8.50 10.55 13.50 Sr. Cash Posting Clerk
8.50 10.55 13.50 Accounting Clerk
8.50 10.55 13.50 Drop Ship Clerk
8.50 10.55 13.50 Sr. Accounting Clerk
8.50 10.55 13.50 Human Resources Clerk
9.00 11.15 14.25 Asst Inventory Controller
9.00 11.15 14.25 Quality Inspector
24,000.00 29,400.00 34,800.00 Catalog.Production Asst.
♦ s
24,000.00 29,400.00 34,800.00 Mailroom/Supply Supervisor
26,000.00 35,000.00 40,000.00 Customer Account Rep.
26,000.00 35,000.00 40,000.00 Key Account Rep
27,600.00 33,810.00 39,997.00 Credit Analyst
27,950.00 37,625.00 40,000.00 Customer Account Rep B
28,600.00 38,500.00 40,000.00 Customer Account Rep C
29,640.00 39,900.00 40,000.00 Customer Account Rep D
31,740.00 38,882.00 45,997.00 Administrative Assistant
31,740.00 38,882.00 45,997.00 Cash Posting Mgr.
31,740.00 38,882.00 45,997.00 HR Generalist
31,740.00 38,882.00 45,997.00 Quality Technician
31,740.00 38,882.00 45,997.00 Quality Technician (Doc.)
31,740.00 38,882.00 45,997.00 Counter Sales Supervisor
31,740.00 38,882.00 45,997.00 Field Sales & Branch Supp. Coo
31,740.00 38,882.00 45,997.00 OPS/Supply Info Mgr.
36,501.00 44,714.00 52,896.00 Assistant Credit Mgr.
36,501.00 44,714.00 52,896.00 Collections Manager
36,501.00 44,714.00 52,896.00 Credit Manager
36,501.00 44,714.00 52,896.00 Content Manager
36,501.00 44,714.00 52,896.00 Content Specialist
36,501.00 44,714.00 5Z89600 Photographer
36,501.00 44,714.00 5Z89600 Benefits Coordinator
36,501.00 44,714.00 52,896.00 Payroll Supervisor
36,501.00 44,714.00 52,896.00 Help Desk
36,501.00 44,714.00 52,896.00 PC Help/EDI Specialist
36,501.00 44,714.00 52,896.00 Inventory Controller
36y501.00 44,714.00 52,896.00 Product Manager
36,501.00 44,714.00 52,896.00 Inside Sales Lead
36,501.00 44,714.00 52,896.00 Sales/Product Support Mgr
36,501.00 44,714.00 52,896.00 Operations Engineer
36,501.00 44,714.00 52,896.00 OPS Training Mgr.
40,000.00 50,000.00 60,000.00 Branch Mgr 1
41,976.00 51,421.00 601831.00 Accounts Payable Mgr.
41,976.00 51,421.00 601831.00 Telecomm Mgr.
41,976.00 51,421.00 60,831.00 Intranet Developer
41,976.00 51,421.00 60,831.00 Online Campaign Mgr
41,976.00 51,421.00 60,831.00 Site Developer
41,976.00 51,421.00 60,831.00 Campaign Mgr./Active Acct.
41,976.00 51,421.00 60,831.00 Media Designer
41,976.00 51,421.00 60,831.00 Nat'l Accounts RFQ-BOMCoor
41,976.00 51,421.00 60,831.00 Receiving/Returns Mgr
41,976.00 51,421.00 60,831.00 StocklOrder Process Mgr.
41,976.00 51,421.00 60,831.00 Shipping/Receiving Mgr.
41,976.00 51,421.00 60,831.00 Stock Inventory Mgr.
41,976.00 51,421.00 60,831.00 Stock Supervisor
45,000.00 55,000.00 60,500.00 Branch Mgr 2
45,000.00 55,000.00 60,000.00 Outside Sales Rep
48,273.00 59,134.00 69,955.00 Media Content
48,273.00 59,134.00 69,955.00 System Administrator
48,273.00 59,134.00 69,955.00 Visual Basic Prog.
48,273.00 59,134.00 69,955.00 Product Marketing Mgr.
48,273.00 59,134.00 69,955.00 Corporate Quality Mgr.
48,273.00 59,134.00 69,955.00 Courseware Developer
48,273.00 59,134.00 69,955.00 National Accounts Sales Rep
50,000.00 60,000.00 66,000.00 Branch Mgr 3
55,000.00 65,000.00 71,500.00 Branch Mgr 4
55,513.00 68,004.00 80,449.00 Assistant Controller
55,513.00 68,004.00 80,449.00 Financial Analyst
55,513.00 68,004.00 80,449.00 Network Mgr.
55,513.00 68,004.00 80,449.00 Sr. Programmer/EDI Spec.
55,513.00 68,004.00 80,449.00 National Accounts Manager
55,513.00 68,004.00 80,449.00 Warehouse Mgr/Director
60,000.00 70,000.00 79,800.00 Branch Mgr 5
63,840.00 78,205.00 92,516.00 Media & Content Mgr.
63Y840.00 78,205.00 92,516.00 Assistant MIS Mgr.
63,840.00 78,205.00 92,516.00 Web Marketing Mgr
63,840.00 78,205.00 92,516.00 Marketing Manager
63,840.00 78,205.00 92,516.00 Organizational Development Mgr
65,000.00 75,000.00 82,500.00 Branch Mgr 6
Allied's benefit summary:
Medical Insurance -United Healthcare/PPO
Dental Insurance -MetLife/Dental PPO
-Cigna/Dental HMO
Vision -Superior Vision Services
Flex Systems
Life Insurance -Unum/Group Life/AD&D
-Unum/Supplemental Life
Disability Insurance -Unum/Short-Term Disability
-Unum/Long-Term Disability
Employee Assistance -Life Balance
Retirement/401k -100% Company match
Sick Pay
Vacation Pay
Holiday Pay
13. Local Commitments:
A. During Construction
1. What percent of the construction costs described in question 11 above will
be committed to:
- Fort Worth business?
25%of total construction cost
- Fort Worth Certified Minority and Women Business Enterprises?
25%of total construction cost
B. For Annual Supply & Service Needs
Regarding discretionary supply and service expenses3 (i.e. landscaping, office or
manufacturing supplies,janitorial services, etc.):
1. What is the annual amount of discretionary supply and service expenses?
$1,000,000.00
2. What percentage will be committed to Fort Worth businesses?
25%
3. What percentage will be committed to Fort Worth Certified Minority and
Women Business Enterprises?
25%
Disclosures
14. Is any person or firm receiving any form of compensation, commission or other
monetary benefit based on the level of incentive obtained by the applicant from
the City of Fort Worth?
No
15. Please provide the following information as attachments:
a. Site plan
See Attached
b. Why tax abatement is necessary
Allied is reviewing several locations within the Metroplex as well as in other
states. Allied is looking for the best location for its employees, suppliers,
customers, logistics and overall costs. Allied's parent company,
Electrocomponents, located in the UK, have 25 other operating companies
around the world. To them, this is simply a dollars and cents issue — to find a
location suitable for the operation that gives them the best return on their dollar.
Electrocomponents employed a national real estate company to search out such
sites. Besides the Dallas/Fort Worth area, Oklahoma and Arkansas have prime
sites which meet Electrocomponents' requirements. Some of these areas
subsidize the cost of the land, construction, make large amounts of money
available for training as well as abate taxes.
c. Environmental impacts
No negative impact. Allied would take an undeveloped parcel of land
(approximately 40 acres) and construct a building suitable for the area of modern
design and architecture while upgrading the remaining property with green belts,
trees and colorful plants.
d. Infrastructure improvements
Standard roadways and utility access.
e. Benefits to the City
Allied Electronics is a 77 year old company. It has been in Fort Worth since the
early 1970's.
Allied has provided:
- employment for local residents, 267 in the immediate area
- over 20 local business in excess of$2,000,000.00 per annum for supplies,
maintenance and services
- over$6,000,000.00 to the local transportation companies
- the local United Way campaign over$150,000.00 in the past 10 years
- its annual Sales Expo (for over 15 years) in downtown Fort Worth hosting
over 500 sales, supplier, and executive heads for 4-5 days spending in
excess of $300,000.00 for lodging, use of the Convention Center,
technology, etc...
- local jobs with a payroll exceeding$11,000,000.00 in 2004
- over $130,000 per year generated from over $45,000,000.00 of inventory
(80% under Freeport) as well as $5,000,000.00 in personal property
- over $260,000.00 per year after Allied's $40,000,000.00 facility is
completed and operational
- the use of Fort Worth hotels and restaurants for it's over 300 suppliers
that come to the Allied facility throughout the year
f. Survey
Unavailable at this time. See aerial photograph.
g. Property tax statements
See Attached
h. Job creation
Allied will need additional personnel for the Fort Worth facility. Allied's current
payroll at the Fort Worth facility with 267 employees total more than
$11,000,000.00 annually. Allied anticipates growth at an average of 30 new jobs
per year adding over$1,000,000.00 per year. That's a cumulative effect in excess
of$11,000,000.00 over a 10 year period on top of the current base.
i. Employee benefits package
Allied's benefit summary:
Medical Insurance -United Healthcare/PPO
Dental Insurance -MetLife/Dental PPO
-Cigna/Dental HMO
Vision -Superior Vision Services
Flex Systems
Life Insurance -Unum/Group Life/AD&D
-Unum/Supplemental Life
Disability Insurance -Unum/Short-Term Disability
-Unum/Long-Term Disability
Employee Assistance -Life Balance
Retirement/401 k -100% Company match
Sick Pay
Vacation Pay
Holiday Pay
j. Plan for M/WBE use
Allied Electronics will work with our employment agency, The Fort Worth Chamber,
Tarrant County Workforce Solutions and the Minority Chambers in order to access
qualified personnel for each of our associate, and management openings throughout our
expansion process. We will continue our hiring ratio that mirrors our current Fort
Worth resident ratio and whenever possible, attempt to increase that Fort Worth resident
ratio.
For our supplier MWBE hiring efforts we will utilize the Fort Worth MWBE certified
company directory. In addition, we would be more than happy to utilize whatever
assistance is available from the minority chambers for identifying qualified suppliers. If
that entails briefings with the chambers in order to communicate our needs and
requirements, we would be more than happy to schedule those meetings. If the City has
other ideas through working with other recent projects, we would be more than happy to
listen to those suggestions.
k. Allied Board of Directors
FY'06 Group Organization Chart
Lee Davidson
President
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Stewart
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Pat Greg Gavin @,sh
Mark Rob
Hasty Nickell Robinson Simon Birse
Corporate Facdttc hranec/IT c°�^° Markcbng
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Manaecr
Mark WKune Contoller National Nauonal
Sales Accounts
Elisa Picky Rohh,, Lori Kcll,
Wehcr Malholra Krscr Product
Marketing Catalog Web M1
11
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On behalf of the applicant, I certify the information contained in this application,
including all attachments to be true and correct. I further certify that, on behalf of the
applicant, I have read the current Tax Abatement Policy, the Fort Worth Enterprise Zone
Information Packet and all or other pertinent City of Fort Worth policies and I agree to
comply with the guidelines and criteria stated therein.
Greg Nickell Vice President
Printed Name Title
_September 13, 2005
Signature Date
Exhibit"D"
Depiction and Description of the Required Improvements
I. Site Plan (Master Plan)
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II. Description
A fully planned 40 acre site designed to meet the future needs and growth of
the business to be built in phases as needed.
Phase 1 — includes a corporate office structure consisting of 2 levels at
approximately 35,000 square feet each for a total 70,000 square feet.
Attached will be a distribution center consisting of 2 levels at approximately
300,000 square feet total space.
Additional phases can be added to fit the needs to the ultimate build-out of the
site.
Phase Final — the corporate office has been designed to grow to a size of
210,000 square feet in 3 connected structures. All of them being 2 levels at
approximately 35,000 square feet per level. The distribution center is
designed to grow an additional 200,000 square feet on the ground and can
have multiple levels internally.
III. Personal Property Listing
Warehouse racking, shelving, work benches $2,000,000.00
Warehouse material handling system $7,000,000.00
Office/Warehouse furniture $1,000,000.00
IS systems/hardware $1,000,000.00
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 11/1/2005
DATE: Tuesday, November 01, 2005
LOG NAME: 17TAAGRMTALLIED REFERENCE NO.: C-21130
SUBJECT:
Authorize Execution of a Tax Abatement Agreement with Allied Electronics, Inc., and Related
Findings of Fact by the City Council
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to execute the attached Tax Abatement Agreement with Allied Electronics,
Inc.; and
2. Find that the statements set forth in the recitals of the attached Tax Abatement Agreement with Allied
Electronics, Inc., are true and correct.
DISCUSSION:
The real property subject to abatement in the attached Tax Abatement Agreement with Allied Electronics,
Inc. (Allied) is located in the Riverbend Business Park West in east Fort Worth. On November 1, 2005,
(M&C G-14992) the City Council designated this property as Tax Abatement Reinvestment Zone Number
53, City of Fort Worth, Texas. This reinvestment zone is located in COUNCIL DISTRICT 4.
Project:
Allied has been in existence for 77 years and has been in Fort Worth since 1970. Allied currently leases
space in the Riverbend Business Park. However, the company anticipates the need for additional space
and is considering development of the site into a corporate headquarters and distribution facility that will be
owned by Allied. The proposed project is estimated to have a construction cost of at least
$18,000,000. Allied is also planning to acquire at least $10,000,000 in new taxable personal property, in
addition to its estimated inventory of approximately $47,000,000.
Employment:
Allied will be required to retain its existing workforce of 275 full-time employees, of which 105 (38% of the
existing workforce) are Fort Worth residents and 52 (19% of the existing workforce) are Central City
residents. Additionally, Allied will be required to create at least 30 new full-time jobs in the first year of
operation for a total of 305 full-time jobs; at least 58 or 19% of all positions must be committed to Central
City residents and 116 or 38% of all positions to Fort Worth residents.
By the fifth year of operation, Allied will be required to have at least 120 new full-time jobs in the facility, for
a total of 395 full-time jobs; at least 75 or 19% of the positions must be committed to Central City residents
and at least 150 or 38% of the positions must be committed to Fort Worth residents.
Logname: 17TAAGRMTALLIED Page 1 of 2
By the tenth year of operation, Allied will be required to have at least 300 new full-time jobs in the facility
for a total of 575 full-time jobs; at least 109 or 19% of the positions must be committed to Central City
residents and at least 219 or 38% of the positions must be committed to Fort Worth residents.
Utilization of Fort Worth Businesses:
Regarding utilization of Fort Worth based businesses, Allied has committed 25% of total construction
spending to Fort Worth construction companies. Additionally, the Allied has committed to make the greater
of$250,000 or 25% of total annual supply and service expenditures with Fort Worth companies. Allied will
be required to make annual supply and service expenditures of at least $1,000,000.
Utilization of Fort Worth MWBE Businesses:
Regarding the utilization of Fort Worth Minority Business Enterprises (MBEs) and Fort Worth Women
Business Enterprises (WBEs), Allied has committed 25% of total construction spending to certified Fort
Worth M/WBE construction companies. Additionally, Allied has committed to make the greater of$250,000
or 25% of total annual supply and service expenditures with certified Fort Worth M/WBE companies.
ABATEMENT TERMS:
Allied will receive a ten-year tax abatement on real and personal property for a maximum abatement of
100% during years 1 through 3, 75% during years 4 through 6, and 50% during years 7 through 10. The
maximum net average abatement over the term is 72.5%, which equates to approximately $116,018
annually if the maximum abatement is reached each year. The abatement incorporates Allied's
commitments for employment, construction expenditures, and total annual supply and service spending.
The abatement is structured as follows:
Abatement Component Years 1 through 3 Years 4 through 6 Years 7 through 10
Employment 50% 50% 30%
Real & Personal Property Improvements 25% 0% 0%
Annual Supply and Service Spending 25% 25% 20%
Failure to meet the minimum employment commitments will result in the reduction of abatement
percentage as follows: (a) reduced by 1 percentage point for each person below the minimum total
positions, (b) reduced by 2 percentage points for each person below the Fort Worth resident commitment,
and (c) reduced by 3 percentage points for each person below the Central City resident
commitment. Failure to meet the supply and service commitments shall cause the applicable component
to be reduced to zero. Failure to meet the minimum real and personal property commitments by
December 31, 2007 shall be an event of default in which case the City will have the right to terminate the
Agreement.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that this action does not require the expenditure of City funds.
TO Fund/Account/Centers FROM Fund/Account/Centers
Submitted for City Manager's Office by: Dale Fisseler (6140)
Originating Department Head: Tom Higgins (6192)
Additional Information Contact: Ardina Washington (8003)Jay Chapa (5804)
Logname: 17TAAGRMTALLIED Page 2 of 2