HomeMy WebLinkAboutContract 49605 CITY SECRETARY
CONTRACT N0. !a
ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
("Agreement") is entered into by and between the CITY OF FORT WORTH, TEXAS
(the "City"), a home rule municipality organized under the laws of the State of Texas,
and SMITH & NEPHEW, INC., a Delaware corporation ("Company").
RECITALS
The City and Company hereby agree that the following statements are true and
correct and constitute the basis upon which the City and Company have entered into this
Agreement:
A. Company is a global leader in the medical technology industry, with a
presence in more than 90 countries around the world. Company currently has business
facilities in the City at 3909 Hulen Street and 4900 West Vickery Blvd. (the latter
property hereinafter referred to as the "Existing Site"). Company wishes to consolidate
some of its operations and proposes to move its advance wound management
headquarters, currently based in St. Petersburg, Florida, to the City. In return for the
economic development incentives set forth in this Agreement, Company will expand its
operations in the City by contracting for the construction of a new building of at least
55,000 square feet (the "Required Improvements") on property that Company will
lease at the intersection of Clearfork Main Street and Chisholm Trail Parkway, as more
specifically described in Exhibit "A" (the "Development Site"). Company will relocate
its advance wound management headquarters as well as its current business operations at
3909 Hulen Street to the Development Site. The Development Site is owned by
Clearfork Office 1, LP and any successor or assign thereof ("Owner"). The lease
between Owner and Company (the "Lease") will include terms and conditions consistent
with those outlined in Exhibit "B". Company will maintain the business operations that
it currently has at the Existing Site. Exhibits "A" and "B" are attached hereto and hereby
made a part of this Agreement for all purposes.
B. The Required Improvements will benefit the City by increasing the scope
of an important commercial operation in the City with significant opportunities for
employment and tax base growth. As recommended by the City's 2015 Comprehensive
Plan, adopted by the City Council pursuant to Ordinance No. 21693-03-2015 (the
"Comprehensive Plan"), and in accordance with Resolution No. 3716-03-2009, the City
has established an economic development program pursuant to which the City will, on a
case-by-case basis, offer economic incentives authorized by Chapter 380 of the Texas
Local Government Code that include monetary loans and grants of public money, as well
as the provision of personnel and services of the City, to businesses and entities that the
City Council determines will promote state or local economic development and sti
business and commercial activity in the City in return for verifiable commit om
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between City of Fort Worth and Smith&Nephew,Inc.
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such businesses or entities to cause specific employment and other public benefits to be
made or invested in the City(the "380 Program").
C. The City has determined that the feasibility of the proposed business
expansion project described herein is contingent on Company's receipt of the Program
Grants, as provided in this Agreement. The City Council has determined that the
proposed development and use of the Required Improvements will benefit and stimulate
the local economy and that the 380 Program is an appropriate means to achieve this
project. In addition, the City Council has determined that by entering into this
Agreement the potential economic benefits that will accrue to the City under the terms
and conditions of this Agreement are consistent with the City's economic development
objectives, as outlined in the Comprehensive Plan. This Agreement is authorized by
Chapter 380 of the Texas Local Government Code.
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:_
AGREEMENT
1. INCORPORATION OF RECITALS.
The City Council has found, and the City and Company hereby agree, that the
recitals set forth above are true and correct and form the basis upon which the parties
have entered into this Agreement.
2. DEFINITIONS.
In addition to other terms defined in the body of this Agreement, the following
terms will have the definitions ascribed to them as follows:
380 Program has the meaning ascribed to it in Recital B.
Affiliate means all entities, incorporated or otherwise, under common control
with, controlled by or controlling Company. For purposes of this definition, "control"
means fifty percent(50%) or more of the ownership determined by either value or vote.
Central City means the area of the corporate limits of the City within Loop 820
(i) consisting of all Community Development Block Grant ("CDBG")-eligible census
block groups; (ii) all enterprise zones, designated as such pursuant to the Texas
Enterprise Zone Act, Chapter 2303, Subchapter F of the Texas Government Code; (iii) all
census block groups that are contiguous by seventy-five percent (75%) or more of their
perimeters to CDBG-eligible block groups or enterprise zones, as well as any CDBG-
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Economic Development Program Agreement
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eligible block in the corporate limits of the City outside Loop 820, as more specifically
depicted in the map attached hereto as Exhibit "C", attached hereto and hereby made a
part of this Agreement for all purposes.
Central City Employment Commitment has the meaning ascribed to it in
Section 4.4.3.
Central City Resident means an individual whose principal place of residence is
at a location within the Central City.
Certificate of Completion has the meaning ascribed to it in Section 5.
Completion Date means the date as of which all occupiable space within the
Required Improvements has received a temporary or permanent certificate of occupancy.
Completion Deadline means December 31, 2016.
Development Site has the meaning ascribed to it in Recital A.
Director means the director of the City's Economic Development Department or
his authorized designee.
Effective Date has the meaning ascribed to it in Section 3.
Existing Site has the meaning ascribed to it in Recital A.
Fort Worth Employment Commitment has the meaning ascribed to it in
Section 4.4.2.
Fort Worth Resident means an individual whose principal place of residence is
at a location within the corporate limits of the City.
Full-time Job means a job provided to one (1) individual by Company for at least
forty (40)hours per week.
Lease means that certain lease between Clearfork Office 1, LP and Company for
59,722 rentable square feet within the Required Improvements, as more specifically set
forth in the Memorandum of Lease attached hereto as Exhibit "B", which is hereby
made a part of this Agreement for all purposes.
New Taxable Tangible Personal Property means any personal property that (i)
is subject to ad valorem taxation by the City; (ii) is located on the Development Site; (iii)
is owned or leased by Company; and (iv) was not located in the City prior to the
Effective Date of this Agreement.
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Overall Employment Commitment has the meaning ascribed to it in Section
4.4.1.
Owner has the meaning ascribed to it in Recital A.
Personal Property Commitment has the meaning ascribed to it in Section 4.3.
Program Grants means the annual economic development grants paid by the
City to Company in accordance with this Agreement and as part of the 380 Program.
Program Source Funds means an amount of City funds available for inclusion in
a given Program Grant, which will equal 35.27% of the Project Real Property Tax
Revenues (as Company is responsible under the Lease for paying a share of the real
property taxes assessed on the Development Site and its improvements at a rate of
0.3527, which is the ratio of the rentable area of Company's leased premises within the
Required Improvements (59,722 square feet) as of the execution date of this Agreement
divided by the rentable area within the Required Improvements (169,332 square feet),
plus one hundred percent (100%) of the Project Personal Property Tax Revenues received
by the City during the Twelve-Month Period ending in the same year in which the
Program Grant is payable; provided, however, that if the Lease is amended or interpreted
by the parties thereto, so that at any time during a given Twelve-Month Period Company
is not required to pay or reimburse to the landlord all of Company's proportionate share
of real property taxes on the Development Site and all improvements thereon, the
Program Source Funds available for the Program Grant payable in the same year as the
year in which such Twelve-Month Period ends will equal only a percentage (calculated in
accordance with this Agreement) of the Development Personal Property Tax Revenues
received by the City during that Twelve-Month Period. If the ratio of the rentable area of
Company's leased premises within the Required Improvements for changes from the
above for any full calendar year during the Term of this Agreement, Company shall
notify the City in writing, and, upon confirmation by the City, the percentage of Project
Real Property Tax Revenues to be included as Program Source Funds will be adjusted to
reflect the then-current ratio of the rentable area of Company's leased premises within the
Required Improvements.
Proiect Personal Property Tax Revenues means City ad valorem taxes on New
Taxable Tangible Personal Property located on the Development Site (but not the
Existing Site). The taxable appraised value of New Taxable Tangible Personal Property
located on the Development Site for any given year will be established solely by the
appraisal district that has jurisdiction over the Development Site at the time.
Proiect Real Property Tax Revenues means City ad valorem taxes on the
Development Site (but not the Existing Site) and any improvements thereon, including
the Required Improvements, minus the taxes attributable to the base collective taxable
appraised value of the Development Site and all improvements thereon for the 2015 tax
year, which base collective taxable appraised value is $466,400.00. The taxable
appraised value of the Development Site and any improvements located thereon,
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including the Required Improvements, for any given year will be established solely by
the appraisal district that has jurisdiction over the Development Site at the time.
Records has the meaning ascribed to it in Section 4.7.
Required Improvements has the meaning ascribed to it in Recital A.
Sala means a cash payment or remuneration made by Company to an individual
for services rendered as an employee to Company, including any paid time off,
commissions, or non-discretionary bonuses paid in accordance with Company's
published bonus plan, but does not include the value of any benefits provided to an
employee, any reimbursements for actual and necessary expenses incurred by the
employee in the course and scope of the employee's job duties, or any discretionary
bonuses.
Term has the meaning ascribed to it in Section 3.
Twelve-Month Period means the period between February 1 of a given year and
January 31 of the following year.
3. TERM.
This Agreement will be effective as of July 28, 2015 (the "Effective Date"),
which is the date on which the City Council authorized execution of this Agreement, and,
unless terminated earlier pursuant to and in accordance with this Agreement, will expire
on the date as of which the City has paid all Program Grants required hereunder (the
"Term").
4. COMPANY OBLIGATIONS AND COMMITMENTS.
4.1. Use of Development Site.
From the Completion Date until expiration of the Term of this Agreement,
Company must use the Development Site as an office facility for Company's
business operations.
4.2. Completion of Real Property Improvements.
The Completion Date must occur on or before the Completion Deadline.
4.3. Personal Property Improvements.
Company covenants and agrees that New Taxable Tangible Personal
Property having a value of at least Two Million Eight Hundred Thousand Dollars
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($2,800,000.00) must be in place on the Development Site by January 1, 2017, as
determined solely by the appraisal district having jurisdiction over the
Development Site at that time (the "Personal Property Commitment").
4.4. Employment Commitments.
Determination each year of compliance with the following employment
commitments will be based on the employment data provided to the City pursuant
to Section 4.5.3 for the year under evaluation.
4.4.1. Overall Employment.
Company must meet or exceed the following levels of overall
employment for the calendar years specified below (for each year below,
the "Overall Employment Commitment").
4.4.1.1. 2017-2020.
In 2017 and each year thereafter through 2020,
Company will meet the Overall Employment Commitment if
Company provides and fills at least 190 Full-time Jobs on the
Development Site and the Existing Site, collectively.
4.4.1.2. 2021.
In 2021, Company will meet the Overall
Employment Commitment if Company provides and fills at least
230 Full-time Jobs on the Development Site and the Existing Site,
collectively.
4.4.2. Employment of Fort Worth Residents.
Company must meet or exceed the following levels of employment
of Fort Worth Residents for the calendar years specified below (for each
year below, the "Fort Worth Employment Commitment"). Full-time
Jobs held by Fort Worth Residents in a given year will also count as Full-
time Jobs for purposes of measuring the Overall Employment
Commitment in the same year.
4.4.2.1. 2017-2020.
In 2017 and each year thereafter through 2020,
Company will meet the Fort Worth Employment Commitment if in
the year under evaluation at least the greater of(i) 76 Full-time
Jobs on the Development Site and the Existing Site, collectively, or
(ii) forty percent (40%) of all Full-time Jobs on the Development
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Site and the Existing Site, collectively, regardless of the total
number of Full-time Jobs provided and filled thereon, were held by
Fort Worth Residents.
4.4.2.2. 2021.
In 2021, Company will meet the Fort Worth
Employment Commitment if at least the greater of(i) 92 Full-time
Jobs on the Development Site and the Existing Site, collectively, or
(ii) forty percent (40%) of all Full-time Jobs on the Development
Site and the Existing Site, collectively, regardless of the total
number of Full-time Jobs provided and filled thereon, were held by
Fort Worth Residents.
4.4.3. Employment of Central City Residents.
Company must meet or exceed the following levels of employment
of Central City Residents for the calendar years specified below (for each
year below, the "Central City Employment Commitment"). Full-time
Jobs held by Central City Residents in a given year will also count as Full-
time Jobs for purposes of measuring the Overall Employment
Commitment and the Fort Worth Employment Commitment in the same
year.
4.4.3.1. 2017-2020.
In 2017 and each year thereafter through 2020,
Company will meet the Central City Employment Commitment if
in the year under evaluation at least the greater of(i) 38 Full-time
Jobs on the Development Site and the Existing Site, collectively, or
(ii) twenty percent (20%) of all Full-time Jobs on the Development
Site and the Existing Site, collectively, regardless of the total
number of Full-time Jobs provided and filled thereon, were held by
Central City Residents.
4.4.3.2. 2021.
In 2021, Company will meet the Central City
Employment Commitment if the greater of(i) 46 Full-time Jobs on
the Development Site and the Existing Site, collectively, or (ii)
twenty percent (20%) of all Full-time Jobs on the Development
Site and the Existing Site, collectively, regardless of the total
number of Full-time Jobs provided and filled thereon, were held by
Central City Residents.
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4.4.4. Average Annual Salary.
Beginning in 2017 and in each subsequent year of the Term of this
Agreement, the average annual Salary, measured on a calendar year basis,
of all Full-time Jobs on the Development Site and the Existing Site,
collectively, must be at least Eighty-five Thousand Dollars ($85,000.00).
4.5. Reports and Filings.
4.5.1. Construction Completion Report.
Within thirty (30) calendar days following the Completion Date,
Company will provide the City with written notice that the Required
Improvements have been completed.
4.5.2. Personal Property Report.
In order for the City to track its obligations under this Agreement,
Company will notify the Director in writing once it believes that the
Personal Property Commitment has been attained.
4.5.3. Annual Employment Report.
On or before February 1, 2018 and February 1 of each year
thereafter, in order for the City to assess the degree to which the Overall
Employment Commitment for the previous calendar year, the Fort Worth
Employment Commitment for the previous calendar year, and the Central
City Employment Commitment for the previous calendar year were met,
as well as to verify the average annual Salary of all Full-time Jobs on the
Development Site and the Existing Site, Company must provide the
Director with a report in a form reasonably acceptable to the Director that
sets forth the total number of individuals, Fort Worth Residents, and
Central City Residents who held Full-time Jobs on the Development Site
and the Existing Site, collectively, as well as the Salary of each, all as of
December 31 (or such other date requested by Company and reasonably
acceptable to the City) of the previous year, together with reasonable
supporting documentation.
4.6. Inspections of Development Site and Lease.
At any time during Company's normal business hours throughout the
Term and following reasonable notice to Company, the City will have the right to
inspect and evaluate the Development Site and any improvements thereon,
including the Required Improvements, and Company will provide full access to
the same, in order for the City to monitor compliance with the terms and
conditions of this Agreement. Company will cooperate fully with the City during
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any such inspection and evaluation. Notwithstanding the foregoing, Company
will have the right to require that any representative of the City be escorted by a
representative or security personnel of Company during any such inspection and
evaluation. In addition, upon request of the City at any time during the Term and
following reasonable advance notice, Company will make available a copy of the
Lease in effect at the time (as certified in writing by a duly authorized officer of
Company) for review by the City to ensure compliance under this Agreement.
4.7. Audits.
The City will have the right throughout the Term to audit the financial and
business records of Company or any Affiliate that relate to the New Taxable
Tangible Personal Property as well as any other documents necessary to evaluate
Company's compliance with this Agreement or with the commitments set forth in
this Agreement (collectively `Records"). Company must make all Records
available to the City on the Development Site or at another location in the City
acceptable to both parties following reasonable advance notice by the City and
will otherwise cooperate fully with the City during any audit.
5. CERTIFICATE OF COMPLETION.
Within sixty (60) calendar days following receipt by the City of the construction
completion report for the Required Improvements submitted in accordance with Section
4.5.1, if the City is able to verify that the Completion Date occurred on or before the
Completion Deadline, the Director will issue Company a certificate confirming this fact
(the "Certificate of Completion").
6. PROGRAM GRANTS.
As more specifically set forth herein, if the Completion Date occurred on or
before the Completion Deadline and the Personal Property Commitment set forth in
Section 4.3 was met, Company will be entitled to receive five (5) annual Program Grants,
payment of which will begin in 2018 and end in 2022.
6.1. Amount.
The amount of each annual Program Grant will equal the lesser of(i) one
hundred percent (100%) of the Program Source Funds received in the Twelve-
Month Period ending in the same year in which the Program Grant is due, or (ii)
Fifty Thousand Dollars ($50,000.00).
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6.2. Deadline for Payments and Source of Funds.
The first Program Grant payable hereunder will be paid by the City on or
before June 1, 2018. Each subsequent annual Program Grant payment will be
made by the City to Company on or before June 1 of the year in which such
payment is due. It is understood and agreed that all Program Grants paid pursuant
to this Agreement will come from currently available general revenues of the City
and not directly from ad valorem taxes on the Development Site or improvements
thereon or on New Taxable Tangible Personal Property that are received by the
City. Company understands and agrees that any revenues of the City other than
those dedicated for payment of a given annual Program Grant pursuant to and in
accordance with this Agreement may be used by the City for any lawful purpose
that the City deems necessary in the carrying out of its business as a home rule
municipality and will not serve as the basis for calculating the amount of any
future Program Grant or other obligation to Company.
6.3. Forfeiture if Average Annual Salary Requirement is Not Met.
Notwithstanding anything to the contrary herein, if in 2017 or any
subsequent year of the Term of this Agreement the average annual Salary,
measured on a calendar year basis, for all Full-time Jobs on the Development Site
and the Existing Site, collectively, is not at least Eighty-five Thousand Dollars
($85,000.00), Company will forfeit payment of the Program Grant it otherwise
would have been owed in the following year. In this event, the City will
nevertheless be credited as having paid Company a Program Grant in that year for
purposes of calculating the Term of this Agreement and the number of remaining
Program Grants that the City is obligated to pay hereunder.
6.4. Forfeiture if Taxable Appraised Value of Development Site.
Notwithstanding anything to the contrary herein, if the combined taxable
appraised value of (i) the Development Site and any improvements located
thereon, including the Required Improvements, plus (ii) New Taxable Tangible
Personal Property is less than Twenty-five Million Dollars ($25,000,000.00) in
any tax year between and including 2017 through 2021, as reflected in the
certified appraisal roll for such tax year that is submitted to the City by the
appraisal district having jurisdiction over the Development Site at that time,
Company will forfeit payment of the Program Grant it otherwise would have been
owed in the following year. In this event, the City will nevertheless be credited as
having paid Company a Program Grant in that year for purposes of calculating the
Term of this Agreement and the number of remaining Program Grants that the
City is obligated to pay hereunder. The taxable appraised value of the
Development Site and any improvements located thereon as well as of New
Taxable Tangible Personal Property will be determined solely by the appraisal
district having jurisdiction over the Development Site at the time.
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7. DEFAULT, TERMINATION AND FAILURE BY COMPANY TO MEET
VARIOUS DEADLINES AND COMMITMENTS.
7.1. Failure to Complete Required Improvements.
Notwithstanding anything to the contrary herein, if the Completion Date
does not occur by the Completion Deadline, the City will have the right to
terminate this Agreement immediately upon provision of written notice to
Company and without further obligation to Company hereunder.
7.2. Failure to Meet Personal Property Commitment.
Notwithstanding anything to the contrary herein, if the Personal Property
Commitment, as outlined in Section 4.3, is not met, the City will have the right to
terminate this Agreement immediately upon provision of written notice to
Company and without further obligation to Company hereunder.
7.3. Failure to Meet Employment Commitments.
Notwithstanding anything to the contrary herein, if in any year Company
fails to meet the Overall Employment Commitment, the Fort Worth Employment
Commitment or the Central City Employment Commitment, as outlined in
Sections 4.4.1, 4.4.2 and 4.4.3, respectively, the City will have the right to
terminate this Agreement immediately upon provision of written notice to
Company and without further obligation to Company hereunder.
7.4. Failure to Use Development Site for Business Purposes; Failure to
Maintain U.S. Headquarters Operations.
If Company fails to use the Development Site as an office facility for
Company's business operations for more than thirty (30) consecutive calendar
days at any time during the Term of this Agreement for any reason (other than on
account of Company's temporary displacement caused by a casualty to the
Development Site and resulting ongoing repairs or restoration to the Development
Site necessitated by such casualty), Company will be in default under this
Agreement and the City will have the right to terminate this Agreement following
provision of notice and opportunity to cure in accordance with Section 7.7.
7.5. No Default for Amendment of Lease; Adjustment of Prolzram Source
Funds.
If the Lease is amended or interpreted by the parties thereto in any way, or
any other arrangement is instituted between the parties, so that at any time during
a given Twelve-Month Period Company is not required to pay or reimburse to the
landlord all of Company's proportionate share of real property taxes on the
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Development Site and all improvements thereon, an event of default shall not
occur under this Agreement, but, in accordance with the definition of"Program
Source Funds" set forth in Section 2, the Program Source Funds available for the
Program Grant payable in the same year as the year in which such Twelve-Month
Period ends will equal only the Development Personal Property Tax Revenues
received by the City during that Twelve-Month Period, and all Development Real
Property Tax Revenues received by the City during that Twelve-Month Period
will be excluded from the calculation of that Program Grant and may be used by
the City for any other lawful purpose.
7.6. Failure to Submit Reports.
If Company fails to submit any report required by and in accordance with
Section 4.5, the City's obligation to pay any Program Grants at the time, if any,
will be suspended until Company has provided all required reports; provided,
however, that if any report required hereunder is delinquent by more than one (1)
year, the City will have the right to terminate this Agreement following provision
of notice and opportunity to cure in accordance with Section 7.7.
7.7. General Breach.
Unless stated elsewhere in this Agreement, Company will be in default
under this Agreement if Company breaches any term or condition of this
Agreement. In the event that such breach remains uncured after thirty (30)
calendar days following receipt of written notice from the City referencing this
Agreement (or, if Company has diligently and continuously attempted to cure
following receipt of such written notice but reasonably requires more than thirty
(30) calendar days to cure, then such additional amount of time as is reasonably
necessary to effect cure, as determined by both parties mutually and in good
faith), the City will have the right to terminate this Agreement immediately by
providing written notice to Company.
7.8. Knowing Employment of Undocumented Workers.
Company acknowledges that the City is required to comply with Chapter
2264 of the Texas Government Code, enacted by House Bill 1196 (80th Texas
Legislature), which relates to restrictions on the use of certain public subsidies.
Company hereby certifies that Company, and any branches, divisions, or
departments of Company, does not and will not knowingly employ an
undocumented worker, as that term is defined by Section 2264.001(4) of the
Texas Government Code. In the event that Company, or any branch, division, or
department of Company, is convicted of a violation under 8 U.S.C. Section
1324a(f) (relating to federal criminal penalties and injunctions for a pattern or
practice of employing unauthorized aliens):
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• if such conviction occurs during the Term of this Agreement, this
Agreement will terminate contemporaneously upon such conviction
(subject to any appellate rights that may lawfully be available to and
exercised by Company), and Company must repay, within one hundred
twenty (120) calendar days following receipt of written demand from the
City, the aggregate amount of the Program Grants received by Company
hereunder, if any,plus Simple Interest at a rate of four percent (4%)per
annum;or
• if such conviction occurs after expiration or termination of this
Agreement, subject to any appellate rights that may lawfully be available
to and exercised by Company, Company must repay, within one hundred
twenty (120) calendar days following receipt of written demand from the
City, the aggregate amount of the Program Grants received by Company
hereunder, if any,plus Simple Interest at a rate of four percent (4%)per
annum.
For the purposes of this Section 7.8, "Simple Interest" is defined as a rate of
interest applied only to an original value, in this case the aggregate amount of
Program Grants paid hereunder. This rate of interest can be applied each year, but
will only apply to the aggregate amount of Program Grants paid hereunder and is
not applied to interest calculated. For example, if the aggregate amount of the
Program Grants paid hereunder is $10,000 and such amount is required to be paid
back with four percent (4%) interest five years later, the total amount would be
$10,000 + [5 x ($10,000 x 0.04)], which is $12,000. This Section 7.8 does not
apply to convictions of any subsidiary or affiliate entity of Company, by any
franchisees of Company, or by a person or entity with whom Company contracts.
Notwithstanding anything to the contrary herein, this Section 7.8 will survive the
expiration or termination of this Agreement.
8. INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Company will operate as an
independent contractor in each and every respect hereunder and not as an agent,
representative or employee of the City. Company will have the exclusive right to control
all details and day-to-day operations relative to the Required Improvements and the
Development Site and any improvements thereon and will be solely responsible for the
acts and omissions of its officers, agents, servants, employees, contractors,
subcontractors, licensees and invitees. Company acknowledges that the doctrine of
respondeat superior will not apply as between the City and Company, its officers, agents,
servants, employees, contractors, subcontractors, licensees, and invitees. Company
further agrees that nothing in this Agreement will be construed as the creation of a
partnership or joint enterprise between the City and Company.
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9. INDEMNIFICATION.
COMPANY, AT NO COST TO THE CITY, AGREES TO DEFEND,
INDEMNIFY AND HOLD THE CITY, ITS OFFICERS,AGENTS SERVANTS AND
EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS,
ACTIONS, COSTS AND EXPENSES OF ANY KIND, INCLUDING, BUT NOT
LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING
ALLEGED DAMAGE OR LOSS TO COMPANY'S BUSINESS AND ANY
RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING
DEATH, THAT MAY RELATE TO, ARISE OUT OF OR BE OCCASIONED BY (i)
COMPANY'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS
AGREEMENT OR (ii) ANY NEGLIGENT ACT OR OMISSION OR INTENTIONAL
MISCONDUCT OF COMPANY, ITS OFFICERS, AGENTS, ASSOCIATES,
EMPLOYEES, CONTRACTORS (OTHER THAN THE CITY) OR
SUBCONTRACTORS, RELATED TO THE DEVELOPMENT SITE OR THE
EXISTING SITE, OR ANY IMPROVEMENTS THEREON, INCLUDING THE
REQUIRED IMPROVEMENTS, OR OTHERWISE TO THE PERFORMANCE OF
THIS AGREEMENT.
10. NOTICES.
All written notices called for or required by this Agreement must 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: Company:
City of Fort Worth Smith&Nephew, Inc.
Attn: City Manager Attn: Michael R. Gilson
1000 Throckmorton 1450 Brooks Road
Fort Worth, TX 76102 Memphis, TN 38116
with copies to:
the City Attorney and
Economic/Community Development
Director at the same address
11. ASSIGNMENT AND SUCCESSORS.
Company may at any time assign, transfer or otherwise convey any of its rights or
obligations under this Agreement to an Affiliate without the approval of the City so long
as Company, the Affiliate and the City first execute an agreement under which the
Affiliate agrees to assume and be bound by all covenants and obligations of Company
Page 14
Economic Development Program Agreement
between City of Fort Worth and Smith&Nephew,Inc.
under this Agreement. Otherwise, Company may not assign, transfer or otherwise convey
any of its rights or obligations under this Agreement to any other person or entity without
the prior consent of the City Council, which consent will not be unreasonably withheld,
conditioned on (i) the prior approval of the assignee or successor and a finding by the City
Council that the proposed assignee or successor is financially capable of meeting the terms
and conditions of this Agreement and (ii) prior execution by the proposed assignee or
successor of a written agreement with the City under which the proposed assignee or
successor agrees to assume and be bound by all covenants and obligations of Company
under this Agreement. Any attempted assignment without the City Council's prior consent
will constitute grounds for termination of this Agreement following ten (10) calendar days
of receipt of written notice from the City to Company. Any lawful assignee or successor in
interest of Company of all rights under this Agreement will be deemed "Company" for all
purposes under this Agreement.
12. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND
REGULATIONS.
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.
13. 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.
14. 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 will not constitute a waiver
of that party's right to insist upon appropriate performance or to assert any such right on
any future occasion.
15. 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 will 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 will be construed in accordance with the
laws of the State of Texas.
Page 15
Economic Development Program Agreement
between City of Fort Worth and Smith&Nephew,Inc.
16. NO THIRD PARTY RIGHTS.
The provisions and conditions of this Agreement are solely for the benefit of the
City and Company, and any lawful assign or successor of Company, and are not intended
to create any rights, contractual or otherwise, to any other person or entity.
17. INTERPRETATION.
In the event of any dispute over the meaning or application of any provision of
this Agreement, this Agreement must be interpreted fairly and reasonably, and neither
more strongly for or against any party,regardless of the actual drafter of this Agreement.
18. CAPTIONS.
Captions and headings used in this Agreement are for reference purposes only and
will not be deemed a part of this Agreement.
19. SEVERABILITY.
If any provision of this Agreement is held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions will not in any way be
affected or impaired.
20. 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 Company, and any lawful assign and successor of Company, 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. Notwithstanding anything to the contrary herein, this Agreement may not be
amended unless executed in writing by both parties and approved by the City Council of
the City in an open meeting held in accordance with Chapter 551 of the Texas
Government Code.
21. COUNTERPARTS.
This Agreement may be executed in multiple counterparts, each of which will be
considered an original, but all of which will constitute one instrument.
Page 16
Economic Development Program Agreement
between City of Fort Worth and Smith&Nephew,Inc.
EXECUTED as of the last date indicated below:
CITY OF FORT WORTH: SMITH & NEPHEW, INC., a
Delaware corporation:
By: �� By:
J us J. Chapa Name: Michael R. Gilson
Assistant City Manager Title: Sr. Director—Corp. Facility Services
Date: 7 -7 —Q Date: August 15,2017
APPROVED AS TO FORM AND LEGALITY:
By:
Peter Vaky 4511,
Deputy City Attorney
M&C: C-27397 07-28-15
An/m, 12 95 2017 -254325-
by -�OF ��R?'iL
70
d P. Gonzales,Asst tY Secretary
.��kAS
OFFICIAL R®COxX
RD
CITY SIICRMITAR1r
FTSWjr
a..n,4-
Page 17
Economic Development Program Agreement
between City of Fort Worth and Smith&Nephew,Inc.
EXHIBITS
"A" —Description and Map Depicting the Development Site
"B" —Memorandum of Lease
"C" —Map of Central City
Economic Development Program Agreement
between City of Fort Worth and Smith&Nephew, Inc.
Exhibit"A"—Description and Map Depicting the Development Site
Lot 2, Block 3,Edwards Ranch Clearfork Addition
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Economic Development Program Agreement
between City of Fort Worth and Smith&Nephew,Inc.
EXHIBIT B TO ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
MEMORANDUM OF LEASE
This Memorandum of Lease is executed by Clearfork Office 1, LP, a Texas limited
partnership ("Landlord") and Smith & Nephew, Inc., a Delaware corporation ("Tenant") for the
purpose of providing a summary of certain terms and conditions set forth in that certain Office
Lease Agreement executed by Landlord and Tenant, having an effective date of May 27, 2015
("Lease").
The terms and conditions of the Lease include the following:
1. Building and Leased Premises. Landlord has completed construction of a six-story
office building located at 5600 Clearfork Main Street, Fort Worth, Texas. The Building
contains a total floor area of approximately 169,332 square feet. The Premises leased
to Tenant include all of the fifth and sixth floors of the Building, containing a total of
59,722 rentable square feet.
2. Lease Term: Renewal Options. The term of the Lease is 123 full calendar months
following its Commencement Date of August 8, 2016. Tenant has the option to extend
the Lease Term for two renewal periods of five years each, subject to the renewal terms
and conditions set forth in the Lease.
3. Permitted Uses, The Lease provides that the Premises may be used only for Tenant's
general office purposes.
4. Rent. The Lease provides that Tenant will pay to Landlord monthly as Base Rent an
amount based upon the Rentable Area of the Premises, as well as Tenant's Pro Rata
Share of Excess Operating Expenses, Electricity Costs and Parking Fees, all as further
described in the Lease.
5. Personal Property Taxes. The Lease provides that Tenant is responsible for the
payment of all taxes assessed on Tenant's furniture, equipment and fixtures placed in
the Premises by Tenant.
6. Real Property Taxes. The Lease provides that real property taxes assessed against the
Land and Building are part of the Project's Operating Expenses and Tenant is obligated
to pay its pro rata share of Operating Expenses in excess of the 2017 Operating
Expenses. Tenant's Pro Rata Share equals 0.3527, being the ratio of the rentable area
of the Premises (59,722 square feet) divided by the rentable ,area of the Building
(169,332 square feet).
This Memorandum is executed to be attached as and an Exhibit to that certain Economic
Development Program Agreement executed or to be executed by Tenant and the City of Fort
Worth. This Memorandum does not modify, increase, decrease or in any way affect the rights,
duties and obligations of Landlord and Tenant under the Lease, as the same may be amended
from time to time. Landlord and Tenant each has rights, duties and obligations (and conditions
to rights) which are not stated in this Memorandum. If the Lease and this Memorandum conflict,
the Lease governs. Capitalized terms used but not defined herein, but defined in the Lease,
shall have the same meaning given to them in the Lease.
Economic Development Program Agreement Exhibit B I Page 1 of 2
1;10209110021111 L4300.DOCX
This Memorandum may be executed in multiple counterparts, each of which will be
considered as an original, and all of which will constitute one instrument.
I�
Economic Development Program Agreement Exhibit B I Page 2 of 2
1:10209110021111 L4300.DOCX
i
I
Executed to be effective the day of December, 2016
LANDLORD:
Clearfork Office 1, LP,
a Texas limited partnership
By: Clearfork Development Company, LLC,
a Texas limited liability company,
it's General Pa ner
By:
Name:
Title.*
TENANT:
Smith & Nephew, Inc.,
a Delaware corporation
By: >^
Name:
Title: l l,�i~`y.�/.�r
Economic Development Program Agreement Exhibit B Page 3 of 2
1:10209110021111 L4300.DOCX
"C"—Map of Central City
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Legend FORT WORTH Updated OW7n014
1)Central City Bowdary
Zip Codes
COW 81gibleArea Economic Development
pCRY umk CDBG Eligible Areas & Central City
Economic Development Program Agreement
between City of Fort Worth and Smith&Nephew,Inc.
M&C Review Page 1 of 2
Official site of the City of Fort Worth,Texas
CITY COUNCIL AGENDA FORTI ORTi1
�Y
COUNCIL ACTION: Approved on 7/28/2015
DATE: 7/28/2015 REFERENCE C-27397 LOG NAME: 17ED SMITHNEPHEW380
NO..
NON- PUBLIC
CODE: C TYPE: CONSENT HEARING:
NO
SUBJECT: Authorize Execution of an Economic Development Program Agreement with Smith &
Nephew, Inc. or an Affiliate for Development of a Medical Technology Facility at the
Intersection of Clearfork Main Street and Chisolm Trail Parkway (COUNCIL DISTRICT 9)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to execute an Economic Development Program Agreement with Smith
& Nephew, Inc. or an affiliate thereof for the development of an approximately 55,000 square foot
medical technology facility at the intersection of Clearfork Main Street and Chisolm Trail Parkway;
and
2. Find that the terms and conditions of the Economic Development Program Agreement, as outlined
below, constitute a custom designed Economic Development Program, as recommended by the 2015
Comprehensive Plan and authorized by Chapter 380 of the Texas Local Government Code.
DISCUSSION:
Smith & Nephew, Inc. (Company), a global leader in the medical technology industry, with a presence
in more than 90 countries around the world, is looking to streamline operations in Fort Worth. The
Company intends to lease 55,000 square feet in a new build-to-suit facility located at the intersection
of Clearfork Main Street and Chisolm Trail Parkway, that will have an estimated capital investment of
$35 million. The Company will also invest$2.8 million in business personal property by December 31,
2016.
The Company will also retain 170 full-time employees (FTEs) and create 20 new full-time (FTEs) by
December 31, 2016, increasing to 60 new FTEs by December 31, 2021. The Company will fill a
minimum of 40 percent of all FTEs with Fort Worth residents and a minimum of 20 percent of all FTEs
with Fort Worth Central City residents. The average salary of all FTEs will be a minimum of
$85,000.00 annually. In return, the City will pay the Company five annual Economic Development
Program grants, as authorized by Chapter 380, Texas Local Government Code.
Failure to meet minimum investment or any annual job number commitments will result in a default
under the Agreement, giving the City the right to terminate without further obligation. In addition, the
Company will forfeit the annual grant in any year that the average salary of employees is below
$85,000.00 or the total real and personal property appraisal for all property located on the platted
property is below $25,000,000.00.
The amount of each annual Program Grant will be up to $50,000.00 and will be calculated in
accordance with the amount of(i) incremental real property tax revenues from the land that were
received by the City for the previous tax year and (ii) personal property tax revenues from New
Taxable Tangible Personal Property that were received by the City for the previous tax year. The
incentive value is approximately$250,000.00 over the five year term.
Staff recommends entering into an Economic Development Program Agreement with the Company
for the project.
http://apps.cfwnet.org/council_packet/mc review.asp?ID=21256&councildate=7/28/2015 9/12/2017
M&C Review Page 2 of 2
This project is located in COUNCIL DISTRICT 9.
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that the above recommendation will have no
material effect on the Fiscal Year 2015 budget. While no current year impact is anticipated, upon
approval the long-term forecast associated with years 2016-2020 will be updated.
TO Fund/AccountlCenters FROM Fund/AccountlCenters
Submitted for City Manager's Office by: David Cooke (6116)
Originating Department Head: Jay Chapa (5804)
Robert Sturns (212-2663)
Additional Information Contact: Ossana Hermosillo (212-2665)
ATTACHMENTS
General Location Map Smith Nephewpdf
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=21256&councildate=7/28/2015 9/12/2017
q-(j1yd5-
CERTIFICATE OF INTERESTED PARTIES FORM 1295
1 of 1
Complete Nos. 1- 4 and 6 if there are interested parties. OFFICE USE ONLY
Complete Nos. 1, 2, 3, 5, and 6 if there are no interested parties. CERTIFICATION OF FILING
1 Name of business entity filing form, and the city, state and country of the business entity's place Certificate Number:
of business. 2017-256325
Smith and Nephew, Inc.
Ft Worth, TX United States Date Filed:
2 Name of governmental entity or state agency that is a party to the contract for which the form is 09/03/2017
being filed.
City of Ft Worth Date Acknowledged:
3 Provide the identification number used by the governmental entity or state agency to track or identify the contract, and provide a
description of the services, goods, or other property to be provided under the contract.
170517
Economic Development Program Agreement, 5600 Clearfork Main Street, M&C C-27397
Nature of interest
4
Name of Interested Party City, State, Country (place of business) (check applicable)
Controlling Intermediary
Duff and Phelps, LLC
Smith and Nephew Holdings, Inc.
5 Check only if there is NO Interested Party
6 AFFIDAVIT
Austin, TX United States
Memphis, TN United States
X
X
I swear, or affirm, under penalty of perjury, that the above disclosure is true and correct.
CINDI J. WAIL
Notary Public, State of Texas
Comm. Expires 06-05-201 t
Notary ID 12571559.1 Signature of authorized agent of contracting business entity
AFFIX NOTARY STAMP / SEAL ABOVE r I �/
Sworn to and subscribed before me, by the said Pp-n� I _� i l 1 this the 3 Y(i day of
20 / 1 , to certify which, witness my hand and seal of office.
i ature of Qifficer ministering oath
Forms provided by Texas Ethics Commission
Printed name of officer administering oath
lvobry
Title of officer administering oath
www.ethics.state.tx.us
Version V1.0.3337