HomeMy WebLinkAboutContract 48003-A1 CITY SECRETARY Q/�03
CONTRACT NO. U //
cti0 �oR�
AMENDMENT NO. 1 TO
ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
(CITY SECRETARY CONTRACT NO.48003)
This AMENDMENT NO. 1 TO ECONOMIC DEVELOPMENT PROGRAM
AGREEMENT ("Amendment") is made and entered into by and between the CITY
OF FORT WORTH ("City"), a home rule municipality organized under the laws of the
State of Texas, and GALDERMA LABORATORIES,L.P., a Texas limited partnership
("Company").
The following introductory provisions are true and correct and form the basis of
this Amendment:
A. Company is an international manufacturer of dermatological products. As of July
19, 2016 the City and Company entered into that certain Economic Development
Program Agreement on file in the City Secretary's Office as City Secretary Contract No.
48003 (the"Agreement"). Under the Agreement, Company agreed, among other things,
to expand its business operations on land in the City located at the northeast corner of
Texas Longhorn Way and Heritage Parkway(more specifically defined in the Agreement
as the "Development Site"), including construction of a new building of at least 100,000
square feet for use in Company's business operations, including office space for research
and development, marketing, sales, medical and regulatory affairs, and Company's U.S.
Headquarters Operations (as defined in the Agreement and collectively referred to as the
"Required Improvements"). In return,the City agreed to pay Company ten(10) annual
Program Grants as authorized by Chapter 380 of the Texas Local Government Code.
B. Under the Agreement, the amount of each annual Program Grant is calculated on
the basis of certain City tax revenues attributable to the Development Site and is
dependent on Company's compliance with certain annual commitments related to
employment and Supply and Service Expenditures, which commitments must be
achieved in the calendar year preceding the year in which a Program Grant is due.
Section 6.10 of the Agreement specifies that the first Program Grant is payable to
Company on or before June 1, 2017, meaning that Company would have to have met
such annual commitments beginning in calendar year 2016 in order for Company to be
eligible to receive the maximum Program Grant available under the Agreement in 2017.
C. Company was required to complete the Required Improvements by December 31,
2016, and to cause installation of New Taxable Tangible Personal Property on the
Development Site with a value of at least $2,550,000.00, and Company did, in fact, meet
these obligations. However, Company was not able to move its actual operations to the
Development Site until December 2016. As a result, Company could not have met its
employment or Supply and Service Expenditures commitments for 2016. In addition,
Company could not have paid any ad valorem taxes on New Taxable Tangible Personal
Amendment No.3 to CSC No.48003
Economic Development Program Agreement with Galderma Laboratories,L.P.
Property located on the Development Site for the 2016 tax year. As a result, the
calculation of the Program Grant and the available Program Source Funds for the funding
of the Program Grant for 2017 would have been severely reduced. The parties agree that
this result would not be equitable or reflective of the spirit of the parties' intentions
behind the Agreement.
D. Accordingly, the City and Company wish to amend the Agreement to change the
first year for payment of a Program Grant from 2017 to 2018 and to extend most
timeframes in which the various annual employment and Supply and Service
Expenditures must be met by one(1)year.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the City and Company hereby agree as
follows:
1. The Recitals set forth above are true and correct and constitute the basis upon
which the City and Company have entered into this Amendment.
2. Section 4.5 of the Agreement(Employment Commitments) is hereby amended to
read as follows:
4.5. 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 4.7.4 for the year under evaluation.
4.5.1. 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").
4.5.1.1. 2017-2019.
In 2017 and in each year thereafter through
2019, Company will meet the Overall Employment
Commitment if Company provides and fills at least 320
Full-time Jobs on the Development Site and the Existing
Site,collectively.
Page 2
Amendment No. 1 to CSC No.48003
Economic Development Program Agreement with Galderma Laboratories,L.P.
4.5.1.2. 2020 through Expiration of Term.
In 2020 and in each year thereafter through
the end of the Term of this Agreement, Company must
provide and fill at least 622 Full-time Jobs on the
Development Site and the Existing Site, collectively.
4.5.2. 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.
4.5.2.1. 2017-2019.
In 2017 and in each year thereafter through
2019, Company will meet the Fort Worth Employment
Commitment if in the year under evaluation at least the
greater of(i) 80 Full-time Jobs on the Development Site
and the Existing Site, collectively, or (ii) twenty-five
percent (25%) 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.
4.5.2.2. 2020 through Expiration of Term.
In 2020 and in each year thereafter through
the end of the Term of this Agreement, Company will meet
the Fort Worth Employment Commitment if in the year
under evaluation at least the greater of(i) 162 Full-time
Jobs on the Development Site and the Existing Site,
collectively, or (ii) twenty-five percent (25%) 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.
4.5.3. Employment of Central City Residents.
Company must meet or exceed the following levels of
employment of Central City Residents for the calendar years
Page 3
Amendment No. 1 to CSC No.48003
Economic Development Program Agreement with Galderma Laboratories,L.P.
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.
4.5.3.1. 2017-2019.
In 2017 and in each year thereafter through
2019, Company will meet the Central City Employment
Commitment if in the year under evaluation at least the
greater of(i) 32 Full-time Jobs on the Development Site
and the Existing Site, collectively, or(ii) ten percent (10%)
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.
4.5.3.2. 2020 through Expiration of Term.
In 2020 and in each year thereafter through
the end of the Term of this Agreement, Company will meet
the Central City Employment Commitment if in the year
under evaluation at least the greater of(i) 62 Full-time Jobs
on the Development Site and the Existing Site, collectively,
or (ii) ten percent (10%) 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.
4.5.4. 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 One Hundred
Ten Thousand Dollars($110,000.00).
3. Section 4.6 of the Agreement (Supply and Service Spending Commitments) is
hereby amended to read as follows:
4.6.1. Supply and Service Expenditures with Fort Worth Companies.
In 2017 and in each calendar year thereafter during the
Term of this Agreement, Company annually must expend at least
Page 4
Amendment No. 1 to CSC No.48003
Economic Development Program Agreement with Galderma Laboratories,L.P.
Five Hundred Thousand Dollars ($500,000.00) in Supply and
Service Expenditures with Fort Worth Companies (the "Fort
Worth Supply and Service Spending Commitment").
4.6.2. Supply and Service Expenditures with Fort Worth
Certified M/WBE Companies.
In 2017 and in each calendar year thereafter during the
Term of this Agreement, Company annually must expend at least
Two Hundred Fifty Thousand Dollars ($250,000.00) in Supply and
Service Expenditures with Fort Worth Certified M/WBE
Companies (the "M/WBE Supply and Service Spending
Commitment"). Dollars spent with Fort Worth Certified M/WBE
Companies will also count as dollars spent with Fort Worth
Companies for purposes of measuring the Fort Worth Supply and
Service Spending Commitment outlined in Section 4.6.1.
4. Section 4.7.4 (Annual Employment Report) and Section 4.7.5 (Annual Supply and
Service Spending Report) are hereby amended to change the first reporting deadline in
each Section from February 1, 2017 to February 1,2018.
5. The first sentence of Section 6 (Program Grants) is hereby amended to read as
follows:
As more specifically set forth herein, if both the Real Property
Commitment set forth in Section 4.2 and the Personal Property
Commitment set forth in Section 4.3 were met, Company will be entitled
to receive ten(10)annual Program Grants, payment of which will begin in
2018 and end in 2027.
6. The first sentence of Section 6.10(Deadline for Payments and Source of Funds) is
hereby amended to read as follows:
The first Program Grant payable hereunder will be paid by the City on or
before June 1, 2018.
7. Section 8.3 (Failure to Meet Average Annual Salary Requirement) is hereby
amended to read as follows:
Page 5
Amendment No. 1 to CSC No.48003
Economic Development Program Agreement with Galderma Laboratories,L.P.
8.3. Failure to Meet Average Annual Salary Requirement.
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, of all Full-time Jobs on the
Development Site and the Existing Site, collectively, is not at least One
Hundred Ten Thousand Dollars ($110,000.00), 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.
8. This Amendment shall be effective as of the Effective Date of the Agreement,
which is July 19, 2016.
9. All terms in this Amendment that are capitalized but not defined shall have the
meanings assigned to them in the Agreement.
10. All terms and conditions of the Agreement that are not expressly amended
pursuant to this Amendment shall remain in full force and effect.
EXECUTED as of the last date indicated below, to be effective as of the
Effective Date:
CITY OF FORT WORTH: APPROVED AS TO FORM AND
LEGALTIY:
By: r T Y By:
JesuJ. Chapa V Peter Vaky
Assi taut City Manager Deputy City Attorney
Date: 2 1 lv 11 M&C: C-28341 8-29-17
Form 1295: 2017-241366
Page 6
Amendment No. 1 to CSC No.48003
Economic Development Program Agreement with Galderma Laboratories,L.P.
CONTRACT COMPLIANCE MANAGER:
By signing below. I hereby acknowledge that I
am the person responsible for the monitoring
and administration of this contract, including
ensuring all performance and reporting
requirements:
ByCC2,E�& y
Name of Cit mploye r6 t 4
Title: bJsiv.ess A),jptV,,*�ew4- Cvjdtvvai-c�
GALDERMA LABORATORIES,L.P.
a Texas limited partnership:
By: Galderma General, LLC, a
Delaware limited liability company
and its general partner:
0
9FV1��
By: k-1&4*1/
Name: vi4fi✓lesst y
Title: V j tC Pfe s,'4#71
Date: 1 - 30—( 8
At*
Maty J. Ka e ity S'ecr 5
Page
Amendment No. 1 to CSC No.48003 OFFICIAL RECORD
Economic Development Program Agreement with Galderma Laboratories,L.P.
CITY SECRETARY
FT.WORTH,TX
L�.
CERTIFICATE OF INTERESTED PARTIES
FORM 1295
loll
Complete Nos.1-4 and 6 if there are Interested parties. OFFICE USE ONLY
Complete Nos.1,2,3,5,and 6 It there are no interested parties. CERTIFICATION OF FILING
I Name of business entity Illhrg form,and the city,stale and country of the business entity's place Certificate Number:
of business. 2017-241366
Gaiderma Laboratories,L.P,
Fort Worth,TX United States Date Filed:
2 Name of governmental entity or state agency that is a party tot the contract for which the form is 07/26/2017
being filed.
City of Fort Worth,Texas Date Ackno dged-
g 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,
City Secretary Contract 1148003
Economic Development Program Agreement with Galderma Laboratories, L.P,
4 Nature of Interest
Name of Interested Party City,State,Country(place of business) (check applicable)
Controlling Intermediary
Galderma Laboratories,L.P. Fort Worth,TX United States X
Lester,David Dallas,TX United States X
Fields,David Dallas,TX United States X
5 Check only if there is NO Interested Party.
6 AFFIDAVIT I swear,or affirm,under penalty of perjury,that The above disclosure Is true and Correct.
, `'f`'fy5 p111N71N CASSADY . m
j+'. •` tvly No"ID q 11682661
��+. •r
Expires�8tNU8 22,2D20 Signature of authorized agent of contracting business entity
February
AFFIX NOTARY STAMP 1 SEAL A13OVE
Sworn to and subscribed before me,by the said Da n n 41 1 r (his the ' day of _.
20 to certify whlch,witness nay hand and seal of office. — -
h�r Y a IUdA�
Signature of officer administering ath Printed name of officer admInIsterind oath Title of officer adrninistering oath
Forms provided by Texas Ethics Commission www.ethics.state.tx.us Version V1.0.883
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 8/29/2017
DATE: Tuesday, August 29, 2017 REFERENCE NO.: **C-28341
LOG NAME: 17GALDERMA380AMEND
SUBJECT:
Authorize Execution of Amendment to City Secretary Contract No. 48003, Economic Development
Program Agreement with Galderma Laboratories, L.P., to Revise the Schedule for Payment of Grants
Related to the Development of a Medical Products Facility at the Northeast Corner of Texas Longhorn Way
and Heritage Parkway (COUNCIL DISTRICT 2)
RECOMMENDATION:
It is recommended that the City Council authorize execution of an amendment to the Economic
Development Program Agreement (City Secretary Contract No. 48003) with Galderma Laboratories, L.P.,
for the development of a medical products facility at the northeast corner of Texas Longhorn Way and
Heritage Parkway in order to revise the schedule for payment of economic development grants under the
Agreement.
DISCUSSION:
The City and Galderma Laboratories, L.P., (Developer) entered into an Economic Development Program
Agreement (City Secretary Contract No. 48003) on July 19, 2016. Under this Agreement, in return for
Developer's commitment to expand its operations in the City of Fort Worth (City) by constructing a new
building on the Development Site (which is now addressed 14600 Heritage Parkway) of at least 100,000
square feet to house additional offices for the Developer's business operations, including research and
development, marketing, sales and medical and regulatory affairs, the City agreed to pay the Developer
certain economic development grants up to 50 percent of the incremental value of the real and business
personal property received from the development, as authorized by Chapter 380 of the Texas Local
Government Code.
The Agreement requires that expansion construction be complete by December 31, 2016 and business
personal property (BPP) installation be complete by January 1, 2017. The first grant payment was
scheduled for June 1, 2017, from taxes paid in 2016. However, the Developer did not move into the
building until December 2016 and had no tax liability for property or BPP taxes in 2016. Therefore,
although the Developer met the deadlines for construction and installation of BPP, the first grant payment
would be $0.
The City and Developer have agreed that it would be equitable to change the date of the first grant
payment to 2018. Therefore, the proposed amendment would leave the Completion Deadline as
December 31, 2016 and the Personal Property Commitment Deadline as January 1, 2017 and move all
other dates except one in the Agreement forward one year. The one exception is the required increase in
number of employees (overall, Fort Worth and Central City) in the year 2020, which requirement will
remain the same. All annual requirements for number of employees, average annual salary and supply
and service expenditures would begin in 2017 and the ten grant payments would be paid from 2018-2027.
This project is located in COUNCIL DISTRICT 2.
Logname: 17GALDERMA380AMEND Page 1 of 2
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that approval of the above recommendation will have no material effect
on the Fiscal Year 2017 Budget. Upon approval of this Agreement, the long term financial impacts will be
included in the multi-year financial forecast. Request for appropriations to make payments under this
agreement will be submitted as part of the annual budget process.
FUND IDENTIFIERS (FIDs):
TO
Fund Department Account Project ProgramActivity Budget Reference # moun
ID ID Year (Chartfield 2
FROM
Fund Departmentccoun Project Program ctivity Budget Reference # moun
ID 1A ID Year (Chartfield 2)
CERTIFICATIONS:
Submitted for City Manager's Office by: Jay Chapa (5804)
Originating Department Head: Robert Sturns (212-2663)
Additional Information Contact: Ossana Hermosillo (212-2665)
Logname: 17GALDERMA380AMEND Page 2 of 2