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HomeMy WebLinkAboutContract 29095-EC1 ESTOPPEL CERTIFICATE CITY SECRETARY (EDP Agreement) CONTRACT NO. 2"95 E C August 22, 2018 Natixis Real Estate Capital LLC 1251 Avenue of the Americas New York, New York 10020 Attention: Real Estate Administration Re: Economic Development Program Agreement, dated October 14, 2002, by and between the CITY OF FORT WORTH, a home rule municipal corporation organized under the laws of the State of Texas, and PIER-FTW, INC., a Delaware corporation (together with its successors and assigns, "Pier 1") (the "Original EDP Agreement"), as amended by that certain Amendment No. 1 to City Secretary Contract No. 29095, dated April 26, 2005 (City Secretary Contract No. 31728), as amended by that certain Amendment No. 2 to City Secretary Contract No. 29095, dated May 26, 2011 (City Secretary Contract No. 29095-A2) (the "2`1 Amendment") (collectively, the "EDP Agreement"). Ladies and Gentlemen: CITY OF FORT WORTH, a home rule municipal corporation organized under the laws of the State of Texas (the "City"), with full knowledge that NATIXIS REAL ESTATE CAPITAL LLC, a Delaware limited liability company (collectively with its successors and assigns, "Lender"), intends to make a mortgage loan (the "Loan") to HERTZ FORT WORTH ENERGY WAY, LP, a Delaware limited partnership (the "Borrower"), which Loan is to be secured by Borrower's fee interest in certain real property located in the City of Fort Worth, Tarrant County, Texas (the "Property"), and that Lender, in making such Loan, is relying upon the truth, accuracy and completeness of the statements made by the City herein, hereby certifies, represents and warrants to Lender that: 1. Attached hereto as Exhibit A is a true and complete copy of the EDP Agreement. There are no other amendments, modifications and/or supplements thereto by and among Borrower, Pier 1, and the City with respect to the EDP Agreement. 2. The EDP Agreement is in full force and effect, there are no claims against Pier 1 thereunder, and there are no other agreements or understandings, whether written or oral, between Pier 1, the City, and the Borrower with respect to the EDP Agreement or the Property. 3. The City has not transferred, assigned, hypothecated or pledged the EDP Agreement or any of its rights thereunder to any third party. 4. All payments due from City under the EDP Agreement have been paid in full through and including May 22, 2018. The City has paid a Program Grant in the amount of$601,011.14 to Pier 1 on May 22, 2018, for the 2017-21118 tax year. OFFICIAL RECORD CITY SECRETARY Estoppel Certificate Issued by City of Fort Worth to Natixis Real Estate Capital,LLC re:Pier I EDPA FT.WORTH,TX 5. The commencement date of the EDP Agreement was October 14, 2002. The City acknowledges that the EDP Agreement shall expire upon payment by the City of the twentieth (20th) annual Program Grant under the EDP Agreement, which is expected to occur by not later than June 1, 2025. 6. Pier 1 and the City have performed all of their respective obligations under the EDP Agreement. Neither Pier 1 nor the City is in breach or default of any provision of the EDP Agreement and no event has occurred and no circumstance exists which, with the passage of time or the giving of notice, or both, would constitute such a default. 7. The City acknowledges that Pier 1 continues to satisfy the obligation of Pier 1 set forth in Section 5.4 of the Original EDP Agreement and Section 1 of 2°d Amendment. 8. The City has no offset or defense to the enforcement of any of the terms of the EDP Agreement. 9. The Aggregate Commitment Ratio Percentage, as defined in Section 6.2 of the EDP Agreement, is equal to 0%. 10. To the extent that such information is considered public information under the Texas Public Information Act, Chapter 552, Texas Government Code, the City hereby agrees to give written notice to Lender, at the following address or such other address of which Lender gives written notice to the City, of any default or breach of any of Pier 1's obligations with respect to the City, including, without limitation, the payment of monies payable by Pier 1 to the City, if any: Natixis Real Estate Capital LLC 1251 Avenue of the Americas New York, New York 10020 Attention: Real Estate Administration 11. By execution of this Estoppel Certificate, the City is not waiving or surrendering any of its governmental powers or immunities. Notwithstanding anything to the contrary herein, in no event shall the City be subject to any monetary damages claimed by Lender or Borrower as a result of the representations hereunder or any breach or alleged breach by the City hereunder. 12. This Estoppel Certificate does not constitute any kind of amendment to the EDP Agreement and does not give Borrower or Lender any rights under the EDP Agreement. 13. Venue for any action arising under this Estoppel Certificate shall lie in state courts located in Tarrant County, Texas or in the United States District Court for -2- Estoppel Certificate Issued by City of Fort Worth to Natixis Real Estate Capital,LLC re:Pier 1 EDPA the Northern District of Texas — Fort Worth Division. The terms and conditions of this Estoppel Certificate shall be governed by the laws of the State of Texas. 14. The undersigned individuals are duly authorized to sign, acknowledge and deliver this Estoppel Certificate on behalf of the City. This Estoppel Certificate and the representations and agreements made herein shall inure to the benefit of Lender, its successors and assigns and shall be binding on the City, its heirs, legal representatives, successors and assigns. To the extent that there are any inconsistencies between this Estoppel Certificate and the EDP Agreement, the terms of the EDP Agreement shall prevail and govern. Dated: August 22, 2018. CITY OF FORT WORTH, a home rule municipal corporation organized under FORT he laws of the State of Texas Attes by: YA Why S C am : Susan Alanis �., XP�S I : Assistant City Manager APPROVED AS TO FORM AND LEGALITY: M&C. N I ra By:— Name: Peter Vaky 1295: !' Title: Deputy City Atomey M&C: None Required OFFICIAL RECORD -3 CITY SECRETARY FT. WORTH,TX Estoppel Certificate Issued by City of Fort Worth to Natixis Real Estate Capital,LLC re:Pier I EDYA EXHIBIT A [EDP AGREEMENT] l -4- Estoppel Certificate Issued by City of Fort Worth to Natixis Real Estate Capital,LLC re:Pier I EDPA 3r CITY CONTRACT NO. A J ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Agreement") is made and entered into by and between the CITY OF FORT WORTH ("City"), a home rule municipal corporation organized under the laws of the State of Texas, and PIER—FTW, INC. ("Pier 1"), a Delaware corporation. RECITALS WHEREAS, the City has created an Economic and Community Development Department in order to, among other things, oversee economic development programs authorized by Texas law and approved by the City Council, including those authorized by Chapter 380 of the Texas Local Government Code, to promote state and local economic development and to stimulate business and commercial activity in the City; and WHEREAS, in accordance with the 2002 Comprehensive Plan adopted by the City Council pursuant to M&C G-13541 on February 26, 2002, the City's economic development programs are based on a model of custom-designed incentives and partnership programs with private businesses on a case-by-case analysis of individual projects to help ensure the growth and diversification of the local economy; and WHEREAS, the City Council has found and 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; Page I Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. 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 SECTION 1. A INCORPORATION OF RECITALS The City Council hereby finds that the recitals set forth above are true and correct and form the basis upon which the City has entered into this Agreement. SECTION 2. PURPOSE 2.1. Objectives. Pier 1's current corporate headquarters are located in leased office space within a high-rise building in downtown Fort Worth. Pier 1 has outgrown its current facilities and intends to build a new corporate headquarters at another location. Pier 1 is exploring a number of locations for construction of its new corporate headquarters, including locations outside of the City. One of the locations that Pier 1 is considering for this purpose is property in the northwest part downtown Fort Worth in the vicinity of Forest Park Boulevard, West Fifth Street and Summit Avenue (the "Pier 1 Site"), which is more specifically depicted in the map attached hereto as Exhibit "A". Exhibit "A" is hereby made a part of this Agreement for all purposes. Page 2 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. The City Council believes that the northwest portion of downtown is underdeveloped and that quality development in that sector will help draw together the central business district, the cultural district and the green spaces along Trinity Park as a more cohesive and lively urban area. Pier 1's proposed development of the Pier 1 Site, as set forth in this Agreement, will contribute significantly to the momentum needed to achieve that goal. Consequently, the City strongly favors Pier 1's relocation of its corporate headquarters to the Pier 1 Site. The parties acknowledge that the present infrastructure in the vicinity of the Pier 1 Site is insufficient to support anticipated development by Pier 1 and that the costs of development on the Pier 1 Site will greatly exceed the costs of comparable development on raw land at another site. Pier 1 wishes to continue its historical presence in the City's downtown area and to play a significant role in its future revitalization. However, in order to justify a relocation to the Pier 1 Site, Pier 1 has requested an economic assistance package from the City so that its costs for development, improvement and expansion of the Pier 1 Site will be more comparable with,rather than greatly exceeding, those associated with raw land. 2.2. Concept and Structure. The parties have jointly developed the concept behind the Program outlined in this Agreement. The Program is designed to make up for the increased costs that Pier 1 will incur as a result of its relocation to the Pier 1 Site rather than to a suburban site in the City or a location in another municipality. Under the Program, the City will provide Pier 1 with economic development grants based on the amount of revenue received by the City from Pier 1's property Page 3 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. taxes on the Pier 1 Site and on compliance by Pier 1 with various commitments that will benefit the City, as further provided in this Agreement. The City will fund these economic development grants from available moneys in the City's general fund. SECTION 3. DEFINITIONS Capped Taxable Appraised Value.means the maximum taxable appraised value of Pier 1 Property for a given tax year, as set forth in Exhibit "B", attached hereto and hereby made a part of this Agreement for all purposes, on which the City will calculate its Program Grant to Pier 1 for that tax year. 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 state-designated enterprise zones; and (iii) all census block groups that are contiguous by seventy-five percent (75%) or more of their perimeter to CDBG eligible block groups or enterprise zones, as well as any CDBG-eligible block in the corporate limits of the City outside Loop 820, as more specifically depicted in the map of Exhibit "C", attached hereto and hereby made a part of this Agreement for all purposes. Central City Resident means an individual whose principal place of residence is at a location within the Central City. Certified M/WBE means a minority or woman-owned business that has received certification as either a minority business enterprise (MBE) or a woman business Page 4 Economic Development Program Agreement between City of FortWorth and Pier—FTW,Inc. enterprise (WBE) by either the City, the North Texas Regional Certification Agency (NTRCA) or the Texas Department of Transportation(TxDOT), Highway Division. Corporate Offices means a major operation and/or administrative facilities for Pier 1 and its successors and assigns. Excess Pier 1 Property Taxes means the positive difference, if any, between property tax revenue received by the City in a given tax year which is based on the entire taxable appraised value of Pier 1 Property and that which is based on the Capped Taxable Appraised Value for the same tax year in accordance with Exhibit `B". For example, and as an example only, if the Capped Taxable Appraised Value in a given tax year is $500,000 and the entire taxable appraised value of Pier 1 Property for that tax year is actually $750,000, Excess Pier 1 Property Taxes would be the tax revenue received by the City for that tax year based on the $250,000 difference between $750,000 and $500,000. Fort Worth Company means a business that has a principal office located within the corporate limits of the City. Fort Worth Resident means an individual whose principal place of residence is located within the corporate limits of the City. Full-time Job means a job filled by one (1) individual for a period of not less than thirty-seven and one-half(37 %2) hours per week or another measurement used to define full-time employment by Pier 1 in accordance with its then-current personnel policies and regulations. Pier 1 means Pier—FTW, Inc., and all companies, incorporated or otherwise under common control With, controlled by, or controlling Pier 1 Imports, Inc. For purposes of Page 5 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. y} g this definition, "control" means fifty percent (50%) or more of the ownership determined by either value or vote. Pier 1 Property means real and personal property owned or leased by Pier 1 (i) on which Pier 1 is required to pay real and/or personal property taxes to the City and (ii) that is located on the Pier 1 Site. Pier 1 Property Taxes means the amount of real and personal property tax paid in a given tax year by Pier 1 to the City based on the lesser of(i) the entire taxable appraised value of Pier 1 Property or (ii) the Capped Taxable Appraised Value. The entire taxable appraised value of Pier 1 Property will be established solely by the appraisal district that has jurisdiction over the Pier 1 Site at the time, with the understanding that Pier 1 shall retain all rights to protest and contest any such appraisals. With respect to property leased by Pier 1, Pier 1 Property Taxes include that portion of annual property tax, prorated on a daily basis, which is attributable to the period during which Pier 1 was the lessee of such property. Program means the economic development program authorized by Chapter 380 of the Texas Local Government Code and established and outlined in this Agreement. Program Grants means the annual economic development grants paid by the City to Pier 1 in accordance with this Agreement and as part of the Program. SECTION 4. TERM This Agreement shall be effective as of the.date of execution by both parties and, subject to Section 8.4.1 of this Agreement, shall expire upon payment by the City to Pier Page 6 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. I of the twentieth (20th) annual Program Grant, as provided by Section 6 hereof (the "Term"), unless terminated earlier as provided by and in accordance with this Agreement. SECTION 5. PIER 1 OBLIGATIONS 5.1. Required Improvements. The commitments set forth in Sections 5.1.1, 5.1.2 and 5.1.3 may hereafter be referred to, either in an individual or a collective sense, as the "Base Commitments". 5.1.1. Construction of Corporate Offices. Pier 1 will make or cause to be made real and personal property investments on the Pier 1 Site of at least $80 million, including site development costs and as further depicted in Exhibit "D", attached hereto and hereby made a part of this Agreement for all purposes (the "Required Improvements"), by December 31, 2005 in order for the Pier 1 Site to be used for Corporate.Offices at all times during the Term of this Agreement. 5.1.2. Use of Fort Worth Companies. Without regard to the actual amount of dollars spent on the Required Improvement's, Pier 1 will spend at least twenty-five percent (25%) of its construction costs for the Required Improvements with contractors that are Fort Worth Companies. Page 7 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. 5.1.3. Use of Certified M/WBEs. Without regard to the actual amount of dollars spent on the Required Improvements, Pier 1 will spend at least twenty percent(20%) of its construction costs for the Required Improvements with contractors that are Certified M/WBEs. Dollars spent with a Certified M/WBE that is also a Fort Worth Company will be calculated at 1.5 times their face value (so that if, for example, Pier 1 spends $1,000 with a Certified M/WBE that is also a Fort Worth Company, Pier 1 will be deemed to have spent $1,500 with such Certified M/WBE for purposes of determining whether Pier 1 has met its twenty percent (20%) Certified M/WBE spending requirement under this Section 5.1.3. 5.2. Employment Commitments. As of the date of execution of this Agreement, Pier 1 employs approximately 730 employees in its headquarters location in downtown Fort Worth. Determination of compliance with this Section 5.2 shall be based on Pier 1's employment data as of August 1 of each year for which the requirements under this Section 5.2 are in effect. 5.2.1. Fort Worth Residents. At all times during the term of this Agreement, Pier 1 will provide at least (i) 350 Full-time Jobs on the Pier 1 Site to Fort Worth Residents or (ii) forty percent (40%) of the total number of Full-time Jobs on the Pier 1 Site to Fort Worth Residents, whichever is greater. Page 8 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. 5.2.2. Central City Residents. At all times during the term of this Agreement, Pier 1 will provide at least (i) 100 Full-time Jobs on the Pier 1 Site to Central City Residents or (ii) ten percent (10%) of the total number of Full-time Jobs on the Pier 1 Site,to Central City Residents, whichever is greater. 5.3. Supply and Service Expenditure Commitments. 5.3.1. Fort Worth Companies. Beginning with calendar year 2005, and in each subsequent year of the term of this Agreement, Pier 1 will spend at least $1 million in local discretionary funds for supplies and services directly provided in connection with the operation of the Required Improvements with Fort Worth Companies. 5.3.2. Certified M/WBEs. Beginning with calendar year 2005, and in each subsequent year of the term of this Agreement, Pier 1 will spend at least $200,000 in local discretionary funds for supplies and services directly provided in connection with the operation of the Required Improvements with Certified MIWBEs. Dollars spent with a Certified M/WBE that is also a Fort Worth Company will be calculated at 1.5 times their face value (so that if, for example, Pier 1 spends $1,000 with a Certified M/WBE that is also a Fort Worth Company, Pier 1 will be deemed to have spent $1,500 with such M/WBE for purposes of determining whether Pier 1 has met its Page 9 Economic Development Program Agreement between City of Fort Wortb and Pier—FTW,Inc. $200,000 Certified M/WBE spending requirement under this Section 5.3.2. 5.4. Use of Pier 1 Site as Corporate Offices. Pier 1 shall use the Pier 1 Site or cause the Pier 1 Site to be used for Corporate Offices at all times during the Term of this Agreement. 5.5. Audits. Pier 1 agrees that the City will have the right to audit the financial and business records of Pier 1 that relate to the Pier 1 Site and the Required Improvements (collectively "Records") at any time during the Term of this Agreement in order to determine compliance with this Agreement. Pier 1 shall make all Records available to the City on the Pier 1 Site or at another location in the City acceptable to both parties following reasonable advance notice by the City and shall otherwise cooperate fully with the City during any audit. SECTION 6. PROGRAM GRANTS Beginning in calendar year 2006, the City will pay to Pier 1 twenty (20) annual Program Grants calculated in accordance with this Section 6. 6.1. Base Benefit. The amount of each annual Program Grant paid during the Term of this Agreement shall be based on the Base Benefit. The "Base Benefit" shall equal the Pier 1 Property Taxes for the previous tax year, multiplied by a percentage equal to ninety percent (90%) minus the Aggregate Commitment Ratio Page 10 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. Percentage, as defined in and calculated in accordance with Section 6.2. The Aggregate Commitment Ratio Percentage shall be determined on the earlier of(i) January 31, 2006 (but only taking into account the extent to which Pier 1 met its Base Commitments, as specifically set forth in Sections 5.1.1, 5.1.2 and 5.1.3, as of December 31, 2005, and disregarding any construction undertaken or payments made after such date) or (ii) the date of issuance of a final certificate of occupancy for all of the Required Improvements. 6.2. Commitment Ratio Percentages. The "Aggregate Commitment Ratio Percentage" shall equal the aggregate percentage, if any, by which pier 1 failed to meet its Base Commitments, as specifically set forth in Sections 5.1.1, 5.1.2 and 5.1.3 (each an "Individual Commitment Ratio Percentage") and as follows: 6.2.1. Commitment With Regard to Construction (Section 5.1.1). If Pier 1 fails to spend at least $80 million on the Required Improvements by December 31, 2005, the Individual Commitment Ratio Percentage related to Section 5.1.1 shall equal the difference between (i) one hundred percent (100%) and (ii) a fraction, to be expressed as a percentage, where (a) the numerator is the actual amount of dollars spent by Pier 1 on the Required Improvements as of December 31, 2005 and where (b) the denominator is $80 million. In other words, by way of example only, if as of December 31, 2005 Pier 1 had spent only $76 million on the Required Improvements, the Individual Commitment Ratio Page 11 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. Percentage under this Section 6.2.1 would be five percent (5%), which is 100%minus [$76 million/$80 million, or 95%]. 6.2.2. Commitment with Regard to Use of Fort Worth Companies (Section 5.1.2). If Pier 1 fails to spend at least at least twenty-five percent (25%) of its construction costs.for the Required Improvements with contractors that are Fort Worth Companies, the Individual Commitment Ratio Percentage related to Section 5:1.2 shall equal the difference between (i) one hundred percent (100%) and (ii) a fraction, to be expressed as a percentage, where (a) the numerator is the number of dollars actually spent with contractors that are Fort Worth Companies in the construction of the Required Improvements and where (b) the denominator is the product of the total number of dollars actually spent in the construction of the Required Improvements multiplied by .25 (25%). In other words, by way of example only, if as of December 31, 2005 Pier 1 had spent $80 million on the Required Improvements, $18 million of which was with Fort Worth Companies, the Individual Commitment Ratio Percentage under this Section 6.2.2 would be ten percent (10%), which is 100% minus [$18 million divided by {$80 million x .251, or $18 million/$20 million, or 90%]. 6.2.3. Commitment with Regard to Use of Certified M/WBEs (Section 5.1.3). If Pier 1 fails to spend at least at least twenty percent (20%) of its construction costs for the Required Improvements with contractors that are Page 12 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. Certified M/WBEs, the Individual Commitment Ratio.Percentage related to Section 5.1.3 shall equal the difference between (i) one hundred percent (100%) and (ii) a fraction, to be expressed as a percentage, where (a) the numerator is the number of dollars actually spent with contractors that are Certified M/WBEs in the construction of the Required Improvements and (b) the denominator is the product of the total number of dollars actually spent in the construction of the Required Improvements multiplied by .20 (20%). In other words, by way of example only, if as of December 31, 2005 Pier 1 had spent $80 million on the Required Improvements, $12.8 million of which was with Certified M/WBEs, the Individual Commitment Ratio Percentage under this Section 6.2.3 would be twenty percent (20%), which is 100% minus [$12.8 million divided by {$80 million x .201, or $12.8 million/$16 million, or 80%]. 6.2.4. Calculation of AnreLxate Commitment Ratio PercentaLe and Impact on Base Benefit. As stated above, the Aggregate Commitment Ratio Percentage equals the sum of each Individual Commitment Ratio Percentage. Therefore, taking the examples used in Sections 6.2.2 and 6.2.3, if Pier 1 spent $80 million on the Required Improvements, $18 million of which was with Fort Worth Companies and $12.8 million of which was with Certified M/WBEs, the Aggregate Commitment Ratio Percentage would equal thirty percent (30%), which is the sum of the 10% Individual Commitment Ratio Percentage under Section 6.2.2 and the 20% Individual Commitment Ratio Percentage under Section 6.2.3. In this instance, then, Page 13 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. the Base Benefit would be sixty percent (60%) of the Pier 1 Property Taxes for the previous tax year (90%, which is the maximum potential Base Benefit available under this Agreement, minus the 30% Aggregate Commitment Ratio.Percentage). 6.2.5. No Offsets. A deficiency in attainment of one Base Commitment may not be offset by exceeding another Base Commitment. In other words, if Pier 1 exceeded its Base Commitment to spend at least twenty-five percent (25%) of its construction costs on the Required Improvements with Fort Worth Companies by five percent (5%) but failed to attain its Base Commitment to spend at least twenty percent (20%) of its construction costs on the Required Improvements with Certified M/WBEs by five percent (5%), the Aggregate Commitment Ratio Percentage would still be five percent (5%) on account of Pier 1's failure to meet the latter Base Commitment. 6.3. Program Grants During Term of Agreement. Each annual Program Grant paid by the City to Pier 1 in calendar year 2006 and in each subsequent year during the term of this Agreement shall be based on a combination of the Base Benefit and Pier 1's compliance with its commitments under Sections 5.2.1, 5.2.2, 5.3.1 and 5.3.2, as follows: Page 14 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. 6.3.1. Base Benefit Component(60%). Pier 1 shall automatically receive sixty percent (601/o) of the applicable Base Benefit as part of each annual Program Grant paid during the term of this Agreement. 6.3.2. Fort Worth Resident Employment(10%). If during the previous tax year Pier 1 has complied with its commitment to provide at least the number of Full-time Jobs on the Pier 1 Site to Fort Worth Residents required for that year, as set forth in Section 5.2.1 of this Agreement, Piet 1's Program Grant for the next calendar year. shall be increased by an amount equal to ten percent (10%) of the applicable Base Benefit. 6.3.3. Central City Resident Employment(10%). If during the previous tax year Pier 1 has complied with its commitment to provide at least the number of Full-time Jobs on the Pier 1 Site to Central City Residents required for that year, as set forth in Section 5.2.2 of this Agreement, Pier 1's Program Grant for the next calendar year shall be increased by an amount equal to ten percent (10%) of the applicable Base Benefit. 6.3.4. Discretionary SpendinLy with Fort Worth Companies (10%). If during the previous calendar year Pier 1 has complied with its commitment to spend at least $1 million in local discretionary funds for supplies and services directly provided in connection with the operation of the Required Improvements with Fort Worth Companies, as set forth in Page 15 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. Section 5.3.1 of this Agreement, Pier 1's Program Grant for the next calendar year shall be increased by an amount equal to ten percent (10%) of the applicable Base Benefit. 6.3.5. Discretionary Spendin ,with Certified M/WBEs (10%). If during the previous calendar year Pier 1 has complied with its commitment to spend at least $200,000 in local discretionary funds for supplies and services directly provided in connection with the operation of the Required Improvements with Certified M/WBEs, as set forth in Section 5.3.2 of this Agreement (and as adjusted as provided in Section 5.3.2 for any Certified MWBE that is also a Fort Worth Company), Pier 1's Program Grant for the next calendar year shall be increased by an amount equal to ten percent(10%) of the applicable Base Benefit. 6.3.6. No Offsets. A deficiency in attainment of any of the commitments set forth in Sections 5.2.1, 5.2.2, 5.3.1 and/or 5.3.2 may not be offset by exceeding another of such commitments. In other words, if in a given year Pier 1 exceeded its commitment, as set forth in Section 5.3.1, to spend at least $1 million in discretionary funds for supplies and services with Fort Worth Companies by $100,000 but spent only $100,000 in discretionary funds for supplies and services with Certified M/WBEs instead of$200,000, as required by Section 5.3.2, Pier 1's Program Grant would still be reduced in the next calendar year by ten percent (10%) for its failure to meet its commitment under Section 5.3.2. Page 16 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. 6.4. Excess Pier 1 Property Taxes Excluded for Program Grants. Pier 1 understands and agrees that any Excess Pier 1 Property Taxes received by the City shall remain the property of the City; that the City will not at any time be required to pay Pier 1 any Excess Pier 1 Property Taxes as part of the Program; and that Excess Pier 1-Property Taxes received in one year will not in any manner be applied to or carried over to any Program Grant to Pier 1 in a subsequent year. 6.5. Deadline for Payment. Annual Program Grants will be paid to Pier 1 no sooner than May 1 and no later than June 1 of 2006 and of each subsequent calendar year during the Term of this Agreement. SECTION 7. OTHER CITY OBLIGATIONS 7.1. Penn Street Right-of-Way Vacation. At Pier 1's request, the City adopted Ordinance No. 15192 on August 13, 2002 under which the City vacated approximately 2.13 acres of public right-of- way (that portion of Penn Street adjacent to the southwest corner of Lot 16, Carlock's Addition, City of Fort Worth, as recorded in the Plat Records of Tarrant . County, Texas and as further depicted in Ordinance No. 15192) (the"Penn Street Right-of-Way": The value established for the Penn Street Right-of-Way is $463,452.45. The parties agree that the vacation of the Penn Street Right-of-Way is necessary in order for Pier 1 to complete the Required Improvements. Page 17 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. Therefore, as part of the consideration under this Agreement, the City agrees to forgo payment by Pier 1 of the $463,452.45 value of the Penn Street Right-of- Way to which the City would otherwise be entitled in return for the vacation thereof. 7.2. Waiver of Development Fees. The City will waive all development, building, permit, inspection and similar fees related to the construction of Pier 1's headquarters (excluding any fees payable to the Department of Engineering related to formal and/or informal community facilities agreements) on the Pier 1 Site. However, the City will not reimburse Pier 1 for any such fees assessed by third parties, such as third party inspection fees. 7.3. Fast-Track Development Approvals. The City will provide a procedure to expedite all City development I pprovals, including permits and inspections, for the Pier 1 Site. 7.4. Enterprise Zone. If requested by Pier 1, the City will use reasonable efforts to obtain Enterprise Zone designation for the Pier 1 Site. 7.5. Infrastructure Improvements. The City and Pier 1 anticipate that the City will undertake certain public infrastructure improvements in and around the Pier 1 Site. The nature of these public infrastructure improvements; the cost and the manner in which the City will share in such cost, if at all; and the time frame in which these public infrastructure improvements will be undertaken and completed will, along with Page IS Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. other pertinent matters, be determined solely in accordance with one or more Community Facilities Agreements that are negotiated in good faith and entered into by and between the City and Pier 1. 7.6. Additional Right-of-Way Vacations. In addition to the Penn Street Right-of-Way, if requested by Pier 1, the City Council may subsequently adopt an ordinance or ordinances that provide for the vacation of additional public rights-of-way on or adjacent to the Pier 1 Site. As part of the consideration under this Agreement, the City may forgo payment by Pier 1 of the value of such public rights-of-way to which the City would otherwise be entitled in return for the vacation thereof. SECTION 8. DEFAULT,TERMINATION AND FAILURE TO MEET VARIOUS OBLIGATIONS. 8.1. Termination by Pier 1. Pier 1 may terminate this Agreement by providing written notice to the City on or before completion of the Required Improvements (as evidenced by issuance of any required certificate of occupancy) should Pier 1 fail to obtain a commitment satisfactory to it for the reimbursement of any or all of the costs of constructing the Required Improvements pursuant to a development contract, lease financing agreement or other arrangement between Pier 1 and a bank or group of banks, developer, leasing company or other third party with resources sufficient to fund such costs. Page 19 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. 8.2. Termination by the City. The City may terminate this Agreement at any time after December 31, 2005 or the date on which a final certificate of occupancy is issued for all of the Required Improvements, whichever is earlier, in the event that the Base Benefit, as calculated in accordance with Section 6.1, is zero (0) or less. 8.3. Failure by Pier 1 to Meet Base Commitments, Employment Commitments and/or Supply and Service Expenditure Commitments. Subject to Section 8.2, Pier I's failure in any given year to comply with all or any of the Base Commitments or the commitments set forth in Section 5.2.1, 5.2.2, 5.3.1 and 5.3.2 shall not place Pier 1 in default hereunder or provide the City with the right to terminate this Agreement, but, rather, shall only be weighed against the amount of the Program Grant that the City is required to pay Pier 1 in accordance with this Agreement and as specifically provided in Sections 6.3 and 6.4. 8.4. Failure to Use Pier 1 Site for Corporate Offices. After December 31, 2005 or the date on which a final certificate of occupancy is issued for all of the Required Improvements, whichever is earlier, if the Pier 1 Site is at any time not used for Corporate Offices, as required by Section 5.4, Pier 1 shall not be deemed to be in default hereunder and the City will not have the right to terminate this Agreement, but, rather, the following provisions shall apply: 8.4.1. For an Entire Year. If the Pier 1 Site is not used for Corporate Offices for an entire year, the City will have no obligation to make any Program Grant payment Page 20 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. to Pier 1 or any successor in interest for the following year, with the understanding that the Term of this Agreement shall not be extended and that any such waiver shall be counted as a Program Grant payment for purposes of calculating the Term of this Agreement. In such an event, the revenue comprising the Program Grant that the City would otherwise have been obligated to make for such following year shall instead be treated as Excess Pier 1 Property Taxes, as provided in Section 6.4, and will be retained by the City and shall not be carried over to any Program Grant in any subsequent year. 8.4.2. For a Portion of a Year. If the Pier 1 Site is used for Corporate Offices for only a portion of a year, the City's Program Grant payment to Pier 1 or a successor in interest for the following year shall be prorated in accordance with the number of days during the previous year that the Pier 1 Site was used for Corporate Offices. In such an event, the revenue comprising difference between the Program Grant actually made.in such following year and the Program Grant that the City would otherwise have been obligated to make for such following year shall be treated as Excess Pier 1 Property Taxes, as provided in Section 6.4, and will be retained by the City and shall not be carried over to any Program Grant in any subsequent year. Page 21 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. SECTION 9. MUTUAL ASSISTANCE. The City and Pier 1 will do all things reasonably necessary or appropriate to carry out the objectives, terms and provisions of this Agreement and to aid and assist each other in carrying out such objectives, terms and provisions. SECTION 10. REPRESENTATIONS AND WARRANTIES. The City represents and warrants to Pier 1 that the Program and this Agreement are within the scope of its authority and the provisions of the charter and code of the City and that it is duly authorized and empowered to establish the Program and enter into this Agreement. Pier 1 represents and warrants to the City that it has the requisite authority to enter into this Agreement. SECTION 11. SECTION OR OTHER HEADINGS. Section or other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. SECTION 12. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the parties with respect to the transaction contemplated herein. Page 22 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. n j 'a SECTION 13. AMENDMENT. This Agreement may only be amended, altered, or revoked by written instrument signed by the City and Pier 1. SECTION 14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and inure to the benefit of the parties, their respective successors and assigns. Provided that Pier 1 is not in default at the time, Pier 1 may assign all or part of its rights and obligations hereunder without the approval or consent of the City. SECTION 15. NOTICE. Any notice and/or statement required and permitted to be delivered shall be deemed delivered by depositing same in the United States mail, certified with return receipt requested, postage prepaid, addressed to the appropriate party at the. following addresses, or at such other addresses provided by the parties in writing: PIER 1: Attn: Chairman Pier 1 Imports 301 Commerce St., Suite 600 Fort Worth, Texas 76102 With a copy to: Attn: General Counsel Pier 1 Imports 301 Commerce St., Suite 600 Fort Worth, Texas 76102 Page 23 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. CITY: Attn: Director Economic & Community Development Department City of Fort Worth 1000 Throckmorton Fort Worth, Texas 76102 With a copy to: Attn: City Attorney City Attorney's Office 1000 Throckmorton Street Fort Worth, Texas 76102 SECTION 16. INTERPRETATION. Regardless of the actual drafter of this Agreement, this Agreement shall, in the event of any dispute over its meaning or application, be interpreted fairly and reasonably, and neither more strongly for or against any party. SECTION 17. APPLICABLE LAW. This Agreement is made, and shall be construed and interpreted under the laws of the State of Texas, and venue shall lie in state courts located in Tarrant County, Texas or in the United States District Court for the Northern District of Texas, Fort Worth Division. SECTION 18. SEVERABILITY. In the event any provision of this Agreement is illegal, invalid, or unenforceable under present or future laws, then, and in that event, it is the intention of the parties hereto that the remainder of this Agreement shall not be affected thereby, and it is also the intention of the Page 24 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. parties to this Agreement that in lieu of each clause or provision that is found to be illegal, invalid, or unenforceable a provision be added to this Agreement which is legal, valid and enforceable and is as similar in terms as possible to the provision found to be illegal, invalid or unenforceable. SECTION 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. EXECUTED as of the last date indicated below: CITY OF FORT WORTH: PIER—FTW, INC.: By: C �/ By: Reid Rector Marvin J. Gir Assistant City Manager Chairman Date: 'IdI141e)z_ Date: /0���0 Z- APPROVED AS TO FORM AND LEGALITY: By: ATTESTED BY Peter Vaky 67 Assistant City Attorney M&C: Page 25 Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. EXHIBITS "A"—Map Depicting the Pier I Site "B"—Capped Taxable Appraised Values for Each Year "C"—Map of the Central City "D"-Required Pier I Improvements Economic Development Program Agreement between City of Fort Worth and Pier—FTW,Inc. EXHIBIT "A" z� U 3 �2 CL Q Q ¢ � �PG AN AS D K T w Li � STHQ w C 2�� � v 3 CK z 7TH O N ry T XA v ti 0 13 T �? G o Q o j 0.6 P21 U W P ES DIp UP RR ® 0, WELPAp RIO GRAN ICKE Y DAGGETT JAR IS DA GET -i BRpADWAY Li Ln �- Q B DADWAY CL w �ICI11T13'Y 1c4P pl" Y .F. AD6 UAAVT� DUNAWAY ASSOCIATES, lac. ENGINEERS - PLANNERS - SURVEYORS . TORT WORTH, TEXAS r Exhibit "B" Maximum Taxable Appriased Value of Pier 1 Property City's Fiscal Maximum Year in Taxable which Taxes Assessed Are Received Value. 2006 805000,000 2007 102,500,000 2008 105,062,500 2009 107,689,063 2010 110,381,289 2011 113,140,821 2012 115,969,342 2013 118,868,575 20.14 121,840,290 2015 124,886,297 2016 128,008,454 2017 131,208,666 2018 .134,4.88,882 2019 137,851,1.04 2020 . . 141,297,382 2021 144,829,817 2022 148,450,562 2023 152,1.61,826 2024 155,965,872 2025 159,865,019 • \Qp/ ra J J Li i1 KF E I: .: OFAR , CITY SECRETARY' 1 CONTRACT NO. AMENDMENT NO. 1 TO CITY SECRETARY CONTRACT NO. 29095 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT WITH PIER 1 SERVICES COMPANY This AMENDMENT NO. 1 TO CITY SECRETARY CONTRACT NO. 29095 ("Amendment") is made and entered into by and between the CITY OF FORT WORTH (the "City"), a home rule municipal corporation organized under the laws of the State of Texas, and PIER 1 SERVICES COMPANY ("Pier 111), a Delaware business trust and the successor to Pier—FTW, Inc. RECITALS The City and Pier 1 hereby agree that the following statements are true and correct and constitute the basis upon which the City and Pier 1 have entered into this Amendment: A. The City and Pier 1 entered into that certain Economic Development Program Agreement ("Agreement") dated on or about October 14, 2002. The Agreement is a public document on file in the City Secretary's Office as City Secretary Contract No. 29095. B. The Agreement calls for the City to make certain economic development Program grants, as authorized by Chapter 380 of the Texas Local Government Code and City Council Resolution No. 2704, and other lawful concessions to Pier 1 in return for Pier 1's construction of Corporate Offices on the Pier 1 Property, which is located in the City, and specific commitments for construction spending and annual supply and service spending with Fort Worth Companies and Certified M/WBEs and for employment of Fort Worth Residents and Central City Residents, all of which the City Council previously determined would promote state and local economic development and stimulate business and commercial activity in the City. C. The Agreement calls for the City to, among other things, vacate certain public rights-of-way for incorporation as part of the Pier 1 Property, on which the Agreement requires Pier 1 to maintain its Corporate Offices as part of the Program. Previous ordinances adopted by the City Council vacating public rights-of-way for this purpose contained erroneous information. Those ordinances are Ordinance No. 15192 and Ordinance.No. 15295. The City and Pier 1 wish to correct those errors and to clarify the City's duties and obligations with respect to the vacation of public rights-of-way, which comprises.a portion of the Program, by means of this Amendment. Page 1 Amendment No. 1 to Economic Development Program Agreement between City of Fort Worth and Pier 1 Services Company NOW, THEREFORE, in consideration of the mutual benefits and promises contained in the Agreement and this Amendment and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: AGREEMENT 1. Section 7.1 (Penn Street Right-of-Way Vacation) is amended to state the following: 7.1. Right-of-Way Vacation. At Pier 1's request, the City adopted Ordinance No. 16306 on February 22, 2005, pursuant to which the City vacated approximately 2.4 acres of public right-of-way, specifically (i) approximately 0.454 acres of land comprising a portion of West Fifth Street and Forest Park Boulevard beginning at the southeast corner of Lot 1, Block 1, Calvary Addition, as recorded in Volume 388-168, Page 7, Plat Records, Tarrant County, Texas, and (ii) approximately 1.946 acres of land comprising a portion of Penn Street, beginning at the southwest corner of Lot 16, Carlock's Addition, as recorded in Volume 106, Page 55, Plat Records, Tarrant County, Texas (collectively, the "Vacated Right-of-Way"), which public right-of-way reverted to Pier 1 as provided by law and has been replatted or will be replatted as part of the Pier 1 Property. The fair market appraised value established for the Vacated Right-of-Way is $501,265.95. As part of the Program, the City previously was deemed to have granted Pier 1 the sum of $463,452.45, which was the fair market value established for approximately 2.13 acres of public right-of-way vacated pursuant to Ordinance No. 15192, which property reverted to Pier 1 as the adjacent property owner, and Pier 1 acknowledges receipt of such grant. The fair market appraised value for the additional 0.27 acres of public right-of-way vacated pursuant to Ordinance No. 16306 is $37,813.50. Pier 1 hereby agrees to pay the City the sum of$37,813.50 for such additional Vacated Right-of-Way. Within ten (10) business days following receipt of this sum, the City shall pay Pier 1, as an additional grant under the Program, the sum of$37,813.50. 2. Section 7.6 ("Additional Right-of-Way Vacations") is hereby deleted in its entirety. 3. All capitalized terms used but not defined in this Amendment shall have the meanings ascribed to them in the Agreement. Page 2 Amendment No. 1 to Economic Development Program Agreement between City of Fort Worth and Pier 1 Services Company 4. This Amendment contains the entire agreement between the parties with respect to the matters set forth herein. All provisions of the Agreement that are not specifically amended by this Amendment shall remain in full force and effect. CITY OF FORT WORTH: PIER 1 SERVICES COMPANY, a Delaware business trust By: Pier 1 Holdings, Inc., a Delaware corporation, its managing trustee By: By: Dale Fisseler V J. Rodney Lawrence Assistant City Manager Executive Vice President Date: v �✓ Date: PV rl I I IJx005 APPROVED AS TO FORM AND LEGALITY: By: Peter Vaky Assistant City Attorney M&C: _!-Z6-DY Attested By. Marty Hendrix City Secretary Page 3 Amendment No. 1 to Economic Development Program Agreement between City of Fort Worth and Pier 1 Services Company CITY SECRETARY CONTRACT NO, ,�7Q 0q 5 1&9 AMENDMENT NO. 2 TO CITY SECRETARY CONTRACT NO. 29095 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT WITH PIER 1 SERVICES COMPANY This AMENDMENT NO. 2 TO CITY SECRETARY CONTRACT NO. 29095 ("Amendment") is made and entered into by and between the CITY OF FORT WORTH (the "City"), a home rule municipality organized under the laws of the State of Texas, and PIER 1 SERVICES COMPANY ("Pier 1"), a Delaware statutory trust and the successor to Pier—FTW, Inc. RECITALS The City -and Pier 1 hereby agree that the following statements are true and correct and constitute the basis upon which the City and Pier 1 have entered into this Amendment: A. The City and Pier 1 previously entered into that certain Economic Development Program Agreement, a public document on file in the City Secretary's Office as City Secretary Contract No. 29095, as amended by that certain Amendment No. 1 to City Secretary Contract No. 29095, a public document on file in the City Secretary's Office as City Secretary Contract No. 31728 (collectively, the "Agreement"). B. The City and Pier 1 wish to amend the Agreement to change the definition of"Pier 1 Property" to reflect the intent of the parties. NOW, THEREFORE, in consideration of the mutual benefits and promises contained in the Agreement and this Amendment and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: AGREEMENT 1. Section 3 (Definitions) is hereby amended so that the definition of "Pier 1 Property"reads as follows: Pier 1 Property means (i) the Pier 1 Site and all improvements located thereon so long as the Pier 1 Site is owned or leased by Pier 1 or another entity that uses the Pier 1 Site for its Corporate Offices, and (ii) Page 1 Amendment No.2 to Economic Development Program Agreement between City of Fort Worth and Pier 1 Services Company taxable business personal property owned or leased by Pier 1 and located on the Pier 1 Site. 2. All capitalized terms used but not defined in this Amendment shall have the meanings ascribed to them in the Agreement. 3. This Amendment contains the entire agreement between the parties with respect to the matters set forth herein. All provisions of the Agreement that are not specifically amended by this Amendment shall remain in full force and effect. EXECUTED as of the last date indicated below: CITY OF FORT WORTH: PIER 1 SERVICES COMPANY: By: By: usa.A Alanis Name: Assistant City Manager Title: � e I/.'re P«s 'd� -o Date: Date: APPROVED AS TO FORM AND LEGALITY: By: attested by: - Peter Vaky 6/ EL Deputy City Attorney - Marty Hendrix, ity Secretary M&C: C-24924 5-24-11 �' Qoog0000aoa��� a a o p n Ocll Page 2 Amendment No.2 to Economic Development Program Agreement between City of Fort Worth and Pier 1 Services Company