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HomeMy WebLinkAboutContract 35626 CITY SECRETARY CONTRACT NO. STRATEGIC PARTNERSHIP AGREEMENT BETWEEN THE CITY OF FORT WORTH,TEXAS AND FORT WORTH MUNICIPAL UTILITY DISTRICT NO. 1 OF DENTON COUNTY STATE OF TEXAS § COUNTY OF DENTON § This Strategic Partnership Agreement (this "Agreement") is entered into by and between the City of Fort Worth, a home-rule municipal corporation situated in Tarrant, Denton and Wise Counties, Texas (the "City"), acting by and through its duly authorized Assistant City Manager, and City of Fort Worth Municipal Utility District No. 1 of Denton County (the "District"), acting by and through its duly authorized Board of Directors, under the authority of Section 43.0751 of the Texas Local Government Code ("Local Government Code"). RECITALS A. Local Government Code, Section 43.0751 (the "Act"), authorizes the City and a municipal utility district to negotiate and enter into a strategic partnership agreement by mutual consent. B. This Agreement provides for the limited purpose annexation by the City of certain tracts of land that have been or may in the future be designated for commercial use for the purpose of collecting Sales and Use Tax Revenues within such commercial tracts. C. Pursuant to this Agreement the City will pay to the District an amount equal to a portion of such Sales and Use Tax Revenues, which may be used to fund the installation and construction of Infrastructure and for other purposes in accordance with this Agreement. D. The District and the City acknowledge that this Agreement provides benefits to each party, including revenue, services and regulatory benefits. E. The District and the City acknowledge that this Agreement does not require the District to provide revenue to the City solely for the purpose of obtaining an agreement with the City to forgo annexation of the District. NOW THEREFORE, for and in consideration of the mutual agreements, covenants, and conditions contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are acknowledged, the District and the City agree as follows: ARTICLE I FINDINGS A. The District is a municipal utility district created under Chapter 54 of the Texas Water Code by Act of May 25, 2005, 791h Legislature, Regular Session, Chapter 1330, Special Strategic Partnership Agreement HH, VEIL, � District Local Laws Code, Chapter 8129, effective September 1, 2005. B. On December 13, 2005, the City Council of the City adopted Resolution No. 3299-12-2005 consenting to the creation of the District and approved that certain Agreement Concerning Creation and Operation of City of Fort Worth Municipal Utility District No. 1 of Denton County (City Secretary Contract No. 32896, M & C C-21197). C. The District encompasses approximately 431.303 acres, more or less, all of which are located within Denton County, Texas and within the extraterritorial jurisdiction of the City as shown on Exhibit A and described on Exhibit B attached to this Agreement (the "Development"). D. Aperion Communities, LLLP, Eladio Properties, LLLP, and Drooy Properties, LLLP, all Arizona limited liability limited partnerships (collectively, "Owner"), have represented to the City and the District that they own the Development. E. Owner desires to develop the Development as a master planned community including residential, commercial and recreational uses. To that end, Owner and the City entered into that certain Development Agreement (City Secretary Contract No. 32897, M & C C-21198), which includes land use and development standards designed to produce a quality mixed-use development and which provides, among other things, that commercial development may occur on Tracts 1 and 14, totaling approximately 59 acres, and mixed-use residential and commercial development may occur on Tracts 3 and 5, totaling approximately 48 acres, as shown on Exhibit C and described on Exhibit D attached to this Agreement. F. The City and the District desire to enter into this Agreement providing for limited purpose annexation of the portions of the Development within which commercial uses may occur for the purpose of collecting Sales and Use Tax Revenues within the annexed areas in accordance with Subsection (k) of the Act, and for the sharing of Sales and Use Tax Revenues between the City and the District. G. The District provided notice of two public hearings concerning the adoption of this Agreement and the proposed limited purpose annexation of the Original Commercial Property, as defined below, in accordance with the procedural requirements of the Act. H. The Board of Directors of the District conducted two public hearings regarding this Agreement and the proposed limited purpose annexation of the Original Commercial Property, at which members of the public who wished to present testimony or evidence regarding this Agreement and the proposed limited purpose annexation were given the opportunity to do so, in accordance with the procedural requirements of the Act on May 16, 2007, at 12:30 p.m. at 5420 LBJ Freeway, Suite #1300, Dallas, TX 75240 and on July 11, 2007, at 3:00 p.m. at 5420 LBJ Freeway, Suite#1300, Dallas, TX 75240. I. The Board of Directors of the District approved this Agreement on July 11, 2007, in open session at a meeting held in accordance with Chapter 551 of the Government Code. Strategic Partnership Agreement Page 2 J. The City provided notice of two public hearings concerning the adoption of this Agreement and the proposed limited purpose annexation of the Original Commercial Property, in accordance with the procedural requirements of the Act. K. The City Council of the City conducted two public hearings regarding this Agreement at which members of the public who wished to present testimony or evidence regarding this Agreement were given the opportunity to do so, in accordance with the procedural requirements of the Act on July 10, 2007, at 7:00 p.m., at the City Council Chambers and on July 17, 2007, at 10:00 a.m., at the City Council Chambers. The City Council of the City also conducted two public hearings regarding the proposed limited purpose annexation of the Original Commercial Property, at which members of the public who wished to present testimony or evidence regarding the proposed limited purpose annexation were given the opportunity to do so, in accordance with the procedural requirements of the Act on July 17, 2007, at 10:00 a.m., at the City Council Chambers and on July 24, 2007, at 10:00 a.m., at the City Council Chambers. L. The City Council of the City approved this Agreement on July 17, 2007, in open session at a meeting held in accordance with Chapter 551 of the Government Code (M & C C- 22258), which approval was after the Board of Directors of the District approved this Agreement. M. All procedural requirements imposed by law for the adoption of this Agreement have been met. N. Pursuant to that certain Agreement for Sale of Treated Water executed by the City and Aqua Utilities, Inc. ("Aqua Utilities"), the City will sell water to Aqua Utilities on a wholesale basis to enable Aqua Utilities to provide retail water service to customers within the District. O. Pursuant to that certain Wholesale Wastewater Service Agreement executed by the City and Aqua Utilities, the City will sell wastewater service to Aqua Utilities on a wholesale basis to enable Aqua Utilities to provide retail wastewater service to customers within the District. P. Pursuant to that certain Superseding Agreement Regarding Water and Wastewater Utility Service executed by the City, the District, Aqua Utilities and Owner(the "Superseding Utility Agreement"), the City will require Aqua Utilities to comply with regulatory and operational standards, the enforcement of which will benefit the District. Q. Pursuant to the Superseding Utility Agreement and the Consent Agreement, the District shall construct, operate, and maintain or cause to be constructed, operated and maintained water, wastewater, drainage and road systems within the District in accordance with City standards. R. In accordance with the requirements of Subsection (p)(2) of the Act, this Agreement provides benefits to the City and the District, including revenue, services, and regulatory benefits which are reasonable and equitable with regard to the benefits provided to the Strategic Partnership Agreement Page 3 other. ARTICLE II DEFINITIONS Terms used in this Agreement shall have the following meanings: "Act" means the Texas Local Government Code, Section 43.0751, and any amendments thereto. "Additional Commercial Property" means any property within the District Boundaries designated for commercial use, other than the Original Commercial Property. "Agreement" means this Strategic Partnership Agreement between the City and the District. "Board" means the Board of Directors of the District. "Bond" means (a) any instrument, including a bond, note, certificate of participation, or other instrument evidencing a proportionate interest in payments, due to be paid by the District, or (b) any other type of obligation that (1) is issued or incurred by the District under the District's borrowing power, without regard to whether it is subject to annual appropriation, and (2) is represented by an instrument issued in bearer or registered form or is not represented by an instrument but the transfer of which is registered on books maintained for that purpose by or on behalf of the District. The term shall include obligations issued to refund outstanding bonds but shall not include reimbursement agreements entered into between the District and a developer of the Development or bond anticipation notes. "City" means the City of Fort Worth, Texas, a home rule municipality located in Tarrant, Wise, and Denton Counties. "City Council" means the City Council of the City. "City Secretary" means the City Secretary of the City. "City Manager" means the City Manager of the City. "City Share" means the City's share of Sales and Use Tax Revenues as defined by Section 4.02 of this Agreement. "Comptroller" means the Comptroller of Public Accounts of the State of Texas. "Consent Agreement" means the Agreement Concerning Creation and Operation of City of Fort Worth Municipal Utility District No. 1 of Denton County by and among the City, the District, and Owner, which was approved by the City Council on December 13, 2005, (City Secretary Contract No.32896, M & C C-21197) and executed as of May 31, 2007. "Development" means that certain 431.303-acre tract located in Denton County, Texas as shover liU tJ� 'i Strategic Partnership Agreement on Exhibit A and described on Exhibit B. "Development Agreement" means the Development Agreement between the City and Owner, which was approved by the City Council on December 13, 2005 (City Secretary Contract No. 32897, M &C C-21198) and executed as of March 21, 2006. "District"means the City of Fort Worth Municipal Utility District No. 1 of Denton County, to be renamed in accordance with Article X of the Consent Agreement, created in the Development by the District Legislation. "District Boundaries" means boundaries of the District, consisting of the boundaries of the 431.303-acre tract as shown on Exhibit A and described on Exhibit B. "District Legislation" means Act of May 25, 2005, 791h Legislature, Regular Session, Chapter 1330, Special District Local Laws Code, Chapter 8129, effective September 1, 2005, creating the District. "District Share" means the District's share of Sales and Use Tax Revenues as defined by Section 4.02 of this Agreement. "ETJ" means the extraterritorial jurisdiction of a city as defined by the Local Government Code, as amended, with the City's ETJ being an unincorporated area presently extending five miles from the City's corporate limits, excluding other incorporated municipalities and their respective ETJs. "Effective Date" means the date on which the City adopted this Agreement. "Finance Director" means the Director of the City's Finance Department. "Government Code"means the Texas Government Code, as amended. "Infrastructure" means all water, wastewater, drainage, roadway and other infrastructure improvements installed or constructed to serve the Development, whether located within or outside the Development. "Limited Purpose Annexation Period" means the period commencing on the effective date of the limited purpose annexation of any Limited Purpose Property and ending upon the full purpose annexation or disannexation of such property. "Limited Purpose Property" means the property in the District that is annexed for limited purposes pursuant to this Agreement, including the Original Commercial Property and any Additional Commercial Property. "Local Government Code"means the Texas Local Government Code, as amended. "Notice" means notice as defined in Section 7.02 of this Agreement. Strategic Partnership Agreement Page 5 "Original Commercial Property" means those certain 12.245-acre (Tract 1), 30.414-acre (Tract 3), 18.269-acre (Tract 5) and 47.262-acre (Tract 14) tracts designated for commercial or mixed commercial and residential use in the Development Agreement, as shown on Exhibit C and described on Exhibit D. The parties recognize that the legal descriptions for such tracts are approximate and may require minor adjustments in order to conform with subdivision plats submitted for the Development. "Owner" means, individually and collectively, Aperion Communities, LLLP, Eladio Properties, LLLP and Drooy Properties, LLLP, Arizona limited liability limited partnerships, their successors and their assigns as permitted by Section 7.11 of this Agreement. "Party" means, individually, the City or the District, their successors and their assigns as permitted by Section 7.11 of this Agreement. "Sales and Use Tax Revenues" means those revenues received by the City from the sales and use tax authorized to be imposed by the City on sales consummated at locations within the Limited Purpose Property pursuant to the Act and Chapter 321 of the Tax Code and whose use is not otherwise controlled or regulated, in whole or in part, by another governmental entity, authority, or applicable law, ordinance, rule, or regulation. Sales and Use Tax Revenues specifically exclude those revenues received by the City from the Crime Control District Sales Tax imposed by the City pursuant to Tax Code Section 323.105 and Local Government Code Section 363.055. "Sales and Use Tax Account" means the account established pursuant to Section 4.03 in which the District deposits the District Share. "Tax Code"means the Texas Tax Code, as amended. ARTICLE III ADOPTION OF AGREEMENT AND LIMITED-PURPOSE ANNEXATION OF ORIGINAL COMMERCIAL PROPERTY AND ADDITIONAL COMMERCIAL PROPERTY 3.01 Public Hearings. The District and the City acknowledge and agree that prior to the execution of this Agreement, the governing bodies of the District and the City have conducted public hearings for the purpose of considering the adoption of this Agreement and that such hearings were noticed and conducted in accordance with the terms of the Act, this Agreement, Chapter 551 of the Government Code, and the City Charter of the City. 3.02 Effective Date. Pursuant to Subsection (c) of the Act, this Agreement took effect on July 17, 2007, the date of adoption of this Agreement by the City. 3.03 Filing in Property Records. The City shall file this Agreement in the Real Property Records of Denton County, Texas. Strategic Partnership Agreement Page 6 3.04 Limited Purpose Annexation of Original Commercial Property. The District and the City agree that the City may annex all or any portion of the Original Commercial Property for the limited purpose of collecting Sales and Use Tax Revenues within the Original Commercial Property pursuant to Subsection (k) of the Act. The District acknowledges that the City Council may adopt a limited purpose annexation ordinance at a meeting conducted in accordance with Chapter 551 of the Government Code and further acknowledges that no additional notices, hearings, or other procedures are required by law in order to approve such limited purpose annexation. 3.05 Limited Purpose Annexation of Additional Commercial Property. In the event the location of proposed commercial development within the District is changed or additional property designated for commercial development is added, the City Council may annex the Additional Commercial Property for the limited purpose of collecting Sales and Use Tax Revenues within the Additional Commercial Property pursuant to Subsection (k) of the Act. The District acknowledges that the City Council may adopt a limited purpose annexation ordinance at a meeting conducted in accordance with Chapter 551 of the Government Code and further acknowledges that no additional notices, hearings, or other procedures are required by law to approve such limited purpose annexation. 3.06 Connections to the City Limits. In the event the City annexes Additional Commercial Property, the District consents to the annexation of additional land connecting the Additional Commercial Property to the City limits. The City may annex property pursuant to this Section 3.06 for limited purposes as permitted by the Act. 3.07 Consent to Limited Purpose Annexation. THE DISTRICT ON BEHALF OF ITSELF AND ALL PRESENT AND FUTURE OWNERS OF LAND WITHIN THE DISTRICT BOUNDARIES HEREBY REQUESTS THAT THE CITY ANNEX THE ORIGINAL COMMERCIAL PROPERTY AND THE ADDITIONAL COMMERCIAL PROPERTY FOR LIMITED PURPOSES AS PROVIDED IN THIS AGREEMENT. THE DISTRICT CONSENTS TO SUCH ANNEXATION AND TO THE COLLECTION OF SALES AND USE TAX REVENUES BY THE CITY WITHIN SUCH LIMITED PURPOSE PROPERTY. SUCH CONSENT SHALL BIND THE DISTRICT AND EACH OWNER AND FUTURE OWNER OF LAND WITHIN THE DISTRICT BOUNDARIES. ARTICLE IV TAXATION AND PROVISION OF SERVICES 4.01 Collection of Sales and Use Tax Revenues. The City may impose a sales and use tax within the Limited Purpose Property pursuant to Subsection (k) of the Act. The sales and use tax shall be imposed on all eligible commercial activities at the rate of one percent or other rate allowed under future amendments to Chapter 321 of the Tax Code and imposed by the City. Collection of the Sales and Use Tax Revenues shall take effect on the date described in Section 321.102 of the Tax Code. 4.02 Payment of Sales and Use Tax. In return for the benefits received by the City pursuant to this Agreement, the City shall pay to the District an amount equal to 50% of the Sales and Use Tax Revenues during the first nineteen (19) years of the Limited Purpose Strategic Partnership Agreement Page 7 Annexation Period, and paid to the City as reflected in sales tax reports provided by the Comptroller to the City. Further, during the nineteenth (19th) year of the Limited Purpose Annexation Period, the City shall retain $300,000 from the 50% payment otherwise due to the District. The City will use such funds in accordance with Section 4.04 of this Agreement. Such $300,000 payment shall be retained by the City in addition to the City's 50% share of the Sales and Use Tax Revenues. Thereafter, the City shall pay to the District an amount equal to 25% of the Sales and Use Tax Revenues collected commencing on the first day of the twentieth (201h) year of the Limited Purpose Annexation Period, and paid to the City as reflected in sales tax reports provided by the Comptroller to the City. All amounts payable to the District pursuant to this Section 4.02 are hereafter referred to as the "District Share". The City shall pay the District Share within thirty (30) days after the City receives the sales tax report reflecting such revenues from the Comptroller. Any payment of the District Share not made within such 30-day period shall bear interest calculated in accordance with Section 2251.025 of the Government Code. The City shall retain all Sales and Use Tax Revenues that do not constitute the District Share (the "City Share"). 4.03 District Use of Sales and Use Tax Revenues. The District shall deposit the District Share in a segregated interest-bearing account (the "Sales and Use Tax Account"). The District shall use funds in the Sales and Use Tax Account in the following order of priority: (a) Reimbursement for the construction or installation of Infrastructure. (b) Funding the construction or installation of Infrastructure. (c) Funding for any purpose for which the District may legally expend funds (including such items as District bond debt service, operational costs, and any contract tax obligations); provided, however, the District shall not fund any such items if the District's Ad Valorem Tax rate is, or with such funding of any such items would be, less than 90% of the City's Ad Valorem Tax rate for the previous year. (d) Purchasing and retiring any Bond after the tenth anniversary of its issuance. 4.04 City Use of Sales and Use Tax Revenues. The City may use the City Share for any lawful purpose; provided, however, it is the City's intent to use the additional 25% share of the Sales and Use Tax Revenues beginning on the first day of the twentieth (20`h) year of the Limited Purpose Annexation Period to defray the costs of providing municipal services to the residents of the Development upon full purpose annexation. Further, pursuant to Section 4.02 of this Agreement, the District has agreed to allow the City to retain $300,000 from the District's Share during the nineteenth (19th) year of the Limited Annexation Period in order to defray the cost of maintaining roads within the Development upon full purpose annexation. Strategic Partnership Agreement Page 8 4.05 Delivery of Sales Tax Reports to District. The City shall include with each payment of the District Share a condensed version of each sales tax report provided by the Comptroller relating to Sales and Use Tax Revenues within thirty (30) days of the City's receipt of such sales tax report. 4.06 Notification of Comptroller. The City shall send notice of this Agreement, together with other required documentation, to the Comptroller in the manner provided by Tax Code, Section 321.102, after the City Council annexes any portion of the Limited Purpose Property for limited purposes. 4.07 Termination of Sales and Use Tax Sharing. Upon termination of this Agreement, the City shall have no further financial obligation to the District pursuant to this Agreement, and all Sales and Use Tax Revenues shall be retained by the City and may be used for any lawful purpose. 4.08 City's Maintenance of Records and District's Audit Rights. The District may audit the Sales and Use Tax Revenues collected by the City to determine whether the District Share has been paid to the District in accordance with this Agreement. The City shall provide reasonable accommodations for the District to perform the audit. Any audit shall be made at the District's sole expense and may be performed at any time during the City's regular business hours on thirty (30) days Notice to the City. For purposes of any such audits, the City shall maintain and make available to the District's representatives all books, records, documents and other evidence of accounting procedures or practices in form sufficiently maintained to reflect the amount of Sales and Use Tax Revenues received by the City from the Limited Purpose Property. Notwithstanding the foregoing, however, if any audit conducted by the District reveals that the District Share has been underpaid by more than two percent (2%), the City shall reimburse the District for the reasonable cost of the audit. 4.09 District's Maintenance of Records and City's Audit Rights. The City may audit the Sales and Use Tax Account and the District's expenditures of the District Share to determine whether the expenditures have been made by the District in accordance with Section 4.03 of this Agreement. The District shall provide reasonable accommodations for the City to perform the audit. Any audit shall be made at the City's sole expense and may be performed at any time during the District's regular business hours on thirty (30) days Notice to the District. For purposes of any such audits, the District shall maintain and make available to the City's representatives all books, records, documents and other evidence of accounting procedures or practices in form sufficiently maintained to reflect deposits to the Sales and Use Tax Account and expenditures of the District Share. Notwithstanding the foregoing, however, if any audit conducted by the City reveals that the District has not used the District Share in accordance with Section 4.03, the District shall reimburse the City for the reasonable cost of the audit. Furthermore, if such breach is not cured as provided by Article VI, the City may withhold payments of future Sales and Use Tax Revenues in the amount of the improper expenditures. F Strategic Partnership Agreement TL ARTICLE V TERM This Agreement commences on the Effective Date and continues until the City annexes the Limited Purpose Property (subject to the provisions of the Development Agreement) for full purposes or disannexes the Limited Purpose Property. This Agreement will automatically terminate with regard to any portion of the Limited Purpose Property upon disannexation or full purpose annexation of such property. ARTICLE VI BREACH,NOTICE AND REMEDIES 6.01 Notification of Breach. If either Party commits a breach of this Agreement, the non-breaching Party shall give Notice to the breaching Party that describes the breach in reasonable detail. 6.02 Cure of Breach. The breaching Party shall commence curing such breach within fourteen (14) calendar days after receipt of such Notice and shall complete the cure within fourteen (14) calendar days from the date of commencement of the cure; however, if the breach is not reasonably susceptible to cure by the breaching Party within such fourteen (14) day period, the non-breaching Party shall not bring any action so long as the breaching Party has commenced to cure the default within such fourteen (14) day period and diligently completes the work within a reasonable time without unreasonable cessation of the work. 6.03 Remedies for Breach. If the breaching Party does not substantially cure such breach within the stated period of time, the non-breaching Party may, in its sole discretion, and without prejudice to any other right under this Agreement, law, or equity, seek any relief available at law or in equity, including, but not limited to, an action under the Uniform Declaratory Judgment Act, specific performance, mandamus and injunctive relief, provided, however, that the non-breaching Party shall not be entitled to terminate this Agreement. The Parties specifically waive any right that they have or in the future may have to terminate this Agreement. Damages, if any, to which any non-breaching Party may be entitled shall be limited to actual damages and shall not include special or consequential damages. In addition, the prevailing party in any such action shall be entitled to reasonable attorney's fees and costs of litigation as determined in a final, non-appealable order in a court of competent jurisdiction. Strategic Partnership Agreement Page 10 ARTICLE VII ADDITIONAL PROVISIONS 7.01 Voting. It is anticipated that the Original Commercial Property and the Additional Commercial Property will predominantly consist of commercial property, but may also include residential dwellings as part of a mixed-use development. The Parties recognize that Chapter 43, Subchapter F, of the Local Government Code does not apply to a limited purpose annexation under a strategic partnership agreement pursuant to Subsection (k) of the Act. Consequently, the Parties acknowledge that Section 43.130(a) of the Local Government Code providing that qualified voters of an area annexed for limited purposes may vote in certain municipal elections does not apply to voters in any area annexed for limited purposes pursuant to this Agreement. 7.02 Notice. Any notices, certifications, approvals, or other communications (a "Notice") required to be given by one Party to another under this Agreement shall be given in writing addressed to the Party to be notified at the address set forth below and shall be deemed given: (i) when the Notice is delivered in person to the person to whose attention the Notice is addressed; (ii) when received if the Notice is deposited in the United States Mail, certified or registered mail, return receipt requested, postage prepaid; (iii) when the Notice is delivered by Federal Express, UPS, or another nationally recognized courier service with evidence of delivery signed by any person at the delivery address; or (iv) five business days after the Notice is sent by FAX (with electronic confirmation by the sending FAX machine) with a confirming copy sent by United States mail within 48 hours after the FAX is sent. If any date or period provided in this Agreement ends on a Saturday, Sunday, or legal holiday, the applicable period for calculating the notice shall be extended to the first business day following the Saturday, Sunday, or legal holiday. For the purpose of giving any Notice, the addresses of the Parties are set forth below. The Parties may change the information set forth below by sending Notice of such changes to the other Party as provided in this Section 7.02. To the City: City of Fort Worth, Texas 1000 Throckmorton Street Fort Worth, Texas 76102 Attn: City Secretary FAX: 817-392-6196 Strategic Partnership Agreement Page 1 1 City of Fort Worth, Texas 1000 Throckmorton Street Attn: City Manager Fort Worth, Texas 76102 Attn: City Manager FAX: 817-392-6134 City of Fort Worth, Texas 1000 Throckmorton Street Attn: Finance Director Fort Worth, Texas 76102 Attn: Finance Director FAX: 817-392-8966 To the District: Fort Worth Municipal Utility District No. 1 of Denton County c/o: Coats Rose 3 Greenway Plaza, Suite 2000 Houston, TX 77046 Attn: Timothy G. Green FAX: 713-890-3924 7.03 Pam. The City shall forward payments of the District Share to the District at the address set out in Section 7.02 by regular U.S. Mail or other method of delivery mutually acceptable to the Parties. 7.04 No Waiver. Any failure by a Party to insist upon strict performance by the other Party of any provision of this Agreement shall not be deemed a waiver thereof, and the Party shall have the right at any time thereafter to insist upon strict performance of any and all of the provisions of this Agreement. No provision of this Agreement may be waived except by writing signed by the Party waiving such provision. Any waiver shall be limited to the specific purpose for which it is given. No waiver by any Party hereto of any term or condition of this Agreement shall be deemed or construed to be a waiver of any other term or condition or subsequent waiver of the same term or condition. 7.05 Governing Law and Venue. THIS AGREEMENT MUST BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AS THEY APPLY TO CONTRACTS PERFORMED WITHIN THE STATE OF TEXAS AND WITHOUT REGARD TO ANY CHOICE OF LAW RULES OR PRINCIPLES TO THE CONTRARY. THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT IS PERFORMABLE IN TARRANT COUNTY, TEXAS AND HEREBY SUBMIT TO THE JURISDICTION OF THE COURTS OF TARRANT COUNTY, TEXAS AND HEREBY AGREE THAT ANY SUCH COURT SHALL BE A PROPER FORUM FOR THE DETERMINATION OF ANY DISPUTE ARISING HEREUNDER. Strategic Partnership Agreement Page 12 7.06 Authority to Execute. The City certifies, represents, and warrants that the execution of this Agreement is duly authorized and adopted in conformity with the City Charter and City Ordinances. The District certifies, represents, and warrants that the execution of this Agreement is duly authorized and adopted by the Board. 7.07 Severability. The provisions of this Agreement are severable and, in the event any word, phrase, clause, sentence, paragraph, section, or other provision of this Agreement, or the application thereof to any person or circumstance, shall ever be held or determined to be invalid, illegal, or unenforceable for any. reason, and the extent of such invalidity or unenforceability does not cause substantial deviation from the underlying intent of the Parties as expressed in this Agreement, then such provision shall be deemed severed from this Agreement with respect to such person, entity or circumstance, without invalidating the remainder of this Agreement or the application of such provision to other persons, entities or circumstances, and a new provision shall be deemed substituted in lieu of the provision so severed which new provision shall, to the extent possible, accomplish the intent of the Parties as evidenced by the provision so severed. 7.08 Changes in State or Federal Laws. If any state or federal law changes so as to make it impossible for the City or the District to perform its obligations under this Agreement, the parties will cooperate to amend this Agreement in such a manner that is most consistent with the original intent of this Agreement as legally possible. 7.09 Additional Documents and Acts. The Parties agree that at any time after execution of this Agreement, they will, upon request of the other Party, execute and/or exchange any other documents necessary to effectuate the terms of this Agreement and perform any further acts or things as the other Party may reasonably request to effectuate the terms of this Agreement. 7.10 Captions. Captions and headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement. 7.11 Assignability, Successors, and Assigns. This Agreement shall not be assignable without the other Party's written consent. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective representatives, successors, and assigns. 7.12 Amendment. This Agreement may be amended only with the written consent of the Parties and with approval of the governing bodies of the City and the District. 7.13 Interpretation. The Parties acknowledge that each party and, if it so chooses, its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments or exhibits hereto. As used in this Agreement, the term "including" means "including without limitation" and the term "days" means calendar days, not business days. Wherever required by the context, the singular shall include the plural, and the plural shall include the singular. Each defined term herein may be used in its singular or plural form whether or not so defined. Strategic Partnership Agreement Page 13 7.14 No Third Party Beneficiaries. This Agreement is solely for the benefit of the City and the District, and neither the City nor the District intends by any provision of this Agreement to create any rights in any third-party beneficiaries or to confer any benefit or enforceable rights under this Agreement or otherwise upon anyone other than the City and the District. 7.15 Governmental Powers. It is understood that by execution of this Agreement, neither the City nor the District waives or surrenders any of their respective governmental powers, immunities or rights, except as specifically waived pursuant to this Section 7.15. The City and the District mutually waive their governmental immunity from suit and liability only as to any action brought by a Party to pursue the remedies available under this Agreement and only to the extent necessary to pursue such remedies. Nothing in this Section 7.15 shall waive any claims, defenses or immunities that the City or the District has with respect to suits against the City or the District by persons or entities not a party to this Agreement. 7.16 Incorporation of Exhibits by Reference. All exhibits attached to this Agreement are incorporated into this Agreement by reference for the purposes set forth herein, as follows: Exhibit A Map of the Development Exhibit B Legal Description of the Development Exhibit C Map of Original Commercial Property Exhibit D Legal Description of Original Commercial Property 7.17 Conspicuous Provisions. The City and the District acknowledge that the provisions of this Agreement set out in bold, CAPITALS (or any combination thereof) satisfy the requirements for the express negligence rule and/or are conspicuous. 7.18 Counterpart Originals. This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original. ATTEST: C F T WORT r` B Marty endrix, City Secretary Marc Ott, Ass tant City Manager Date: AP OVED AS TO FORM AND ALITY: GvL Contract- Authori zatio-0 Assistant Cit Attorney TLC Date �'' i ^'��Strategic Partnership Agreement �;���� ����� li�j,!� Fa ge 14 CITY OF FORT WORTH MUNICIPAL UTILITY DISTRICT NO. 1 OF DENTON COUNTY By: Printed N President, Board of Directors Date: 7 / 62 / STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me, on the 2 day of 296fy—, by Marc Ott, Assistant City Manager of the City of Fort Worth, on b alf of said city. Notary Public, State of Texas HE771E LANE Printed Name: MY COMMISSION EXPIRES My Commission Expires: 7—d't� July 26,2011 [SEAL] STATE OF TEXAS § COUNTY OF D RLLAS § This instrument was acknowledged before me, on the Wh day of UUI)/ , 200�,7 by 'f ry\z slowbe , President, Board of Directors of City of Fort Worth Municipal Utility District No. 1 of Denton County, on behalf of said district. Notary Public, State of Texas Printed Name: LESLIE A.CODE My Commission Expires: Bvotary PuW State d Texas (Fes y C wissW Expires 1Ql09tP010 r -c- Strategic Partnership Agreement Exhibit A Map of the Development Exhibit A to Strategic Partnership Agreement Page 1 u \ \ \ (@ B § § N�! •§ |//§/ § a G , ( | � . � �m 89 gym. . » k ) \ � ) � wE ~ � '14 )/( g \ \ k / \ \/ i © w «.a -- �� I � . � I Exhibit B Legal Description of the Development BEING a 431.303 acre tract of land comprised of two separate tracts of land in the G. Cardinas Survey, Abstract No. 214, situated in Denton County, Texas and being a combination of that tract conveyed to Alliance 161 Investments by deed recorded in Volume 2778, Page 958 of the Real Property Records of Denton County, Texas (RPRDCT), a portion of those tracts conveyed to Aperion Communities, L.L.L.P. by deed recorded under County Clerk's File No. 2004-11913 RPRDCT (Aperion Tract One-A and Aperion Tract One-B) and a portion of that tract conveyed to Nancy Talley Reynolds, et al, by deed recorded in Volume 2301, Page 223 RPRDCT and being more particularly described as follows: TRACT ONE BEGINNING at a capped 5/8" iron pin found, said iron pin also being on the north right-of-way line of State Highway No. 114, said iron pin also being on the west line of said Alliance 161 Investments tract, said iron pin also being on the east line of a tract conveyed to Betty Marie McIntyre, et al, by deed recorded in Volume 2906, Page 363 RPRDCT; THENCE N 00032'36" W along the west line of said Alliance 161 Investments tract and the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, a distance of 3701.24 feet to a 3/8" iron pin found; THENCE N 89039'59" E along the north line of said Alliance 161 Investments tract and the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, a distance of 1826.89 feet to a 1/2" iron pin found, said iron pin also being on the west line of said Aperion Tract One-A; THENCE N 00022'44" W along the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, and the west line of said Aperion Tract One-A, a distance of 1294.80 feet to a capped 1/2" iron pin set; THENCE S 86°14'27" E, a distance of 222.13 feet to a capped 1/2" iron pin set; THENCE S 52°34'22" E, a distance of 867.86 feet to a capped 1/2" iron pin set; THENCE S 44008'03" E, a distance of 999.82 feet to a capped 1/2" iron pin set; THENCE S 65°58'36" E, a distance of 1029.92 feet to a capped 1/2" iron pin set; THENCE N 90000'00" E, a distance of 773.31 feet to a capped 1/2" iron pin set; said capped 1/2" iron pin set also being on the east line of said Aperion Tract One-A and the west line of that tract conveyed to Ferbro Investments, LLC by deed recorded under County Clerk's File No. 97- 0003605 RPRDCT; THENCE S 00007'20" E along the east line of said Aperion Tract One-A and the west line of Exhibit B to Strategic Partnership Agreement Page ] said Ferbro Investments tract, a distance of 857.55 feet to a 1/2" iron pin found, said iron pin being on the northwesterly line of a tract conveyed to The Atchison, Topeka and Santa Fe Railway Company by deed recorded under County Clerk's File No. 93-R0020408 RPRDCT; THENCE S 44023'02" W along the east line of said Aperion Tract One-A and the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract a distance of 2256.14 feet to a 5/8" iron pin found; THENCE N 47°15'51" W along the east line of said Aperion Tract One-A and the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 24.73 feet to a 5/8" iron pin found; THENCE S 44°27'42" W along the east line of said Aperion Tract One-A and the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 1121.43 feet to a brass monument in concrete found, said brass monument also being on the said north right-of- way line of State Highway No.114; THENCE S 89047'36" W along the south line of said Aperion Tract One-A and the north right- of-way line of State Highway No.114, a distance of 286.33 feet to a brass monument in concrete found; THENCE S 84030'09" W along the south line of said Aperion Tract One-A and the north right- of-way line of State Highway No.114, a distance of 703.04 feet to a brass monument in concrete found; THENCE S 89048'48" W along the south line of said Aperion Tract One-A and the north right- of-way line of State Highway No.114, a distance of 1249.97 feet to a capped 1/2" iron pin set; THENCE N 00°11'12" W along the south line of said Aperion Tract One-A and the north right- of-way line of State Highway No.114, a distance of 15.00 feet to a capped 1/2" iron pin set; THENCE S 89048'48" W along the south line of said Aperion Tract One-A and the north right- of-way line of State Highway No.114, a distance of 250.00 feet to a capped 1/2" iron pin set; THENCE S 00°11'12" E along the south line of said Aperion Tract One-A and the north right- of-way line of State Highway No.114, a distance of 15.00 feet to a capped 1/2" iron pin set; THENCE S 89048'48" W along the south line of said Aperion Tract One-A and the north right- of-way line of State Highway No.114, a distance of 238.28 feet to the Point of Beginning and containing 16,728,840 square feet or 384.041 acres of land, more or less. TRACT 2 BEGINNING at a brass monument in concrete found, said brass monument also being on the south line of said Aperion Tract One-B, said brass monument also being on the north right-of- way line of State Highway No. 114, said brass monument also being on the west line of a tract Exhibit B to Strategic Partnership Agreement Page 2 conveyed to Ferbro Investments by deed recorded under County Clerk's File No. 97-0003605 RPRDCT THENCE S 89046'48" W along the south line of said Aperion Tract One-B and the north right- of-way line of State Highway No.114, a distance of 1072.97 feet to a brass monument in concrete found; THENCE N 86029'44" W along the south line of said Aperion Tract One-B and the north right- of-way line of State Highway No.114, a distance of 900.20 feet to a brass monument in concrete found, said brass monument also being on the southeasterly line of a tract conveyed to The Atchison, Topeka and Santa Fe Railway Company by deed recorded under County Clerk's File No. 93-R0020408 RPRDCT; THENCE N 44026'31" E along the west line of said Aperion Tract One-B and the southeasterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 2809.53 feet to a 5/8" iron pin found, said iron pin also being on the west line of said Ferbro Investments tract; THENCE S 00007'09" E along the east line of said Aperion Tract One-B and the west line of said Ferbro Investments tract, a distance of 2056.80 feet to the Point of Beginning and containing 2,058,725 square feet or 47.262 acres of land, more or less. Exhibit B to Strategic Partnership Agreement Page 3 Exhibit C Map of Original Commercial Property Exhibit C to Strategic Partnership Agreement Page 1 d ' oa abz�a 3 � Z10 RIM Sm�< p � Z° m Q� � V O 0 gg L OZAOSOOs .08'9909 3.60.0.005 VRO L1 7 [�j xQQ y v 6 „ ,W NC u N uSi •e 2 a 'p orb �� C . pNp 9ss0 N �00 "� OGGGiii�O yap 3 uM: O Zn N.W°2.00N .a .OB'r62t i 111000 —lb a •2 a IC N W 6. a .o¢'tOLE M.9E.2E.00N tl'tl C)0'AY 106) YY N°113 Ap/MfM WIr) S AEM°l l tll!!T '314IM1]11)!MN IfIA y� Exhibit D Legal Description of Original Commercial Property Tract 1 BEING a 12.245 acre tract of land in the G. Cardinas Survey, Abstract No. 214, situated in Denton County, Texas and being a portion of that tract conveyed to Alliance 161 Investments by deed recorded in Volume 2778, Page 958 of the Real Property Records of Denton County, Texas (RPRDCT), and being more particularly described as follows: BEGINNING at a capped 5/8" iron pin found, said iron pin also being on the proposed north right-of-way line of State Highway No. 114, said iron pin also being on the west line of said Alliance 161 Investments tract, said iron pin also being on the east line of a tract conveyed to Betty Marie McIntyre, et al, by deed recorded in Volume 2906, Page 363 RPRDCT; THENCE N 00032'36" W along the said west line of said Alliance 161 Investments tract and the said east line of said McIntyre tract, a distance of 534.24 feet to a point; THENCE N 8902724" E, a distance of 337.96 feet to a point; THENCE N 00032'36" W, a distance of 409.30 feet to a point; THENCE N 88°27'04" E, a distance of 110.71 feet to a point, said point also being the Point of Curvature of a circular curve to the right having a radius of 400.00 feet, a central angle of 26050'42" and being subtended by a chord which bears S 78°07'35" E, 185.70 feet; THENCE along said curve to the right, a distance of 187.41 feet to a point; THENCE S 64°42'14" E tangent to said curve, a distance of 147.91 feet to a point, said point also being the Point of Curvature of a non-tangent circular curve to the left having a radius of 1255.00 feet, a central angle of 15055'19" and being subtended by a chord which bears S 07°25'03" W, 347.63 feet; THENCE along said curve to the left, a distance of 348.75 feet to a point; THENCE S 00032'36" E tangent to said curve, a distance of 501.25 feet to a point, said point also being on the said proposed north right-of-way line of State Highway No.114; THENCE S 89048'48" W along the said proposed north right-of-way line of State Highway No.114, a distance of 226.72 feet to a capped 1/2" iron pin set; THENCE N 00°11'12" W along the said proposed north right-of-way line of State Highway No.114, a distance of 15.00 feet to a capped 1/2" iron pin set; THENCE S 89048'48" W along the said proposed north right-of-way line of State Highway No.114 , a distance of 25 0.00 feet to a capped 1/2" iron pin set; Exhibit D to Strategic Partnership Agreement Page 1 THENCE S 00°11'12" E along the said proposed north right-of-way line of State Highway No.114, a distance of 15.00 feet to a capped 1/2" iron pin set; THENCE S 89048'48" W along the said proposed north right-of-way line of State Highway No.114, a distance of 238.28 feet to the Point of Beginning and containing 533,394 square feet or 12.245 acres of land, more or less. Tract 3 BEING a 30.414 acre tract of land in the G. Cardinas Survey, Abstract No. 214, situated in Denton County, Texas and being a portion of that tract conveyed to Alliance 161 Investments by deed recorded in Volume 2778, Page 958 of the Real Property Records of Denton County, Texas (RPRDCT) and a portion of those tracts conveyed to Aperion Communities, L.L.L.P. by deed recorded under County Clerk's File No. 2004-11913 RPRDCT (Aperion Tract One-A and Aperion Tract One-B) and being more particularly described as follows: COMMENCING at a capped 5/8" iron pin found, said iron pin also being on the proposed north right-of-way line of State Highway No. 114, said iron pin also being on the west line of said Alliance 161 Investments tract, said iron pin also being on the east line of a tract conveyed to Betty Marie McIntyre, et al, by deed recorded in Volume 2906, Page 363 RPRDCT; THENCE N 89048'48" E along the said proposed north right-of-way line of State Highway No.114, a distance of 238.28 feet to a capped 1/2" iron pin set; THENCE N 00°11'12" W along the said proposed north right-of-way line of State Highway No.114, a distance of 15.00 feet to a capped 1/2" iron pin set; THENCE N 89048'48" E along the said proposed north right-of-way line of State Highway No.114 , a distance of 250.00 feet to a capped 1/2" iron pin set; THENCE S 00°11'12" E along the said proposed north right-of-way line of State Highway No.114, a distance of 15.00 feet to a capped 1/2" iron pin set; THENCE N 89048'48" E along the said proposed north right-of-way line of State Highway No.114, a distance of 226.72 feet to the Point of Beginning of the herein described tract; THENCE N 00032'36" W departing the said proposed north right-of-way line of State Highway No.114, a distance of 501.25 feet to a point, said point also being the Point of Curvature of a circular curve to the right having a radius of 1255.00 feet, a central angle of 44"41'36" and being subtended by a chord which bears N 21°48'12" E , 954.33 feet; THENCE along said curve to the right, a distance of 978.96 feet to a point; THENCE N 44009'00" E tangent to said curve, a distance of 440.50 feet to a point; Exhibit D to Strategic Partnership Agreement Page 2 THENCE S 4505l'00" E, a distance of 173.53 feet to a point, said point also being the Point of Curvature of a circular curve to the left having a radius of 122.50 feet, a central angle of 44035'59" and being subtended by a chord which bears S 68°08'59" E , 92.97feet; THENCE along said curve to the left, a distance of 95.36 feet to a point; THENCE N 89033'01" E tangent to said curve, a distance of 276.39 feet to a point; THENCE S 0002659" E, a distance of 768.50 feet to a point; THENCE S 89033'01" W, a distance of 208.99 feet to a point; THENCE N 42037'00" W, a distance of 35.75 feet to a point; THENCE S 89033'01" W, a distance of 92.01 feet to a point; THENCE S 00°26'59" E, a distance of 476.50 feet to a point; THENCE S 89033'01" W, a distance of 140.19 feet to a point; THENCE S 00024'36" E, a distance of 50.00 feet to a point; THENCE S 89033'01" W, a distance of 60.58 feet to a point; THENCE S 00032'36" E, a distance of 275.42 feet to a point, said point also being on-the proposed north right-of-way line of State Highway No. 114; THENCE S 89048'48" W along the said proposed north right-of-way line of State Highway No.114, a distance of 630.48 feet to the Point of Beginning and containing 1,324,829 square feet or 30.414 acres of land, more or less. Tract 5 BEING a 18.269 acre tract of land in the G. Cardinas Survey, Abstract No. 214, situated in Denton County, Texas and being a portion of that tract conveyed to Alliance 161 Investments by deed recorded in Volume 2778, Page 958 of the Real Property Records of Denton County, Texas (RPRDCT), and being more particularly described as follows: COMMENCING at a capped 5/8" iron pin found, said iron pin also being on the proposed north right-of-way line of State Highway No. 114, said iron pin also being on the west line of said Alliance 161 Investments tract, said iron pin also being on the east line of a tract conveyed to Betty Marie McIntyre, et al, by deed recorded in Volume 2906, Page 363 RPRDCT; THENCE N 89048'48" E along the said proposed north right-of-way line of State Highway No.114, a distance of 238.28 feet to a capped 1/2" iron pin set; THENCE N 00011,12" W along the said Exhibit D to Strategic Partnership Agreement Page 3 proposed north right-of-way line of State Highway No.114, a distance of 15.00 feet to a capped 1/2" iron pin set; THENCE N 89°48'48" E along the said proposed north right-of-way line of State Highway No.114 , a distance of 250.00 feet to a capped 1/2" iron pin set; THENCE S 00°11'12" E along the said proposed north right-of-way line of State Highway No.114, a distance of 15.00 feet to a capped 1/2" iron pin set; THENCE N 89°48'48" E along the said proposed north right-of-way line of State Highway No.114, a distance of 226.72 feet to a point; THENCE N 00032'36" W departing the said proposed north right-of-way line of State Highway No.114, a distance of 501.25 feet to a point, said point also being the Point of Curvature of a circular curve to the right having a radius of 1255.00 feet, a central angle of 32043'52" and being subtended by a chord which bears N 15°49'20" E , 707.23 feet; THENCE along said curve to the right, a distance of 716.94 feet to the Point of Beginning of the herein described tract; THENCE N 56026'33" W, a distance of 341.40 feet to a point, said point also being the Point of Curvature of a circular curve to the left having a radius of 470.00 feet, a central angle of 34°06'03" and being subtended by a chord which bears N 73029'35" W, 275.62 feet; THENCE along said curve to the left, a distance of 279.73 feet to a point; THENCE S 89027'24" W tangent to said curve, a distance of 32.60 feet to a point; THENCE N 00032'36" W, a distance of 537.12 feet to a point, said point also being the Point of Curvature of a circular curve to the right having a radius of 668.00 feet, a central angle of 45°28'14" and being subtended by a chord which bears N 22°11'31" E, 516.33 feet; THENCE along said curve to the right, a distance of 530.13 feet to a point; THENCE N 43 051'21" E, a distance of 53.48 feet to a point; THENCE S 45°51'00" E, a distance of 1146.77 feet to a point; THENCE S 44009'00" W, a distance of 440.50 feet to a point, said point also being the Point of Curvature of a circular curve to the left having a radius of 1255.00 feet, a central angle of 11 057'44" and being subtended by a chord which bears S 38°10'08" W, 261.54 feet; THENCE along said curve to the left, a distance of 262.02 feet to the Point of Beginning and containing 795,905 square feet or 18.269 acres of land, more or less. Tract 14 BEING Tract 2 of those tracts conveyed to Aperion Communities, L.L.L.P. by deed recorded under County Clerk's File No. 2004-11913 of the Real Property Records of Denton County, Texas (RPRDCT) and being more particularly described as follows: BEGINNING at a brass monument in concrete found, said brass monument also being on the south line of said Aperion Tract 2, said brass monument also being on the north right-of-way line of State Highway No. 114, said brass monument also being on the west line of a tract conveyed Exhibit D to Strategic Partnership Agreement Page 4 to Ferbro Investments by deed recorded under County Clerk's File No. 97-0003605 RPRDCT THENCE S 89046'48" W along the south line of said Aperion Tract 2 and the north right-of-way line of State Highway No.114, a distance of 1072.97 feet to a brass monument in concrete found; THENCE N 86029'44" W along the south line of said Aperion Tract 2 and the north right-of-way line of State Highway No.114, a distance of 900.20 feet to a brass monument in concrete found, said brass monument also being on the southeasterly line of a tract conveyed to The Atchison, Topeka and Santa Fe Railway Company by deed recorded under County Clerk's File No. 93- R0020408 RPRDCT; THENCE N 44026'31" E along the west line of said Aperion Tract 2 and the southeasterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 2809.53 feet to a 5/8" iron pin found, said iron pin also being on the west line of said Ferbro Investments tract; THENCE S 00007'09" E along the east line of said Aperion Tract 2 and the west line of said Ferbro Investments tract, a distance of 2056.80 feet to the Point of Beginning and containing 2,058,725 square feet or 47.262 acres of land, more or less. Exhibit D to Strategic Partnership Agreement Page 5 Page 1 of 2 City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 7/17/2007 DATE: Tuesday, July 17, 2007 LOG NAME: 06TRADITIONlSPA REFERENCE NO.: C-22258 SUBJECT: Authorize Execution of the Strategic Partnership Agreement for Municipal Utility District No. 1 of Denton County, Texas ("Tradition Phase I") RECOMMENDATION: It is recommended that the City Council authorize the City Manager to execute a Strategic Partnership Agreement for Municipal Utility District No. 1 of Denton County ("Tradition Phase I"). DISCUSSION: Aperion Communities, LLLP, Eladio Properties, LLLP and Drooy Properties, LLLP ("AED") are Arizona limited liability partnerships that own and intend to develop approximately 2,663 acres in Fort Worth's extraterritorial jurisdiction as a mixed-use development to be known as "Tradition". The property is in Denton County and is located north of Hwy. 114 and west of Hwy. 156. AED has requested that the City Council consent to creation of a 431-acre municipal utility district (the "District"), which overlies the southern end of Tradition. On December 13, 2005, (M&C C-21197 and C-21198), the City Council authorized the execution of the following documents to support Municipal Utility District No. 1 of Denton County, commonly known as Tradition Phase I. 1) Consent Resolution; 2) Consent Agreement; 3) Strategic Partnership Agreement; 4) Development Agreement; 5) Tradition Project Special Regulations Agreement; 6) Superseding Agreement Regarding Water and Wastewater Utility Service; 7) Buy-Out Option Contract; 8) Memorandum of the Buy-Out Option Contract; 9) Agreement for Sale of Treated Water; and 10) Wholesale Wastewater Service Agreement. These documents defined the plans for utility services and the development standards that would be required in the district. Although the City Council approved the execution of a Strategic Partnership Agreement (SPA) at that time, it has since been determined that public hearings are required by the district and the City Council after the MUD formation and prior to entering into these agreements. An election creating the MUD was held on May 12, 2007. The Municipal Utility District held appropriate public hearings and approved the SPA on July 11, 2007. The City Council held a public hearing on July 10, 2007. The second public hearing is being held in conjunction with this Mayor and Council Communication. The purpose of the SPA is to delay annexation of the district until completion of at least 90 percent of the http://www.cfwnet.org/council_packet/Reports/mc_print.asp 8/8/2007 Page 2 of 2 infrastructure, dissolution of the district or termination of the Development Agreement. The SPA will allow annexation for the following two purposes: 1) annexation of limited tracts to facilitate the connection to areas outside of the district; and 2) limited-purpose annexation of approximately 108 acres within the development designated for commercial development to impose sales and use tax. The agreement provides the City and the District will divide the sales tax proceeds equally for the first 19 years of the Limited Purpose Annexation period. The City's share will increase to 75 percent in year 19. Approval of this Mayor and Council Communication will allow staff to execute the contract. In addition, staff will initiate the appropriate steps for limited purpose annexation when deemed appropriate. FISCAL INFORMATION/CERTIFICATION: The Finance Director certifies that this action has no material effect on City funds. TO Fund/Account/Centers FROM Fun d/Accou nt/C enters Submitted for City Manager's Office by; Dale Fisseler (6140) Originating Department Head: Fernando Costa (8042) Additional Information Contact: Susan Alanis (8180) http://www.cf\vnet.org/council_packet/Reports/mc_print.asp 8/8/2007