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HomeMy WebLinkAboutContract 36485CITY SECRETARY CONTRACT NO. LEt ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Agreement") is entered into by and between the CITY OF FORT WORTH, TEXAS the "City"), a home rule municipal corporation organized under the laws of the State of Texas, and FW RIVER PLAZA, L.P. ("Developer"), a Texas limited partnership. RECITALS The City and Developer hereby agree that the following statements are true and correct and constitute the basis upon which the City and Developer have entered into this Agreement: A. Developer owns or is under contract to purchase approximately 4.3 acres of land in the vicinity of the intersection of University Drive and River Run (the "Developer -Owned Property"). Developer also intends to purchase a parcel of real property adjacent to the Developer -Owned Property that the City currently owns (the "City -Owned Property"), as more specifically set forth in this Agreement and a separate purchase agreement between the City and Developer. The Developer -Owned Property and the City -Owned Property (collectively, the "Development Property") are specifically depicted and described in Exhibit "A", attached hereto and hereby made a part of this Agreement for all purposes. The Development Property, which is located in the Central City, currently contains an older Class CB office building and parking lots and is served by an inefficient network of streets which has stifled optimum development in the area. B. Developer intends to cause construction of a mixed -use development on the Development Property consistingapproximately 80,000 square feet of retail space, plus (ii) approximately 100,000 square feet of commercial office space, plus (iii) a hotel with approximately 50,000 square feet, plus (iv) in Developer's sole discretion, Residential Units, with the understanding that if Developer elects to construct a residential component, it will consist of not less than fifty (50) Residential Units (collectively, the "Development"). The proposed Development is generally depicted in the schematic attached hereto as Exhibit "B", which is hereby made a part of this Agreement for all purposes. Developer has represented to the City that the Development A ill not be feasible financially without public assistance due to, among other things, obsolete infrastructure on and around the Development Property, the necessity of reconfiguring access to and egress from the Development Property, the demolition of existing structures on the Development property and the need to construct a parking garage in order to make the Development more dense. C. The 2007 Comprehensive Plan, adopted by the City Coun it tifir I�e�ru�r^ 20, 2007 pursuant to Ordinance No. 17413-02-2007 (the "Compre n i��!�� J�'' /'i�,� pp �l:ll 1J pp �j p9 Page Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. recommends that the City promote Central City locations in the City for business development and that the City establish incentives to promote the redevelopment or reuse of deteriorated properties in the City's commercial districts. D. As recommended by the Comprehensive Plan and in accordance with Resolution No. 2704, adopted by the City Council on January 30, 2001, the City has established an economic development program pursuant to which the City will, on a case - by -case basis, offer economic incentive packages authorized by Chapter 380 of the Texas Local Government Code that include monetary loans and grants of public money, as well as the provision of personnel and services of the City, to businesses and entities that the City Council determines will promote state or local economic development and stimulate business and commercial activity in the City in return for verifiable commitments from such businesses or entities to cause specific infrastructure, employment and other public benefits to be made or invested in the City (the "380 Program"). E. The City Council has determined that by entering into this Agreement, the potential economic benefits that will accrue to the City under the terms and conditions of this Agreement are consistent with the City's economic development objectives and that promoting mixed -use development in the Central City will further the goals espoused by the Comprehensive Plan for positive growth in the City. In addition, the City Council has determined that the 380 Program is an appropriate means to achieve the construction of the Development, which the City Council has determined is necessary and desirable, and that the potential economic benefits that will accrue to the City pursuant the terms and conditions of this Agreement are consistent with the City's economic development objectives as outlined in the Comprehensive Plan. This Agreement is authorized by Chapter 380 of the Texas Local Government Code. F. The City has determined that the feasibility of the Development is contingent on Developer's receipt of the Program Grants, as provided in this Agreement. The City's analysis is specifically based on financial information provided by Developer. NOW, THEREFORE, in consideration of the mutual benefits contained herein and for other good and valuable consideration, th sufficiency of which is hereby acknowledged, the parties agree as follows: AGREEMENT 1. INCORPORATION OF RECITALS. and promises e receipt and The City Council has found, and the City and Developer hereby agree, that the recitals set forth above are true and correct and form the basis upon which the parties have entered into this Agreement. Page 2 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. 2. DEFINITIONS. In addition to terms defined in the body of this Agreement, the following terms shall have the definitions ascribed to them as follows. 380 Program has the meaning ascribed to it in Recital D. Affiliate means all entities, incorporated or otherwise, under common control with, controlled by or controlling Developer. For purposes of this definition, "control" means fifty percent (50%) or more of the ownership determined by either value or vote. Affordable Housing Commitment has the meaning ascribed to it in Section 4.8. Affordable Housing Units has the meaning ascribed to it in Section 4.8. Certificate of Completion has the meaning ascribed to in Section 5.1. City -Owned Property has the meaning ascribed to it in Recital A. Completion Date means the date as of which certificates of occupancy, whether final or temporary, have been issued by the City for all of the improvements comprising the Development. Completion Deadline means June 1, 2011. Comprehensive Plan has the meaning ascribed to it in Recital C. Construction Costs means Hard Construction Costs and the following costs directly expended by Developer for the Development: engineering fees, architectural and design fees; real estate commissions; costs of third party consultants; developer fees; and financing costs, including capitalized interest. Developer -Owned Property has the meaning ascribed to it in Recital A. Development has the meaning ascribed to it in Recital B. Development Personal Property Tax Revenues means ad valorem taxes on Tangible Personal Property located on the Development Property that are received by the City, minus taxes payable on Tangible Personal Property located on the Development Property for the 2008 tax year, based on the taxable appraised value of Tangible Personal Property located on the Development Property for the 2008 tax year. With respect to Tangible Personal Property leased by a Development Property User, Development Personal Property Tax Revenues will include that portion of annual property tax paid by the Development Property User, prorated on a daily basis, which is attributable to the period during which the Development Property User was the lessee of such property. The taxable appraised value of such Tangible Personal Property for any given tax year Page 3 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. will be established solely by the appraisal district that has jurisdiction over the Development Property at the time. Development Property has the meaning ascribed to it in Recital A. Development Property User means any person or entity that has the legal right to use all or any portion of the Development for commercial, retail, residential or other lawful purposes, including without limitation, Developer and third party retail and commercial businesses, including the hotel. Development Real Property Tax Revenues means ad valorem taxes on the Development Property and any improvements located thereon, minus the taxes payable on the Development Property and any improvements located thereon for the 2008 tax year, based on the taxable appraised value of the Development Property and any improvements located thereon for the 2008 tax year. The taxable appraised value of the Development Property and any improvements located thereon for any given year will be established solely by the appraisal district that has jurisdiction over the Development Property at the time. Development Sales Tax Revenues means a one percent (1%) available sales tax, such as that presently in effect pursuant to Texas Tax Code §§ 321.101(a) and 321.103, resulting from sales taxes received by the City and collected by Developer and other Developer Property Users on Sales transacted on the Development Property. Development Sales Tax Revenues specifically excludes all revenues from (1) the Crime Control District Sales Tax imposed by the City pursuant to Texas Tax Code § 323.105 and Texas Local Government Code § 363.005, as may be amended, and (ii) the Transit Authority Sales Tax paid to the City by the Fort Worth Transportation Authority pursuant to City Secretary Contract No. 19689, as previously or subsequently amended or restated, from the sales tax imposed by the Fort Worth Transportation Authority pursuant to Texas Fax Code Chapter 322. Notwithstanding anything to the contrary herein, in no event shall Development Sales Tax Revenues ever exceed a one percent (1%) sales tax imposed by the City, even if the City at any point in the future charges more than a one percent (1%) sales tax. If the City's sales tax rate is ever decreased to the extent that the City receives available sales tax revenues based on less than a one percent (1%) sales tax, then the meaning of Development Sales Tax Revenues shall automatically be adjusted to equal that lesser percentage. If the City's sales tax rate is ever decreased as provided in the preceding sentence and the City then subsequently adds a sales tax that increases such lower percentage and whose use is not controlled or regulated, in whole or in part, by another governmental entity or authority or otherwise dedicated to a specific use by the City, then Development Sales Tax Revenues shall be computed to reflect that increased percentage up to a maximum aggregate of one percent (1%). Director means the director of the City's Economic and Community Development Department. Effective Date has the meaning ascribed to it in Section 3. Page 4 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. Employment Goal has the meaning ascribed to it in Section 4.5. First Operating Year means the first full year following the year in which the Completion Date occurs. Fort Worth Certified M/WBE Company means a minority or woman -owned business that has received certification as either a minority business enterprise (MBE), a woman business enterprise (WBE) or a disadvantaged business enterprise (DBE) by the North Texas Regional Certification Agency (NTRCA) and that has a principal business office located within the corporate limits of the City that performs a commercially useful function and that provides the services for which Developer is seeking credit under this Agreement. Fort Worth Company means a business that has a principal office located within the corporate limits of the City that performs a commercially useful function and that provides the services for which Developer is seeking credit under this Agreement. Fort Worth Construction Commitment has the meaning ascribed to it in Section 4.3. Fort Worth Construction Percentage has the meaning ascribed to it in Section 5.2.1.2. Fort Worth Supply and Service Percentage has the meaning ascribed to it in Section 5.2.1.4. MA Fort Worth Supp] ascribed to it in Section 4.6. �V has the meaning Hard Construction Costs means actual site development and construction costs, contractor tees and the costs of supplies and III and specifically excludes land acquisition costs. Job means a job provided to an individual by a Development Property User on the Development Property. M/WBE Construction Commitment has the meaning ascribed to it in Section 4.4. M/WBE Construction Percentage has the meaning ascribed to it in Section 5.2.1.3. M/WBE Supply and Service Percentage has the meaning ascribed to it in Section 5.2.1.5. Page 5 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. M/WBE Supply and Service Spending Commitment has the meaning ascribed to it in Section 4.7. Overall Construction Percentage has the meaning ascribed to it in Section 5.2.1.1. Program Cap means the maximum number of gross dollars comprising all Program Grants that the City is required to pay Developer pursuant to this Agreement, based on the amount of Construction Costs expended for the Development by the Completion Date, as follows. (a) If Developer expended between $50,0009000.00 and $6395009000.00 in Construction Costs for the Development by the Completion Date, as verified in the Certificate of Completion issued by the City in accordance with Section 5.1, the Program Cap shall equal $6,691,549.00, gross. (b) If Developer expended between $63,500,001.00 and $81,500,000.00 in Construction Costs for the Development by the Completion Date, as verified in the Certificate of Completion issued by the City in accordance with Section 5.1, the Program Cap shall equal $9,270,837.00, gross. (c) If Developer expended $81,500,001.00 or more in Construction Costs for the Development by the Completion Date, as verified in the Certificate of Completion issued by the City in accordance with Section 5.1, the Program Cap shall equal $12,133,062.00, gross. Program Grants means the annual economic development grants paid by the City to Developer in accordance with this Agreement and as part of the 380 Program. Program Source Funds means an amount of City funds available for inclusion in a Program Grant that is payable in a given Program Year, which shall equal to seventy- five percent (75%) of the Development Real Property Tax Revenues, plus seventy-five percent (75%) of the Development Personal Property Tax Revenues, plus seventy-five percent (75%) of the Development Sales Tax Revenues which were received by the City during the Twelve -Month Period ending in the same Program Year in which the Program Grant for that Program Year is payable. Program Year means a calendar year in which the City is obligated pursuant to this Agreement to pay Developer a Program Grant, beginning with the first full calendar year following the Completion Date (Program Year 1). Records has the meaning ascribed to it in Section 4.11. Residential Units means either residential rental aparhnents or condominiums. Page 6 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. Sales means all sales of merchandise (including gift and merchandise certificates), services and other receipts whatsoever of all business conducted in, on or from the Development Property, whether cash or credit, including mail, telephone, telefax, telegraph, internet or catalogue orders received or filled at or from the Development Property, deposits not refunded to purchasers, orders taken (although such orders may be filled elsewhere), sales to employees, sales through vending machines or other devices. Sales will not include (i) any sums collected and paid for any sales or excise tax imposed by any duly constituted governmental authority, (ii) the exchange of merchandise purchased on and returned to the Development Property, (iii) the amount of returns to shippers and manufacturers or (iv) the sale of any Development Property User's fixtures. Second Operating Year means the second full year following the year in which the Completion Date occurs. Supply and Service Expenditures means all expenditures by Developer, whether pursuant to a written contract or on an ad hoc basis, expended directly for the operation and maintenance of the Development, including amounts paid to third parties for the provision of personnel services, but excluding amounts paid for electric, gas, water and any other utility services. Tangible Personal Property means personal property that is located on the Development Property and is owned or leased by any Development Property User, including, without limitation, inventory, fixtures, store signage, checkout stands, computers, cash registers and security and communications systems. Term has the meaning ascribed to it in Section 3. Twelve -Month Period means the period between February 1 of a given year and January 31 of the following year. 3. TERM. This Agreement shall be effective as of the date of execution by both parties (the "Effective Date") and, unless terminated earlier in accordance with this Agreement, shall expire on the earlier of (i) the date as of which the City has paid all Program Grants required hereunder or (ii) the date as of which the amount of aggregate Program Grants paid by the City equals Program Cap (the "Term"), Page 7 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. 4. DEVELOPER OBLIGATIONS, GOALS AND COMMITMENTS. 4.1. City Approval of Development Fajade and Site Plans. All faYade and site improvements for the Development shall be of an architectural and aesthetic style that enhances existing development in the vicinity of the Development Property. In order to ensure compliance with this condition, Developer must obtain the Director's written approval of all plans and specifications for all fagade and site improvements for the Development (excluding demolition work) prior to work on the Development being undertaken. The City shall not unreasonably withhold or deny such approval, with the understanding that, provided that the City Council's Central City Revitalization and Economic Development Committee (or successor City Council committee) (the "Committee") meets within thirty (30) calendar days following submission of such plans and specifications to the Director, the Director shall not be obligated to provide such written approval until the Committee has had an opportunity to review and comment on such plans and specifications. If the Committee does not meet within thirty (30) calendar days following submission of such plans and specifications to the Director, the Director, in his or her administrative capacity, shall either approve or deny such plans and specifications within such time frame. If the Director denies approval of any such plans and specifications, the Director shall provide a written explanation of why the City believes that the plans and specifications do not enhance existing development in the vicinity of the Development Property, and the City and Developer shall thereafter work diligently and in good faith to revise the plans and specifications as necessary to address the City's concerns. Approval by the Director of any plans and specifications relating to the Development shall not constitute or be deemed (i) to be a release by the City of the responsibility or liability of Developer or any of its contractors; their officers, agents, employees and subcontractors, for the accuracy or competency of the plans and specifications, including, but not limited to, any related investigations, surveys, designs, working drawings and other specifications or documents, or (ii) an assumption of any responsibility or liability by the City for any negligent act, error or omission in the conduct or preparation of any investigation, surveys, designs, working drawings and other specifications or documents by Developer or any of its contractors; their officers, agents, employees and subcontractors. 4.2. Real Property Improvements. In accordance with the terms and conditions of this Agreement, by the Completion Date Developer shall have expended at least Fifty Million Dollars ($50,000,000,00) in Construction Costs for the Development. The Completion Date must occur on or before the Completion Deadline, Page 8 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. 4.3. Construction Spending Commitment for Fort Worth Companies. By the Completion Date, Developer shall have expended or caused to be expended with Fort Worth Companies the greater of at least (i) $7,200,000.00 in Hard Construction Costs for the Development or (ii) thirty percent (30%) of all Hard Construction Costs for the Development, regardless of the total amount of such Hard Construction Costs (the "Fort Worth Construction Commitment"), 4.4. Construction Spending Commitment for Fort Worth Certified M/WBE Companies. By the Completion Date, Developer shall have expended or caused to be expended with Fort Worth Certified M/WBE Companies the greater of at least (i) $6,000,000.00 in Hard Construction Costs for the Development or (ii) twenty-five percent (25%) of all Hard Construction Costs for the Development, regardless of the total amount of such Hard Construction Costs (the "NVWBE Construction Commitment"). Dollars spent with Fort Worth Certified M/WBE Companies shall also count as dollars spent with Fort Worth Companies for purposes of the Fort Worth Construction Commitment outlined in Section 4.3. 4.5. Employment Goal. From and after the Completion Date, Developer will use commercially reasonable efforts to cause at least ten (10) Jobs to be provided on the Development Property (the "Employment Goal"). 4.6. Supply and Service Spending Commitments for Fort Worth Companies. In the Second Operating Year and each calendar year thereafter, Developer shall spend at least $50,000.00 in annual Supply and Service Expenditures with Fort Worth Companies (the "Fort Worth Supply and Service Spending Commitment"). 4.7. Supply and Service Spending Commitment for Fort Worth Certified M/WBE Companies. In the Second Operating Year and each calendar year thereafter, Developer shall spend at least $35,000.00 in annual Supply and Service expenditures with Fort Worth Certified M/WBE Companies (the "M/WBE Supply and Service Spending Commitment"). Dollars spent with Fort Worth Certified M/WBE Companies shall also count as dollars spent with Fort Worth Companies for purposes of the Fort Worth Supply and Service Spending Commitment outlined in Section 4.6. Page 9 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. 4.8. Affordable Housing Set -Aside. If Developer elects to construct Residential Units as part of the Development, Developer shall construct not less than fifty (50) such Residential Units. If any such Residential Units are rental apartments, at least fifteen percent (15%) of such Residential Units, regardless of the person or entity that owns such Residential Units, shall be reserved for lease exclusively as quality affordable housing in accordance with the provisions of this Section 4.8 (the "Affordable Housing Units"). At least one-third (1/3) of all Affordable Housing Units will be set aside exclusively for lease to qualifying households earning no more than sixty percent (60%) of the area median income at rental rates that are affordable to such qualifying households, as determined by the U.S. Department of Housing and Urban Development or successor agency. The remainder of the Affordable Housing Units will be set aside exclusively for lease to qualifying households earning no more than eighty percent (80%) of the area median income at rental rates that are affordable to such qualifying households, as determined by the U.S. Department of Housing and Urban Development or successor agency (all of the preceding, the "Affordable Housing Commitment"). This Section 4.8 only applies to the extent that Developer elects to construct, as part of the Development, Residential Units that are designated as rental apartments; it does not require Developer to construct any Residential Units as part of the Development or to designate any Residential Units so constructed as rental apartments instead of condominiums. Developer will cooperate with the City's Housing Department in publicizing the availability of the Affordable Housing Units. 4.9. Purchase of City -Owned Property. Developer must close on its purchase of the City -Owned Property within one hundred twenty (120) calendar days of receipt from the City of a purchase/sale agreement covering the City -Owned Property. 4.10. Reports and Filings. 4.10.1. Plan for Use of Fort Worth Certified M/WBE Companies. Within thirty (30) calendar days following the Effective Date or prior to the submission of an application by or on behalf of Developer for a permit from the City to initiate any work on the Development (including demolition work), whichever is earlier, Developer will file a plan with the Director as to how Developer intends to meet the M/WBE Construction Commitment and the M/WBE Supply and Service Spending Commitment. Developer agrees to meet with the City's M/WBE Office and Minority and Women Business Enterprise Advisory Committee as reasonably Page 10 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. necessary for assistance in implementing such plan and to address any concerns that the City may have with such plan. 4.10.2. Construction Spending Reports. 4.10.2.1. Monthly Reports. From the Effective Date until the Completion Date, in order to enable the City to assist Developer in meeting the M/WBE Construction Commitment, Developer will provide the Director with a monthly report in a form reasonably acceptable to the City that specifically outlines the then -current aggregate Hard Construction Costs expended by and on behalf of Developer for the Development as well as the then -current aggregate Hard Construction Costs expended by and on behalf of Developer for the Development with Fort Worth Certified M/WBE Companies. Developer agrees to meet with the City's M/WBE Office and Minority and Women Business Enterprise Advisory Committee as reasonably necessary for assistance in meeting or exceeding the UWBE Construction Commitment and to address any related concerns that the City may have. 4.10.2.2. Final Construction Report. Within thirty (30) calendar days following the Completion Date, in order for the City to assess whether Developer satisfied the requirements of Section 4.2, the extent to which Developer met the Fort Worth Construction Commitment and the M/WBE Construction Commitment, and to establish the Program Cap under this Agreement, Developer will provide the Director with a report in a form reasonably acceptable to the City that specifically outlines the total Construction Costs and Hard Construction Costs expended by and on behalf of Developer for the Development, together with supporting invoices and other documents necessary to demonstrate that such amounts were actually paid by Developer, including, without limitation, final lien waivers signed by Developer's general contractor. This report shall also include actual total Construction Costs and Hard Construction Costs expended by Developer for construction of the Development with Fort Worth Companies and Fort Worth Certified M/WBE Companies, together with supporting invoices and other documents necessary to demonstrate that such amounts were actually paid by Developer to such contractors. Page 11 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. 4.10.3. Annual Employment Report. On or before February 1 of the year following the Completion Date and of each year thereafter, in order for the City to assess the degree to which Developer met the Employment Goal in the previous calendar year, Developer shall provide the Director with a report in a form reasonably acceptable to the City that sets forth the total number of individuals who held Jobs on the Development Property, all as of December 1 (or such other date requested by Developer and reasonably acceptable to the City) of the previous year, together with reasonable supporting documentation. If Developer failed to meet the Employment Goal in the previous calendar year, Developer shall include an explanation as to why Developer believes it did not meet the Employment Goal and the efforts that Developer utilized to meet the Employment Goal, 4.10.4. Quarterly Supply and Service Spending Report. Beginning with the first calendar quarter of the Second Operating Year, within thirty (30) calendar days following the end of each calendar quarter, Developer will provide the Director with a report in a form reasonably acceptable to the City that sets forth the then -aggregate Supply and Service Expenditures made during such calendar as well as the then -aggregate Supply and Service Expenditures made during such calendar year with Fort Worth Companies and with Fort Worth Certified MMBE Companies. The City will use each year's fourth quarter report to assess the degree to which Developer met the Fort Worth Supply and Service Spending Commitment and the M/WBE Supply and Service Spending Commitment for that year. 4.10.5. Annual Affordable Housing Report. To the extent that the Affordable Housing Commitment applies, on or before February 1 of the year following the Completion Date and of each year thereafter, in order for the City to assess the degree to which Developer met the Affordable Housing Commitment in the previous calendar year, Developer shall provide the Director with a report in a form reasonably acceptable to the City that sets forth (i) the total number of Residential Units in the Development that are rental apartments; (ii) the total number of Affordable Housing Units; (iii) the number of Residential Units that are rental apartments and that were under lease at any time during the previous calendar year; (iv) the number of Affordable Housing Units that were under lease at any time during the previous calendar year, and (v) for each Affordable Housing Unit that was under lease at any time during the previous calendar year, sufficient documentation for the City to assess the adjusted income of the tenant Page 12 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. leasing such Affordable Housing Unit and the amount of monthly rent paid by that tenant. The City will have the right throughout the Term to audit the financial and business records of Developer that relate to the Development and any other documents necessary to evaluate Developer's compliance with this Agreement or with the commitments set forth in this Agreement, including, but not limited to construction documents and invoices (collectively "Records"). Developer shall make all Records available to the City on the Development Property 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. 5. CITY OBLIGATIONS. 5.1. Issuance of Certificate of Completion for Development. Within sixty (60) calendar days following receipt by the City of the final construction spending report for the Development, as required by Section4.10.2.2, and assessment by the City of the information contained therein, if the City is able to verify that Developer expended at least $50,000,000.00 in Construction Costs for the Development by the Completion Date and that the Completion Date occurred on or before the Completion Deadline, the Director will issue Company a certificate stating the amount of Construction Costs and Hard Construction Costs expended on the Development, including amounts expended specifically with Fort Worth Companies and Fort Worth Certified M/WBE Companies, plus the amount of the Program Cap established under this Agreement based on the amount of Construction Costs expended by and on behalf of Developer for the Development (the "Certificate of Completion"). 5.2. Program Grants. Subject the terms and conditions of this Agreement, provided that Developer expended at least $50,000,000.00 in Construction Costs for the Development by the Completion Date and that the Completion Date occurred on or before the Completion Deadline, Developer will be entitled to receive from the City fifteen (15) annual Program Grants. The amount of each Program Grant shall equal a percentage of the Program Source Funds available for that Program Grant. This percentage is based on the extent to which Developer meets the various construction and operational expenditures for the Development, as more specifically set forth in Section 5.2.1. Notwithstanding anything to the contrary herein, aggregate Program Grants payable under this Agreement shall be subject to and shall not exceed the Program Cap. Page 13 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. 5.2.1. Calculation of Each Program Grant Amount. Subject to the terms and conditions of this Agreement, and subject to reductions or forfeitures imposed pursuant to Section 5.2.2, the amount of a given Program Grant shall equal the sum of the Overall Construction Percentage, the Fort Worth Construction Percentage and the M/WBE Construction Percentage, as defined in Section 5.2.1.1, 5.2.1.2 and 5.2.1.35 respectively, plus, to the extent applicable, the Fort Worth Supply and Service Percentage and the M/WBE Supply and Service Percentage, as defined in Sections 5.2.1.4 and 5.2.1.5, respectively, multiplied by the Program Source Funds available for that Program Grant. 5.2.1.1. Completion of Development (50%). Each annual Program Grant shall include an amount that is based on Developer's completion of the Development. If Developer expended at least $50,000,000.00 in Construction Costs for the Development by the Completion Date and the Completion Date occurred on or before the Completion Deadline, as confirmed by the City in the Certificate of Completion issued by the Director in accordance with Section 5.1, each annual Program Grant shall include fifty percent (50%) of the Program Source Funds (the "Overall Construction Percentage"). In no event will the Overall Construction Percentage exceed fifty percent (50%). Notwithstanding anything to the contrary herein, if Developer failed to expend at least $50 million in Construction Costs for the Development by the Completion Date or the Completion Date did not occur by the Completion Deadline, an Event of Default, as more specifically set forth in Section 6.1, will occur and the City shall have the right to terminate this Agreement without the obligation to pay Developer any Program Grants hereunder. 5.2.1.2. Fort Worth Construction Cost Spending (LTp to 30% for Program Year 1; Up to 15% Thereafter). Each annual Program Grant shall include an amount that is based on the percentage by which the Fort Worth Construction Commitment, as outlined in Section 4.3, was met (the "Fort Worth Construction Percentage"). The Fort Worth Construction Percentage for the Program Grant payable in Program Year 1 will equal the product of thirty percent (30%) multiplied by the percentage by which the Fort Worth Construction Commitment was met, which will be calculated by dividing the actual Hard Construction Costs expended by the Completion Date with Fort Page 14 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. Worth Companies for the Development by the number of dollars comprising the Fort Worth Construction Commitment, as determined in accordance with Section 4.3. The Fort Worth Construction Percentage for all subsequent Program Grants will equal the product of fifteen percent (15%) multiplied by the percentage by which the Fort Worth Construction Commitment was met, calculated in accordance with the preceding sentence. For example, if the Fort Worth Construction Commitment is $10,000,000.00 and only $8,000,000.00 in Hard Construction Costs were expended with Fort Worth Companies by the Completion Date, the Fort Worth Construction Percentage for the Program Grant payable in Program Year 1 would be 24% instead of 30% (or .30 x [$8 million/$10 million], or .30 x .80, or .24), and the Fort Worth Construction Percentage for all subsequent Program Grants would be 12% instead of 15% (or .15 x [$8 million/$10 million], or .15 x .80, or .12). If the Fort Worth Construction Commitment is met or exceeded, the Fort Worth Construction Percentage will be thirty percent (30%) for the Program Grant payable in Program Year 1 and fifteen percent (15%) for all subsequent Program Grants. In no event will the Fort Worth Construction Percentage exceed those percentages for the respective Program Year in which a Program Grant is payable. 5.2.1.3. Fort Worth M/WBE Construction Cost Spending (Up to 2076 for Program Year 1; Up to 10% Thereafter). Each annual Program Grant shall include an amount that is based on the percentage by which the M/WBE Construction Commitment, as outlined in Section 4.4, was met (the "NVWBE Construction Percentage"). The M/WBE Construction Percentage for the Program Grant payable in Program Year 1 will equal the product of twenty percent (20%) multiplied by the percentage by which the M/WBE Construction Commitment was met, which will be calculated by dividing the actual Hard Construction Costs expended by the Completion Date with Fort Worth Certified M/WBE Companies for the Development by the number of dollars comprising the M/WBE Construction Commitment, as determined in accordance with Section 4.4. The M/WBE Construction Percentage for all subsequent Program Grants will equal the product of ten percent (10%) multiplied by the percentage by which the M/WBE Construction Commitment was met, calculated in accordance with the preceding sentence. For example, if the M/WBE Construction Commitment is $6,000,000.00 and only $4,500,000.00 in Hard Construction Costs were expended with Fort Worth Certified M/WBE Companies by Page 15 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. the Completion Date, the M/WBE Construction Percentage for the Program Grant payable in Program Year 1 would be 15% instead of 20% (or .20 x [$4.5 million/$6 million], or .20 x .75, or .15), and the M/WBE Construction Percentage for all subsequent Program Grants would be 7.5% instead of 10% (or .10 x [$4.5 million/$6 million], or .10 x .75, or .075). If the M/WBE Construction Commitment is met or exceeded, the M/WBE Construction Percentage will be twenty percent (20%) for the Program Grant payable in Program Year 1 and ten percent (10%) for all subsequent Program Grants. 5.2.1.4. Fort Worth Supply and Service Spending (Up to 15% after Program Year 1). Except for the Program Grant payable in Program Year 1, each annual Program Grant shall include an amount that is based on the percentage by which the Fort Worth Supply and Service Spending Commitment, as outlined in Section 4.6, was met he "Fort Worth Supply and Service Percentage"). The Fort Worth Supply and Service Percentage will equal the product of fifteen percent (15%) multiplied by the percentage by which the Fort Worth Supply and Service Spending Commitment was met, which will be calculated by dividing the actual Supply and Service Expenditures made in the previous calendar year with Fort Worth Companies by $50,000.00, which is the Fort Worth Supply and Service Spending Commitment. For example, if only $40,000.00 in Supply and Service Expenditures were made with Fort Worth Companies in the previous calendar year, the Fort Worth Supply and Service Percentage for the Program Grant payable in the foRowing Program Year (other than Program Year 1) would be 12% instead of 15% (or .15 x [$40,000/$50,000], or .15 x .80, or 12). If the Fort Worth Supply and Service Spending Commitment is met or exceeded in any given year, the Fort Worth Supply and Service Percentage for the Program Grant payable in the following Program Year will be fifteen percent (15%). Calculation of the Program Grant payable for Program Year 1 does not include the Fort Worth Supply and Service Percentage because the Fort Worth Supply and Service Commitment does not apply to the First Operating Year. 5.2.1.5. Fort Worth M/WBE Supply and Service Spending (Up to 10% after Program Year 1). Except for the Program Grant payable in Program Year 1, each annual Program Grant shall include an amount that is based on the percentage by which the M/WBE Supply and Service Page 16 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. Spending Commitment, as outlined in Section 4.7, was met (the M/WBE Supply and Service Percentage"). The M/WBE Supply and Service Percentage will equal the product of ten percent (10%) multiplied by the percentage by which the M/WBE Supply and Service Spending Commitment was met, which will be calculated by dividing the actual Supply and Service Expenditures made in the previous calendar year with Fort Worth Certified M/WBE Companies by $35,000.00, which is the M/WBE Supply and Service Spending Commitment. For example, if only $21,000.00 in Supply and Service Expenditures were made with Fort Worth Certified M/WBE Companies in the previous calendar year, the M/WBE Supply and Service Percentage for the Program Grant payable in the following Program Year (other than Program Year 1) would be 6% instead of 10% (or .10 x [$21,000/$35,000], or .10 x .60, or .06). If the M/WBE Supply and Service Spending Commitment is met or exceeded in any given year, the M/WBE Supply and Service Percentage for the Program Grant payable in the following Program Year will be ten percent (10%). Calculation of the Program Grant payable for Program Year 1 does not include the M/WBE Supply and Service Percentage because the M/WBE Supply and Service Commitment does not apply to the First Operating Year. 5.2.1.6. No Offsets. A deficiency in attainment of one commitment may not be offset by the exceeding attainment in another commitment. For example, if in a given year Developer failed to meet the M/WBE Supply and Service Spending Commitment by $5,000.00, but exceeded the Fort Worth Supply and Service Spending Commitment by $5,000.00, all Program Grants payable in the foRowing year would still be reduced in accordance with Section 5.2.1.5 on account of Developer's failure to meet the M/WBE Supply and Service Spending Commitment. 5.2.2. Reductions to or Forfeiture of Program Grants for Failure to Comply with Affordable Housing Commitment. If the Affordable Housing Commitment, as outlined in Section 4.89 applies in any given year during the Term of this Agreement and the City determines that Developer has not complied with or is not in compliance with the Affordable Housing Commitment, the City will notify Developer in writing. If Developer disagrees with the City's determination, Developer shall have fourteen (14) calendar days to provide the City with documentation to rebut such determination. If Developer does not provide the City with documentation sufficient to Page 17 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. rebut the City's determination within such time, the City's determination shall be deemed conclusive. In this event, notwithstanding anything to the contrary herein, (1) if the Affordable Housing Commitment was not met for an entire calendar year, Developer shall forfeit payment of the Program Grant payable in the following Program Year, and (ii) if the Affordable Housing Commitment was not met for a portion of a calendar year, then the amount of the Program Grant payable in the following Program Year is calculated in accordance with Section 5.2.1) shall be reduced by a fraction, to be expressed as a percentage, where the numerator is the number of days in that calendar year in which the Affordable Housing Commitment was met and the denominator is 365. Any Program Grant that is forfeited in a given Program Year pursuant to this Section 5.2.3 shall nevertheless count as one of the fifteen (15) annual Program Grants paid for a respective Phase in accordance with this Section 5.2. 5.2.3. Program Cap. Once the City has paid Developer aggregate Program Grants equal to the Program Cap, this Agreement shall terminate. If in any Program Year the amount of a Program Grant would cause the aggregate Program Grants paid by the City pursuant to this Agreement to exceed the Program Cap, the amount of the Program Grant payable in that Program Year shall equal the difference between the aggregate of all Program Grants paid by the City as of the previous Program Year and the Program Cap, and this Agreement shall terminate upon payment of such Program Grant. 5.2.4. Deadline for Payments and Source of Funds. The first Program Grant payable hereunder (in other words, the Program Grant payable for Program Year 1) shall be paid by my on or before June 1 of (i) the Second Operating Year or (ii) the First Operating Year if requested by Developer in writing within sixty (60) calendar days following the Completion Date and the City, taking into consideration its current fiscal year budget and following fiscal year budget planning, provides Developer with written consent to such request. Each subsequent annual Program Grant payment will be made by the City to Developer on or before June 1 of the Program Year in which such payment is due. It is understood and agreed that all Program Grants paid pursuant to this Agreement shall come from currently available general revenues of the City and not directly from Development Real Property Tax Revenues, Development Personal Property Tax Revenues or Development Sales Tax Revenues. Developer understands and agrees that any revenues of the City other than those dedicated for payment of a given annual Program Grant pursuant to this Agreement may be used by the City for any lawful purpose that the City deems necessary in the carrying out of its business as a home rule municipality and will not serve as the basis for Page 18 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. calculating the amount of any future Program Grant or other obligation to Developer. 6. DEFAULT, TERMINATION AND FAILURE BY DEVELOPER TO MEET VARIOUS DEADLINES AND COMMITMENTS. 6.1. Failure to Complete Development. If Developer fails to expend by the Completion Date at least Fifty Million Dollars ($50,000,000.00) in Construction Costs for the Development, or if the Completion Date does not occur by the Completion Deadline, the City shall have the right to terminate this Agreement by providing written notice to Developer without further obligation to Developer hereunder. 6.2. Failure to Purchase City -Owned Property. If Developer fails to close on its purchase of the City -Owned Property by March 1, 2008, the City shall have the right to terminate this Agreement by providing written notice to Developer without further obligation to Developer hereunder. 6.3. Failure to Pay City Taxes. An event of default shall occur under this Agreement if any City taxes owed on the Development Property by Developer or an Affiliate or arising on account of Developer's or an Affiliate's operations on the Development Property become delinquent and Developer or the Affiliate does not either pay such taxes or properly follow the legal procedures for protest and/or contest of any such taxes. In this event, the City shall notify Developer in writing and Developer shall have thirty (30) calendar days to cure such default. If the default has not been fully cured by such time, the City shall have the right to terminate this Agreement immediately by providing written notice to Developer and shall have alI other rights and remedies that may be available to it under the law or in equity. 6.4. Violations of City Code, State or Federal Law. An event of default shall occur under this Agreement if any written citation is issued to Developer or an Affiliate due to the occurrence of a violation of a material provision of the City Code on the Development Property or on or within any improvements thereon (including, without limitation, any violation of the City's Building or Fire Codes and any other City Code violations related to the environmental condition of the Development Property; the environmental condition other land or waters which is attributable to operations on the Development Property; or to matters concerning the public health, safety or welfare) and such citation is not paid or the recipient of such citation does not Page 19 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. properly follow the legal procedures for protest and/or contest of any such citation. An event of default shall occur under this Agreement if the City is notified by a governmental agency or unit with appropriate jurisdiction that Developer or an Affiliate, or any successor in interest thereto; any third party with access to the Development Property pursuant to the express or implied permission of Developer or an Affiliate, or any a successor in interest thereto; or the City (on account of the Development or the act or omission of any party other than the City on or after the effective date of this Agreement) is in violation of any material state or federal law, rule or regulation on account of the Development Property, improvements on the Development Property or any operations thereon (including, without limitation, any violations related to the environmental condition of the Development Property; the environmental condition other land or waters which is attributable to operations on the Development Property; or to matters concerning the public health, safety or welfare). Upon the occurrence of such default, the City shall notify Developer in writing and Developer shall have (i) thirty (30) calendar days to cure such default or (ii) if Developer has diligently pursued cure of the default but such default is not reasonably curable within thirty (30) calendar days, then such amount of time that the City reasonably agrees is necessary to cure such default. If the default has not been fully cured by such time, the City shall have the right to terminate this Agreement immediately by providing written notice to Developer and shall have all other rights and remedies that may be available to under the law or in equity. 6.5. Failure to Meet Construction Cost Spending, Supply and Service Spending and/or Affordable Housing Commitments; Failure to Meet Employment Goal. If Developer fails to meet the Fort Worth Construction Commitment or the M/WBE Construction Commitment, or if Developer fails to meet the Fort Worth Supply and Service Spending Commitment or the M/WBE Supply and Service Spending Commitment in any given year, such event shall not constitute a default hereunder or provide the City with the right to terminate this Agreement, but, rather, shall only cause the amount of the Program Grants that the City is required to pay pursuant to this Agreement to be reduced in accordance with this Agreement. If the Affordable Housing Commitment applies in any given year of the Term of this Agreement and Developer fails to meet the Affordable Housing Commitment in that year, such event shall not constitute a default hereunder or provide the City with the right to terminate this Agreement, but, rather, shall only cause the Program Grant payment that would otherwise have been payable in the following Program Year to be forfeited or reduced in accordance with this Agreement. If Developer fails to meet the Employment Goal in any given year, such event shall not constitute a default hereunder and shall not cause the amount of the Program Grant that the City is required to pay in the following Program Year to be reduced. Page 20 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. 6.6. Failure to Submit Reports. Without limiting the application of Section 0.7, if Developer fails to submit any report required by and in accordance with Section 4.10, the City's obligation to pay any Program Grants at the time, if any, shall be suspended until Developer has provided all required reports. 6.7. General Breach. Unless stated elsewhere in this Agreement, Developer shall be in default under this Agreement if Developer breaches any term or condition of this Agreement. In the event that such breach remains uncured after thirty (30) calendar days following receipt of written notice from the City referencing this Agreement (or, if Developer has diligently and continuously attempted to cure following receipt of such written notice but reasonably requires more than thirty (30) calendar days to cure, then such additional amount of time as is reasonably necessary to effect cure, as determined by both parties mutually and in good faith), the City shall have the right to terminate this Agreement immediately by providing written notice to Developer. 7. INDEPENDENT CONTRACTOR. It is expressly understood and agreed that Developer shall operate as an independent contractor in each and every respect hereunder and not as an agent, representative or employee of the City. Developer shall have the exclusive right to control all details and dayAo-day operations relative to the Development Property and any improvements thereon and shall be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors, subcontractors, licensees and invitees. Developer acknowledges that the doctrine of respondeat superior will not apply as between the City and Developer, its officers, agents, servants, employees, contractors, subcontractors, licensees, and invitees. Developer further agrees that nothing in this Agreement will be construed as the creation of a partnership or joint enterprise between the City and Developer. 8. INDEMNIFICATION. DEVELOPER, AT NO COST TO THE CITY, AGREES TO DEFEND, INDEMNIFYAND HOLD THE CITY, ITS OFFICERS, AGENTS SERVANTS AND EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS, ACTIONS, COSTS AND EXPENSES OF ANY "ND, INCLUDING, BUT NOT LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO DEVELOPER'S BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING Page 21 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. DEATH, THAT MAY RELATE TO, ARISE OUT OF OR BE OCCASIONED BY (1) DEVELOPER'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT OR (ii) ANY NEGLIGENT ACT OR OMISSION OR INTENTIONAL MISCONDUCT OF DEVELOPER, ITS OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE CITY) OR SUBCONTRACTORS, RELATED TO THE DEVELOPMENT AND ANY OPERATIONS AND ACTIVITIES THEREON OR OTHERWISE TO THE PERFORMANCE OF THIS AGREEMENT. 9. NOTICES. All written notices called for or required by this Agreement shall be addressed to the following, or such other party or address as either party designates in writing, by certified mail, postage prepaid, or by hand delivery. City: City of Fort Worth Attn: City Manager 1000 Throckmorton Fort Worth, TX 76102 with copies to: the City Attorney and Economic/Community Development Director at the same address 10. ASSIGNMENT AND SUCCESSORS. Developer: FW 1 Attn: with a copy to: L.P i� Developer may at any time assign, transfer or otherwise convey any of its rights or obligations under this Agreement to an Affiliate without the approval of the City so long as Developer, the Affiliate and the City first execute an agreement under which the Affiliate agrees to assume and be bound by all covenants and obligations of Developer under this Agreement. Developer may also assign its rights and obligations under this agreement to a financial institution or other lender for purposes of granting a security interest in the Development and/or Development Property, provided that such financial institution or other lender first executes a written agreement with the City governing the rights and obligations of the City, Developer and the financial institution or other lender with respect to such security interest. Otherwise, Developer may not assign, transfer or otherwise convey any of its rights or obligations under this Agreement to any other person or entity without the prior consent of the City Council, which consent shall not be Page 22 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. unreasonably withheld, conditioned on (i) the prior approval of the assignee or successor and a finding by the City Council that the proposed assignee or successor is financially capable of meeting the terms and conditions of this Agreement and (ii) prior execution by the proposed assignee or successor of a written agreement with the City under which the proposed assignee or successor agrees to assume and be bound by all covenants and obligations of Developer under this Agreement. Any attempted assignment without the City Council's prior consent shall constitute grounds for termination of this Agreement and following ten (10) calendar days of receipt of written notice from the City to Developer. Any lawful assignee or successor in interest of Developer of all rights under this Agreement shall be deemed "Developer" for all purposes under this Agreement. 11. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND REGULATIONS. This Agreement will be subject to all applicable federal, state and local laws, ordinances, rules and regulations, including, but not limited to, all provisions of the City's Charter and ordinances, as amended. 12. GOVERNMENTAL POWERS. It is understood that by execution of this Agreement, the City does not waive or surrender any of it governmental powers or immunities. 13. NO WAIVER. The failure of either party to insist upon the performance of any term or provision of this Agreement or to exercise any right granted hereunder shall not constitute a waiver of that parry's right to insist upon appropriate performance or to assert any such right on any future occasion. 14. VENUE AND JURISDICTION. If any action, whether real or asserted, at law or in equity, arises on the basis of any provision of this Agreement, venue for such action shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas — Fort Worth Division. This Agreement shall be construed in accordance with the laws of the State of Texas. Page 23 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. 15. NO THIRD PARTY RIGHTS. The provisions and conditions of this Agreement are solely for the benefit of the City and Developer, and any lawful assign or successor of Developer, and are not intended to create any rights, contractual or otherwise, to any other person or entity. 16. FORCE MAJEURE. It is expressly understood and agreed by the parties to this Agreement that if the performance of any obligations hereunder is delayed by reason of war, civil commotion, acts of God, inclement weather, or other circumstances which are reasonably beyond the control of the party obligated or permitted under the terms of this Agreement to do or perform the same, regardless of whether any such circumstance is similar to any of those enumerated or not, the party so obligated or permitted shall be excused from doing or performing the same during such period of delay, so that the time period applicable to such design or construction requirement shall be extended for a period of time equal to the period such party was delayed. Notwithstanding anything to the contrary herein, it is specifically understood and agreed that Developer's failure to obtain adequate financing to complete the Development by the Completion Deadline shall not be deemed to be an event of force majeure and that this Section 16 shall not operate to extend the Completion Deadline in such an event. 17. INTERPRETATION. In the event of any dispute over the meaning or application of any provision of this Agreement, this Agreement shall be interpreted fairly and reasonably, and neither more strongly for or against any party, regardless of the actual drafter of this Agreement. 18. CAPTIONS. Captions and headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement. 19. ENTIRETY OF AGREEMENT. This Agreement, including any exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the City and Developer, and any lawful assign and successor of Developer, as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with any provision of this Agreement. Notwithstanding anything to the contrary herein, this Agreement shall not be Page 24 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. amended unless executed in writing by both parties and approved by the City Council of the City in an open meeting held in accordance with Chapter 551 of the Texas Government Code. 20. 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: By: Assistant City Manager Date: l l APPROVED AS TO FORM AND LEGALITY: By: Peter Vaky Assistant City Attorney M&C: C-22239 0740-07 Page 25 Economic Development Program Agreement between City of Fort Worth and FW River Plaza, L.P. FW RIVER PLAZA, L.P.: By: Trademark River Plaza, L.P., a Texas limited partnership and its sole general partner: By: TRP Genpar, L.L.C., a Texas limited liability company and its sole general partney: Rick Knight Senior Vice F1trested By: i�lartt� Hens i_x �;itv �;ecretary Exhibit "A" - Development Property Economic Development Program Agreement between City of Fort Worth and Trademark Property Company Exhibit -Development Property Legal Description Beginning at a point of the intersection of the east ROW line of Old University Drive and the north property line of River Plaza Complex block 1 lot 3A4R1 thence Easterly along the north property line of River Plaza Complex block 1 lot 3A4R1 to a point where said line intersects with the west ROW line of River Run Road thence Northward along the west ROW line of River Run Road to a point where said line intersects with the projection of the north property line of River Plaza Complex block 1 lot 3A1 thence Eastward along the north property line of River Plaza Complex block 1 lot 3A1 to a point where said property line intersects with the north property line of River Plaza Complex block 1 lot 3A1A thence Eastward along the projection of the north property line of River Plaza Complex block 1 lot 3A1A to a point where said property line intersects with the east property line of River Plaza Complex block 1 lot 3A1A thence Southward along the east property line of River Plaza Complex block 1 lot 3A1A to a point where said property line intersects with the east property line of River Plaza Complex block 1 lot 3A1 thence Southward along the east property line of River Plaza Complex block 1 lot 3A1 to a point where said property line intersects with the east property line of River Plaza Complex block 1 lot 3A2 thence Southward along the east property line of River Plaza Complex block 1 lot 3A2 to a point where said property intersects with the south property line of River Plaza Complex block 1 lot 3A2 thence North Westerly along the south property line of River Plaza Complex block 1 lot 3A2 to a point where said property line intersects with the south property line of River Plaza Complex block 1 lot 3A4R1 thence Westward along the south property line of River Plaza Complex block 1 lot 3A4R1 to a point where said property line intersects with the east ROW line of University Drive thence North along the east ROW line of University Drive to a point where said line intersects the east ROW line of Old University Drive thence North easterly along the east ROW line of Old University Drive to a point where said line intersects with the north property line of River Plaza Complex block 1 lot 3A4R1, which is the starting point. Economic Development Program Agreement between City of Fort Worth and Trademark Property Company Exhibit "B" - Development Depiction I f� fil' PARK VILLAGE i llO\tF41EAD ' � VD1AC6 Y_q g �w BUILDING TO bnETAi A MGTOR C\ONtT CLEAR FORK iRLYF1Y AIVF.R roRFsr PARK ® gideontoal River Plaza Study ADgus o3 2.0 PRELIMINARY LEASING PLAN A2A Economic Development Program Agreement between City of Fort Worth and Trademark Property Company Page I of 2 City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 7/10/2007 DATE: Tuesday, July 10, 2007 LOG NAME: 17RVRPLZAXAGR SUBJECT: Authorize Execution Group, Related to a Drive and River Run REFERENCE NO.: C-22239 of Economic Development Program Agreement with Trademark Property Mixed -Use Project to be Constructed at the Intersection of South University RECOMMENDATION: It is recommended that the City Council: 1Authorize the City Manager to execute an Economic Development Program Agreement with Trademark P. roperty Company (subject to subsequent, non -material changes agreed to by the parties) related to a mixed -use project to be constructed at South University Drive and River Run; and 2. Find that the terms and conditions of the Agreement, as outlined below and in the Agreement, constitute a custom -designed economic development program, as recommended by the 2007 Comprehensive Plan and authorized by Chapter 380 of the Texas Local Government Code. DISCUSSION: Under the proposed Economic Development Program Agreement, Trademark Property Group (Developer), has committed to construct a mixed -use development consisting of for sale residential units, office space, retail space, and a hotel on property near the intersection of South University Drive and River Run. In exchange for achieving the specified investment levels, the Developer will be eligible to receive up to 15 annual economic development grants, equal to 75 percent of incremental real and business personal property taxes paid to the City; and 75 percent of the City's one percent incremental sales tax. The amounts of the grants will be tied to the investment level achieved by the Developer. The minimum investment and maximum incentive schedule are summarized as follows: Investing between $50,000,000 and $63,500,000 will result in total possible maximum grants of $6,691,549. Investing between $63,500,001 and $81,500,000 will result in total possible maximum grants of $9,270,837. Investing in excess of $81,500,001 will result in total possible maximum grants of $12,133,062. All investment criteria are exclusive of land costs, but include hard and soft construction costs. Failure to meet a minimum investment of $50,000,000 is a condition of default and the agreement will be terminated. The Developer will not be eligible to receive the proposed grants until fagade and site plan improvements are approved by the Central City Revitalization and Economic Development (CURED) Committee. CCRED approval of the proposed fagade and site plan improvements must be obtained prior to any work on the project. If the Developer meets the minimum investment commitments for the project, the Developer will be entitled Page 2 of 2 to receive 50 percent of the possible maximum grants. To receive the maximum incentives, however, the Developer must also spend 30 percent of hard construction costs with Fort Worth contractors, and 25 percent of the hard construction costs with certified Fort Worth M/WBE contractors. In addition, the Developer must spend at least $50,000 on annual discretionary service and supply contracts with Fort Worth contractors and at least $35,000 with certified Fort Worth M/WBE contractors. If the Developer fails to meet these additional commitments, the grants will be reduced by the following percentages from the maximum according to the following schedule: in year one of the grant term, 30 percent for failure to meet the requirement for spending on hard construction costs with Fort Worth companies; in year one of the grant term, 20 percent for failure to meet the requirement for spending on hard construction costs with Fort Worth M/WBE companies; starting in year two of the agreement, 15 percent for failure to meet the requirement for annual discretionary service and supply contracts with Fort Worth companies; and starting in year two of the grant term 10 percent for failure to meet the requirement for annual discretionary service and supply contracts with Fort Worth M/WBE companies. The incentive for construction and service and supply components for Fort Worth and Fort Worth M/WBE will be reduced proportionally based on the amount by which these commitments are not met. The Developer will not be eligible for incentive funding this fiscal year. They are estimated to be eligible for the incentive in 2011 due to the best information we have on construction plans. At that time, funding will be appropriated. The River Plaza Development is located in COUNCIL DISTRICT 9. FISCAL INFORMATION/CERTIFICATION: The Finance Director certifies that the terms of this agreement may provide incentives to Trademark Property Group not to exceed the specified maximums. The incentives are calculated to be less than the additional revenue received from incremental taxes paid to the City. TO Fund/Account/Centers FROM Fund/Account/Centers Submitted for City Manager's Office by: Dale Fisseler (6266) Originating Department Head: Tom Higgins (6192) Jay Chapa (5804) Additional Information Contact: Mark Folden (8634)