HomeMy WebLinkAboutContract 37031f SECRETARy 37031
CONTRACT NO.
AMENDMENT NO. I TO CITY SECRETARY CONTRACT N0.36456
TAX ABATEMENT AGREEMENT BETWEEN
CITY OF FORT WORTH AND CINRAM WIRELESS, LLC
This AMENDMENT NO. 1 TO TAX ABATEMENT AGREEMENT
("Amendment") is made and entered into by and between the CITY OF FORT
WORTH ("City"), a home rule municipal corporation organized under the laws of the
State of Texas, and CINRAM WIRELESS, LLC ( "Cinram"), a Delaware limited
liability company.
The following introductory provisions are true and correct and for the basis of this
Amendment:
A. As of December 28, 2007 the City and Cinram entered into that certain Tax
Abatement Agreement on file in the City Secretary's Office as City Secretary Contract
No. 36456 (the "Agreement"). Under the Agreement, Cinram agreed, among other
things, to cause construction of a wireless telephone manufacturing facility on Land in
the City owned by Alliance Gateway No. 11, Ltd. (the "Land"), to place certain taxable
tangible personal property on the Land, and to fill a certain percentage of Full-time Jobs
on the Land with individuals residing in the Central City, all as more specifically set forth
in the Agreement. In return, the City agreed to abate, for a period of ten (10) years, up to
seventy-five percent (75%) of the real property taxes on Cinram's leasehold interest, if
any, in the Land and the improvements thereon and up to seventy-five percent (75%) of
the personal property taxes on Cinram's taxable tangible personal property located on the
.and.
B. The City and Cinram now wish to amend the Agreement in order to revise
Cmram's obligation with respect to the installation of taxable tangible personal property
on the Land and Cinram's commitment to provide certain Full-time Jobs on the Land.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the City and Cinram hereby agree as
follows:
1. The first sentence of Section 1.1 of the Agreement (Real Property Improvements)
is hereby deleted in its entirety and replaced with the following sentence:
In accordance with the Lease, Cinram shall cause to be constructed by the
Completion Deadline certain improvements on the Land consisting of, at a
minimum, a wireless telephone manufacturing facility of approximately
788,160 square feet in size and having a minimum aggregate Construction
Cost upon completion.of=$15,500,000.00 (collectively, the "Required
Improvements").
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Amendment No. 1 to CSC No. 3645 9
Tax Abatement Agreement with Cinram iieIess, T.W
2. The third sentence of Section 1.2 of the Agreement (Completion Date of Required
Improvements and Installation of Tangible Personal Property) is hereby deleted in its
entirety and replaced with the following sentence:
Cinram further covenants and agrees that at least $10,500,000 worth of
taxable new tangible personal property owned by Cinram or leased by and
taxable to Cinram will be placed on the Land by the Completion Deadline,
unless delayed because of Force Majeure, in which case this deadline shall
be extended by the number of days comprising the specific Force Majeure.
3. Section 2.1.1 of the Agreement (Abatement Based on Construction and Personal
Property Expenditures (10%)) is hereby deleted in its entirety and replaced with the
following:
Cinram shall receive a ten percent (10%) Abatement in each year
of the Abatement Term, as defined in Section 2.5, if by the Completion
Deadline (i) at least $15,500,000.00 in Construction Costs were expended
on the Required Improvements and (ii) at least $10,500,000.00 in taxable
tangible personal property owned by Cinram or leased by and taxable to
Cinram is located on the Land. If by the Completion Deadline less than
$15,500,000.00 in Construction Costs have been expended on the
Required Improvements or less than $10,500,000.00 in taxable tangible
personal property owned by Cinram or leased by and taxable to Cinram is
located on the Land, not only will Cinram be ineligible to receive the ten
percent (10%) Abatement under this Section 2.1.1, but an Event of
Default, as defined and addressed in Section 4, shall also occur.
4. The first sentence of Section 2.1.6 of the Agreement (Abatement Based on
Number of Full-time Jobs with Central City Residents (Up to 5%)) is hereby deleted in
its entirety and replaced with the following:
Subject to Section 2.1.4 of this Agreement, Cinram shall receive a
five percent (5%) Abatement in any given year of the Abatement Term, as
defined in Section 2.5, if on the Compliance Date in the previous calendar
year at least ten percent (10%) of all Full-time Jobs provided and filled on
the Land by Cinram, regardless of the number of such Full-time Jobs,
were held by individuals residing in the Central City (the "Central City
Employment Commitment").
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Amendment No. 1 to CSC No. 36456
Tax Abatement Agreement with Cinram Wireless, LLC
5. The last sentence of Section 2.1.6 of the Agreement (Abatement Based on
Number of Full-time Jobs with Central City Residents (Up to 5%)) is hereby
deleted in its entirety and replaced with the following:
For example, if CiMam provided and filled 1,300 Full-time Jobs on the
Land in a given year of the Compliance Auditing Term (meaning that the
Central City Employment Commitment would be 130 Full-time Jobs), and
only 78 Full-time Jobs provided and filled on the Land by Cinram were
held by individuals residing within the Central City, the percentage of
Abatement granted in the following year of the Abatement Term pursuant
to this Section 2.1.6 would be reduced from 5% to 3% (or .05 x 78/130, or
OS x .60, or 0.03).
6. The first three sentences of Section 4.2 (Notice to Cure) is hereby deleted in its
entirety and replaced with the following:
Subject to Section 2.1.9 and Section 5 of this Agreement, if the City
determines that an Event of Default has occurred, the City shall provide a
written notice to Cinram that describes the nature of the Event of Default.
If the Event of Default is due to a breach under sections 1.1 or 1.2 of this
Agreement, or on account of the expiration or termination of the Lease,
the City will have the right, as its sole and exclusive remedy in addition to
any other rights the City may have under Section 4.3 hereof, to terminate
this Agreement immediately. For any other Event of Default, including
without limitation an Event of Default due to a breach under Section 1.3 of
this Agreement, Cinram shall have sixty (60) calendar days from the date
of receipt of this written notice to fully cure or have cured the Event of
Default.
6. This Amendment shall take effect as of the date both parties have executed this
Amendment.
7. The first parenthetical of Section 4.3 of the Agreement is hereby deleted in its
entirety and is replaced with the following parenthetical "(and which Event of
Default is uncured)".
8. All terms in this Amendment that are capitalized but not defined shall have the
meanings assigned to them in the Agreement.
9. All terms and conditions of the Agreement that are
pursuant to this Amendment shall remain in full force and effect.
1A
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Amendment No. I to CSC No. 36456
Tax Abatement Agreement with Cinram Wireless, LL'
not expressly amended
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed as of the later date below:
[SIGNATURES FOLLOW IMMEDIATELY ON NEXT TWO (2) PAGES]
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Amendment No. 1 to CSC No. 36456
Tax Abatement Agreement with Cinram Wireless, LLC
CITY OF FORT WORTH: APPROVED AS TO FORM AND
LEGALITY:
Tom Higgins
AGting Assistant City Manager
Date: /0 8
ATTEST:
By:Ztzv , 0
Peter Vaky
Assistant City Attorney
By.AA A
LLY) i
City Secretary is
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, on this day personally appeared Tom
Higgins, ^ Assistant City Manager of the CITY OF FORT WORTH, a municipal
corporation organized under the laws of the State of Texas, known to me to be the person
and officer whose name is subscribed to the foregoing instrument, and acknowledged to me
that the same was the act of the CITY OF FORT WORTH, that he was duly authorized to
perform the same by appropriate resolution of the City Council of the City of Fort Worth
and that he executed the same as the act of the CITY OF FORT WORTH for the
purposes and consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this /jtday of
2008.
� a
ot y Public in and for o����P�s„ �,���p,�� , N
the State of Texas
NO T ARY PUBLIC
~� ,P STP, L E OF TEXAS
O My
Notary's Primed �i y Comr �p-1 14 t�;9 r
IDOCS:5183.44:666174.1Page 5
Amendment No. 1 to CSC No. 36456
Tax Abatement Agreement with Cinram Wireless, LLC
CINRAM WIRELESS, LLC:
By:
Name:
Title:
Date:
ATTEST:
�AvA-NCi A-C
4
STATE OF §
COUNTY OF §
� � r
FORE ME, the undersi ned authorit on this day personally appeared
of CINRAM WIRELESS, LLC,
known to me to&6e the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that s/he executed the same for the purposes and consideration therein
expressed, in the capacity therein stated and as the act and deed of CINRAM WIRELESS,
LLC.
GIVEN UNDER MY IIAND AND SEAL OF OFFICE this
Notary Public in and for
the State of
Notary's Printed Name
DEBBIE S. FISHER
Notary Public, State of Texas
My Commission Expires
MY 31, 2008
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Amendment No. 1 to CSC No. 36456
Tax Abatement Agreement with Cinram Wireless, LLC
Page 1 of 2
• • � -
Mayor and Council Communication
DATE: Tuesday, April 29, 2008
LOG NAME: 17CRAMAMEND REFERENCE NO.: **C-22783
SUBJECT:
Authorize Execution of Amendments to City Secretary Contract Nos. 36456 and 36458, Tax
Abatement Agreements with Cinram Wireless, LLC, and Alliance Gateway No. 11, Ltd., Revising
Commitments for Employment and the Installation of New Business Personal Property
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to execute the attached amendments to
the Tax Abatement Agreements with Cinram Wireless, LLC, and Alliance Gateway No. 11, Ltd., (City
Secretary Contract Nos. 36456 and 36458).
DISCUSSION:
On September 18, 2007, the City Council authorized execution of ten-year Tax Abatement Agreements with
Cinram Wireless, LLC, (Cinram) and Alliance Gateway No. 11, Ltd., (Alliance), for the construction of a
wireless telephone facility in the Alliance Corridor in north Fort Worth (M&C C-22398).
The proposed amendments provide that 10 percent (rather than 15 percent) of all full-time jobs at the facility
be held by Central City residents. The 10 percent figure is consistent with what was presented to City
Council, but M&C C-22398 erroneously set the commitment at 15 percent.
During negotiations it was understood that all of Cinram's investment in business personal property would
be new. Cinram has now notified the City that a portion of their business personal property will be
purchased from another Fort Worth company. The property is existing on the tax rolls and not subject to
abatement and cannot be counted towards Cinram's investment. Therefore, the proposed amendment
reduces the commitment for the business personal property investment from $15 million to $10.5 million.
Cinram also requested a language revision to more accurately capture the intent of the parties regarding
the levying of liquidated damages in the event of default.
Otherwise, the structure and terms of the Agreement will remain the same.
This project is in COUNCIL DISTRICT 2.
tittp://apps.cfwnet.org/council_packet/Reports/mc�rint.asp 5/1 /2008
Page 2 of 2
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that this action will have no material impact on City funds.
TO Fund/Account/Centers
FROM Fund/Account/Centers
Submitted for City Manager's Office b� Tom Higgins (6140)
Originating Department Head: Jay Chapa (6192)
Additional Information Contact: Mark Folden (8634)
http://apps.cfwnet.org/council�acket/Reports/mc�rint.asp 5/1/2008