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HomeMy WebLinkAboutContract 41300 (2)STATE'. of TEXAS ' H 1_ SECRETARY CONTRACT NO , 130 D 4.s COUNTY OF TARRANT § TAX ABAT ',I\% KNT AG H J' ,It NT '1his TAX ABATF,I\4 ENT AGREEMENT ("Agr°eement") 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 acting by and through Dale Fisseler, its duly authorized Assistant City Manager; FS RP 700 DFW, L.L.P., a Texas limited liability company ("Seefried"); and PRATT INDUSTRIES (U.S.A.), INC. ("Pratt"), a Delaware corporation. The City Council of the City of Fort Worth ("City Council") hereby finds, and the City, Seefried and Pratt hereby agree, that the following statements are true and correct and constitute the basis upon which the City, Seefried and Pratt have entered into this Agreement: A. On June 22, 2010, the City Council adopted Resolution No. 3895-06-2010 entitled "Tax Abatement Policy Statement for Qualifying Development Projects" (the "Policy"), which is incorporated herein by reference for all purposes, stating that the City elects to be eligible to participate in tax abatement and including guidelines and criteria governing tax abatement agreements entered into between the City and various third parties, in accordance with Chapter 312 of the Texas Tax Code (the "Code") B. On June 22, 2010, the City Council adopted Ordinance No. 19195-06-2010 (the "Ordinance") establishing Tax Abatement Reinvestment Zone No. 70, City of Fort Worth, Texas (the "Zone"). C. Contingent on receipt of the tax abatement set forth herein, Pratt wishes to establish a corrugated box manufacturing facility in the River -Park Business Center in the City and, for such purpose, has leased certain real property located entirely within the Zone and that is more particularly described in Exhibit "A", attached hereto and hereby made a part of this Agreement for all purposes (the "Land") The Land and current improvements thereon are owned by Seefried. The lease between Seefried and Pratt (the "Lease") will include terms and conditions consistent with those outlined in Exhibit "B", attached hereto and hereby made a part of this Agreement for all purposes. D. In accordance with the terms of the Lease, Seefried and, as permitted under the Lease, Pratt will cause an existing building on the Land to be improved for use as a corrugated box manufacturing facility of approximately 3 00, 000 square feet, as more specifically set forth in Exhibit "C", attached hereto and hereby made a part of this Agreement for all purposes (the "Required Improvements"). E. Under the Lease, Pratt is required to pay Seefried's real property taxes on the Land and the Required Improvements. In order for the full tax abatement necessary to pr Page 1 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DEW, L.L.P. and Pratt Industries (U.S.A.) ovide incentive OFFICIAL RECORD CITY SECRETARY Ft WORTH, TX for this project to be undertaken, which the City Council has previously found to be consistent with the City's desire to encourage development of the Zone and to generate economic development and increased employment opportunities in the City, the City has been requested to grant an abatement on real property taxes on the Land and the Required Improvements as well as an abatement on taxes on tangible personal property located on the Land. On June 9, 2010 Seefried submitted an application for tax abatement to the City concerning the contemplated use of the Land (the "Application"), attached hereto as Exhibit "D" and hereby made a part of this Agreement for all purposes. G. Section 312.204(a) of the Texas Tax Code permits the City to enter into a tax abatement agreement with the owner of the Land to abate taxes on the value of the Land and improvements thereon or of tangible personal property located on the Land, or both. Because Pratt will be permitted by Seefried to make improvements to the Land in accordance with the Lease, and because Pratt must meet certain employment and spending commitments in order for the City to grant the full amount of abatement available hereunder it is necessary that Pratt be a party to this Agreement m addition to Seefried. H. The terms of this Agreement, and the Land and Required Improvements, satisfy the eligibility criteria of Section 6.2 of the Policy. I. Written notice that the City intends to enter into this Agreement along with a copy of this Agreement has been furnished in the manner prescribed by the Code to the presiding officers of the governing bodies of each of the taxing units in which the Land is located. NOW, THEREFORE, the City, Seefried and Pratt, for and in consideration of the terms and conditions set forth herein, do hereby contract covenant and agree as follows: 1. COVENANTS OF THE PARTIES. 1.1. Real Property Improvements. In accordance with the Lease, Seefried and/or Pratt shall expend or cause to be expended a minimum of Three Million Dollars ($3.000,000.00) in Construction Costs in the aggregate to construct or install the Required Improvements. For purposes of this Agreement, `Construction Costs" shall mean site development costs, actual construction costs, including contractor fees the costs of supplies and materials, engineering fees, architectural fees and other professional, development and permitting fees expended directly in connection with the Required Improvements. 1.2. Completion Date of Required Improvements; Completion Deadline. The Required Improvements shall be deemed complete on the date as of which the City has issued a final certificate of occupancy for all improvements on the Land, as modified by the Required Improvements (the "Completion Date"). Seefried and Pratt Page 2 of 22 Tax Abatement Agreement between. City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) covenant and agree that the Completion Date shall occur by June 30, 2012 (the "Completion Deadline") 1.3. Installation of Tangible Personal Property. New Taxable Tangible Personal Property having a value of at least Twenty -Five Million Dollars ($25,000,000.00) shall be in place on the Land by January 1 of the second full year following the year in which the Completion Date occurred, as determined by Tarrant Appraisal District. For purposes of this Agreement, "New Taxable Tangible Personal Property" means any personal property other than mventory or supplies that (i) is subject to ad valorem taxation by the City; (ii) is located on the Land; (m) is owned, leased or financed by Pratt; and (iv) was not located in the City prior to the Effective Date of this Agreement. 1.4. Use of Land and Required Improvements. The Required Improvements and the Land shall be used as a corrugated box manufacturing facility at all times during the Compliance Auditing Term, as defined in Section 2.4. In addition Pratt covenants that throughout the Term, the Required Improvements shall be operated and maintained for the purposes set forth in this Agreement and in a manner that is consistent with the general purposes of encouraging development or redevelopment of the Zone. 1.5. Performance by Pratt. Any obligation of Pratt hereunder may be fulfilled by Pratt or any Affiliate, as defined in Section 5. 2. ABATEMENT AMOUNTS, TERMS AND CONDITIONS; FEE WAIVERS. Provided that the Lease is in full force and effect at the time and subject to and in accordance with this Agreement, the City will grant annual property tax abatements during the ten (10)-year Abatement Term, as defined in Section 2.4 on (i) the Land and the Required Improvements, including any taxes due on Pratt's leasehold interest in the Land and the Required Improvements, and (ii) the New Taxable Tangible Personal Property (collectively, the `Abatement"). The actual amount of the Abatement granted under this Agreement shall be based upon the increase in value of Land and the Required Improvements and the increase in value of the New Taxable Tangible Personal Property over their respective values as of January 1, 2010, which is the year in which this Agreement was entered into, and upon attainment of certain construction, construction contracting, employment, and supply and service spending benchmarks set forth in this Section 2. Page 3 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) 2.1. Amount of Abatement. Subject to Sections 2.2 and 4 of this Agreement, during each year of the Abatement Tenn, the Abatement granted hereunder may range up to a maximum of sixty percent (60%) of the increased value of the Land and the Required Improvements and up to a maximum of sixty percent (60%) of the increased value of the New Taxable. Tangible Personal Property, and shall be calculated in components as follows: 2.1.1. Abatement Based on Construction and Personal Property Expenditures (15% Component). The City will grant a fifteen percent (15%) Abatement in each year of the Abatement Term, as defined in Section 2.4, if (i) the Completion Date occurs on or before the Completion Deadline; (ii) at least Three Million Dollars ($3,000,000.00) in Construction Costs have been expended on the Required Improvements by the Completion Date; and (iii) New Taxable Tangible Personal Property having a value of at least Twenty -Five Million Dollars ($25,000,000.00) has been placed on the Land by January 1 of the year follow ing the year in which the Completion Date occurred, as determined by Tarrant Appraisal District. If (i) the Completion Date does not occur by the Completion Deadline; (ii) less than Three Million Dollars ($3,000 000.00) in Construction Costs have been expended on the Required Improvements as of the Completion Date, or (iii) New Taxable Tangible Personal Property having a value of at least Twenty -Five Million Dollars ($25,000,000.00) has not been placed on the Land as of January 1 of the year following the year in which the Completion Date occurred, as determined by Tarrant Appraisal District, not only will the fifteen percent (15%) Abatement under this Section 2.1.1 not be granted, but an Event of Default, as defined and addressed in Section 4, shall also occur. 2.1.2. Abatement Based on Construction Spending with Fort Worth Certified M/WBE Companies (10% Component) The City will grant a ten percent (10%) Abatement in each year of the Abatement Term, as defined in Section 2.4, if by the Completion Date at least the greater of (i) twenty-five percent (25%) of all Construction Costs for the Required Improvements, regardless of the total amount of such Construction Costs, or (ii) Seven Hundred Fifty Thousand Dollars ($750,000 00) in Construction Costs for the Required Improvements have been expended with Fort Worth Certified M/WBE Companies (the "M/WBE Construction Commitment' ). For purposes of this Agreement, "Fort Worth Certified M/WBE Company' means a minority -owned or woman -owned business that (i) has received certification as a minority business enterprise (MBE), a woman business enterprise (MBE), or a disadvantaged business enterprise (l )BE) by the North Texas Central Regional Certification Agency (NC 1'RCA) (ii) has a principal office located within the corporate limits of the City that performs a Page 4 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) commercially useful function; and (iii) has provided from such office the services or sales that Seefried or Pratt are seeking to have counted as Construction Costs for purposes of the M/WBE Construction Commitment. If the M/WBE Construction Commitment is not met, the ten percent (10%) Abatement under this Section 2.1.2 will not be granted in any year of the Abatement Term. 2.1.3. Abatement Based on Overall Number of Full-time Jobs (10% Component). The City will grant a ten percent (10%) Abatement if Pratt meets the Overall Employment Commitment, as more specifically set forth in this Section 2.1.3. The "Overall Employment Commitment" is defined in Section 2.1.3.1 for purposes of the first year of the Abatement Term and in Section 2.1.3.2 for purposes of each year thereafter Determination of compliance with the Overall Employment Commitment shall be based on Pratt's employment data as of December 1 (or such other date as may mutually be acceptable to both the City and Pratt) of each year during the Compliance Auditing Term, as defined in Section 2 4 If the Overall Employment Commitment is not met in a given year of the Compliance Auditing Term, then the ten percent (10%) Abatement under this Section 2.1.3 will not be granted in the following year of the Abatement Term. 2.1.3.1. First Year of Abatement Term. The City will grant a ten percent (10%) Abatement in the first year of the Abatement Term, as defined in Section 2.4, if in the previous calendar year at least seventy (70) Full-time Jobs were provided and filled on the Land by Pratt. For purposes of this Agreement, a "Full- time Job" means a job filled by one (1) individual for a period of not less than forty (40) hours per week 2.1.3.2. Subsequent Years of Abatement Term. The City will grant a ten percent (10%) Abatement in a given year of the Abatement Term, as defined in Section 2.4, other than the first year of the Abatement Teim, if in the previous calendar year at least one hundred forty (140) Full-time Jobs were provided and filled on the Land by Pratt. 2.1.4. Abatement Based on Number of Full-time Jobs with Fort Worth Residents (10% Component). The City will grant a ten percent (10%) Abatement if Pratt meets the Fort Worth Employment Commitment, as more specifically set forth in this Section 2.1.4. The "Fort Worth Employment Commitment" is defined in Section 2.1.4 1 for purposes of the first year of the Abatement Tex m and in Section 2.1.4.2 Page 5 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) for purposes of each year thereafter. Determination of compliance with the Fort Worth Employment Commitment shall be based on Pratt's employment data as of December 1 (or such other date as may mutually be acceptable to both the City and Pratt) of each year during the Compliance Auditing Teini, as defined in Section 2 4 If the Fort Worth Employment Commitment is not met in a given year of the Compliance Auditing Term, then the ten percent (10%) Abatement under this Section 2.1.4 will not be granted in the following year of the Abatement Term. 2.1.4.1. First Year of Abatement Term. The City will grant a ten percent (10%) Abatement in the first year of the Abatement Term, as defined in Section 2.4, if in the previous calendar year the greater of at least (i) twenty-five percent (25%) of all Full-time Jobs provided and filled on the Land by Pratt regardless of the total number of such Full-time Jobs, or (ii) eighteen (18) Full-time Jobs provided and filled on the Land by Pratt were held by indi\ iduals residing at a location within the corporate limits of the City. 2.1.4.2. Subsequent Years of Abatement Term. The City will grant a ten percent (10%) Abatement in a given year of the Abatement Term, as defined in Section 2.4, other than the first year of the Abatement Term, if in the previous calendar year the greater of at least (i) twenty-five percent (25%) of all Full-time Jobs provided and filled on the Land by Pratt, regardless of the total number of such Full-time Jobs, or (ii) thirty-five (35) Full-time Jobs provided and filled on the Land by Pratt were held by individuals residing at a location within the corporate limits of the City. 2.1.5. Abatement Based on Number of Full-time Jobs with Central City Residents (10% Component). The City will grant a ten percent. (10%) Abatement if Pratt meets the Central City Employment Commitment, as more specifically set forth in this Section 2.1.5. The "Central City Employment Commitment" is defined in Section 2.1.5.1 for purposes of the first year of the Abatement Term and in Section 2.1.5.2 for purposes of each year thereafter. Determination of compliance with the Central City Employment Commitment shall be based on Pratt's employment data as of December 1 (or such other date as may mutually be acceptable to both the City and Pratt) of each year during the Compliance Auditing Term, as defined in Section 2.4. If the Central City Employment Commitment is not met in a given year of the Compliance Auditing Term then the ten percent (10%) Abatement under this Section 2.1.5 will not be granted in the following year of the Abatement Term Page 6 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) 2.1.5.1. First Year of Abatement Term. The City will grant a ten percent (10%) Abatement in the first year of the Abatement Tecui, as defined in Section 2.4, if in the previous calendar year at least the greater of (i) ten percent (10%) of all Full-time Jobs provided and filled on the Land by Pratt, regardless of the total number of such Full-time Jobs or (ii) seven (7) Full-time Jobs provided and filled on the Land by Pratt were held by individuals residing at a location within the Central City as defined in the Policy. 2.1.5.2. Subsequent Years of Abatement Term. The City will grant a ten percent (10%) Abatement in a given year of the Abatement Term, as defined in Section 2.4, other than the first year of the Abatement Term, if in the previous calendar year at least the greater of (i) ten percent (10%) of all Full-time Jobs provided and filled on the Land by Pratt regardless of the total number of such Full-time Jobs, or (ii) fourteen (14) Full-time Jobs provided and filled on the Land by Pratt, whichever number is greater, were held by individuals residing at a location within the Central City, as defined in the Policy. 2.1.6. Abatement Based on Supply and Service Expenditures with Fort Worth M/WBE Companies (5% Component). The City will grant a five percent (5%) Abatement in any given year of the Abatement Term, as defined in Section 2.4, if durmg the previous calendar year Pratt expended the greater of at least (i) Twenty -Five Thousand Dollars ($25,000.00) in local discretionary funds for supplies and services directly in connection with the operation or maintenance of the Required Improvements ("Supply and Service Expenditures") or (ii) twenty-five percent (25%) of all Supply and Service Expenditures, regardless of the total amount of such Supply and Service Expenditures, with Fort Worth Certified M/WBE Companies (the "M/WBE Supply and Service Spending Commitment"). If the M/WBE Supply and Service Spending Commilinent is not met in a given year of the Compliance Auditing Teiui, then the five percent (5%) Abatement under this Section 2.1.6 will not be granted in the following year of the Abatement Term 2.2. Abatement Limitation. Notwithstanding anything that may be interpreted to the contrary in this Agreement, the Abatement on real property in any given year of the Abatement Term shall be based on the increase in the value of the Land and the Required Improvements since January 1, 2010, up to a maximum of sixty percent (60%) of $4,500,000 00, and the Abatement on New Taxable Tangible Personal Property in any given year of the Abatement Term shall be based on the increase in the value of the New Taxable Tangible Personal Property since January 1, 2010, up to a maximum of sixty percent (60%) of Page 7 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industnes (U.S.A.) $37,500,000.00 In other words in any year in which the value of the Land and the Required Improvements exceeds their values as of January 1, 2010 plus (ii) $4,500,000 00, the Abatement for that tax year shall be capped and calculated as if the increase in the value of the Land and the Required Improvements since January 1, 2010 had only been $4,500,000.00. For example, and as an example only, if the value of the Land and the Required Improvements in the sixth year of the Compliance Auditing Terni is $5,000,000 00 over their values as of January 1, 2010 a maximum real property tax Abatement of sixty percent (60%) of $4,500,000.00 in the sixth year of the Abatement Term would be granted and full taxes on the remaining $500,000.00 in value would be due and payable. Along the same lines, if the value of the New Taxable Tangible Personal Property in the sixth year of the Abatement Terns is $40,000,000.00 over the value of that Property as of January 1, 2010, a maximum personal property tax Abatement of sixty percent (60%) of $37,500,000.00 in the sixth year of the Abatement Term would be granted and full taxes on the remaining $2,500,000.00 in value would be. due and payable. 2.3. Protests Over Appraisals or Assessments. Seefried and/or Pratt shall have the right to protest and contest any or all appraisals or assessments of the Land and/or improvements or taxable tangible personal property thereon in accordance with and subject to all applicable legal requirements. 2.4. Terms. This Agreement shall be effective as of July 13, 2010 (the "Effective Date") and, unless terminated earlier in accordance with its tennis and conditions, shall expire simultaneously upon expiration of the Abatement Teuri, as defined below (the ' Term"). The percentage of overall Abatement available in any given year will be based, in part, on Pratt s compliance with the Overall Employment Commitment, the Fort Worth Employment Commitment, the Central City Employment Commitment, and the M/WBE Supply and Service Spending Commitment in the previous calendar year. The term during which the City will audit compliance with such commitments shall commence in the calendar year following the year in which the Completion Date occurred and expire on December 31 of the tenth (l Oth) year thereafter (the "Compliance Auditing Term') The teen during which an Abatement will be granted hereunder shall begin on January 1 of the year following the first year of the Compliance Auditing Tenn and expire on December 31 of the tenth (10th) year thereafter (the "Abatement Term"). 2.5. Abatement Application Fee. The City acknowledges receipt from Pratt of the required Application fee of Fifteen Thousand Dollars ($15,000.00). Of such amount, Two Thousand Dollars ($2,000.00) is nonrefundable and shall be used by the City for the purposes set forth in the Policy. If Seefried and Pratt diligently begin or cause to begin construction of the Required Improvements on the Land within one (1) year from the date of the Application, the remaining Thirteen Thousand Dollars ($13 000.00) of such fee shall be creditable to their Page 8 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) benefit against any permit, impact, inspection or other lawful fee required by the City in connection with the Required Improvements that is not waived pursuant to Section 2.6 hereof, and any remaining amounts shall be refunded to Pratt solely in accordance with the Policy. 2.6. Waiver of Certain Fees. Seefried, Pratt, and their contractors will be required to apply for and receive all permits and other licenses and certificates required by the City with respect to construction of the Required Improvements. However, as further consideration for the public purposes that will be achieved from construction and use of the Required Improvements and the development of the Land, unless otherwise prohibited by applicable law, ordinance, rule or regulation, the City agrees to waive the following fees related to the Required Improvements that would otherwise be charged by the City at any time prior to the Completion Deadline: (i) all building permit, plan review, inspection, and re -inspection fees; (ii) all zoning fees, (iii) all temporary encroachment fees; (iv) all platting fees, and (v) all fire, sprinkler, and alarm permit fees. All other fees charged or assessed by the City in accordance with applicable federal state and local laws, ordinances, rules and regulations, including, but not limited to transportation impact fees and water and sewer impact fees, are not waived hereunder and shall be fully payable by Seefried, Pratt and their contractors. 3. RECORDS, AUDITS AND EVALUATION OF PROJECT. 3.1. Inspection of Property. At any time during normal office hours throughout the Term and the year following the Term and following reasonable notice to Seefried and Pratt, the City shall have, and Seefried (subject to any rights granted to Pratt under the Lease) and Pratt (notwithstanding any rights granted by Seefried under the Lease) shall provide, access to the Land and any improvements thereon, including the Required Improvements, in order for the City to inspect the Land and evaluate the Required Improvements to ensure compliance with the tents and conditions of this Agreement. Seefried and Pratt shall cooperate fully with the City during any such mspection and/or evaluation Notwithstanding the foregoing, Seefried and Pratt shall have the right to require that any representative of the City be escorted by Seefried's and Pratt s security personnel while on the Land. 3.2. Audits. The City shall have the right to audit the financial and business records of Seefried, Pratt and any of their Affiliates (as defined in Section 5) that relate to the Lease the Required Improvements and this Agreement (collectively, the "Records") at any time during the Compliance Auditing Term in order to determine compliance with this Agreement and to calculate the correct percentage of Abatement available hereunder. Seefried and Pratt shall make all Records available to the City on the Land or at another location in the City following reasonable advance notice by the City and shall otherwise cooperate fully with the City during any audit. Page 9 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) 3.3. Reports and Filings. 3.3.1. Plan for Use of Fort Worth Certified E Companies. • Within thirty (30) calendar days following execution of this Agreement, whichever is earlier3 Seefried or Pratt will file or cause to be filed with the City a plan as to how the commitments for the use from that date forward of Fort Worth Certified MAVBE Companies outlined in this Agreement will be attained. The party filing such plan agrees to meet with the City's M/WBE Office and Minority and Women Business Enterprise Advisory Committee as reasonably necessary for assistance in implementing such plan and to address any concerns that the City may have with such plan. 3.3.2. Monthly M/WBE Construction Spending Reports. From the date of execution of this Agreement until the Completion Date, in order to enable the City to assist in attainment of the M/WBE Construction Commitment, Seefried or Pratt will provide to the City or cause the City to be provided a monthly report in a form reasonably acceptable to the City that specifically outlines the then -current aggregate Construction Costs expended with Fort Worth Certified M/WBE Companies for construction of the Required Improvements. 3.3.3. Construction Spending Report. Within ninety (90) calendar days following the Completion Date, Seefried or Pratt will provide or cause to be provided to the City a report in a form reasonably acceptable to the City that specifically outlines the Construction Costs expended for construction of the Required Improvements, together with supporting invoices and other documents necessary to demonstrate that such amounts were actually paid, including, without limitation, final lien waivers signed by Seefried's general contractor. This report shall also include actual Construction Costs expended for construction of the Required Improvements 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. Page 10 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) 3.3.4. Employment Report. On or before February 1 following the end of each year of the Compliance Auditing Team, Pratt shall provide the City with a report in a form reasonably acceptable to the City that sets forth (i) the total number of individuals who held Full-time Jobs on the Land; (ii) the total number of individuals residing within the corporate limits of the City who held Full-time Jobs on the Land and (iii) the total number of individuals residing in the Central City who held Full-time Jobs on the Land, all as of December 1 of the previous year (or such other date as may mutually be acceptable to both the City and Pratt), together with reasonable documentation regarding the residency of such employees. 3.3.5. Annual Supply and Service Spending Report. In order to determine whether the M/WBE Supply and Service Spending Commitment is attained in any given year on or before February 1 of each year of the Compliance Auditing Term, Pratt shall provide a report to the City in a foiuu reasonably acceptable to the City that specifically outlines the then -aggregate Supply and Service Expenditures made in the same calendar year with Fort Worth Certified M/WBE Companies, together with reasonable documentation verifying that such Expenditures were made. 3.3.6. General. Seefried and Pratt shall supply any additional information requested by the City that is pertinent to the City's evaluation of compliance with each of the terms and conditions of this Agreement. Failure to provide all information required by this Section 3.3 shall constitute an Event of Default, as defined and more specifically outlined in Section 4. 4. EVENTS OF DEFAULT 4.1. Effect of Failure to Meet Section Certain Commitments. The failure to meet the M/WBE Construction Commitment, the Overall Employment Commitment, the Fort Worth Employment Commitment, the Central City Employment Commitment, and/or the M/WBE Supply and Service Spending Commitment shall result only in the failure to earn an a percentage of Abatement that would otherwise have been available hereunder as set forth in Sections 2 1 2 through 2.1.6, and shall not constitute an Event of Default as defined in Section 4.2. Page 11 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) 4.2. Defined. A default will occur under this Agreement if (i) any of the covenants set forth in any portion or all of Sections 1 1, 1.2, 1.3, or 1.4 of this Agreement are not met; (ii) the Lease expires or is terminated for any reason or is amended in any way so that Pratt is not required to pay or reimburse to the landlord thereunder all real property taxes on the Land and the Required Improvements• (iii) ad valorem real property taxes with respect to the Land and the Required Improvements, including any leasehold interest of Pratt in the Land and the Required Improvements, or ad valorem taxes NA ith respect to the New Taxable Tangible Personal Property become delinquent and the legal procedures for protest and/or contest of any such ad valorem real property or personal property taxes are not timely and properly followed or (iv) subject to Section 4.1 Seefried or Pratt breach any of the other terms or conditions of this Agreement (collectively, each an "Event of Default") 4.3. Notice to Cure. If the City determines that an Event of Default has occurred, the City shall provide a written notice to Seefried and Pratt that describes the nature of the Event of Default. If the Event of Default is on due to a breach under Sections 1.1, 1.2, 1.3 or 1.4 of this Agreement or on account of the expiration or termination of the Lease or an amendment of the Lease prohibited under Section 4.2 hereof, the City will have the right to terminate this Agreement immediately. For any other Event of Default Seefried and Pratt shall have thirty (30) calendar days from the date of receipt of this written notice to fully cure or have cured the Event of Default. If Seefried or Pratt reasonably believes that additional time will be required to cure the Event of Default, that party shall promptly notify the City m writing in which case (i) after advising the City Council in an open meeting of the efforts and intent to cure, the City shall allow ninety (90) calendar days from the original date of receipt of the written notice, for cure of the Event of Default or (ii) if that party reasonably believes that more than ninety (90) days will be required to cure the Event of Default, after advising the City Council in an open meeting of Seefried s and Pratt's efforts and intent to cure, such additional time, if any, as may be offered by the City Council in its sole discretion. If an Event of Default has not been cured within the time frame specifically allowed hereunder (if any), the City shall have the right to terminate this Agreement immediately upon provision of written notice to Seefried and Pratt. 4.4. Termination for Event of Default and Payment of Liquidated Damages. Seefried and Pratt acknowledge and agree that an uncured Event of Default will (i) harm the City's economic development and redevelopment efforts on the Land and in the vicinity of the Land; (ii) require unplanned and expensive additional administrative oversight and involvement by the City and (iii) otherwise harm the City, and Seefried and Pratt agree that the amounts of actual damages therefrom are speculative in nature and will be difficult or impossible to ascertain Therefore, upon termination of this Agreement for any Event of Default, whether caused by Seefried or Pratt, or by both, Pratt, on behalf of Seefried and on its own behalf, hereby agrees to pay the City as liquidated damages, all Page 12 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) taxes that were abated in accordance with this Agreement for each year when an Event of Default existed and which otherwise would have been paid to the City in the absence of this Agreement. the City, Seefried and Pratt agree that this amount is a reasonable approximation of actual damages that the City will incur as a result of an uncured Event of Default and that this Section 4.4 is authorized by Section 312.205(b)(6) of the Code, is intended to provide the City with compensation for actual damages, and is not a penalty. This amount may be recovered, in whole or in part, by the City through adjustments made to Pratt's ad valorem property tax appraisal by the appraisal district that has jurisdiction over the Land and over any taxable tangible personal property located thereon Otherwise, this amount shall be due, owing and paid to the City within sixty (60) days following the e ffective date of termination of this Agreement. In the event that all or any portion of this amount is not paid to the City within sixty (60) days following the effective date of termination of this Agreement, Pratt shall also be liable for all penalties and interest on any outstanding amount at the statutory rate for delinquent taxes, as determined by the Code at the time of the payment of such penalties and interest (currently, Section 33.01 of the Code) If this Agreement is terminated on account of the failure to construct or to cause to be constructed the Required Improvements in accordance with Sections 1.1 and/or 1.2 of this Agreement no liquidated damages will be owed to the City because taxes will not yet have been abated hereunder. The City will seek payment of such liquidated damages from Pratt only, and the City hereby waives any right to pursue payment of such liquidated damages from Seefried 4.5. Termination at Will. If the City, Seefried and Pratt mutually determine that the development or use of the Land or the anticipated Required Improvements are no longer appropriate or feasible or that a higher or better use is preferable, the City Seefried and Pratt may terminate this Agreement in a written format that is signed by all parties. In this event, (i) if the Term has commenced, the Term shall expire as of the effective date of the termination of this Agreement, (ii) there shall be no recapture of any taxes previously abated; and (iii) neither party shall have any further rights or obligations hereunder. 4.6. Knowing Employment of Undocumented Workers. Seefried and Pratt acknowledges that effective September 1, 2007, the City is required to comply with Chapter 2264 of the Texas Government Code, enacted by House Bill 1196 (80th Texas Legislature), which relates to restrictions on the use of certain public subsidies. Seefried and Pratt hereby cert fr that Seefried, Pratt, and any branches, divisions, or departments of Seefried and Pratt, do not and will not knowingly employ an undocumented worker, as that term is defined by Section 2264.001(4) of the Texas Government Code. In the event that Seefried, Pratt, or any branch, division, or department of Seefried or Pratt, is convicted of a violation under 8 U.S.C. Section 1324a(fl (relating to federal criminal penalties and injunctions for a pattern or practice of employing unauthorized aliens): Page 13 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) • if such conviction occurs during the Term of this Agreement, this Agreement shall terminate contemporaneously upon such conviction (subject to any appellate rights that may lawfully be available to and exercised by the party convicted) and Pratt, on behalf of Seefried and on its own behalf shall repay, within one hundred twenty (120) calendar days following receipt of written demand from the City, the aggregate amount of Abatement received by Seefried hereunder, if any, plus Simple Interest at a rate of four percent (4%) per annum based on the amount of Abatement received in each previous year as of December 31 of the tax year for which the Abatement was received; or • if such conviction occurs after expiration or termination of this Agreement, subject to any appellate rights that may lawfully be available to and exercised by the party convicted, Pratt, on behalf of Seefried and on its own behalf, shall repay, within one hundred twenty (120) calendar days following receipt of written demand from the City, the aggregate amount of Abatement received hereunder, if any, plus Simple Interest at a rate of four percent (4%) per annum based on the amount of Abatement received in each previous year as of December 31 of the tax year for which the Abatement was received. For the purposes of this Section 4.6, "Simple Interest" is defined as a rate of interest applied only to an original value, in this case the aggregate amount of Abatement. this rate of interest can be applied each year but will only apply to the aggregate amount of Abatement and is not applied to interest calculated. For example, if the aggregate amount of Abatement is $10,000 and it is required to be paid back with four percent (4%) interest five years later, the total amount would be $10 000 + [5 x ($10,000 x 0.04)], which is $12,000. This Section 4.6 does not apply to convictions of any subsidiary or affiliate entity of Seefried or Pratt, by any franchisees of Seefried or Pratt, or by a person or entity with whom Seefried or Pratt contracts. The City will seek any repayments and interest under this Section 4.6 from Pratt only, and the City hereby waives any right to pursue payment of such liquidated damages from Seefried. Notwithstanding anything to the contrary herein, this Section 4.6 shall survive the expiration or termination of this Agreement. 5. EFFECT OF SALE OF LAND AND/OR REQUIRED IMPROVEMENTS. Seefried may assign • its rights and obligations under this Agreement to another party without the consent of the City, and Pratt may assign this Agreement and all or any portion of the benefits provided hereunder to an Affiliate without the consent of the City, provided that (i) prior to or contemporaneously with the effectiveness of such assignment, the City is provided with written notice of such assignment, which notice shall include the name of the Affiliate and a contact name, address and telephone number, and (ii) the assignee agrees in writing to assume all terms and conditions of the assigning party under this Agreement. For purposes of this Agreement an "Affiliate" means all entities, incorporated or otherwise, under common control with Pratt, controlled by Pratt or controlling Pratt For purposes of this definition, "control" means fifty percent (50%) or more of the ownership determined by either value or vote. Pratt may not assign Page 14 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) this Agreement or any of the benefits provided hereunder to a person or entity that is not an Affiliate without the consent of the City Council, which consent shall not unreasonably be withheld or delayed, provided that (i) the City Council fords that the proposed assignee is financially capable of meeting the terms and conditions of this Agreement and (ii) the proposed assignee agrees in writing to assume all teinis and conditions of Pratt under this Agreement. Any attempted assignment without the City Council's prior consent shall constitute an Event of Default. 6. NOTICES. All written notices called for or required by this Agreement shall be addressed to the following or such other party or address as any party designates in writing, by certified mail, postage prepaid, or by hand delivery. City: Seefried: City of Fort Worth Attn: City Manager 1000 Throckmorton Fort Worth, TX 76102 with copies to: the City Attorney and Housing/Economic Development Director at the same address Pratt: Pratt Industries (U.S.A.), Inc. Attn: General Manager 3300 High River Rd. Fort Worth TX 76155 with copies to: Pratt Industries (U.S A.), Inc. Attn Chief Financial Officer 1800C Sarasota Parkway Conyers, GA 30013 Anti: Page 15 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) and Pratt Industries (U.S.A.), Inc Attn: General Counsel 3535 Piedmont Rd. Suite 440, Bldg. 14 Atlanta, GA 30305 7. 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. 8. 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 9. 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 perfomance or to assert any such right on any future occasion 10. VENUE AND JURISDICTION. If any action, whether or not 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 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. • 11. NO THIRD PARTY RIGHTS. The provisions of this Agreement are solely for the benefit of the City, Seefried and Pratt, and any assign or successor of Seefried or Pratt that has satisfied the requirements of Section 5 of this Agreement, and are not intended to create any rights, contractual or otherwise, in any other person or entity. Page 16 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) 12. FORCE MAJEURE. If the performance by any party of any obligation hereunder is delayed by reason of Force Majeure, the time period applicable to performance of such obligation shall be extended for a period of time equal to the period of the specific event of Force Majeure For purposes of this Agreement, "Force Majeure" shall mean an event beyond a parry's reasonable control, including, without limitation, acts of God, fires, strikes, national disasters, wars, terrorism, riots, material or labor restrictions, and unreasonable delays by the City in issuing any permits with respect to the Required Improvements or inspecting any of the Required Improvements (taking into account the City's then -current workload with respect to the issuance of permits or the conducting of inspections), but shall not include construction delays caused due to events within the control of Seefried or Pratt or due to purely financial matters involving Seefried or Pratt, such as, without limitation, delays in the obtaining of adequate financing. 13. 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 either party, regardless of the actual drafter of this Agreement. In the event of any conflict between the City's zoning ordinances, or other City ordinances and regulations, and this Agreement, such ordinances or regulations shall control. In the event of any conflict between the body of this Agreement and the Application, the body of this Agreement shall control 14. BONDHOLDER RIGHTS. 1'he Required Improvements will not be financed by tax increment bonds This Agreement is subject to the rights of holders of outstanding bonds of the City. 15. CONFLICTS OF INTEREST. Neither the Land nor any of the improvements thereon, including the Required Improvements covered by this Agreement, are owned or leased by any member of the City Council, any member of the City Plan or Zoning Commission or any member of the governing body of any taxing unit with jurisdiction in the Zone. 16. CAPTIONS. Captions and headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement. Page 17 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) 17. ENTIRETY OF AGREEMENT. Phis Agreement, including any exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the City, Seefried and Pratt, their lawful assigns and successors in interest, as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent m conflict with any provision of this Agreement. This Agreement shall not be amended unless executed in writing by both parties and approved by the City Council. 18. 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. IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the later date below, but to take effect as of July 13, 2010: [SIGNATURES IMMEDIATELY FOLLOW ON NEXT THREE (3) PAGES] Page 18 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L L P and Pratt Industnes (U.S.A.) CITY OF FORT WORTH: By Susa Alanis ssistant City Manager Date: ia l a-9 I IQ • ATTEST: �By: Mr�AAA?�y7n CYty Secretary STATE OF TEXAS COUNTY OF TARRANT § APPROVED AS TO FORM AND LEGALITY: By: te---11) Peter V aky Assistant City Attorney M &c £22'/3S/ 7r/3/O Qa �ofoifFN 04o�ke � itt 3°11%9 �oa 474 .1740000aa b AASat••41 Ilitieilafottest• • BEFORE ME, the undersigned authority, on this day personally appeared Susan Alanis, 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 she was duly authorized to perform the same by appropriate resolution of the City Council of the City of Fort Worth and that she 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 acats; day of �O,eur�l�.►� m W otafv Public in and for ,2010. the State of Texas Ltrtca UV\ l4wvluwr Notary's Printed Name Page 19 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L L.P. and Pratt Industries (U.S.A.) LINDA M. HIRRLINGER MY COMMISSION EXPIRES February 2, 2014 • OFFICIAL RECORD CITY SECRETARY FS RP 700 DFW, L.L.P.: By: Na e q.17htiC C M Cory o Title: rY «'L tnee (0/1-(5 mf-ter Date: b'cervWer 2], Zoio ATTEST: By: STATE OF flcizivk § COUNTY OF &As-n3A § B,E�FO� ME, the undersi ned authority, on this day personally appeared ��-w•Q-d- M. �-�.6Yt �eim,vVP of FS RP 700 DFW, L.L.P., known to me to be 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 FS RP 700 DFW, L.L.P. GIVEN,UNDERMY HAND AND SEAL OF OFFICE this 27' day of Decem_beir , 2010. on_ Notary Publi the State of and for oQ f DAB %rrvEikcttNotary's Pryited Name Pus� SHERRY EILEEN WARE �� Nota Public - * t, _ ,, * ry ublic State of Florida y Comm. Exp. Apr. 24, 2012 40F•.. Comm. No. DD 753515 Page 20 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) PRATT INDUSTRIES (U.S.A.), INC.: By: Name: Title: Date: De-442a P. (.-1 Cam' ATTEST: By: STATE OF COUNTY OF § BEFORE ME, the undersigned authority, on this day personally appeared of PRATT INDUSTRIES (U.S.A.), INC., known to me to be 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 PRATT INDUSTRIES (U.S.A.), INC.. VEN UNDER MY HAND AND SEAL OF OFFICE this day /t2t-rn. k,7c.,i . 2010. 0(12/et Notary's Printed Name Page 21 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) EXIIIBITS "A" — Map and Legal Description of the Land "B" — Lease Abstract between Pratt and Seefried "C" — Depiction and Description of the Required Improvements "D" — Tax Abatement Application Page 22 of 22 Tax Abatement Agreement between City of Fort Worth, FS RP 700 DFW, L.L.P. and Pratt Industries (U.S.A.) Exhibit "A" Legal Description LEGAL DESCRIPTION RIVERPARK 700 DESCRIPTION of a 19.194 acre tract of land situated in the John Childress Survey, Abstract No. 268, Tanant County, Texas; said tract being all of Lot 3R1 Block 2, Meeker Addition, an addition to the City of Fort Worth, Texas according to the plat recorded in Cabinet A, Slide 12315 of the Plat Records of Tarrant County, Texas; said 19.194 acre tract being more particularly described as follows: COMMENCING, at the intersection of the south right-of-way line of Grand River Road (a 60- foot wide right -of way) with the east right-of-way line of High River Road (a 60-foot wide right- of-way) said point being the northwest corner of Lot 2, Block 2, Meeker Addition, an addition to the City of Fort Worth, Texas, according to the plat recorded in Cabinet A, Slide 8257 of said Plat Records; THENCE, South 00 degrees, 33 minutes, 28 seconds East, along the said east line of High River Road and the west line of said Lot 2, Block 2, a distance of 946.25 feet to a 1/4-inch rod with `Pacheco Koch" cap found at the POINT OF BEGINNING; said point being the southwest corner of said Lot 2, Block 2; THENCE, North 89 degrees, 28 minutes, 08 seconds East, departing the said east line of High River Road and along the south lines of said Lot 2, Block 2 and Lot 1R, Block 2, Meeker Addition, an addition to the City of Fort Worth, Texas according to the plat recorded in Cabinet B, Slide 2584 of said Plat Records, at a distance of 713.00 feet passing the southeast corner of said Lot 2, Block 2 and the southwest corner of said Lot 1R Block 2, then continuing in all a total distance of 1029.42 feet to a 1/4-inch iron rod with `Pacheco Koch cap found for corner; said point being the northwest corner of Lot 3R2, Block 2 of the first referenced Meeker Addition; THENCE, South 00 degrees, 31 minutes, 52 seconds East, departing the said south line of Lot 1R, Block 2 and along the west line of said Lot 3R2, Block 2, a distance of 904.99 feet to a "+' cut in concrete found for corner; said point being the southwest corner of said Lot 3R2, Block 2 and in the north right-of-way line of said High River Road THENCE, in a northerly direction, along the said north and east lines of High River Road the following seven (7) calls: South 89 degrees, 28 minutes, 08 seconds West, a distance of 355.59 feet to a point at the beginning of a tangent curve to the right; Along said curve to the right, having a central angle of 23 degrees, 49 minutes, 41 seconds, a radius of 430.00 feet, a chord bearing and distance of North 78 degrees, 37 minutes, 02 seconds West, 177.54 feet, an arc distance of 178.83 feet to a point at the end of said curve; Page 1 of 2 2128573-1 11724.0001000 North 66 degrees, 42 minutes 11 seconds West, a distance of 253.52 feet to a point at the beginning of a tangent curve to the right; Along said curve to the right having a central angle of 64 degrees, 14 minutes, 10 seconds, a radius of 430.00 feet, a chord bearing and distance of North 34 degrees, 35 minutes, 05 seconds West, 457.23 feet, an arc distance of 482.09 feet to a 1/2-inch icon rod with "Pacheco Koch" cap found at the end of said curve; North 02 degrees, 28 minutes, 00 seconds West, a distance of 235.70 feet to a 1/2-inch iron rod with `Pacheco Koch" cap found for corner said point being the beginning of a non -tangent curve to the left; Along said curve to the left, having a central angle of 100 degrees, 04 minutes, 12 seconds, a radius of 50.00 feet, a chord bearing and distance of North 03 degrees, 39 minutes, 10 seconds West, 76.64 feet, an arc distance of 87.33 feet to a'/2-inch iron rod with "Pacheco Koch" cap found for corner at the end of said curve; North 00 degrees, 33 minutes, 28 seconds West, a distance of 75.00 feet to the POINT OF BEGINNING; CONTAINING: 836,097 square feet or 19.194 acres of land, more or less. Page 2 of 2 2128573-1 11724.0001000 Exhibit "B" Lease Abstract LEASE ABSTRACT Lease: Lessor: Lessee: Premises Address: Lease Term: Lease Commencement: Rent Commencement: Options to Extend: Real Estate Taxes: Agreement between FS RP 700 DFW, LLP and Pratt Industries (U.S.A.), Inc. dated June 4, 2010 FS RP 700 DFW, LLP, a Texas limited liability partnership Pratt Industries (U.S.A.), Inc., a Delaware corporation 328,828 square feet of space located within 19.2 acre parcel having an address of 3300 High River Road, Fort Worth, Texas 76155 16 years October 1, 2010 December 1, 2011 Three 5-year renewal options All responsibility of Lessee NOTE* Lessor and Lessee have agreed that the City of Fort Worth shall have the opportunity to review the entire Lease, provided that all terms of the Lease except those set forth above shall be kept confidential. 2195593-1 Exhibit "C" Depiction and Description of Required Improvements STRUCTURAL ALTERATIONS (90K) To accommodate process equipment STRUCTURAL FOUNDATIONS: (800K) Converting equipment Corrugating equipment Ancillary ELECTRICAL SERVICE (1.1Mi1) Add second 3,000 amp service Switch gear and main service (converting and corrugating) Lighting system Fire alarm system SPRINKLER SYSTEM (80K) DOCK PACKAGES (240K) Docks, plates, locks and shelters 50,000 lb 35,000 lb HVAC SYSTEMS (200K) Exhaust Fans (50,000 cfm) Air Distribution Units Ancillary Ventilation Packages PIPING DISTRIBUTION SYSTEMS (interior)(50K) Gas Water Sewer ANCILLARY OFFICE AND SUPPORT SPACE (12,000 sf) (650K) DRIVE-IN DOORS (60K) Exhibit "D ' Tax Abatement Application v I rrtiv' alicati Housing and Economic Development' 1000 Throckmorton $trest Fort Worth, Texas 76102 {817) 392-610: General' Inforrnatian t Application Information:.. Company Name Company Address City Incentive ' pplicatiort Date Jun 9, 2010'. FS RP700 DFW; LLP c/o Seefried Properties 3030 L$J Freeway Suite 1475 Dallas, Contact Person:. Robert W: Rice Telephone Number State Title/Position 214-393-6066 Mobile TeiephoneNumber; E-Mail Address 1214-264-7423 1 Zip 75234.00000000 Regional Vice President`: Ext Fax Number 2143936070.00000000 Ibobr@seefnedproperties.com 2r Project Site Information if different from above): Address/Location �3300 High River Road Fort Worth -TX 76155 3 Development requests that will be sought for the project (select.ali that apply):. ■ Replat [� Rezoning D. Variances n' Downtown Design Review Board.. Landmark Commission Incentive(s) Requested; =Tax Abatement Current Zoning If yes, please describe Requested Zoning 5 Spe.cify elements of the project that make it eligible for the requested:incentive(s), Pratt Industries is proposing a new corrugated packaging factory in the Southern States with potential project investment of $35 million and employment updwards of 140 workers; •6. Do you intend to pursue• abatement of: County Taxes?` Yes ❑ No 7. Whatlevel afabatethentiniill you request: Page 2 of 5 Years? I1 o.000a0000 Percentage? 160,00000000 'I F'raject..fnformation. For real estate projects, please include below the; project. concept, project benefits and how the ,project relates to: existing community plans. Areal estate project is one that involves the construction or renovation of real property that will be either far lease or for sale Any incentives given by the City should be considered only "gap" financing: and should not be considered a substitute•for debt and equity, However,. the City is underno al? lhgatian: to•provide gap financing just because a gap exists. in=order for a property. owner/developer to- be eligible to. receive incentives and/or tax abatement for- a project, the •property owner/developer A. Must complete and "submit this ap. plication and`the application fee;to the City: B.Owner/developer or owner/developer's principails.must not be delinquent in paying property taxes. for any property owned in.:Fort Worth; C: Owner/developer or owner/developer's principals must not have ever been subject to. the: City of • Fort•Worth's Building Standards Commiss,on`s Review, D. Ownerldeveloper. or owneridevelrper's•principals must not•.have any City b Fort Worth liens files againstany other propertyowned by the applicant propertyownerldeveloper,'"Liens" including, but: not. limited: to, weed liens, demolition: liens; board rpp/open structure liens end paving liens. For business expansions projects, please include below services; provided or products manufactured, major customers and locations, etc. For business expansion project: involving the'purchase and/or construction of"real estate, please arswer-ail that apply: S:..Type-af Project,; 9. 'Will this 6e a relocation?:. (Commercial/Industrial. Ej Yes ✓ No If yes where is the company currently located? 10 Project Description: A, Please provide a beef descript n of the.project The proposed factory will "corrugate` paper that Pratt Industries produces at its recently opened 1006%o recycled paper mill in Shreveport. LA into sheets which will then be converted into boxes and other packaging solutions that are consumed within the surrounding area: (primarily Dallas/Fort Worth).: A business expansion project involves assistance to`a business entity that seeks to expand operations within Fort Worth. The Business is in a growth mode seeking working capital, personal property or fixed asset financing. B,Real Estate Development 1. Current AssessedValuation of: 2. Development Type Page 3of5 New Development Land $ Size: 60636' 1328,628 3. For mixed -use projects, please list -square footage for each use: 4; Site Development (parking, fencing,landscaping; etc): Type of Work to be done General construction, alterations and imp rovements;structural, electrical; mechanicapl Cost of Site Development $ lmprovements>$ SF Cost.of Construction $ 13,000,000 N/A N/A C. Personal Property and Inventory 1. Personal Property: Cost of equipments machinery, furnishing, etc.: $ Purchase or lease?:' 2. Inventory and Supplies:: 25,000,000' TBD. Value oFi 'Inventory $ 5000,000': ( Supplies:: $ Percent iof inventoryeligib 4f6r Freeport Exemption{inventory, exported from Texaswithin i75 days 91, Employment and Job Creation; A. During: Construction 1. Anticipated date when construction will start? 2, How many construction jobs will be created? 3. What is the estimated payroll for these jobs?. 13. From Development 1. How many persons are currently employed?. 2. what percent of currentemployees above are Fort Worth residents? oho 3. What percent of current employees above are Central City: residents? °lo 4, Please complete the following table for new jobs to be created from direct hire by applicant.; Jul 15, 2010. First Year By Fifth Year By Tenth Year: Less Transfers' %of NetJabs to be filled by Fort worth Residents 60,00000000 * If any employees will be transferring, please describe from where they will betransferring Approximately 40 employees will he transferring from.a facility in Grand Prairie that will be dosing, Please atta. a descrlptionof the jobs to becreated tasks to' be performed :for each, wage rate for each classification; and a brief description of the employee benefit packa.ge(s)1.offered including the portion paid by er ptoyee and employer respectively. See question; 14.for rriore inforrnation. Please. describe anyanciilary (not direct hire by applicant) job creation thatwill occur as a result of completing this project:. Page'4'of5., j2 Locat..Commitments: A. During Construction 1, What percent of the construction costs described in question 11 above will be committed to: Fort Worth businesses?' Fort Worth Certified Minority. and Women Business Enterprises? B. For Annual Supply and Service Needs Regarding discretionary supply and service:exaenses (i.e landscaping,.. officeor manufacturing supplies, Janitorial services, etc:); 1'. What is the annual amount of discretionary supply and. service expenses? $1100000.00000000 25 00000000 2 What percentage will be committed to. Fort Worth businesses? 3. What percentage will be committed to Fort Worth Certified Minority and Women Business Enterprises? DISCLOSURES 25AOn 13. /s any person or firm receiving any form of compensation, commission or other monetary benefit based on the level of incentive obtained by applicant from the City of Fort .Worth? 'if yes, please explain .and/or attach details.. No. 14.. Pleaseprovide the following information asattachments: a.) Attach a site plan of the project b.) Explain why incentives are necessary for the success of this, project, Include a business pro -forma or other documentation to substantiate your request; a.) Describe any environmental impacts associated with this project d) Describe the infrastructure improvements (water, sewer, streets, etc.) that will be constructed as pa of this project. e.) Describe any direct benefits. to the City of Fort Worth as a. result of this project t) Attach.a legal description or surveyor's certified metes and boundsdescription, g) Attach a copy of the most recent property tax statement from the appropriate appraisal district for all parcels involved In the project h.) Attach a description of the jobs tobecreated (technician, engineer,: manager, etc.), tasks to be performed for each, and wage rate for each classification. f:) Attach a brief description of the employee' benefit package(s) offered (Le. health insurance;retirement, public transportation assistance, daycare provisions; etc.). including portion paid by employeeand employer respectively. j.) Attach a plan for the utilization of Fort Worth Certified MAYBE companies: k ).Attach a listing of the applicant's Board of Director's, if applicable. 1.) Attach a copy ofIncorporation _Papers noting all principals, partners, and agents -and 'all Fort Worth properties owned byeach. On behalf ofthe applicant,;I certify the information contained in this application, including all attachments to be true and correct. I further certify that, on behalf of the applicant, 1 have read the current Incentive Policy and all other pertinent City of Fort Worth policies and? agree with the guidelines and criteria state therein. Printed Name .Signature Page5.0f 5; Ro Rice. Title Date Regional Vice President I10n;9, 2010; First Page: City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 7/13/2010 DATE: Tuesday, July 13, 2010 REFERENCE NO.: C-24331 LOG NAME: 17TAPRATTINDUSTRIES SUBJECT. Authorize the Execution of Tax Abatement Agreements with Pratt Industries (U.S.A.), Inc. and FS RP 700 DFW, L L P for Property and Improvements in the Vicinity of 3300 High River Road, Make Related Findings of Fact and Authorize the Waiver of Certain Development Fees (COUNCIL DISTRICT 5) RECOMMENDATION: It is recommended that the City Council: 1. Authorize the City Manager to execute a Tax Abatement Agreement with Pratt Industries (U.S.A.), Inc.; 2. Authorize the City Manager to execute a Tax Abatement Agreement with FS RP 700 DFW, L L P ; 3 Find that the contemplated use of land in the reinvestment zone covered by the Tax Abatement Agreements and the improvements to be constructed in the reinvestment zone are consistent with encouraging development of the land and generating economic development and increased employment opportunities in the City; and 4. Authorize the waiver of the following City fees that would otherwise be charged to the developers: (i) all building permit, plan review inspection, and re —inspection fees (ii) all zoning fees; (in) all temporary encroachment fees; (iv) all platting fees; and (v) all fire sprinkler and alarm permit fees DISCUSSION: The Housing and Economic Development Department is proposing 10—year Tax Abatement Agreements with Pratt Industries (U.S.A.), Inc , (Pratt) and FS RP 700 DFW, L L P , an affiliate of Seefried Industrial Properties, Inc., (Seefried) that could potentially abate up to (60 percent) of the City' s taxes on the incremental value of real and business personal property investment. The real and business personal property subject to abatement in the attached Tax Abatement Agreements is located in the RiverPark Business Park in far east Fort Worth. Pursuant to Ordinance No. 19195-06-2010, adopted June 22 2010, the City Council designated this property as Tax Abatement Reinvestment Zone Number 70, City of Fort Worth Texas. Project: Pratt I is America's sixth largest paper and packaging company, with more than 3,500 highly —skilled employees dedicated to the environment and sustainability. The Conyers, Georgia —based company operates three of the most modern, cost—effective 100 percent recycled paper mills in the country along with a series of sheet and box plants located throughout the eastern United States as well as Mexico. The company plans to develop a new corrugated box manufacturing facility in the RiverPark Business Center on property owned by Seefried. The proposed project is estimated to have a construction cost of at least $3,000,000.00 and Pratt will acquire at least $25,000,000.00 in new taxable personal property. Pratt will be leasing both the land and the facility from Seefried Seefried will oversee construction of the new leasehold improvements and will retain ownership of the building once it is completed. Under the proposed lease agreement between Pratt and Seefried, Pratt will be responsible for payment of all of Seefried's property taxes on the real property improvements. Consequently, because state law requires real property tax abatement agreements to be made with owner of the real property, the City must enter into two tax abatement agreements, one with Pratt and one with Seefned, in order to abate both real and personal property taxes and provide the overall incentive negotiated on this project. The Pratt agreement will apply to taxes on the leasehold estate, if any, and the all business personal property taxes. The Seefried agreement will apply to taxes on the land and improvements thereon, subject to a requirement in the lease requiring Pratt to pay all property taxes on the site as part of its rental or other financial obligation to Seefried, as landlord. Employment. Pratt will be required to employ a minimum 70 full—time employees (FTEs) on site by December 31 2012 and 140 FTEs by December 31, 2013 and in each year of the abatement thereafter. Of the total jobs Pratt is required to fill a minimum of 60 percent of the jobs with Fort Worth residents and a minimum of 10 percent of the jobs with Central City residents. Utilization of Fort Worth M/WBE Businesses: Regarding the utilization of Fort Worth Minority Business Enterprises and Fort Worth Women Business Enterprises (collectively, M/WBEs), Seefried has committed 25 percent of total construction spending to certified Fort Worth M/WBE construction companies. Additionally, Pratt has committed to spend the greater of 25 percent or $25,000.00 of its annual supply and service expenditures with Fort Worth companies. ABATEMENT TERMS: Pratt and Seefried, together, will receive a 10 year tax abatement on real and personal property for a maximum abatement of 60 percent annually. The projected value of the tax abatement, if the maximum abatement amount is reached every year during the agreement term, is approximately $800,000.00 in present value dollars The abatement incorporates Pratt's and Seefried's commitments for employment, construction expenditures and total annual supply and service spending. The abatement is structured as follows: Abatement Component Real and Personal Property Improvements 15 percent Fort Worth M/WBE Construction 10 percent Annual Supply and Service Spending five percent Overall Employment 10 percent Fort Worth Employment 10 percent Central City Employment 10 percent Failure to meet the minimum real and personal property commitments by June 30, 2012 shall be an event of default, in which case the City will have the right to terminate both Agreements. Up to 25 percent abatement can be reached for the term of the Agreements in the construction phase with (i) 15 percent awarded for meeting the minimum investment requirements and (ii) 10 percent awarded for meeting the Fort Worth M/WBE construction commitment. An additional 10 percent abatement can be awarded annually for meeting the Fort Worth M/WBE supply and service commitments Additionally, up to an additional 30 percent can be awarded for meeting the employment commitments as outlined in the Agreements, with the minimum employment commitment worth 10 percent, the Fort Worth resident commitment worth 10 percent and the Central City resident commitment worth 10 percent FEE WAIVERS: As part of the public purpose attained on account of the development of this property, which would not occur but for the Proposed Tax Abatement Agreements, City staff recommends that any building permit plan review, inspection, re —inspection, zoning, temporary encroachment, platting fire, sprinkler and alarm permit fees that would otherwise be charged to Pratt or Seefried be waived. All other City fees will be paid from the Tax Abatement application fee received from Pratt. This proposed project is located in COUNCIL DISTRICT 5. FISCAL INFORMATION: The Financial Management Services Director certifies that this action will have no material effect on City funds. FUND CENTERS: TO Fund/Account/Centers FROM Fund/Account/Centers CERTIFICATIONS: Submitted for City Manager's Office by: Originating Department Head: Additional Information Contact: ATTACHMENTS 1. 17Pratt Tax Abatement.doc 2. Seefried Tax Abatement.doc Thomas Higgins (6192) Jay Chapa (5804) Robert Sturns (8003)