HomeMy WebLinkAboutResolution 4021-08-2011A Resolution
NO. 4021 -08 -2011
APPROVING EXECUTION OF
ECONOMIC INCENTIVE AGREEMENTS
BETWEEN THE CITY OF IRVING, TEXAS AND
AVIALL SERVICES, INC.
RELATED TO AN ECONOMIC DEVELOPMENT PROJECT AT
DALLAS /FORT WORTH INTERNATIONAL AIRPORT
WHEREAS, as of December 21, 1998 the City of Fort Worth ( "Fort Worth "), the City of
Dallas ( "Dallas "), the City of Irving, Texas ( "Irving "), and the Dallas /Fort Worth International Airport
Board ( "DFW ") each entered into that certain Interlocal Agreement on file as City Secretary Contract
No. 24539, as amended by that certain First Amendment to Interlocal Agreement on file as City
Secretary Contract No. 24539 -A1 executed by and between Fort Worth, Dallas, Irving and DFW as of
April 2, 2009 (collectively, the "Interlocal Agreement ") pursuant to which Irving agreed to share with
Fort Worth and Dallas certain tax revenues received by Irving from economic development projects at
any portion of Dallas /Fort Worth International Airport located within the corporate limits of Irving (the
"Affected Airport Property "); and
WHEREAS, Section III of the Interlocal Agreement provides that Irving will not grant any tax
abatement agreements or create any tax increment reinvestment zones or public improvement districts,
or grant or create any similar types of incentive plans, without the written consent of Fort Worth, Dallas,
and DFW, including economic development program grants authorized by Chapter 380 of the Texas
Local Government Code ( 11380 Grants ") that are calculated on the basis of tax revenues which fall
within the definition of "Increased Revenues" under Section II of the Interlocal Agreement; and
WHEREAS, Irving and Aviall Services, Inc. ( "Aviall ") wish to enter into two (2) Economic
Incentive Agreements, one related to Aviall's current facilities on the Affected Airport Property, which
Agreement is attached hereto as Exhibit "A ", and the other that is related to another facility on the
Affected Airport Property in which Aviall intends to lease for expanded operations on the Affected
Airport Property, which Agreement is attached hereto as Exhibit "B" (collectively, the "Irving
Incentive Agreements "); and
WHEREAS, Aviall's commitment during the terms of the Irving Incentive Agreements to
maintain its business operations within Aviall's current facilities and to expand its business operations
within the additional facilities (such facilities collectively referred to herein as the " Aviall Facilities ")
will cause increased employment and other economic benefits to occur in the region; and
WHEREAS, because the amount of each 380 Grant paid by Irving under the Irving Incentive
Agreements will be based on a percentage of annual ad valorem tax revenues generated by tangible
OUT WORT
19
Resolution No. 4021 -08 -2011
personal property located in the Aviall Facilities and such revenues fall within the definition of
"Increased Revenues" under Section 11 of the Interlocal Agreement, Irving has requested that Fort
Worth, Dallas and DFW each approve the Irving Incentive Agreement for purposes of exempting from
the tax sharing requirements of the Interlocal Agreement those ad valorem tax revenues used to calculate
the amount of any 380 Grants paid pursuant to the Irving Incentive Agreements; and
WHEREAS, the Fort Worth City Council is willing to approve the Irving Incentive Agreements
for purposes of exempting those ad valorem tax revenues generated by tangible personal property on the
Aviall Facilities from the revenue sharing requirements of the Interlocal Agreement, as amended, solely
in accordance with the terms and conditions of this Resolution;
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FORT WORTH, TEXAS THAT:
1. The two (2) Irving Incentive Agreements attached hereto as Exhibit "A" are hereby
approved, subject to the following:
1.1. That the only revenues defined in the Interlocal Agreement as "Increased
Revenues" that Fort Worth agrees to exempt from the tax sharing obligations of the Interlocal
Agreement are those ad valorem tax revenues generated from tangible personal property
located in the Aviall Facilities which are used to calculate the amount of a 380 Grant paid by
Irving to Aviall pursuant to and in accordance with the Irving Incentive Agreements (the
"Exempted Revenues ").
1.2. That notwithstanding anything to the contrary in Section IV of that Irving
Incentive Agreement attached hereto as Exhibit "A" or in Section III of that Irving Incentive
Agreement attached hereto as Exhibit "B ", Fort Worth approves the Irving Incentive
Agreements only for (i) their initial nine (9) -year terms and (ii) one (1) extended term of up
to ten (10) years, and that if Aviall applies for additional extensions as authorized under such
Sections and any such additional extensions are granted by Irving, such extensions shall not
be deemed to be approved by Fort Worth, and any Increased Revenues used by Irving to
calculate the amount of any 380 Grants during such extended terms shall not be exempted
from the tax sharing requirements of the Interlocal Agreement, unless the Fort Worth City
Council, the Dallas City Council and DFW each approve such extensions by resolution.
1.3. That if either or both of the Irving Incentive Agreements are amended to extend
the term or number of 380 Grants payable thereunder, or are otherwise amended
or restated, or if any other agreement between Irving and Aviall is executed, so
that the amount of the 380 Grants payable thereunder and calculated on the basis
of tax revenues that are deemed "Increased Revenues" under the Interlocal
Agreement are greater than those anticipated in the Irving Incentive Agreements
attached hereto, such additional "Increased Revenues" will not be exempted from
the tax sharing obligations of the Interlocal Agreement unless the Fort
ORT W, URTH
!l
Resolution No. 4021 -08 -2011
Worth City Council, the Dallas City Council and DFW each approve such amendment or
other agreement by resolution.
1.4. That, as a condition precedent to the effectiveness of this Resolution, Irving will
enter into a written agreement with Fort Worth, in a form reasonably acceptable to Fort
Worth, that if Aviall pays Irving, as liquidated damages on account of default under Section
VII.B of that Irving Incentive Agreement attached hereto as Exhibit "A" or on account of
default under Section V.B of that Irving Incentive Agreement attached hereto as Exhibit
"B ", or otherwise reimburses Irving all or any portion of any 380 Grant(s) paid pursuant to
the Irving Incentive Agreement, plus any interest thereon, Irving will, within thirty (30)
calendar days following receipt thereof, pay Fort Worth a percentage of all such sums,
calculated in accordance with Section II of the Interlocal Agreement.
1.5. That if Irving withholds any Exempted Revenues from its payment to Fort Worth
of revenues subject to the tax sharing obligations of the Interlocal Agreement, Irving will, if
requested by Fort Worth, provide reasonably adequate documentation that allows Fort Worth
to verify that the amounts withheld as Exempted Revenues were actually paid by Irving to
Aviall as a 380 Grant under the Irving Incentive Agreements.
1.6. That the Irving Incentive Agreements attached hereto are approved only for
purposes of Fort Worth's consent to exempt the Exempted Revenues from the tax sharing
obligations of the Interlocal Agreement, and that Fort Worth does not ratify or approve any
particular provision of the Irving Incentive Agreements for any other purpose.
1.7. That, as a condition precedent to the effectiveness of this Resolution, the Irving
Incentive Agreements attached hereto must be approved by resolution of the Dallas City
Council on substantially the same conditions as those set forth herein, and by DFW.
2. Subject to the conditions set forth in Section 1 above, this Resolution shall take effect on the
date of its adoption.
Adopted this 23rd day of August 2011.
APPROVED
CITY COUNCIL
ATTEST:
ORrinaa� AUG 2 3 2011
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Marty Hendrix, ity Secretary QF'$ Qz.ityotFort Worth,Texas
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ORT WORT
Resolution No. 4021 -08 -2011
Exhibit "A" — Irving Incentive Agreement Related to Current Aviall Facilities
Exhibit "B" — Irving Incentive Agreement Related to Expanded Aviall Facilities
ORT WORT
Exhibit "A"
CITY OF IRVING
COUNCIL RESOLUTION NO. RES_2011 -180
WHEREAS, pursuant to Chapter 380 of the Texas Local Government Code, the City Council
has adopted a program for granting public funds to promote local economic development, and stimulate
business and commercial activity in the City of Irving; and
WHEREAS, pursuant to said policy and Chapter 380 of the Texas Local Government Code, the
City Council finds the economic development incentive offered in the attached
economic development and stimulate business and commercial activity in the City of rve ntg; promote
NOW, THEREFORE, BE IT RESOLVED BY THE
1RVING, TEXAS; CITY COUNCIL OF THE CITY OF
SECTION I. THAT the City Council hereby
between the City of Irving and approves ail Services, Inc., c d the Mayorns authonzed to
execute said agreement.
SECTION II. THAT this resolution shall take effect from and after its final
accordingly so ordered, date of passage, and it is
PASSED AND APPROVED BY THE CITY COUNCIL, OF THE CITY OF IRVING, TEXAS,
on August 4, 2011.
BETH VAN D YNE` -
MAYOR
ATT T:
Shanae Jenning4r/
Acting City Secretary U
APP D AS FO�
OF
Charles R. An rson
City Attorney
ECONOMIC INCENTIVE AGREEMENT
STATE OF TEXAS §
COUNTY OF DALLAS §
CITY OF IRVING §
This Economic Incentive Agreement ( "Agreement "), is made and entered into as of the 4th day
of August, 2011, by and between the City of Irving, Texas ( "CITY"), a home rule city and municipal
corporation of Dallas County, Texas, duly acting herein by and through its Mayor, and Aviall Services,
Inc. ( "AVIALL "), acting by and through its authorized officers, for the purposes and consideration
stated below: s
WITNESSETH:
WHEREAS, the CITY has adopted a Comprehensive Policy Statement on Tax Base
Enhancement and Economic Development Incentives ( "Policy Statement "), by the passa a of
Ordinance No. 9137, on the 3rd day of December, 2009; and g
WHEREAS, the CITY's current Policy Statement entitled:
COMPREHENSIVE POLICY STATEMENT
ON LOCAL ECONOMIC DEVELOPMENT AND BUSINESS
STIMULATION INCENTIVES
(GUIDELINES AND CRITERIA ACTS 1989,
71 ST LEG., CH. 555)
is attached as Exhibit "A" hereto; and
WHEREAS, the Policy Statement constitutes appropriate
economic development incentive and grant agreements to be g entered into by criteria
the CITY governing
contemplated by Chapter 380 of the Local Government Code,
WHEREAS, the CITY desires to enter into an Agreement with AVIALL for economic incentives
Pursuant to Chapter 380 of the Texas Local Government Code; and
WHEREAS, the City Council also finds that the improvements sought are feasible and practical
and would be of benefit to the CITY after expiration of this Agreement; and
WHEREAS, the City Council finds that the terms of this Agreement and the Premises and
proposed Qualified Facilities, as hereinafter defined, subject to this Agreement meet the applicable
guidelines and criteria heretofore adopted by the City Council; and
NOW, THEREFORE, the CITY, for good and valuable consideration, the adequacy and receipt
of which is hereby acknowledged, which consideration includes the expansion of
employment, the attraction of major investment and increased Primary
p
economic development of Irving and enhancement of the tax base in the CITY, AVIALLbfor good and to the
Aviall
380 BPP Agreement Page 1
valuable consideration, the adequacy and receipt of which is hereby acknowledged, which
consideration includes the economic development incentive set forth herein below, as authorized by
Section 380 of the Code, as amended, does hereby contract, covenant and agree as follows:
I.
DEFINITIONS
Wherever used in this Agreement, the following capitalized terms shall have the meanings
ascribed to them:
A. "Qualified Facilities" shall mean the real property and improvements at the Premises leased by
AVIALL at 2700 Regent Blvd. providing for office and warehouse space for AVIALL.
B. "Eligible Property Value" is the Personal Property Increment in taxable assessed value of
Personal Property owned by AVIALL, located at 2700 Regent Blvd. and on the appraisal rolls
of the Dallas Central Appraisal District as of tax year beginning January 1, 2012 and continuing
through the tax year ending December 31, 2020.
C. "Freeport Goods" shall mean that personal property as defined by Article VIII, Section 1 -j of
the Texas Constitution, as amended,
D. "Premises" shall mean a certain buildings located at 2700 Regent, DFW Airport, Texas 75261.
E. "Grant' shall mean the economic development incentive earned from meeting the Minimum
Threshold Eligibility Requirements during the nine (9) year grant term.
F. "Minimum Threshold Eligibility Requirements" shall mean (i) the lease and occupancy of at
least three- hundred thousand (300,000) square feet for a minimum of nine (9) years and (ii)
the creation of at least one - hundred (100) new jobs, employed in Irving, filled by full time year -
round employees with a hire date within three (3) years of the effective date of this agreement
and (iii) an average salary/benefits of at least forty- seven - thousand ($47,000) per full -time
employee and (iv) current taxable value of the Personal Property owned by Aviall, located at
2750 and 2755 Regent Blvd. remains at or above the taxable value certified for tax year 2011.
G. "Personal Property" shall mean furniture, fixtures, machinery, equipment and other taxable
personal property, exclusive of Freeport Goods, located in the Qualified Facilities, on the
appraisal rolls of the Dallas Central Appraisal District as of the applicable tax year.
H. "Personal Property Increment' shall mean the increase in taxable assessed valuation of the
Personal Property located on the Premises, over the 2011 certified taxable value on the Dallas
Central Appraisal District appraisal roll.
II.
GENERAL PROVISIONS
A. AVIALL agrees and covenants that it will diligently and faithfully use the Qualified Facilities for
a minimum term of nine (9) continuous years, during the term of this Agreement_ AVIALL
further covenants and agrees that the use of the Qualified Facilities will be in accordance with
all applicable state and local laws and regulations.
Aviall
380 BPP Agreement Page 2
B. All procedures followed by the CITY conform to the requirements of the Code, and wi
undertaken in coordination with AVIALL's corporate, public, employe If be
requirements. e, and business relations
C. The Premises are or will be leased by AVIALL which Premises are located solely within the
city limits of the CITY.
D. The Premises are not in an improvement project financed by tax increment bonds.
E. This Agreement is entered into subject to the rights of the holders of outstanding bonds of the
CITY; provided however, that this section shall not be construed to create a security interest in
the Premises or Qualified Facilities in favor of such holders of outstanding bonds of the CITY.
F. The Premises are not owned or leased by any member of the Irving City Council or any
member of the Planning and Zoning Commission of the City of Irving.
G. During the period of the economic incentive grant herein authorized, AVIALL shall be subject
to all applicable CITY taxation not specifically rebated, including but not limited to, sales tax
and ad valorem taxation on land, inventory and supplies.
H. As a condition precedent to receiving any Grant hereunder, AVIALL shall meet the Minimum
Threshold Eligibility Requirements each year during the term of this Agreement.
AVIALL further agrees to limit uses on the Premises to those uses allowed under the zoning
regulations for the Premises and those uses which are complementary such as, but not limited to,
parking, landscaping, and business services, and shall not allow uses which cause property
values to decline.
AVIALL shall covenant and certify that it does not and will not knowingly employ an
undocumented worker as that term is defined by Section 2264.01(4) of the Texas
Government Code. In accordance with Section 2264,052 of the Texas Government Code,
if AVIALL is convicted of a violation under 8 U.S.D. Section 1324a(f), AVIALL shall repay
to the City the full amount of payments made under this Agreement, plus ten percent
(10 %) per annum from the date the payment was made. Repayment shall be paid within
one hundred twenty (120) days after the date AVIALL receives notice of violation from the
City.
Ill.
OCCUPANCY OF QUALIFIED FACILITIES
As a condition precedent to a Grant, AVIALL must lease the Premises for a term of at least
nine (9) years.
IV.
Aviall
380 BPP Agreement Page 3
TERM AND GRANT PERIOD
This agreement shall become effective August 4, 2011; however, the first tax year for which the CITY
shall be obligated to reimburse AVIALL for tax payments set forth above shall be that tax year
beginning January 1 of the first tax year that Aviall meets the Minimum Threshold Eligibility
Requirements and shall thereafter be in effect until December 31, 2020. The first possible
reimbursement due to AVIALL shall be March 31,following the tax year that Aviall meets the Minimum
Threshold Eligibility Requirements.
This Agreement will be automatically extended when lease options are exercised up to a
maximum of ten (10) additional years. Aviall is eligible to apply for additional extensions to
this economic incentive agreement at the end of each lease period.
V.
RATE OF GRANT
The annual Grant amount to Aviall shall be 40% of the taxes paid on the Personal Property
Increment for the Eligible Property Value for each year that Aviall meets the Minimum Threshold
Eligibility Requirements.
Minimum Personal Property Valuation — Should the valuation of the Eligible Property Value on the
Premises fall below the 2011 Certified Value as of January 1 of any year during the term of the
Agreement, there shall be no Grant allowed that year or any other future year until the taxable
assessed valuation of the Eligible Property Value on the Premises as of January 1 of that year
exceeds the 2011 Certified Value.
VI
RECORDS AND AUDITS
A. Not later than February 10 of each applicable year, AVIALL shall submit to the CITY a
certification from AVIALL as to (i) the number of square feet occupied at the Qualified
Facilities on January 1 of that year, (ii) the number of full -time AVIALL employees
hired /employed that were hired subsequent to the effective date of this agreement (iii) proof of
at least a nine (9) year lease (iv) the average annual salary/benefits for AVIALL's full -time
employees
B. At all times throughout the term of this Agreement, the CITY or its agents shall have
reasonable access to the Premises by CITY employees (upon reasonable prior written notice
to AVIALL) for the purpose of inspecting same to ensure that the Qualified Facilities are
maintained in accordance with the specifications and conditions of this Agreement; provided
that AVIALL shall have the right to accompany CITY employees on any such inspection and
that such inspection shall be limited to examining only that information necessary to
determining the basis for this abatement.
Aviall
380 BPP Agreement Page 4
C. The Premises at all times shall be used in a manner that is consistent with City of Irving Zoning
Ordinance No. 1144 as amended, and the Policy Statement, and consistent with the general
purpose of encouraging development within the city.
VII.
BREACH
A. CITY may cancel or modify this agreement if owners or Association fails to comply with its
terms.
B. In the event that: (i) the Qualified Facilities for which Grant has been granted are not occupied
in accordance with this Agreement; or (ii) AVIALL allows its ad valorem taxes with respect to
real or personal property on the Premises owed the CITY to become delinquent and fails to
timely and properly follow the legal procedures for protest and /or contest of any such ad
valorem real property taxes or personal property taxes, or (iii) AVIALL breaches any of the
terms or conditions of this Agreement, then AVIALL shall be in default of this Agreement. In
the event AVIALL defaults in its performance of (i), (ii), or (iii) above, the CITY shall give
AVIALL written notice of such default and if AVIALL has not cured such default within thirty
(30) days of said written notice, or, if such default cannot be cured by the payment of money or
posting of a bond or other collateral acceptable to the CITY, and cannot with due diligence be
cured within such thirty (30) day period owing to causes beyond the control of AVIALL, this
Agreement may be terminated by the CITY; provided, however, that if such default is not
reasonably susceptible of cure within such thirty (30) day period and AVIALL has commenced
and is pursuing the cure of same, then, after first advising the City Council of AVIALL's efforts
to cure same, AVIALL may utilize an additional (60) days for such purposes. Time, in addition
to the foregoing ninety (90) days may be authorized by the City Council. Except as provided in
Section V- E, CITY's sole and exclusive remedy for any breach of this Agreement during the
period of Grant, in the event of default after the expiration of the applicable notice and cure
periods, is that the CITY receive from AVIALL as its sole remedy liquidated damages of all
Grants that have been paid to AVIALL for the entire period of the agreement, and interest
thereon be charged at the statutory rate for delinquent taxes as determined by Section 33.01
of the Code, as amended, from thirty (30) days following receipt of written notice of the default
for breach and will become a debt from AVIALL to the CITY, Such amount shall be due,
owing, and paid to the CITY within sixty (60) days of the expiration of the above -mentioned
applicable cure periods as the sole remedy of the CITY, subject to any and all lawful offsets,
settlements, deductions, or credits to which AVIALL may be entitled. The parties
acknowledge that actual damages in the event of default and termination would be speculative
and difficult to determine and that the CITY shall look only to AVIALL in the event of AVIALL's
breach of this Agreement.
VIII.
EFFECT OF SALE, ASSIGNMENT OR LEASE OF PROPERTY
A. The Grant will continue during the term of this Agreement if the conditions for such
grant(s) have been met, so long as AVIALL uses the Premises as set forth in B or
C below, and AVIALL is not otherwise in default or breach of this agreement.
Aviall
380 BPP Agreement Page 5
B. Leases or subleases to AVIALL affiliates which result in a continuation of the
business as an ongoing business in the Premises in the same general manner,
shall not result in a forfeiture of Grant or require City Council approval.
C. Notwithstanding paragraphs A or B above, AVIALL will not lose eligibility to receive
the Grant before the expiration of the ten (10) year grant period should AVIALL
sell the Premises and Qualified Facilities if the following conditions are first met:
1. AVIALL or any of its affiliates continues to occupy and use the Premises
and Qualified Facilities during the Grant period in accordance with this Agreement;
2. AVIALL or any of its affiliates continues to employ at least one - thousand
(1,000) full time employees who shall work on the Premises and in the Qualified
Facilities during the Grant period in accordance with this Agreement; and
3. AVIALL or any of its affiliates meets all other requirements necessary to
receive the Grant.
The term "affiliate" as used herein with respect to AVIALL shall mean a person or entity
controlled by, controlling, or under common control with AVIALL. Control of an entity for
these purposes shall mean direct or indirect ownership of at least fifty percent (50 %) of the
vote or value of the entity.
IX.
INDEMNITY
It is understood and agreed between the parties that Association AVIALL, in performing their
obligations hereunder, are acting independently, and the CITY assumes no responsibilities or
liabilities in connection therewith to AVIALL or to third parties and AVIALL agrees to indemnify and
hold the CITY, its agents, employees and officers harmless therefrom.
X.
NOTICE
All 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:
Aviall Services, Inc.
2750 Regent Blvd.
DFW Airport, Texas 75261
Attn: Ed Dolanski, COO
CITY OF IRVING, TEXAS
825 W. Irving Boulevard
Irving, TX 75060
Attn: City Secretary
Aviall
380 BPP Agreement Page 6
XI.
CITY COUNCIL AUTHORIZATION
This Agreement was authorized by resolution of the City Council that was approved by the
affirmative vote of a majority of the City Council at its regularly scheduled City Council meeting on the
4 day of August 2011, authorizing the Mayor to execute this Agreement on behalf of the CITY.
X1 1.
BOARD OF DIRECTORS AUTHORIZATION
This Agreement was entered into by an officer of AVIALL pursuant to authority granted by
their respective Board of Directors through a formally adopted Schedule of Authorizations.
XIII,
SEVERABILITY
In the event any section, subsection, paragraph, sentence, phrase or word is held invalid,
illegal, or unconstitutional, the balance of this Agreement shall stand, shall be enforceable and shall
be read as if the parties intended at all times to delete said invalid section, subsection, paragraph,
sentence, phrase or word.
XIV.
ESTOPPEL CERTIFICATE
Any party hereto may request an estoppel certificate from another party hereto so long as the
certificate is requested in connection with a bona fide business purpose. The certificate, which will
upon request be addressed to a subsequent purchaser or assignee, shall include, but not necessarily
be limited to, statements (to the best knowledge of the party providing such) that this Agreement is in
full force and effect without default (or if default exists, the nature of default and curative action, which
should be undertaken to cure same), the remaining term of this Agreement, the levels of Grant in
effect, and such other matters reasonably requested by the party(ies) to receive the certificate. Any
such certificate on behalf of the CITY shall be provided by the Financial Services Department for the
City of Irving.
XV.
APPLICABLE LAW
This Agreement shall be construed under the laws of the State of Texas. Venue for any action
under this Agreement shall be the State District Court of Dallas County, Texas. This Agreement is
performable in Dallas County, Texas.
XVI.
RECORDATION OF AGREEMENT
A certified copy of this Agreement in recordable form may be recorded in the Deed Records of
Dallas County, Texas.
XVII.
Aviall
380 BPP Agreement Page 7
ENTIRE AGREEMENT
This Agreement along with that Economic Incentive Agreement entered into simultaneously by
the parties on August 0', 2011 ( "Freeport Agreement ") and along with the Economic Incentive
Agreement entered into by the parties on Feb 22, 2001 and Renewed on Sept 7`" 2006 constitutes
the entire Grant Agreement between the parties, supercedes any prior understanding or written or
oral grant agreements or representations between the parties, and can be modified only by written
instrument subscribed to by both parties. Notwithstanding the foregoing provision, this Grant
Agreement does not modify, alter, or amend any other agreement or instrument between the CITY
and AVIALL relating to matters other than the abatement of ad valorem taxes with respect to the
Premises. This Agreement may be executed in multiple counterparts, each of which shall be
considered an original. The obligation to create new jobs contained in this Agreement is the same
obligation and not in addition to the obligation to create jobs contained in the Freeport Agreement.
XVIII.
REVENUE SHARING CONTINGENCY
The Qualified Facilities are located within a portion of the D /FW International Airport which is subject
to revenue sharing between the Cities of Irving, Dallas and Fort Worth. In as much as the amount of
the grant specified in this agreement exceeds the amount which would be retained by the City of
Irving under such revenue sharing, any grant under this Agreement is contingent upon approval of
this agreement by both cities of Dallas and Fort Worth. Approval of this Agreement by all of the cities
means that the amount of the grant will be borne by all of the cities in proportion in the same manner
as revenue divided pursuant to such revenue sharing, and Irving shall pay such grant without having
to divide the revenue generated by Qualified Facilities in the amount of the grant with the Cities of
Dallas and Fort Worth. However, if AVIALL should breach this agreement and be required to repay
all prior grants, such grant repayment shall be divided between all three cities pursuant to such
revenue sharing.
Aviall
380 BPP Agreement Page 8
EXECUTED the A day of � ,�t�f 2011.
CITY OF IRVING, TEXAS
By:
Beth Van Duyne, Mayor
ATTEST•
Sh nae Jenning ding Ci ecretary, City of Irving
APPRO D AS TO FORM:
Charles A rso , City Attorney, City of Irving
Aviall Services;ski,
By:
Ed Do
OO
Approved��
Resolution #��
Aviall
380 BPP Agreement Page 9
MAYOR'S ACKNOWLEDGMENT
THE STATE OF TEXAS §
COUNTY OF DALLAS §
CITY OF IRVING §
BEFORE ME, the undersigned authority, a Notary Public in and for said County and
State, on this day personally appeared Beth Van Duyne, Mayor of the City of Irving, Texas, a
municipal corporation, 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 said City of Irving,
Texas, a municipal corporation, that she was duly authorized to perform the same by appropriate
resolution of the City Council for the City of Irving and that she executed the same as the act of the
said CITY for the purposes and consideration therein expressed, and in the capacity therein stated.
' {{ GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of
A.D., 2011.
SHANAE JENNINGS
`z! F'= Notary Public State of Texas
„•` Commission Expires Not ry Public it#nd for the tate of Texas
'w��FOF DECEMBER 3, 2011
{Typed /Printed Name of No ary)
My Com is on Expires:
�f
Aviall
380 BPP Agreement Page 10
CORPORATE ACKNOWLEDGEMENT
THE STATE OF TEXAS §
COUNTY OF DALLAS §
BEFORE ME, the undersigned authority, a Notary Public in and for said County and
State, on this day personally appeared Ed Dolanski of Aviall Services, Inc. known to me to be the
person and officer whose name is subscribed to the foregoing instrument and acknowledged to me
he /she executed the same as a duly authorized officer of such association, and as the act and deed
of such corporation, for the purposes and consideration therein expressed, and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this ek day of
t �( J , A.D., 2011.
��
FAANM- J. HFAi1ANM
MY COMN155KNV EXPIRES
AV" 11,2012 j Notary Public in nd for the State of xas
r�u i9 � r � .�� E' ►''f ?C� � 1G(�
My Commission Expires: Z-
(Typed/Printed Name of Notary)
CJI- ll -1�.
Aviall
380 BPP Agreement Page 11
Exhibit "B"
CITY OF IRVING
COUNCIL RESOLUTION NO. RES- 2011 -181
WHEREAS, pursuant to Chapter 380 of the Texas Local Government Code, the City Council
has adopted a program for granting public funds to promote local economic development, and stimulate
business and commercial activity in the City of Irving; and
WHEREAS, pursuant to said policy and Chapter 380 of the Texas Local Government Code, the
City Council finds the economic development incentive offered in the attached agreement will promote
economic development and stimulate business and commercial activity in the City of Irving;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
IRVING, TEXAS:
SECTION 1. THAT the City Council hereby approves the attached Economic Incentive Agreement
between the City of Irving and Aviall Services, Inc., and the Mayor is authorized to
execute said agreement.
SECTION I1. THAT this resolution shall take effect from and after its final date of passage, and it is
accordingly so ordered.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF IRVING, TEXAS,
on August 4, 2011.
BETH VAN, UYNE
MAYOR
ATTEST:
OF TR�I
Shanae Jennings /, U
Acting City Secretary U
APPR /" D AS TO RM /,
Ih
OF
Charles t&Andes on
City Attey
ECONOMIC INCENTIVE AGREEMENT
STATE OF TEXAS §
COUNTY OF DALLAS §
CITY OF IRVING §
This Economic Incentive Agreement (Agreement), effective as of the 4th day of August,
2011, is entered into by and between the City of Irving, Texas (CITY), a home rule city and
municipal corporation of Dallas County, Texas, duly acting herein by and through its Mayor,
and Aviall Services, Inc. ( "AVIALL "), acting by and through its authorized officers, for the
purposes and considerations stated below:
WHEREAS, the CITY has adopted a Comprehensive Policy Statement on Local Economic
Development and Business Stimulation Incentives (Policy Statement), by the passage of
Ordinance No. 9137 on the 91h day of December, 2009; and
WHEREAS, the CITY'S Policy Statement entitled: COMPREHENSIVE POLICY
STATEMENT ON LOCAL ECONOMIC DEVELOPMENT AND BUSINESS STIMULATION
INCENTIVES (GUIDELINES AND CRITERIA ACTS 1989, 71ST LEG., CH. 555) is attached
as Exhibit A hereto; and
WHEREAS, the Policy Statement constitutes appropriate guidelines and criteria governing
economic incentive agreements to be entered into by the CITY as contemplated by Chapter
380 of the Texas Local Government Code; and
WHEREAS, Chapter 380 of the Texas Local Government Code authorizes the CITY to
enter into economic incentive agreements with business entities such as AVIALL for the
purpose set forth in the Guidelines, and
WHEREAS, the CITY desires to enter into an Agreement with AVIALL for economic
incentives pursuant to Chapter 380 of the Texas Local Government Code, as amended; and
WHEREAS, the contemplated use of the Premises, and the other terms hereof are
consistent with encouraging development and retention of this major corporate citizen and
are in compliance with the Policy Statement and similar guidelines and criteria adopted by
the CITY and all applicable law; and
WHEREAS, the City Council finds that the terms of this Agreement meet the applicable
guidelines and criteria heretofore adopted by the City Council; and
WHEREAS, in order to maintain and enhance the commercial and industrial economic and
employment base of the City of Irving, the City Council finds that it is in the best interest of
the taxpayers for the CITY to enter into this Agreement;
AVIALL Page 1
Chapter 380 Incentive Agreement
NOW, THEREFORE, the CITY for good and valuable consideration, the adequacy and
receipt of which is hereby acknowledged, which consideration includes the expansion of a
major corporate citizen that will contribute to the economic development of CITY and
AVIALL for good and valuable consideration, the adequacy and receipt of which is hereby
acknowledged, which consideration includes the economic incentives set forth herein
below, as authorized by Chapter 380 of the Texas Local Government Code, as amended,
do hereby contract, covenant and agree as follows:
I.
DEFINITIONS
"Freeport Goods" shall mean that personal property as defined by Article VIII, Section 1 -j of
the Texas Constitution, and as may be amended.
"Premises" shall mean a warehouse /distribution center at 2700 Regent Blvd., DFW Airport,
Texas 75261 of not less than 300,000 square feet.
"New Jobs" shall mean full time jobs, employed in Irving, Texas with a hire date subsequent
to this Agreement.
"Inventory" shall mean all business personal property (non - Freeport Goods) located at the
Premises with a minimum taxable value of $50,000,000 as determined by Dallas Central
Appraisal District.
II.
CONSIDERATION
In consideration for AVIALL leasing the warehouse /distribution center located at 2700
Regent Blvd., DFW Airport, Texas 75261 pursuant to a lease agreement with a minimum
term of nine (9) years, creating at least one - hundred (100) New Jobs with a hire date within
three (3) years of the effective date of this agreement, and maintaining an Inventory at the
Premises a portion of which includes Freeport Goods, the CITY will pay to AVIALL, no
later than March 31st of each applicable year, an amount equal to the ad valorem personal
property tax AVIALL paid to the CITY for the previous year as taxes on personal property
located at 2700 Regent Blvd, DFW Airport, Texas 75261 and currently defined as Freeport
Goods . However, should AVIALL fail to pay CITY said personal property taxes for any
year, CITY shall not make any payment to AVIALL.
III.
TERM
This agreement shall become effective August 4, 2011 however, the first tax year for which
the CITY shall be obligated to reimburse AVIALL for tax payments set forth above shall be
that tax year beginning January 1, 2012, and shall thereafter be in effect until December 31,
2020. The first possible reimbursement due to AVIALL shall be March 31, 2013.
AVIALL Page 2
Chapter 380 Incentive Agreement
This Agreement will be automatically extended when lease options are exercised up to a
maximum of ten (10) additional years. Aviall is eligible to apply for additional extensions to
this economic incentive agreement at the end of each lease period
V.
RECORDS AND AUDITS
A. Throughout the term of this agreement, the CITY or its agents shall have reasonable
access to AVIALL'S Premises by CITY employees (upon prior reasonable notice to
AVIALL) for the purpose of inspecting same to ensure that the inventory is located in
accordance with the specifications and conditions of this agreement; provided that
AVIALL shall have the right to accompany CITY employees on any such inspection
and keeping in mind the privacy and security interest of AVIALL'S employees.
B. The Premises at all times shall be used in a manner that is consistent with City of Irving
Zoning Ordinances applicable to the Premises.
C. AVIALL shall covenant and certify that it does not and will not knowingly employ an
undocumented worker as that term is defined by Section 2264.01(4) of the Texas
Government Code. In accordance with Section 2264.052 of the Texas Government
Code, if AVIALL is convicted of a violation under 8 U.S.D. Section 1324a(f), AVIALL
shall repay to the City the full amount of payments made under this Agreement, plus
ten percent (10 %) per annum from the date the payment was made. Repayment shall
be paid within one hundred twenty (120) days after the date AVIALL receives notice of
violation from the City.
V.
BREACH
A. CITY may modify this Agreement if AVIALL fails to comply with its terms, provided
that any such modification will have prospective application only and AVIALL may
terminate this Agreement on notice (forfeiting any future rebates from the CITY) if any
such modifications are not mutually acceptable. It is expressly agreed that
participation by AVIALL in the protest/appeal process of property values through
the Dallas Central Appraisal District does not constitute failure to comply with the
terms of this Agreement.
B. If AVIALL fails to comply with its terms, or in the event that (i) the office /warehouse is
moved from the CITY or (ii) AVIALL allows its ad valorem taxes with respect to
personal property on the Premises owed the CITY to become delinquent and fails to
timely and properly follow the legal procedures for protest and /or contest of any such
ad valorem personal property taxes, or (iii) AVIALL breaches any of the terms or
conditions of this Agreement, then AVIALL shall be in default of this Agreement. In
the event that AVIALL defaults in its performance of (i), (ii) or (iii) above, the CITY
shall give AVIALL written notice of such default and if AVIALL has not cured such
default within thirty (30) days of said written notice, or, if such default cannot be cured
AVIALL Page 3
Chapter 380 Incentive Agreement
by the payment of money or posting of a bond or other collateral reasonably
acceptable to the CITY, and cannot with due diligence be cured within such thirty (30)
day period owing to causes beyond the control of AVIALL, this Agreement may be
terminated by the CITY provided, however, that if such default is not reasonably
susceptible of cure within such thirty (30) day period and AVIALL has commenced
and is pursuing the cure of same, then after first advising the City Council of
AVIALL'S efforts to cure same, AVIALL may utilize an additional thirty (30) days.
Time, in addition to the foregoing sixty (60) days may be authorized by the City
council. During the initial three (3) year term of this Agreement, as CITY's sole and
exclusive remedy for any breach under this Agreement, in the event of default after the
expiration of the applicable notice and cure periods, the CITY shall receive from
AVIALL as liquidated damages all previous payments made by the CITY to AVIALL
pursuant to this economic incentive agreement and interest thereon be charged at the
statutory rate for delinquent taxes as determined by Section 33.01 of the Tax Code, as
amended, from the date of the first payment and will become a debt from AVIALL to
the CITY. And CITY shall have no obligation to reimburse AVIALL for any tax
payments. Such amount shall be due, owing, and paid to the CITY by AVIALL within
sixty (60) days of the expiration of the above - mentioned applicable curing period as
the sole remedy of the CITY, subject to any and all lawful offsets, settlements,
deductions, or credits to which AVIALL may be entitled. The parties acknowledge that
actual damages in the event of default and termination would be speculative and
difficult to determine. During extensions to this Agreement following the initial five (5)
year tern, as CITY's sole and exclusive remedy for any breach under this Agreement,
in the event of default after the expiration of the applicable notice and cure periods, the
CITY may cancel the Agreement and no further payments shall be due to AVIALL.
VI.
EFFECT OF SALE, ASSIGNMENT OR LEASE OF PROPERTY
This agreement and the economic incentives are not assignable by AVIALL to any entity
other than an affiliated company or successor without approval of the City Council. In the
event of assignment to an affiliated company or successor, AVIALL must confirm such
assignment in writing to the CITY, and the successor must confirm its intent to be bound by
this Agreement and to assume all responsibilities hereunder of AVIALL within 90 days of
such assignment, or before the beginning of the next tax year, whichever comes first. In the
event of failure to confirm assignment to an affiliate or successor hereunder, the successor
may seek approval from the City Council for the assignment.
AVIALL Page 4
Chapter 380 Incentive Agreement
VII.
NOTICE
All 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:
AVIALL, SERVICES, INC.
2750 Regent Blvd.
DFW Airport, Texas 75261
Attn: Ed Dolanski, COO
CITY OF IRVING, TEXAS
825 W. Irving Boulevard
Irving, Texas 75060
Attention: City Secretary
VIII.
CITY COUNCIL AUTHORIZATION
This Agreement was authorized by resolution of the City Council that was approved by the
affirmative vote of a majority of the City Council at its regularly scheduled City Council meeting on
the 4th day of August, 2011, authorizing the Mayor to execute this Agreement on behalf of the
CITY.
IX.
BOARD OF DIRECTORS AUTHORIZATION
This Agreement was entered into by an authorized representative of AVIALL pursuant to
authority granted by their respective Board of Directors through formal delegations.
X.
SEVERABILITY
In the event any section, subsection, paragraph, sentence, phrase or word is held invalid,
illegal, or unconstitutional, the balance of this Agreement shall stand, shall be enforceable and
shall be read as if the parties intended at all times to delete said invalid section, subsection,
paragraph, sentence, phrase or word.
Xi.
AVIALL Page 5
Chapter 380 Incentive Agreement
APPLICABLE LAW
This Agreement shall be construed under the laws of the State of Texas. Venue for any action
under this Agreement shall be the State's District Court of Dallas County, Texas. This Agreement
is performable in Dallas County, Texas.
XII.
RECORDATION OF AGREEMENT
A certified copy of this Agreement in recordable form shall be recorded in the Deed Records
of Dallas County, Texas.
XIII.
CERTIFICATION
During the term of such agreement, AVIALL will submit a statement annually on or before
February 10, immediately following the calendar year end, providing the percentage of
inventory which constitutes Freeport Goods, the square footage occupied at the premises
and the number of full -time employees hired subsequent to the effective date of this
agreement for each year for which the applicant seeks the incentive provided by the policy.
The City's rights shall be the same rights as the Dallas Central Appraisal District with regard
to the review and examination of AVIALL'S appropriate books and records. Should
AVIALL fail to submit the required statement, AVIALL shall not be stopped from seeking
the incentive in future years. The assessed value of AVIALUS inventory utilized for this
agreement will be that value determined from time to time by the Dallas Central Appraisal
District in accordance with Texas law.
XIV.
ENTIRE AGREEMENT
This Agreement along with the Economic Incentive Areement entered into by the parties
on February 22, 2001 and renewed on September 792006 and the Economic Incentive
Agreement entered into the same date as this Agreement by the parties ("380 Agreement ,,)
constitutes the entire economic incentive agreement between the parties, and supersedes
any prior understanding or written or oral agreements or representations between the
parties, and can be modified only by written instrument subscribed to by both parties.
Notwithstanding the foregoing provision, this Agreement does not modify, alter, or amend
any other agreement or instrument between CITY and AVIALL relating to matters other
than the economic incentives with respect to the Freeport Goods inventory. This
Agreement may be executed in multiple counterparts, each of which shall be considered an
original. The obligation to create new jobs contained in this Agreement is the same
obligation and not in addition to the obligation to create jobs contained in the 380
Agreement.
AVIALL Page 6
Chapter 380 Incentive Agreement
XV.
REVENUE SHARING CONTINGENCY
The Qualified Facilities are located within a portion of the D /FW International Airport
which is subject to revenue sharing between the Cities of Irving, Dallas and Fort Worth.
In as much as the amount of the grant specified in this agreement exceeds the amount
which would be retained by the City of Irving under such revenue sharing, any grant
under this Agreement is contingent upon approval of this agreement by both cities of
Dallas and Fort Worth. Approval of this Agreement by all of the cities means that the
amount of the grant will be bome by all of the cities in proportion in the same manner as
revenue divided pursuant to such revenue sharing, and Irving shall pay such grant
without having to divide the revenue generated by Qualified Facilities in the amount of
the grant with the Cities of Dallas and Fort Worth. However, if AVIALL should breach
this agreement and be required to repay all prior grants, such grant repayment shall be
divided between all three cities pursuant to such revenue sharing.
Attest:
Sh nae Jennin
Acting City Secretary
Approved as to form:
Charles Andeo6on
City Attorney
Approved
Resolution 4 i�-1�1
CITY OF IRVING, TEXAS
By: tuyne, Beth Van M or
AVIALL
Chapter 380 Incentive Agreement
AVIALL SERVICES, INC.
Page 7
CORPORATE ACKNOWLEDGEMENT
THE STATE OF TEXAS §
COUNTY OF DALLAS §
CITY OF IRVING §
BEFORE ME, the undersigned authority, a Notary Public in and for said County and State,
on this day personally appeared Ed Dolanski, COO of AVIALL SERVICES, INC., known to me to be the
person and officer whose name is subscribed to the foregoing instrument and acknowledged to me he/she
executed the same as a duly authorized officer of such corporation, and as the act and deed of such
corporation, for the purposes and consideration therein expressed, and in the capacity therein stated.
A.D., 2011. GIVEN UNDER MY HAND AND SEAL OF OFFICE this I&jk day of ", �' I
FRAME I HERNAtDEZ
M' COMNSSlON EKPM
0i --- AV" 11, 2012 - 1111
My Commission Expires:
Julj'� / . ild'i
Notary Public
�ruk1e l &-makidez-
(Typed /Printed Name of Notary)
AVIALL Page 8
Chapter 380 Incentive Agreement
City of Fort Worth, Texas
Mayor and Council Communication
CPVNCI,L ACTION: Approved on 8/23/2011 - Resolution N0,4091,-90-411.
DATE: Tuesday, August 23, 2011 REFERENCE NO.: G -17365
LOG NAME: 17AVIALL
SUBJECT:
Adopt Resolution Approving Execution of Economic Incentive Agreements Between City of Irving and Aviall
Services, Inc., for Purposes of Tax Revenue Sharing Obligations at Dallas /Fort Worth Airport
(NO COUNCIL DISTRICT)
RECOMMENDATION:
It is recommended that the City Council adopt the attached Resolution approving two Economic Incentive
Agreements between the City of Irving and Aviall Services, Inc., for purposes of the City of Irving's tax
revenue sharing obligations at Dallas /Fort Worth Airport.
DISCUSSION:
On December 21, 1998, the City of Fort Worth executed an Interlocal Agreement with the Dallas /Fort
Worth (D /FW) Airport Board (the Board), the City of Dallas and the City of Irving (City Secretary Contract
No. 24539, as amended by City Secretary Contract No. 24539 -A1). This Interlocal Agreement provides
that specified tax revenues attributable to property located in the City of Irving's corporate limits within the
fence at D /FW Airport (the Irving Airport Property) will be shared between the City of Irving (1/3) and the
Cities of Fort Worth and Dallas (2/3 collectively, with that amount divided between the City of Fort Worth
[4/11] and the City of Dallas [7/11]). The Interlocal Agreement prohibits the City of Irving from granting tax
abatements and other incentives, including economic development grants calculated on the basis of tax
receipts, that would impact the amount of taxes payable to the Cities of Fort Worth and Dallas under the
Interlocal Agreement without approval by the Cities of Fort Worth, Dallas and the D /FW Board.
Consistent with the Interlocal Agreement, the City of Irving has requested the Cities of Fort Worth, Dallas
and the D /FW Board to consent to two Economic Incentive Agreements between the City of Irving and
Aviall Services, Inc. ( Aviall). These Agreements are set forth in Exhibits A and B of the attached
Resolution. Aviall, a Boeing company, wishes to expand its current operations in the City of Irving on
D /FW Airport property at International Commerce Park. Aviall proposes to lease the soon to be vacated
630,000 square foot space currently occupied by Amazon.com at 2700 Regent Blvd. The lease term for
the new facility will be for nine years, with an option to renew the lease for an additional ten years.
The City of Irving would collect additional tax revenue estimated at $6,900,000.00 as a result of the
economic development project and its associated economic impacts. In order to bring the project to
completion, the City of Irving is considering a forty percent Chapter 380 Economic Development
Agreement on the incremental business personal property for the duration of the lease. Since the City of
Irving does not offer Freeport Exemption, the City of Irving has also agreed to rebate through Chapter 380
Agreement, one hundred percent of the taxes collected on Freeport- qualifying inventory.
Since the project is located at DFW Airport property, the owner cities will also benefit from this
expansion. The net revenue from the expansion to the owner cities after the City of Irving provides the
incentive payments would total $329,497.00 with net revenue to the City of Fort Worth of $119,817.00
Logname: 17AVIALL Pagel of 2
over the initial lease term. Accordinginly, taxes collected on the company's property, the company's
taxable sales and franchise fees collected on some of the company's utilities will be shared between the
Cities of Irving, Dallas and Fort Worth. Taxes and franchise fees will be collected at the City of Irving's
rates and then split among the three cities in the following manner:
• City of Irving retains one -third of applicable revenues
• City of Dallas receives 7/11 of the remaining two - thirds of applicable revenues
• City of Fort Worth receives 4/11 of the remaining two - thirds of applicable revenues
FISCAL INFORMATION / CERTIFICATION:
The Financial Management Services Director certifies that this action will have no material effect on City
funds.
FUND CENTERS:
TO Fund /Account/Centers
CERTIFICATIONS:
Submitted for City Manager's Office by:.
Originating Department Head:
Additional Information Contact:
FROM Fund /Account/Centers
Susan Alanis (8180)
Jay Chapa (5804)
Robert Sturns (8003)
Logname: 17AVIALL Page 2 of 2