HomeMy WebLinkAboutContract 44327 (2)CITY SECRETARY [L'J3L1._,
CONTRACT Nat
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT
(Foreign -Trade Zone Payment In Lieu of Taxes)
This ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT
("Agreement") is entered into by and between the CITY OF FORT WORTH (the
"City"), a home rule municipality organized under the laws of the State of Texas, and
LASKO PRODUCTS, INC. ("Lasko"), a Pennsylvania corporation.
RECITALS
The City and Lasko hereby agree that the following statements are true and correct
and constitute the basis upon which the City and Lasko have entered into this Agreement:
A. Lasko is a manufacturer of pedestal and oscillating fans. Lasko conducts
business operations at three locations in the United States: the City; Franklin, TN; and
West Chester, PA. Lasko facilities in the City are located at 1700 Meacham Boulevard;
4925 Pylon Street; and 4600 Blue Mound Road (collectively, and including any Future
Lasko Site, the "Lasko Sites"). The facility at 4600 Blue Mound Road (the "Blue Mound
Site") is leased to Lasko by the Fort Worth Local Development, a non-profit corporation
created for the benefit of the City.
B. As part of its plans to expand its operations in the City, Lasko wishes to
apply to the United States Department of Commerce for expansion of the activation of
Foreign -Trade Zone No. 39 (Dallas/Fort Worth International Airport) to include the Lasko
Sites (the "FTZ Application"). Approval of the FTZ Application will cause certain
tangible personal property located on the Lasko Sites that currently is subject to ad
valorem taxation by the City to become tax exempt pursuant to applicable federal and state
law. Lasko has represented to the City that if the FTZ Application is approved, Lasko will
expand its operations in the City, which will result in increased investment and
employment opportunities in the City. Accordingly, Lasko has requested that the City
issue a Letter of Concurrence from the City in substantially the same form as that set forth
in Exhibit "A", attached hereto (the "Letter of Concurrence"), to be included as part of
the FTZ Application.
C. In accordance with ,action taken by the City Council at its regular meeting
of February 19, 2013 pursuant to agenda item M&C C-26118, and in return for the
economic development benefits that the City will receive as a result of Lasko's expanded
investment and employment plans in the City if the FTZ Application is approved, the City
is willing to issue the Letter of Concurrence requested by Lasko conditioned on Lasko's
agreement, if the FTZ Application is approved, (i) to pay the City an amount equal to the
amount of ad valorem taxes that the City would have received from the Blue Mound Site
after the Effective Date of this Agreement, and (ii) to make certain real property
improvements and increase employment at the Lasko Sites as part of its expanded
operations by October 31, 2016, and, if Lasko fails to meet such commitments, to pay the
Page 1
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
RECEIVED MAR 29 2013
City an amount equal to the amount of ad valorem taxes that the City would have received
from all Lasko Sites but for approval of the FTZ Application, all as more specifically set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
AGREEMENT
1. INCORPORATION OF RECITALS.
The City Council has found, and the City and Lasko hereby agree, that the recitals
set forth above ale true and correct and form the basis upon which the parties have entered
into this Agreement.
2. DEFINITIONS.
In addition to terms defined in the body of this Agreement, the following terms
shall have the definitions ascribed to them as follows:
Affiliate means all entities, incorporated or otherwise, under common control with,
controlled by or controlling Lasko. For purposes of this definition, "control" means fifty
percent (50%) or more of the ownership determined by either value or vote.
Aggregate PILOT Amount means an amount equal to the aggregate ad valorem
taxes that the City would have received from all of the Lasko Sites in a given year, based
on the then -applicable calculation of such ad valorem taxes, if there were not an exemption
from such taxes on account of Foreign -Trade Zone activation of the Lasko Sites.
Annual Employment Report has the meaning ascribed to it in Section 4.4.
Annual Personal Property Report has the meaning ascribed to it in Section 4.3.
Blue Mound PILOT Amount means an amount equal to the aggregate ad valorem
taxes that the City would have received from the Blue Mound Site in a given year, based
on the then -applicable calculation of such ad valorem taxes, if there were not an exemption
from such taxes on account of Foreign -Trade Zone activation of the Blue Mound Site.
Blue Mound Site has the meaning ascribed to it in Recital A.
Certificate of Completion has the meaning ascribed to it in Section 5.2.
Page 2
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
Completion Date means the date as of which Lasko has met both the Real and
Personal Property Commitment and the Future Employment Commitment, which must be
confirmed by a Certificate of Completion issued in accordance with this Agreement.
Completion Deadline means October 31, 2016.
Completion Notice has the meaning ascribed to it in Section 4.5.
Construction Costs means actual site development and construction costs,
including directly -related contractor fees, costs of construction labor and costs of supplies
and materials, plus engineering fees, architectural and design fees, and permit fees.
Director means the director of the City's Housing and 1-4conomic Development
Department or his or her authorized representative.
Effective Date has the meaning ascribed to it in Section 3.
Employment Commitment has the meaning ascribed to it in Section 4.2.
FTZ Application has the meaning ascribed to it in Recital B.
Full-time Job means a job provided to an individual by Lasko at a Lasko Site for
at least forty (40) hours per week.
Future Lasko Site means a site located within the corporate limits of the City that
is purchased or leased by Lasko after the Effective Date of this Agreement and is granted
Foreign -Trade Zone activation.
Lasko Sites has the meaning ascribed to it in Recital A and includes any Future
Lasko Sites as well as any Lasko Sites with Foreign -Trade Zone activation that are
conveyed to or leased by an Affiliate to which this Agreement has been assigned pursuant
to and in accordance with Section 10 of this Agreement.
Letter of Concurrence has the meaning ascribed to it in Recital B.
New Taxable Tantible Personal Property means any personal property,
including inventory and supplies, that (i) is subject to ad valorem taxation by the City or
would be subject to ad valorem taxation by the City but for a tax exemption provided on
account of approval of the FTZ Application; (ii) is located on a Lasko Site; (iii) is owned
by Lasko; and (iv) was not located in the City prior to the Effective Date of this
Agreement.
PILOT means ` payment in lieu of taxes" and is a general term used to describe
any obligation to pay the Blue Mound PILOT Amount and the Aggregate PILOT in
accordance with the terms and conditions of this Agreement.
Page 3
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
Real and Personal Property Commitment has the meaning ascribed to it by
Section 4.1.
Records has the meaning ascribed to it in Section 4.6.
Term has the meaning ascribed to it in Section 3.
3. TERM.
This Agreement shall be effective as of the date of execution by both parties (the
"Effective Date") and unless terminated earlier in accordance with this Agreement, shall
continue in effect so long as Lasko leases or owns property in the City that has been
granted Foreign -Trade Zone activation (the "Term").
4. LASKO OBLIGATIONS.
4.1. Real and Personal Property Commitment.
On or before the Completion Deadline, Lasko shall have expended or
caused to be expended at least Five Million Dollars ($5,000,000.00) in the
aggregate for (i) Construction Costs foi real property improvements at the Lasko
Sites on and after the Hffective Date and (ii) actual costs of New Taxable Tangible
Personal Property located on the Lasko Sites on or after the Effective Date
(collectively, the "Real and Personal Property Commitment"), as verified by the
documentation submitted with the Completion Notice and the Certificate of
Completion issued by the City in accordance with Section 5.2.
4.2. Employment Commitment.
Between the Effective Date and the Completion Date, Lasko shall provide
and fill at least three hundred (300) Full-time Jobs collectively on the Lasko Sites,
which is the same number of Full-time Jobs that Lasko currently provides in the
City (the Current Employment Commitment"). On or before the Completion
Deadhne, Lasko shall provide and fill at least three hundred thirty (330) Full-time
Jobs collectively on the Lasko Sites (the "Future Employment Commitment").
Attainment of the Cuirent Employment Commitment shall be determined from the
employment data submitted by Lasko in its Annual Employment Report, as
outlined in Section 4.4. Attainment of Future Employment Commitment shall be
determined fiom the employment data submitted by Lasko in its Completion
Notice, as outlined in Section 4.5.
Page 4
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
4.3. Annual Personal Property Report.
In order for the City to monitor the costs and value of New Taxable
Tangible Personal Propeity purchased by Lasko and located on the Lasko Sites
prior to the Completion Date Lasko will, on or befoie Febivary 1, 2014 and of
each year thereafter until the date of submission of the Completion Notice, provide
the Director with a report, in a form reasonably acceptable to the Director, that
contains a list of the New Taxable Tangible Personal Property that was installed on
the Lasko Sites during the previous calendar year, together with reasonable
documentation concerning the identification and cost (including invoices and
receipts) of such New Taxable Tangible Personal Property (the ' Annual Personal
Property Report").
4.4. Annual Employment Report.
In order for the City to ascertain whether Lasko has attained the Current
Employment Commitment in any yeas up to the Completion Date, Lasko will, on or
befoie February 1, 2014 and of each year thereafter until the date of submission of
the Completion Notice, provide the Director with a report in a form reasonably
acceptable to the Director, that sets forth the number of Full-time Jobs collectively
provided on the Lasko Sites during the previous calendar year, together with
reasonable supporting documentation (the "Annual Employment Report").
4.5. Completion Notice.
Once Lasko believes that the Completion Date has occurred, and provided
that the Completion Date has occurred on or before the Completion Deadline,
Lasko will submit a written notice to the Director, in a form reasonably acceptable
to the Director, that sets forth (i) the aggregate Construction Costs expended by and
on behalf of Lasko foi real property improvements to the Lasko Sites between the
Effective Date and the Completion Date, together with supporting invoices and
other documents necessary to demonstrate that such amounts were actually paid by
Lasko, including, without limitation, final lien waivers signed by Lasko s general
contractor(s); (ii) a list of the New Taxable Tangible Personal Property that was
installed on the Lasko Sites between the Effective Date and the Completion Date,
together with reasonable documentation concerning the identification and cost
(including invoices and receipts) of such New Taxable Tangible Personal Property
(with the understanding that the parties may agree to use the information supplied
in Annual Personal Property Reports previously submitted in partial satisfaction of
this obligation); and (iii) the total number of Full-time Jobs provided and filled on
the Lasko Sites as of sixty (60) calendar days prior to the date of such notice (or
such other date requested by Lasko and reasonably acceptable to the City), together
with reasonable supporting documentation (collectively the "Completion
Notice') The Completion Notice, and any supplemental Completion Notice
permitted by Section 5.2, must be submitted on or before December 31, 2016.
Page 5
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
4.6. Audits.
Upon reasonable advance notice to Lasko, the City will have the right
throughout the Term to audit, during Lasko's normal business hours, the financial
and business records of Lasko that are reasonably necessary to evaluate Lasko's
compliance with this Agreement (the "Records") Lasko shall make all Records
available to the City at the Site or at another location in the City acceptable to both
parties following reasonable advance notice by the City and shall otherwise
cooperate fully with the City during any audit.
5. CITY OBLIGATIONS.
5.1. Issuance of the Letter of Concurrence.
As part of the consideration for this Agreement, the City has issued the
Letter of Concurrence.
5.2. Issuance of Certificate of Completion.
Within ninety (90) calendar days following receipt of the Completion
Notice from Lasko in accordance with Section 4 5 provided that the City is able to
verify that Lasko met both the Real and Personal Property Commitment and the
Future Employment Commitment on or prior to the Completion Deadline, the
Directoi will issue Lasko a certificate stating this fact and the date as of which such
Commitments were met ("Certificate of Completion") If the City cannot verify
that Lasko met both the Real and Personal Property Commitment and the Future
Employment Commitment on or prior to the Completion Deadline, the City shall
notify Lasko in writing within such ninety (90)-day period. In this event, Lasko
shall have the right to supplement its Completion Notice at any time prior to the
Completion Deadline, and the process for review of such Completion Notice as set
forth in this Section 5.2 shall again be followed. Notwithstanding anything to the
contrary herein, the City will not consider (i) any Construction Cost expenditures
for real property improvements made after the Completion Deadline; (ii) any
expenditures for New Taxable Tangible Personal Property made after the
Completion Deadline; or (iii) any employment data covering any period of time
after the Completion Deadline. In addition, Lasko may not file any Completion
Notice or supplemental Completion Notice after December 31, 2016, and the City
will not consider any Completion Notice or supplemental Completion Notice filed
after such date If, after considenng any Completion Notice and supplemental
Completion Notice properly submitted in accordance with this Section 5.2, the City
cannot verify that both the Real and Personal Property Commitment and the Future
Employment Commitment were met, Section 6.1 and/or Section 6.2, as the case
may be, shall apply.
Page 6
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
6. PAYMENT BY LASKO OF PILOT AMOUNTS.
6.1. Annual Payment of Blue Mound PILOT Amount.
As part of the consideration for the City's submission of the Letter of
Concurrence, if the FTZ Application is approved, Lasko agrees to pay the City the
Blue Mound PILOT Amount for the 2013 tax yeai on or before January 31 2014
and the Blue Mound PILOT Amount for each subsequent tax year on or before
January 31 of the calendar year following such tax year.
6.2. Failure to Meet Current Employment Commitment.
If the FTZ Application is approved, but Lasko fails to meet the Current
Employment Commitment in any year prior to the year in which the Completion
Date occurs, Lasko agrees that it will pay the City the Aggregate PILOT Amount
for that year within thirty (30) calendar days of written notification from the City.
In this event, Section 6 1 will not apply since the Blue Mound PILOT Amount is
included as part of the Aggregate PILOT Amount. However, if the Blue Mound
PILOT Amount for that year has already been paid in accordance with Section 6.1,
Lasko will only be obligated to pay the difference between the Aggregate PILOT
Amount and the Blue Mound PILOT Amount for that year.
6.3. Failure to Meet the Real and Personal Property Commitment or the
Future Employment Commitment.
If the FTZ Application is approved, but Lasko fails to meet the Real and
Personal Property Commitment or the Future Employment Commitment, as
determined in accordance with this Agreement, Lasko agrees that the full extent of
the economic development benefits that would have occurred in the City based on
Lasko's representations, which foamed the basis for the City's agreement to submit
the Letter of Concurrence, will not have been achieved. As a result, if the FTZ
Application is approved, but Lasko fails to meet the Real and Personal Property
Commitment or the Future Employment Commitment, as determined in accordance
with this Agreement, Lasko must pay the City the Aggregate PILOT Amount
annually foi the remainder of the Term of this Agreement. In this event, Section
6.1 will no longer apply since the Blue Mound PILOT Amount is included as part
of the Aggregate PILOT Amount.
6.4. Failure to Submit Reports.
6.4.1. Failure to Submit Annual Personal Property Report.
If Lasko fails to submit any Annual Personal Property Report as set
forth in Section 4 3, the City will notify Lasko in writing. If Lasko fails to
submit the Annual Personal Property Report within sixty (60) calendar days
following the City's written notice, Lasko will be deemed to have not
Page 7
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
purchased and located New Taxable Tangible Personal Property on the
Lasko Sites for the year to be covered by the Report.
6.4.2. Failure to Submit Annual Employment Report.
If Lasko fails to submit any Annual Employment Property Report as
set forth in Section 4 4, the City will notify Lasko in writing If Lasko fails
to submit the Annual Employment Property Report within sixty (60)
calendar days following the City's written notice, Lasko will be deemed to
have not met the Current Employment Commitment for that year, and
Section 6.2 will apply.
6.4.3. Failure to Submit Completion Notice.
If Lasko fails to submit the Completion Notice as set forth in
Section 4.5, the City will notify Lasko in writing. If Lasko fails to submit
the Completion Notice within sixty (60) calendar days following the City's
written notice, Lasko will be deemed to have not met the Real and Personal
Property Commitment, and Section 6.3 will apply.
6.5. Irrevocable Covenant.
Lasko hereby represents its full understanding that issuance of the Letter
of Concurrence by the City and the City's support of Lasko's FTZ Application is
conditioned upon Lasko's execution of this Agreement. Notwithstanding any
City ad valorem tax exemption to which Lasko may be entitled as a result of
approval of the FTZ Application, Lasko understands and agrees that this
Agreement forms an irrevocable obligation to pay the Blue Mound PILOT
Amount or the Aggregate PILOT Amount to the City if required by and in
accordance with this Agreement Notwithstanding anything to the contrary
herein, this Section 6 shall survive the expiration or termination of this Agreement.
Lasko has had the opportunity to review this Agreement with legal counsel of its
choosing and represents that it is freely entering into this Agreement of its own
accord.
6.6. If FTZ Application is Not Approved.
Notwithstanding anything to the contrary herein, if the FTZ Application is
denied by the United States Department of Commerce and any other necessary
agencies or authorities, and all administrative and legal remedies to appeal or
request a review of such decision (without the need foi a subsequent Letter of
Concurrence from the City) have been exhausted, have been waived of have
expired, Lasko shall have the right to terminate this Agreement immediately upon
provision of written notice to the City.
Page 8
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
7. INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Lasko shall operate as an independent
contractor in each and every respect hereunder and not as an agent, representative or
employee of the City Lasko shall have the exclusive right to control all details and day-to-
day operations relative to the Site and shall be solely responsible for the acts and omissions
of its officers, agents, servants, employees, contractors, subcontractors, licensees and
invitees Lasko acknowledges that the doctrine of respondeat superior will not apply as
between the City and Lasko, its officers, agents, servants, employees, contractors,
subcontractors, licensees, and invitees. Lasko further agrees that nothing in this
Agreement will be construed as the creation of a partneiship or joint enterprise between the
City and Lasko.
8. INDEMNIFICATION.
LASKO, AT NO COST TO THE CITY, AGREES TO DEFEND, INDEMNIFY
AND HOLD THE CITY, ITS OFFICERS, AGENTS SERVANTS AND EMPLOYEES,
HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS, ACTIONS, COSTS
AND EXPENSES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, THOSE
FOR PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS
TO LASKO'S BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR
PERSONAL INJURY, INCLUDING DEATH, THAT MAY RELATE TO, ARISE OUT
OF OR BE OCCASIONED BY (i) LASKO'S BREACH OF ANY OF THE TERMS OR
PROVISIONS OF THIS AGREEMENT; OR (ii) ANY ACT OR OMISSION OR
INTENTIONAL MISCONDUCT OF LASKO, ITS OFFICERS, AGENTS,
ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE CITY), OR
SUBCONTRACTORS DUE OR RELATED TO OR ARISING FROM THE LASKO
SITES, AND ANY OPERATIONS AND ACTIVITIES THEREON, OR OTHERWISE
RELATED TO OR ARISING FROM THE PERFORMANCE OR NON-
PERFORMANCE OF THIS AGREEMENT, EXCEPT TO THE EXTENT DIRECTLY
CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OR INTENTIONAL
MISCONDUCT OF THE CITY OR ITS EMPLOYEES.
9. NOTICES.
All written notices called for or required by this Agreement shall be addressed to
the following, or such other party or address as either party designates in writing, by
certified mail, postage prepaid, or by hand delivery:
Page 9
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
City:
City of Fort Worth
Attn: City Manager
1000 Throckmorton
Fort Worth, TX 76102
with copies to:
the City Attorney and
Director, Housing Sc. Economic
Development Dept. at the same address
10. ASSIGNMENT AND SUCCESSORS.
LASKO:
Lasko Products, Inc.
Attn. 1- dward McAssev_
820 Lincoln Ave
West Chester, PA 19380
with copies to:
A. William Brackett
Brackett & Ellis
100 Main Street
Fort Worth, TX 76102
Lasko may at any time assign, transfer or otherwise convey any of its rights or
obligations under this Agreement to an Affiliate that is the owner or lessee of a Lasko Site
without the approval of the City Council so long as Lasko, the Affiliate and the City first
execute an agieement under which the Affiliate agrees to assume and be bound by all
covenants and obligations of Lasko under this Agreement. Otherwise, Lasko may not
assign, transfer or otherwise convey any of its rights or obligations under this Agreement to
any other person or entity that is the owner or lessee of a Lasko Site without the piior
consent of the City Council which consent shall not be unreasonably withheld, conditioned
on (i) the piior approval of the assignee or successor and a finding by the City Council that
the proposed assignee or successor is financially capable of meeting the terms and conditions
of this Agreement and (ii) prior execution by the proposed assignee or successor of a written
agieement with the City under which the proposed assignee or successor agrees to assume
and be bound by the same covenants and obligations of Lasko undei this Agreement. Any
lawful assignee o>_ successor in interest of Lasko of all rights undei this Agreement shall be
deemed "Lasko" for all purposes under this Agreement.
If Lasko sells, transfers or conveys, or attempts to sell, transfer or convey, any
Lasko Site with Foreign -Trade Zone activation to another person or entity, and such
person or entity has not executed an agreement with the City under which the person or
entity agrees to assume and be bound by the same covenants and obligations of Lasko
under this Agreement, Lasko understands and agrees that the City will object to the United
States Department of Commerce or other appropriate entity as to the assignment or
transfer of Foreign -Trade Zone activation on such Lasko Site and that the City will use
any available legal remedies to ensure continuing enforcement of all obligations
hereunder to pay a PILOT pursuant to this Agreement.
11. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND
REGULATIONS.
Page 10
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
This Agreement will be subject to all applicable federal, state and local laws,
ordinances, rules and regulations, including, but not limited to, all provisions of the City's
Charter and ordinances, as amended.
12. GOVERNMENTAL POWERS.
It is understood that by execution of this Agreement, the City does not waive or
surrender any of it governmental powers or immunities.
13. NO WAIVER.
The failure of either party to insist upon the performance of any term or provision
of this Agreement o1 to exercise any right granted hereunder shall not constitute a waiver
of that party's right to insist upon appropriate performance or to assert any such right on
any future occasion.
14. SEVERABILITY.
If any provision of this Agreement is held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not in any way be
affected or impaired.
15. VENUE AND JURISDICTION.
If any action, whether real or asserted, at law or in equity, arises on the basis of any
provision of this Agreement, venue for such action shall lie in state courts located in
Tarrant County, Texas or the United States District Court for the Northern District of
Texas — Fort Worth Division This Agreement shall be construed in accordance with the
laws of the State of Texas.
16. NO THIRD PARTY RIGHTS.
The provisions and conditions of this Agreement are solely for the benefit of the
City and Lasko, and any lawful assign or successor of Lasko, and are not intended to create
any rights, contractual or otherwise, to any other person o1 entity.
17. INTERPRETATION.
Page 1 I
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
Wv
In the event of any dispute over the meaning or application of any provision of this
Agreement, this Agreement shall be interpreted fairly and reasonably, and neither more
strongly for or against any party, regardless of the actual drafter of this Agreement.
18. CAPTIONS.
Captions and headings used in this Agreement are for reference purposes only and
shall not be deemed a part of this Agreement.
19. ENTIRETY OF AGREEMENT.
This Agreement, including any exhibits attached hereto and any documents
incorporated herein by reference, contains the entire understanding and agreement between
the City and Lasko, and any lawful assign and successor of Lasko, as to the matters
contained herein. Any prior or contemporaneous oral or written agreement is hereby
declared null and void to the extent in conflict with any provision of this Agreement.
Notwithstanding anything to the contrary herein, this Agreement shall not be amended
unless executed in writing by both parties and approved by the City Council of the City in
an open meeting held in accordance with Chapter 551 of the Texas Government Code.
20. COUNTERPARTS.
This Agreement may be executed in multiple counterparts, each of which shall be
considered an original, but all of which shall constitute one instrument.
EXECUTED as of the last date indicated below:
CITY OF FORT WORTH: LASKO P • DUCTS, INC.:
By: >dhaia_ B _
Fernando Costa Name: Edward McAssey
Assistant City Manager Title: Chief Operating O icer
Date: s/zi/is Date: � Qi L. c,"0/ty
APPROVED AS TO FORM AND LEGALITY:
Page 12
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
By:
Peter Vaky
Deputy City Attorney
M&C: C-26118 2-19-13
Page 13
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
EXHIBITS
"A" — Substantial Form of Letter of Concurrence
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
(date)
Ms. Christina Wood
Dallas/Foit Worth International Airport
PO Box 619428
DFW Airport, TX 75261-9428
RE: Foreign Trade Zone Application
Dear Ms. Wood:
On behalf of the City of Fort Worth I wish to express my support for the Application to
establish a Foreign Trade Zone at the Lasko Products, Inc facilities at 1700 Meacham
Blvd, 4925 Pylon St. and 4600 Blue Mound Rd. in Fort Worth, Texas. The Foreign Trade
Zone will complement our efforts to expand and diversify our economy. We understand
that imported inventory and inventory held in a foreign trade zone for export will be
exempt from ad valorem tax, and fully support the Application as a means of pi omoting
economic growth in the region
Sincerely,
414942-v2/3357-041000
Economic Development Incentive Agreement
between City of Fort Worth and Lasko Products, Inc. (FTZ PILOT)
M&C Review
Page 1 of 2
IIT OUNCIL GENDA
COUNCIL ACTION: Approved on 2/19/2013
Official site of the City of Fort Worth, Texas
FORT WORTH
DATE: 2/19/2013 REFERENCE NO.: C-26118 LOG NAME: 17LASKOFTZ
CODE: C TYPE: NON -CONSENT PUBLIC NO
HEARING:
SUBJECT: Authorize Submission of a Letter of No Objection to the U.S. Foreign -Trade Zones Board to
Allow for Foreign -Trade Zone Activation at the Lasko Products, Inc , Facilities Located at
1700 Meacham Boulevard, 4925 Pylon Street, and 4600 Blue Mound Road, and Authorize
Execution of an Economic Development Incentive Agreement, Payment in Lieu of Taxes,
with Lasko Products, Inc. (COUNCIL DISTRICT 2)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the submission of a Letter of No Objection to the U.S. Foreign -Trade Zones Board
allowing for Foreign -Trade Zone tax -exemption at three facilities located at 1700 Meacham
Boulevard, 4925 Pylon Street, and 4600 Blue Mound Road; and
2. Authorize the execution of a Payment in Lieu of Taxes Agreement with Lasko Products, Inc.
DISCUSSION:
Lasko Products, Inc. (Company), has been in operation in Fort Worth since 1978 and the principal
product produced are Pedestal & Oscillating Fans. The Company operates three manufacturing
plants in the United States: Fort Worth Franklin, TN, and West Chester PA with a total of 930
employees. There are 342 full-time employees at the three Fort Worth facilities, with 290 of them
being Fort Worth or Tarrant County residents.
Employment at the Company's Fort Worth facility has grown 17 percent over the past five years. The
Company's goal is to maintain its current headcount for the foreseeable future The Company is
seeking to have Foreign -Trade Zone (FTZ) activation at its Fort Worth facilities in order to realize
supply chain savings for imported parts used in the assembly of fans An FTZ is a restricted access
site in or adjacent to a U.S. Customs port of entry. FTZs are considered outside the U.S. Customs
Territory. Foreign or domestic merchandise can be stored or manufactured before formal Customs
entry procedures. FTZs are a trade program established by the U.S. Congress to create jobs and
facilitate international trade in the U.S.
When an FTZ application involves areas where inventory is subject to personal property taxation,
federal regulations require that the applicant provide the U.S. Foreign -Trade Zones Board with a
statement regarding the views of the local taxing authorities with respect to the impact of the tax
exemption that would result from FTZ activity. As a result, the Company has requested that the City
provide the Board with a Letter of No Objection as to FTZ activation at its facilities located at 1700
Meacham Boulevard, 4925 Pylon Street, and 4600 Blue Mound Road
Project:
If the Company's facilities at 1700 Meacham Boulevard, 4925 Pylon Street, and 4600 Blue Mound
Road are granted FTZ activation the Company will expend or cause to be expended, approximately
the amount of $5 000,000.00 in real property and related equipment in either (i) expanding the
existing facility located at 1700 Meacham Boulevard or (ii) constructing a new facility with a minimum
http://apps.cfwnet.org/council_packet/mc_review.asp7ID=18079&councildate=2/19/2013 02/20/2013
M&C Review Page 2 of 2
of 150,000 square feet by October 31, 2016 at a site to be determined, but within the boundaries of
Fort Worth, provided that the new location is also granted FTZ activation. The expanded facility
located at 1700 Meacham Boulevard or a newly constructed facility could allow the Company to move
its operations from the facility located at 4600 Blue Mound Road which Company leases from the
Fort Worth Local Development Corporation.
Employment Commitment
The Company will retain 300 full-time employees and increase by 30 new full-time employees (total of
330 full-time employees) as a result of the proposed business expansion by October 31, 2016.
Payment in Lieu of Taxes (PILOT)
The Economic Development Incentive Agreement will provide that (i) from the Agreement's effective
date the Company will pay the City an amount equal to the ad valorem taxes that the City would
have received from the location at 4600 Blue Mound Road had the site not been granted FTZ
activation and (ii) if Company fails to complete the project and employment commitments set forth
above by October 31, 2016, Company will pay the City an amount equal to the ad valorem taxes that
the City would have received from Company's other locations had they not been granted FTZ
activation.
The Lasko facilities are located in COUNCIL DISTRICT 2.
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that this action will have no material effect on
City funds.
TO Fund/Account/Centers FROM Fund/Account/Centers
Submitted for City Manager's Office bv: Fernando Costa (6122)
Oriainatina Department Head: Jay Chapa (5804)
Additional Information Contact: Robert Sturns (8003)
ATTACHMENTS
Lasko Reference Mao 130205.odf
http://apps.cfwnet org/council_packet/mc_review.asp?ID=18079&councildate=2/19/2013 02/20/2013