HomeMy WebLinkAboutContract 4273417 CITY CONTRACT NO.
STATE OF TEXAS §
COUNTY OF TARRANT §
TAX ABATEMENT AGREEMENT
This TAX ABATEMENT AGREEMENT ( "Agreement ") is entered into by and
between the CITY OF FORT WORTH, TEXAS (the "City "), a home rule municipality
organized under the laws of the State of Texas, and FTS INTERNATIONAL SERVICES, LLC,
a Texas limited liability company formerly known as FRAC TECH SERVICES, LLC
( "Company ").
The City Council of the City of Fort Worth ( "City Council") hereby finds, and the City
and Company hereby agree, that the following statements are true and correct and constitute the
basis upon which the City and Company have entered into this Agreement:
A. On June 22, 2010, the City Council adopted Resolution No. 3895 -06 -2010, stating
that the City elects to be eligible to participate in tax abatement and setting forth guidelines and
criteria governing tax abatement agreements entered into between the City and various third
parties, entitled "General Tax Abatement Policy" (the "Policy "), which is incorporated herein by
reference and hereby made a part of this Agreement for all purposes.
B. The Policy contains appropriate guidelines and criteria governing tax abatement
agreements to be entered into by the City as contemplated by Chapter 312 of the Texas Tax Code,
as amended (the "Code ").
C. On September 20, 2011, the City Council adopted Ordinance No. 19896-09-2011
(the "Ordinance ") establishing Tax Abatement Reinvestment Zone No. 74, City of Fort Worth,
Texas (the "Zone ").
D. Company owns or is under contract to purchase approximately 27.719 acres of real
property within the Zone, as more specifically described in Exhibit "A" (the "Land ").
Contingent on receipt of the tax abatement herein, Company intends to renovate the existing
building at 4601 Gold Spike Drive in the Zone for use as an industrial pump manufacturing facility
and other oil and gas service equipment manufacturing and assembly facility (collectively referred
to as "Manufacturing Operations ") , as more specifically described in Exhibit "B" (the
"Required Improvements "). Exhibits "A" and "B" are attached hereto and are hereby made a
part of this Agreement for all purposes.
E. On June 30, 2011 Company submitted an application for tax abatement to the City
concerning the contemplated use of the Land (the "Application "), which is incorporated herein by
reference for all purposes.
F. The contemplated use of the Land, the Required Improvements, and the terms of
this Agreement are consistent with encouraging development of the Zolle and generating
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economic development and increased employment opportunities in the City, in accordance with
the purposes for creation of the Zone, and are in compliance with the Policy Statement, the
Ordinance and other applicable laws, ordinances, rules and regulations.
G. The terms of this Agreement, and the proposed use and nature of the Land and
Required Improvements, satisfy the eligibility criteria for commercial/industrial tax abatement
pursuant to Section 4.1 of the Policy.
H. On May 17, 2011 the City issued that certain Letter of No Prejudice, attached
hereto as Exhibit "D" (the "Letter of No Prejudice "), which will also be used in determining
whether certain costs of Company are deemed to be Construction Costs expended for the Required
Improvements for purposes of Sections 1.1, 2.1.1, 2.1.2 and 2.1.3 and whether certain personal
property located on the Land is deemed to be New Taxable Tangible Personal Property for
purposes of Sections 1.3 and 2.1.1.
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 and Company, for and in consideration of the terms and
conditions set forth herein, do hereby contract, covenant and agree as follows:
1. COMPANY'S COVENANTS.
1.1. Real Property Improvements.
Company shall expend a minimum of Ten Million Eight Hundred Seventy -five
Thousand Dollars ($10,875,000.00) in Construction Costs for the Required Improvements
by the Completion Date, as defined in Section 1.2. For purposes of this Agreement,
"Construction Costs" shall mean the following expenditures directly associated with
construction of the Required Improvements: site development and construction costs,
contractor fees and the costs of supplies and materials; engineering fees; architectural fees;
and other professional, development and permitting fees, and shall specifically exclude any
property acquisition costs.
1.2. Completion Date of Required Improvements.
The Required Improvements will be considered completed as of the date on which
all Required Improvements have received either a temporary or final certificate or
certificates of occupancy for industrial/commercial use (the "Completion Date "). The
Completion Date must occur on or before December 31, 2012 or such date as otherwise
agreed upon by the parties in a subsequently executed written amendment to this
Agreement approved by the City Council in accordance with Section 17 hereof (the
"Completion Deadline "). Once Company provides the City with a Completion Notice in
accordance with Section 3.3.3 of this Agreement, the City will inspect the Required
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Improvements and audit all Records pursuant to and in accordance with Sections 3.1 and
3.2. Within sixty (60) calendar days following completion of all such inspections and
audits, the City will notify Company in writing as to whether it concurs that all of the
Required Improvements have been constructed or installed in accordance with this
Agreement. If the City does not concur, the written notice will specify the nature of the
disagreement. In this event, Company will have the right to take corrective measures
(provided that such measures are completed on or before the Completion Deadline) or to
provide appropriate supplemental information and to submit an amended Completion
Notice. When, and if, the City concurs that all of the Required Improvements have been
constructed or installed in accordance with this Agreement, the City's written notice to
Company shall state this fact, and such notice shall be deemed a `Certificate of
Completion" for purposes of this Agreement.
1.3. Installation of Tangible Personal Property.
New Tamable Tangible Personal Property having an initial cost of at least Fifty
Million Five Hundred Thousand Dollars ($50,500,000.00) shall be in place on the Land
by January 1 of the first full calendar year following the year in which the Completion
Date occurs, with the assessed value including depreciation and other factoring of the
initial costs as determined solely by the appraisal district having jurisdiction over the
Land at that time and reflected in the certified appraisal roll received by the City from
such appraisal district in such year. Nothing in the proceeding sentence prohibits
Company from appealing a valuation with the appraisal district at any time during this
Agreement. For purposes of this Agreement, "New Taxable Tangible Personal
Property" shall mean any personal property other than inventory or supplies that (i) is
subject to ad valorem taxation by the City; (ii) is located on the Land; (iii) is owned or
leased by Company; and (iv) was not located in the City prior to the Effective Date of
this Agreement save and except for such property as permitted under the Letter of No
Prejudice.
1.4. Use of Land and Required Improvements.
Company covenants that the Required Improvements and the Land shall be used
for Company's Manufacturing Operations and in accordance with this Agreement. In
addition, Company 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.
2. ABATEMENT AMOUNTS, TERMS AND CONDITIONS.
Subject to and in accordance with this Agreement, the City will during the ten (10) -year
Abatement Term, as defined in Section 2.3, grant to Company an annual abatement of the City's
ad valorem real property taxes on improvements located on the Land (but not on the Land itself)
and on New Taxable Tangible Personal Property based upon the increase in value of
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improvements located on the Land and on New Taxable Tangible Personal Property over their
respective values as of January 1, 2011, which is the year in which this Agreement was entered
into, and further based on the extent to which certain construction, construction contracting,
employment, and supply and service spending benchmarks, all as more specifically set forth in
this Section 2, have been met (the "Abatement ").
2.1. Amount of Abatement.
Subject to Section 2.2 of this Agreement, during each year of the Abatement
Term, the Abatement granted hereunder may range up to a maximum of sixty -five
percent (65 %) of the increased value of improvements on the Land and a maximum of
sixty -five percent (65 %) of the increased value of New Taxable Tangible Personal
Property, calculated as follows:
2.1.1. Abatement Based on Construction of Required Improvements and
Personal Property Installation (10% Component).
Subject to receipt of a Certificate of Completion pursuant to Section 1.2,
Company shall receive a ten percent (10 %) Abatement in each year of the
Abatement Term, as defined in Section 2.3, if (i) the Completion Date occurs on
or before the Completion Deadline; (ii) at least Ten Million Eight Hundred
Seventy -five Thousand Dollars ($10,875,000.00) in Construction Costs are
expended on the Required Improvements as of the Completion Date; and (iii)
New Taxable Tangible Personal Property having an initial cost of at least Fifty
Million Five Hundred Thousand Dollars ($50,500,000.00) is in place on the Land
by January 1 of the first full calendar year following the year in which the
Completion Date occurs, as determined solely by the appraisal district having
jurisdiction over the Land at that time and reflected in the certified appraisal roll
received by the City from such appraisal district in such year, subject to
Company's right to appeal. If (i) the Completion Date does not occur by the
Completion Deadline; (ii) less than Ten Million Eight Hundred Seventy -five
Thousand Dollars ($10,875,000.00) in Construction Costs are expended on the
Required Improvements as of the Completion Date; or (iii) New Taxable Tangible
Personal Property having an initial cost of at least Fifty Million Five Hundred
Thousand Dollars ($50,500,000.00) is not in place on the Land on the Land as of
January 1 of the first calendar year following the Completion Date, as determined
solely by the appraisal district having jurisdiction over the Land at that time and
reflected in the certified appraisal roll received by the City from such appraisal
district in such year, subject to Company's right to appeal, not only will Company
be ineligible to receive the ten percent (10 %) Abatement under this Section 2.1.1,
but an Event of Default, as defined and addressed in Section 4, shall also occur.
Construction Cost expenditures with Fort Worth Companies and Fort Worth
Certified M/WBE Companies that are counted for purposes of determining
Company's compliance with this Section 2. 1.1 will also be counted for purposes
of Sections 2.1.2. and 2.1.3.
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2.1.2. Abatement Based on Construction Spending with Fort Worth
Companies (Up to 5% Component).
Company shall receive a five percent (5 %) Abatement in each year of the
Abatement Term, as defined in Section 2.3, if by the Completion Date at least the
greater of (i) seventy -five percent (75 %) of all Construction Costs for the
Required Improvements, regardless of the total amount of such Construction
Costs, or (ii) Eight Million One Hundred Fifty -six Thousand Two Hundred Fifty
Dollars ($8,156,250.00) in Construction Costs for the Required Improvements
have been expended with Fort Worth Companies (the "Fort Worth Construction
Commitment "). For purposes of this Agreement, "Fort Worth Company"
means a business that has a principal office located within the corporate limits of
the city that performs a commercially useful function and that provides the services
for which Company is seeking credit under this Agreement. If the Fort Worth
Construction Commitment is not met, the percentage of Abatement that Company
may receive pursuant to this Section 2.1.2 throughout the Abatement Term shall
be reduced to an amount equal to the product of five percent (5 %) multiplied by
the percentage by which the Fort Worth Construction Commitment was met,
which will be calculated by dividing the actual Construction Costs expended for
the Required Improvements by the Completion Date with Fort Worth Companies
by the number of dollars comprising the Fort Worth Construction Commitment.
For example, if $12,000,000.00 in Construction Costs were expended for the
Required Improvements, the Fort Worth Construction Commitment will be
$9,000,000.00 (75% of $12,000,000.00). If only $8,500,000.00 in Construction
Costs were expended with Fort Worth Companies by the Completion Date, the
percentage of Abatement that could be received pursuant to this Section 2.1.2
throughout the Abatement Term would be 4.7% instead of 5% (or .05 x
[$8,500,000.00/$9,000,000.00], or .05 x .9444, or .047). Construction Cost
expenditures with Fort Worth Companies shall also count as Construction Costs
expenditures for purposes of determining Company's compliance with Section
2.1.1.
2.1.3. Abatement Based on Construction Spending with Fort Worth
Certified M/WBE Companies (Up to 5% Component).
Company shall receive a five percent (5 %) Abatement in each year of the
Abatement Term, as defined in Section 2.3, 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) Two Million Seven Hundred Eighteen Thousand Seven Hundred
Fifty Dollars ($2,718,750.00) 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 or
woman-owned business that (i) has received certification as a minority business
enterprise (MBE), a woman business enterprise (WBE) or a disadvantaged business
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enterprise (DBE) by the North Central Texas Regional Certification Agency
(NCTRCA), and (ii) has a principal office located within the corporate limits of the
City that performs a commercially useful function, and (iii) has provided from such
office the services or sales that Company is seeking credit under this Agreement. If
the M/WBE Construction Commitment is not met, the percentage of Abatement
that may be received pursuant to this Section 2.1.3 throughout the Abatement
Term shall be reduced to an amount equal to the product of five percent (5 %)
multiplied by the percentage by which the MJWBE Construction Commitment
was met, which will be calculated by dividing the actual Construction Costs
expended for the Required Improvements by the Completion Date with Fort
Worth Certified M/WBE Companies by the number of dollars comprising the
M/WBE Construction Commitment. Construction Cost expenditures with Fort
Worth Certified M/WBE Companies shall also count as Construction Cost
expenditures for purposes of determining Company's compliance with Section
2.1.1 as well as Construction Cost expenditures for purposes of determining
Company's attainment of the Fort Worth Construction Commitment pursuant to
Section 2.1.2.
2.1.4. Abatement Based on Overall Employment (Up to 25% Component).
A percentage of Abatement in a given year of the Abatement Term shall
be based on the extent to which Company met the Overall Employment
Commitment in the previous calendar year, as more specifically set forth in this
Section 2.1.4. For purposes of this Agreement, the "Overall Employment
Commitment" shall mean (i) for purposes of calendar years 2013, 2014 and
2015, two hundred (200) Full -time Jobs provided and filled on the Land; (ii) for
purposes of calendar years 2016, 2017, 2018, 2019 and 2020, three hundred (300)
Full -time Jobs provided and filled on the Land; and (iii) for purposes of calendar
years 2021 and 2022, four hundred fifty (450) Full -time Jobs provided and filled
on the Land. For purposes of this Agreement, a "Full -time Job" shall mean a job
filled by one (1) individual for a period of not less than forty (40) hours per week.
Determination of compliance with the applicable Overall Employment
Commitment in any given year shall be based on Company's employment data as
of December 1 (or such other date as may mutually be acceptable to both the City
and Company) of each year during the Compliance Auditing Term, as defined in
Section 2.3. If the Overall Employment Commitment is met or exceeded in a
given year of the Compliance Auditing Term, Company shall be entitled to
receive a twenty -five percent (25 %) Abatement in the following year. If the
Overall Employment Commitment is not met in a given year of the Compliance
Auditing Term, then the percentage of Abatement that Company will be eligible
to receive in the following year pursuant to this Section 2.1.4 shall be reduced to
equal the product of twenty -five percent (25 %) multiplied by the percentage by
which the applicable Overall Employment Commitment was met in the previous
calendar year, which will be calculated by dividing the actual number of Full -time
Jobs provided on the Land in the previous year by the Overall Employment
Commitment applicable to such year. For example, if one hundred sixty (160)
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Full -time Jobs were provided on the Land in a given year and the Overall
Employment Commitment for such year was two hundred (200) Full -time Jobs,
the percentage of Abatement that Company would be eligible to receive in the
following year pursuant to this Section 2.1.4 would be 20% instead of 25% (or .25
x [ 160/200]), or .25 x .80, or .20.
2.1.5. Abatement Based on Fort Worth Employment (Up to 5%
Component).
A percentage of Abatement in a given year of the Abatement Term shall
be based on the extent to which Company met the Fort Worth Employment
Commitment in the previous calendar year, as more specifically set forth in this
Section 2.1.5. For purposes of this Agreement, the "Fort Worth Employment
Commitment" shall mean (i) for purposes of calendar years 2013, 2014 and
2015, one hundred (100) Full -time Jobs on the Land held by individuals residing
at a location within the corporate limits of the City; (ii) for purposes of calendar
years 2016, 2017, 2018, 2019 and 2020, one hundred fifty (15 0) Full -time Jobs on
the Land held by individuals residing at a location within the corporate limits of
the City; and (iii) for purposes of calendar years 2021 and 2022, two hundred
twenty -five (225) Full -time Jobs on the Land held by individuals residing at a
location within the corporate limits of the City. Determination of compliance
with the Fort Worth Employment Commitment shall be based on Company's
employment data on December 1 (or such other date as may mutually be
acceptable to both the City and Company) of each year during the Compliance
Auditing Term, as defined in Section 2.3. If the Fort Worth Employment
Commitment is met or exceeded in a given year of the Compliance Auditing
Term, Company shall be entitled to receive a five percent (5 %) Abatement in the
following year. If the Fort Worth Employment Commitment is not met in a given
year of the Compliance Auditing Term, then the percentage of Abatement that
Company will be eligible to receive in the following year pursuant to this Section
2.1.5 shall be reduced to equal the product of five percent (5 %) multiplied by the
percentage by which the applicable Fort Worth Employment Commitment was
met in the previous calendar year, which will be calculated by dividing the actual
number of Full -time Jobs on the Land held by individuals residing at a location
within the corporate limits of the City in the previous year by the Fort Worth
Employment Commitment applicable to such year. The number of Full -time Jobs
on the Land held by individuals residing in the corporate limits of the City in a
given year shall also be counted for purposes of determining Company's
attainment of the Overall Employment Commitment in that same year pursuant to
Section 2.1.4.
2.1.6. Abatement Based on Central City Employment (Up to 5%
Component).
A percentage of Abatement in a given year of the Abatement Term shall
be based on the extent to which Company met the Central City Employment
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Commitment in the previous calendar year, as more specifically set forth in this
Section 2.1.6. For purposes of this Agreement, the "Central City Employment
Commitment" shall mean (i) for purposes of calendar years 2013, 2014 and
2015, sixty (60) Full -time Jobs on the Land held by individuals residing at a
location within the Central City; (ii) for purposes of calendar years 2016, 2017,
2018, 2019 and 2020, ninety (90) Full -time Jobs on the Land held by individuals
residing at a location within the Central City; and (iii) for purposes of calendar
years 2021 and 2022, one hundred thirty-five (135) Full -time Jobs on the Land
held by individuals residing at a location within the Central City. For purposes of
this Agreement, "Central City" means (i) that area in the corporate limits of the
City within Loop 820 (a) consisting of all Community Development Block Grant
( "CDBG ") eligible census block groups; (b) all state - designated enterprise zones;
and (c) all census block groups that are contiguous by seventy -five percent (75 %)
or more of their perimeter to CDBG eligible block groups or enterprise zones, as
well as (ii) any CDBG eligible block in the corporate limits of the City outside
Loop 820, as more specifically depicted in the map attached hereto as Exhibit
"C ", which is hereby made a part of this Agreement for all purposes. The
number of Full -time Jobs on the Land held by individuals residing in the Central
City in a given year shall also count as Full -time Jobs held by individuals residing
in the corporate limits of the City for purposes of determining Company's
attainment of the Fort Worth Employment Commitment in that same year
pursuant to Section 2.1.5 as well as Full -time Jobs for purposes of determining
Company's attainment of the Overall Employment Commitment in that same year
pursuant to Section 2.1.4.
Determination of compliance with the Central City Employment
Commitment shall be based on Company's employment data on December 1 (or
such other date as may mutually be acceptable to both the City and Company) of
each year during the Compliance Auditing Term, as defined in Section 2.3. If the
Central City Employment Commitment is met or exceeded in a given year of the
Compliance Auditing Term, Company shall be entitled to receive a five percent
(5 %) Abatement in the following year. If the Central City Employment
Commitment is not met in a given year of the Compliance Auditing Term, then
the percentage of Abatement that Company will be eligible to receive in the
following year pursuant to this Section 2.1.6 shall be reduced to equal the product
of five percent (5 %) multiplied by the percentage by which the applicable Central
City Employment Commitment was met in the previous calendar year, which will
be calculated by dividing the actual number of Full -time Jobs on the Land held by
individuals residing at a location within the Central City in the previous year by
the Central City Employment Commitment applicable to such year.
2.1.7. Abatement Based on Supply and Service Expenditures with Fort
Worth Companies (Up to 5% Component).
Company shall receive a five percent (5 %) Abatement in any given year of
the Abatement Term, as defined in Section 2.3, if in the previous calendar year it
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expended at least the greater of (i) One Hundred Eighty -seven Thousand Five
Hundred Dollars ($187,500.00) in local discretionary expenditures for supplies
and services directly in connection with the operation or maintenance of the Land
and any improvements thereon, excluding utility service costs ( "Supply and
Service Expenditures "), with Fort Worth Companies or (ii) seventy -five percent
(75 %) of all Supply and Service Expenditures, regardless of the total amount of
such Supply and Service Expenditures, with Fort Worth Companies (the "Fort
Worth Supply and Service Spending Commitment "). If the Fort Worth
Supply and Service Spending Commitment is not met in a given year of the
Compliance Auditing Term, then the percentage of Abatement that Company may
receive pursuant to this Section 2.1.7 in the following year of the Abatement
Term shall be reduced to an amount equal to the product of five percent (5 %)
multiplied by the percentage by which the Fort Worth Supply and Service
Spending Commitment was met, which will be calculated by dividing the actual
Supply and Service Expenditures made with Fort Worth Companies in the
previous calendar year by the number of dollars comprising the Fort Worth
Supply and Service Spending Commitment. For example, if Company made
$200,000.00 in Supply and Service Expenditures in a given year, the Fort Worth
Supply and Service Spending Commitment for that year would be $187,500.00.
If Company made only $150,000.00 in Supply and Service Expenditures with
Fort Worth Companies in that year, the percentage of Abatement that Company
would receive pursuant to this Section 2.1.7 in the following year of the
Abatement Term would be 4% instead of 5% (or .05 x
[$150,000.00/$187,500.00], or .05 x .80, or .04). Supply and Service
Expenditures made with Fort Worth Certified M/WBE Companies in a given year
that are counted for purposes of determining Company's attainment of the
M/WBE Supply and Service Spending Commitment in that same year pursuant to
Section 2.1.8 shall also count as Supply and Service Expenditures made with Fort
Worth Companies for purposes of determining Company's attainment of the Fort
Worth Supply and Service Spending Commitment in that same year pursuant to
this Section 2.1.7.
2.1.8. Abatement Based on Supply and Service Expenditures with Fort
Worth Certified M/WBE Companies (Up to 5% Component).
Company shall receive a five percent (5 %) Abatement in any given year of
the Abatement Term, as defined in Section 2.3, if in the previous calendar year it
expended at least the greater of (i) Sixty -two Thousand Five Hundred Dollars
($62,500.00) in Supply and Service Expenditures with Fort Worth Certified
M/WBE Companies 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 Commitment is not met in a given year of the Compliance
Auditing Term, then the percentage of Abatement that Company may receive
pursuant to this Section 2.1.8 in the following year of the Abatement Term shall
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be reduced to an amount equal to the product of five percent (5 %) multiplied by
the percentage by which the M/WBE Supply and Service Spending Commitment
was met, which will be calculated by dividing the actual Supply and Service
Expenditures made with Fort Worth Certified M/WBE Companies in the previous
calendar year by the number of dollars comprising the M/WBE Supply and
Service Spending Commitment. Supply and Service Expenditures made with Fort
Worth Certified M/WBE Companies in a given year that are counted for purposes
of determining Company's attainment of the M/WBE Supply and Service
Spending Commitment in that same year pursuant to this Section 2.1.8 shall also
count as Supply and Service Expenditures made with Fort Worth Companies for
purposes of determining Company's attainment of the Fort Worth Supply and
Service Spending Commitment in that same year pursuant to Section 2.1.7.
2.2. Abatement Limitation.
Notwithstanding anything to the contrary herein, Company's Abatement in any
given year of the Abatement Term shall be based (i) on the increase in the real property
value of any improvements on the Land (and not on the Land itself) since January 1,
2011, up to a maximum increase of Sixteen Million Three Hundred Twelve Thousand
Five Hundred Dollars ($16,312,500.00) (or greater amount if agreed upon by the parties
in a subsequently executed written amendment to this Agreement approved by the City
Council in accordance with Section 17 hereof) and (ii) on the increase in the value of New
Taxable Tangible Personal Property located on the Land since January 1, 2011, up to
maximum increase of Seventy -five Million Seven Hundred Fifty Dollars
($75,750,000.00). In other words, in any year in which the taxable value of
improvements on the Land exceeds their value as of January 1, 2011 plus
$16,312,500.00, Company's Abatement for that tax year shall be capped and calculated
as if the increase in the value of the Land and improvements on the Land since January 1,
2011 had only been $16,312,500.00. For example, and as an example only, if in a given
year of the Abatement Term the value of improvements on the Land is $18,000,000.00
over their value as of January 1, 2011, the City would grant a maximum real property
Abatement of sixty -five percent (65 %) of $16,312,500.00 in valuation for that year and
full taxes on the $1,687,500.00 difference over the cap would be owed. Along the same
lines, if the value of New Taxable Tangible Personal Property located on the Land in a
given year of the Abatement Term is $80,000,000.00 over the value of that Property as of
January 1, 2011, the City would grant a maximum personal property Abatement of sixty -
five percent (65 %) of $75,750,000.00 in valuation for that year and full taxes on the
$4,250,000.00 difference over the cap would be owed.
2.3. Terms.
This Agreement shall take effect on the date as of which both the City and
Company have executed this Agreement (the "Effective Date ") and, unless terminated
earlier in accordance with its terms and conditions, shall expire simultaneously upon
expiration of the Abatement Term, as defined below (the "Term "). The percentage of
overall Abatement available to Company in any given year will be based in part on
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Company's compliance with the Overall Employment Commitment, the Fort Worth
Employment Commitment, the Central City Employment Commitment, the Fort Worth
Supply and Service Spending Commitment, and the M/WBE Supply and Service
Spending Commitment. The term during which the City will audit Company's
compliance with such annual commitments shall commence in the first full calendar year
following the year in which the Completion Date occurred and expire on December 31 of
the tenth (10th) year thereafter (the "Compliance Auditing Term "). The term during
which Company may receive an Abatement shall commence on January 1 of the second
full calendar year following the year in which the Completion Date occurred and expire
on December 31 of the tenth (10th) year thereafter (the "Abatement Term ").
2.4. Abatement Application Fee.
The City acknowledges receipt from Company of the required Application fee of
Five Thousand Dollars ($5,000.00). 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
Company diligently begins or causes to begin construction of the Required Improvements
on the Land within one (1) year from the date of the Application, the remaining Three
Thousand Dollars ($3,000.00) of such fee shall be creditable to the benefit of Company
against any permit, impact, inspection or other lawful fee required by the City in
connection with the Required Improvements, and any remaining amounts shall be refunded
to Company solely in accordance with the Policy.
3. INSPECTIONS, AUDITS, AND REPORTS AND FILINGS.
3.1. Inspection of the Land and Required Improvements.
At any time during normal office hours throughout the Term and following
reasonable notice to Company, the City shall have and Company shall provide or cause
provision of 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 terms and conditions of this Agreement.
Company shall cause full cooperation with the City during any such inspection and/or
evaluation. Notwithstanding the foregoing, Company shall have the right to require that
any representative of the City be escorted by Company's security personnel while on the
Land.
3.2. Audits.
The City shall have the right to audit the financial and business records of
Company and any of its Affiliates (as defined in Section 5) that relate to the Required
Improvements and this Agreement in general (collectively, the "Records ") at any time
during the Term in order to determine compliance with this Agreement and to calculate
the correct percentage of Abatement available hereunder. Company shall make all
Records available to the City on the Land or at another location in the City following
Page I I
lax Abatement Agreement between
City of Fort Worth and FTS International Services, LLC
reasonable advance notice by the City and shall otherwise cooperate fully with the City
during any audit.
3.3. Reports and Filings.
3.3.1. Plan for Use of Fort Worth Certified M/WBE Companies.
Prior to the application of any building permit for the Required
Improvements (including for any demolition work), Company will file a plan with
the City as to how the M/WBE Construction Commitment and the M/WBE Supply
and Service Spending Commitment will be attained. Company agrees to meet with
the City's M/WBE Office 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 Company in meeting the M/WBE Construction
Commitment, Company will provide the City with a monthly report in a form
reasonably acceptable to the City that specifically outlines the then- current
aggregate Construction Costs expended by and on behalf of Company with Fort
Worth Certified M/WBE Companies for the Required Improvements.
3.3.3. Completion Notice.
Once Company believes that the Completion Date has occurred, Company
will provide the City with a report in a form reasonably acceptable to the City that
specifically outlines the Construction Costs expended by and on behalf of Company
for 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 Company's general
contractor (the "Completion Notice "). The Completion Notice shall also include
actual Construction Costs expended by and on behalf of Company for 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 to such contractors. The.
Completion Notice shall be reviewed by the City in accordance with Section 1.2 of
this Agreement.
3.3.4. Annual Employment Report.
In order to determine whether Company attained the Overall Employment
Commitment, the Fort Worth Employment Commitment and the Central City
Employment Commitment in a given year of the Compliance Auditing Term, on or
before February 1 following the end of each year of the Compliance Auditing
Term, Company shall provide the City with a report in a form reasonably
Page 12
Tax Abatement Agreement between
City of Fort Worth and FTS International Services. LLC
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 within the Central City who held Full -time Jobs on
the Land, all as of December 1 (or such other date as may mutually be acceptable to
both the City and Company) of the previous calendar year, together with reasonable
documentation regarding the residency of such employees.
3.3.5. Annual Supply and Service Spending Report.
In order to determine whether Company attained the Fort Worth Supply and
Spending Commitment and the M/WBE Supply and Service Spending
Commitment in a given year, on or before February 1 following the end of each
year of the Compliance Auditing Term, Company will provide a report to the City
in a form reasonably acceptable to the City that specifically outlines the Supply and
Service Expenditures made in the previous calendar year with Fort Worth
Companies and Fort Worth Certified M/WBE Companies, together with reasonable
documentation verifying that such Expenditures were made.
3.3.6. General.
Company shall supply or cause to be supplied 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 Certain Commitments.
The failure to meet the Fort Worth Construction Commitment, the M/WBE
Construction Commitment, the Overall Employment Commitment, the Fort Worth
Employment Commitment, the Central City Employment Commitment, the Fort Worth
Supply and Service Spending 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
2.1.8, and shall not constitute an Event of Default, as defined in Section 4.2.
4.2. Defined.
Company shall be in default of this Agreement if (i) any of the covenants set forth
in any portion of Sections 1.1, 1.2, 1.3 or 1.4 of this Agreement are not met; (ii) any ad
valorem taxes owed to the City by Company or an Affiliate become delinquent and
Company or the Affiliate does not timely and properly follow the legal procedures for
Page 13
Fax Abatement Agreement between
Citv of Fort Worth and FTS International Services, LLC
protest and/or contest of any such ad valorem real property or tangible personal property
taxes; or (iii) subject to Section 4. 1, Company breaches 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 Company that describes the nature of the Event of Default. If the Event
of Default is on due to a breach under Section 1.1, 1.2 or 1.3 of this Agreement, the City
will have the right to terminate this Agreement immediately. For any other Event of
Default, Company shall have thirty (30) calendar days (or such additional time as the City
and Company reasonably and mutually agree upon) from the date of receipt of this written
notice to fully cure or have cured the Event of Default.
4.4. Termination for Event of Default and Payment of Liquidated Damages.
If an Event of Default has not been cured within the time frame specifically allowed
under Section 4.3 (if any), the City shall have the right to terminate this Agreement
immediately upon provision of written notice to Company. Company acknowledges and
agrees 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) be
detrimental to the City's general economic development programs, both in the eyes of the
general public and by other businesses and corporate relocation professionals, and
Company agrees 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, other than pursuant to Sections 4.5 or 4.6 or pursuant
to Section 4.2 on account of failure for the Required Improvements to be constructed in
accordance with Sections 1.1 and 1.2 of this Agreement or failure for the New Taxable
Tangible Personal Property to be installed on the Land in accordance with Section 1.3 of
this Agreement, and as authorized by Section 311.205(b)(6) of the Code, Company shall
pay the City, as liquidated damages, all taxes that were abated in accordance with this
Agreement for each year in which an Event of Default existed and which otherwise would
have been paid to the City in the absence of this Agreement. The City and Company 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 intended to provide the
City with compensation for actual damages and is not a penalty. This amount may be
recovered by the City through adjustments made to Company'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 effective 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, Company
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).
Page 14
Fax Abatement Agreement between
City of Fort Worth and FTS International Services. LLC
4.5. Termination at Will.
Company may terminate this Agreement at any time by providing written notice of
such intent to the City. In this event, there shall be no recapture of any taxes abated prior to
the effective date of termination, and neither party shall have any further rights or
obligations hereunder.
4.6. Knowing Employment of Undocumented Workers.
Company 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.
Company hereby certifies that Company, and any branches, divisions, or departments of
Company, does 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
Company, or any branch, division, or department of Company, is convicted of a violation
under 8 U.S.C. Section 1324a(g (relating to federal criminal penalties and injunctions
for a pattern or practice of employing unauthorized aliens):
• 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 Company) and
Company shall repay, within one hundred twenty (120) calendar days following
receipt of written demand from the City, the aggregate amount of Abatement
received by Company 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
Company, Company shall repay, within one hundred twenty (120) calendar days
following receipt of written demand from the City, the aggregate amount of
Abatement received by Company 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 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
Page 15
Fax Abatement Agreement between
City of Fort Worth and FTS International Services, LLC
Company, by any franchisees of Company, or by a person or entity with whom Company
contracts. 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.
Company 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, Company provides the City 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 Affiliate agrees in writing to assume all
terms and conditions of Company under this Agreement. For purposes of this Agreement, an
"Affiliate" means all entities, incorporated or otherwise, under common control with Company,
controlled by Company or controlling Company. For purposes of this definition, "control" means
fifty percent (50 %) or more of the ownership determined by either value or vote. Company may
not otherwise assign this Agreement or any of the benefits provided hereunder to another party
without the consent of the City Council, which consent shall not unreasonably be withheld or
delayed, provided that (i) the City Council finds 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 terms and conditions of Company 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 either party designates in writing, by certified mail,
postage prepaid, or by hand delivery:
City:
City of Fort Worth
Attn: City Manager
1000 Throckmorton
Fort Worth, TX 76102
with copies to:
the City Attorney and
Housing and Economic Development
Director at the same address
Page 16
lax Abatement Agreement between
City of Fort Worth and FTS International Services. LLC
Company:
FTS International Services, LLC
Attn: Marcus Rowland
777 Main Street, Suite 3000
Fort Worth, Texas 76102
with copies to:
Office of General Counsel, Transactions
777 Main Street, Suite 1600
Fort Worth, Texas 76102
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 party's
right to insist upon appropriate performance or to assert any such right on any future occasion.
10. 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.
11. 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.
12. NO THIRD PARTY RIGHTS.
The provisions of this Agreement are solely for the benefit of the City and Company, and
are not intended to create any rights, contractual or otherwise, in any other person or entity.
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
Page 17
Tax Abatement Agreement between
City of Fort Worth and FTS International Services, LLC
for or against either party, regardless of the actual drafter of this Agreement. In the event of any
conflict between any 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.
The 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 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.
17. 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
Company, their 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 in
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:
Page 19
fax Abatement Agreement between
Citv of Fort Worth and FTS International Services. LLC
♦ i
/ � t
CITY OF FOR ORTH:
By:
R ndle Ha ood
Acting Assistant City Manager
Date: (Z los /( t
ATTEST:
By: ZAIt /?
/1C.$t dity Secretary
STATE OF TEXAS §
COUNTY OF TARRANT §
APPROVED AS TO FORM AND LEGALITY:
By:
Peter Vaky
Deputy City Attorney
M &C: C -25183 09 -20 -11
F
T OHO 0 * A xx
000 NA'-, coo
BEFORE ME, the undersigned authority, on this day personally appeared Randle
Harwood, Acting Assistant City Manager of the CITY OF FORT WORTH, a municipal
corporation organized under the laws of the State of Texas, known to me to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged to me that the
same was the act of the CITY OF FORT WORTH, that he was duly authorized to perform the
same by appropriate resolution of the City Council of the City of Fort Worth and that he executed
the same as the act of the CITY OF FORT WORTH for the purposes and consideration therein
expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 4�Lay of
o , 2011.
tary Public in and for
the State of Texas
6VU11',4 3
Notary's Printed Name
Page 19
1 as Abatement Agrecmcnt hct�Ncen
('itv of Fort \ orth and FI S International Ser, ices. LL('
i ��
FTS INTERNATIONAL SERVICES, LLC,
a Texas limited liability
Frac Tech Services, LLI
Na*.- C
Title: P�5,
Date: /o,Lq.PZl o //
ATTEST:
formerly known as
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, on this day personally appeared
1 16? t of FTS INTERNATIONAL
SERVICES, LLC, 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 his act and that s/he executed the
same as the act of FTS INTERNATIONAL SERVICES, LLC for the purposes and
consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this ,j2 day of
, 2011.
Notary Public in and for
the State of,2 y�
AD11 j l /)
Notary's Printed Name
Page 20
Fax Abatement Agreement between
City of Fort Worth and FTS Intemational Services, LLC
�„ ; -' 1 "x ity
:•�►
_•�' "S Notary
DAVID JAY MILLER
Public, State of Texas
My Commission Expires
lot
October 31, 2015
�„ ; -' 1 "x ity
EXHIBITS
"A" — Legal Description of the Land
"B" — Description of the Required Improvements
"C" — Map of Central City
"D" — Letter of No Prejudice
Fax Abatement Agreement between
City of Fort Worth and FTS International Services. LLC
.t
EXHIBIT "A"
LEGAL DESCRIPTION OF THE LAND
BEING a tract of land in the S.A. & M. G. Railroad Company Survey, Abstract No. 1464, City of
Fort Worth, Tarrant County, Texas, and being all of Lot 2R, Block 2 of Railhead Fort Worth
Phase IV, an addition to the City of Fort Worth, Tarrant County, Texas, according to the plat thereof
recorded in Cabinet A, Slide 11612, of the Plat Records, Tarrant County, Texas (P.R.T.C.T.), and
being more particularly described as follows:
BEGINNING at a 1/2-inch iron rod with a cap stamped "Wier & Assoc., Inc." found at the
southeasterly corner of said Lot 2R, Block 2, said point being at the intersection of the westerly line
of Gold Spike Drive right -of -way (68 feet wide) and the northerly line of Meacham Boulevard right -
of -way, (96 feet wide), said point being the beginning of a curve to the left South 45 degrees 00
minutes 16 seconds 14.23 feet continuing left with a radius of 1583.91 feet and whose chord bears
South 87 degrees 48 minutes 04 seconds West, a distance of 92.91 feet continuing Westerly crossing
a 1/2 inch iron rod with a cap stamped "Wier & Assoc., Inc" bear South 34 degrees 43 minutes 52
seconds East 0.21 feet and continuing Westerly South 88 degrees 31 minutes 22 seconds West 51.30
feet and continuing curving left with a radius of 1586.91 feet and whose chords bears South 73
degrees 38 minutes 51 seconds West 584.47 feet crossing a %2 rod stamped "Wier Assoc., Inc" and
continuing South 63 degrees 02 minutes 07 seconds West 113.53 feet to the Southwest corner of
said Lot 2R marked with a11/2 inch iron rod stamped "Wier & Assoc., Inc. ";
THENCE North 27 degrees 10 minutes 09 seconds West 39.80 feet to iron rod stamped "Wier &
Assoc., Inc." and curving left a radius of 5680.15 feet whose chord bears North 20 degrees 41
minutes 12 seconds West a distance of 1282.70 feet along the easterly right of way of Chicago
Rock Island & Pacific R.R. and ending on at the northwest corner of Lot 2R marked by a 1/2 inch
iron rod stamped "Wier & Assoc., Inc." with a cap stamped "Trans System "'
THENCE, North 62 degrees 02 minutes 33 seconds West 0.45 feet bearing South 89 degrees 29
minutes 48 seconds East 1293.84 feet to a 1/2 inch iron rod stamped "Wier & Assoc., Inc." with a
cap stamped "Field Bush 5213 "marking the southeast corner of Lot 2R;
THENCE South 59 degrees 16 minutes 07 seconds West 0.75 feet bearing South 00 degrees 20
minutes 46 seconds West a distance of 993.07 feet to the POINT OF BEGINNING AND
CONTAINING 1,207,432 square feet or 27.719 acres of land, more or less.
Exhibit `B"
Description of Required Improvements
Note: At the time of execution of the Tax Abatement Agreement, the Company is in the process
of entering into contract for architectural and engineering services to draw plans to be used for
bid and construction purposes. Exhibit B.1 and Exhibit B.2 attached reflects the functional
design of the manufacturing areas providing only a process flow whereby raw material enters
one end and completed product exits on the other end. Current building improvements consist of
a shell with minimal structure improvements. Items to be constructed include but are not limited
to the following categories.
• Construction and finish out of all designated manufacturing areas (466,292 sq ft plus
future expansion areas 27,243 sq ft)
➢ Crane Systems — Installation of craneways (6)
➢ Paint Booth
➢ Testing Areas
➢ Cut and install additional employee entrance doors and emergency exits
• Foundation
➢ Drilling and pouring of footings to support equipment structurally (will require
removal of existing concrete in some areas and the relocation of existing support
columns)
➢ Pouring of remaining foundation in all areas
➢ Pouring of external drives and dock entrances
• Electrical Service - Installation all of required electrical including but not limited to:
transformers to the site, electrical panels and sub - panels to support manufacturing and
office use, all electrical wiring for equipment use and office use, all wiring for lighting
internally and additional external lighting
• HVAC System — Installation of HVAC and exhaust fans needed in manufacturing area
and office
• Sprinkler System
• Utilities — Installation and piping for:
➢ Gas
Water
➢ Sewer
➢ Phones and other electronic equipment
• Mezzanine Level (total of 56,464 sq ft)
Office Space — Construction and finish out (13,569 sq ft)
➢ Training Room, Conference Room — Construction and finish out (7,218 sq ft)
➢ Restroom and Locker Rooms — construction and finish out (4,378 sq ft)
➢ Electrical substations — construction and finish out (1,200 sq ft)
➢ Multipurpose Room — construction and finish out (13,530 sq ft)
➢ Air Compressors, Electronics, Hydraulic Hoses (14,486 sq ft)
➢ Corridor — construction and finish out (2,083 sq ft)
Overhead Doors — Cut and install 30 truck doors
Construction of Site Improvements
➢ Detention pond
➢ Employee parking
➢ Parking and staging for manufactured equipment
➢ Fire lanes
➢ Exterior lighting
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Legend FORT WORTH Updated 08/09/2011
0 zip Codes
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C N
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FORTWORTH
EXHIBIT "D"
May 17, 2011
Mr. John Castro, CEcD
Maximus Alliance Partners, LLC
3131 McKinney Avenue
Suite 540
Dallas, Texas 75204
RE: Frac Tech Services (Project SURFACE) Request for Letter of No Prejudice
Dear Mr. Castro:
This is in response to your May 11, 2011 letter requesting a Letter of No Prejudice from the City of Fort
Worth ( "City"). This Letter of No Prejudice will allow Premium Frac Pumps and Cisco High Lift of
Texas (collectively "FTS ") to spend funds for the retention and expansion project under consideration
( "PROJECT") prior to execution of a City Council approved agreement for tax incentives.
It is understood FTS must begin design and engineering to determine the potential of the unfinished shell
building located at 4601 Gold Spike Road. Additionally, it is also realized some equipment must be
ordered now so that delivery would occur by the time the building is completed. All incentive agreements
must be approved by the City Council and the uncertainty as to the City's desire to approve an agreement
prevents the City from guaranteeing that any incentives for the Project will be available. Accordingly,
any work and related expenditures FTS makes under this Letter of No Prejudice are undertaken solely at
the risk of FTS, as the City cannot guarantee the approval of an incentive agreement. The City shall have
no responsibility or obligation to provide incentives for the Project based on anything contained in this
letter.
With this understanding, if FTS still desires to go forward with the Project at this time, the City agrees
that if FTS chooses to expend funds for any improvements or purchases of new equipment in advance of
the approval of an incentives agreement, then such expenses shall be considered eligible project costs
contingent upon meeting the following condition:
■ All expenses made prior to the approval of an incentives agreement must be fully documented, in
compliance with the approved scope of the Project approved by the City, and directly attributable
to the Project tasks described in the scope and schedule submitted to City staff.
With this in mind, it is important to note Section 11.1 of the City of Fort Worth Tax Abatement Policy
states:
"A tax abatement shall not be granted for any development project in which a building permit
application has been filed with the City's Planning and Development Department."
HOUSING AND ECONOMIC DEVELOPMENT DEPARTMENT
Tm Cin OI FI IKI WORTH + 1000 THRIH'KMURIUN .STRF1I - FORI Wo RTII. TEYx" 76102
817- 3'.12 -610:3 • Fnx 817-392-243 1
I : Pnntrd on — y, Ir,I pa prr
As a result, if you are required to obtain a building permit to perform any of the work at 4601 Gold Spike
Road, as contemplated above, please notify me immediately, and do not apply for the permit until we
have discussed that matter.
If you should have any questions regarding the terms and conditions of this Letter of No Prejudice, please
call me at 817- 392 -5804 or email me at Jesus.Chapa @fortworthgov.org.
Sincerely,
Jay Chapa
Director
M &C Review Page I of 3
Official site of the City of Fort Worth, Texas
CITY COUNCIL AGENDA FORTWORT11
Ir-
COUNCIL ACTION: Approved on 9120/2011
DATE: 9/20/2011 REFERENCE NO.: C -25183 LOG NAME: 17TAFRACTECH
CODE: C TYPE: CONSENT HEARING: NO
SUBJECT: Authorize Execution of Tax Abatement Agreement with Frac Tech Services, LLC, for the
Relocation of Its Industrial Pump Manufacturing Operations to Railhead Industrial Park
(COUNCIL DISTRICT 2)
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to execute a Tax Abatement
Agreement with Frac Tech Services, LLC, for the relocation of its industrial pump manufacturing
operations to Railhead Industrial Park.
DISCUSSION:
The Housing and Economic Development Department is proposing a 10 -year Tax Abatement
Agreement with Frac Tech Services, LLC, (Frac Tech) that could potentially abate up to 65 percent of
the City's taxes on the incremental value of real and business personal property investment at 4601
Gold Spike Drive.
Protect:
Frac Tech is considering the relocation of its industrial pump manufacturing operations to an existing
building at 4601 Gold Spike Drive in Railhead Industrial Park. In order to accomplish this relocation,
Frac Tech will have to renovate the building. The proposed project is estimated to have at least
$10,875,000.00 expended in real property improvements to the site, and Frac Tech will invest at least
$50,500,000.00 in new taxable personal property by December 31, 2012.
Failure to meet this minimum real property and business personal property investment is a condition
of default and will result in immediate termination of the Agreement.
In order to achieve the maximum amount of abatement available under the Agreement each year,
Frac Tech will also have to meet the following construction spending, employment, and annual supply
and service spending commitments:
Utilization of Fort Worth Companies and Fort Worth M/WBE Businesses (Real Property
Improvements):
Frac Tech has committed to spend the greater of 75 percent or $8,156,250.00 of real property
improvements with contractors that are Fort Worth companies. In addition, the greater of 25 percent
or $2,718,750.00 of these real property improvements must be expended with contractors that are
Fort Worth certified M/WBE companies (with the understanding that dollars spent with Fort Worth
certified M/WBE companies will also count as dollars spent with Fort Worth companies).
Employment Commitments:
Frac Tech has committed to employ a minimum of 200 full -time employees on the property by
December 31, 2013, 300 full -time employees by December 31, 2016 and 450 full -time employees by
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December 31, 2021.
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In addition, the greater of 50 percent or 100 of the these jobs must be provided to Fort Worth
residents during years two through five of the Agreement. This amount will increase to the greater of
50 percent or 150 jobs in years six through nine and the greater of 50 percent or 225 jobs in year ten
of the Agreement. Frac Tech will fill the greater of 30 percent or 60 of these jobs with Fort Worth
Central City residents during years two through five of the Agreement. This amount will increase to
the greater of 30 percent or 90 jobs in years six through nine and the greater of 30 percent or 135
jobs in year ten of the Agreement.
Utilization of Fort Worth Companies and Fort Worth M/WBE Businesses (Supply & Services):
Frac Tech has committed to spend the greater of 75 percent or $187,500.00 of annual discretionary
service and supply expenditures with contractors that are Fort Worth companies. The greater of 25
percent or $62,500.00 of annual discretionary service and supply expenditures must be made with
contractors that are Fort Worth certified M/WBE companies (with the understanding that dollars
spent with certified Fort Worth M/WBE companies will also count as dollars spent with Fort Worth
companies).
Discretionary service and supply expenditures include all expenditures, whether under written
contract or ad hoc purchases, other than for electric, gas and water utilities, related to the operation
and maintenance of the project, including amounts paid to eligible companies or contractors for
personnel.
All tax abatements granted under the Agreement are for City property taxes based on the incremental
increase in the value of real property improvements (above a base year value) and business personal
property. The percentage of abatement is capped at 65 percent for a period of ten years. Failure to
meet any of the commitments above will result in a reduction of the corresponding component of the
Abatement for that year proportional to the amount the commitment was not met, or for the duration
of the abatement in the case of construction commitments, as depicted more specifically depicted in
the following chart:
Company Commitment
Potential
Abatement
Real and Personal Property Investment
10
percent
Fort Worth Contractors
5
percent
Fort Worth M/WBE Contractors
5
percent
Overall Employment
25
percent
Employment of Fort Worth Residents
5
percent
Employment of Fort Worth Central City Residents
5 percent
Utilization of Fort Worth Companies for Services and Supplies
5 percent
Utilization of Fort Worth M/WBE Companies for Services and
Supplies
5 percent
TOTAL
65
percent
The project is 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
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Submitted for City Manager's Office by:
Originating Department Head:
Additional Information Contact:
ATTACHMENTS
Susan Alanis (8180)
Jay Chapa (5804)
Robert Sturns (8003)
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