HomeMy WebLinkAboutContract 57440 CITY SECRETARY
CW MACTNo. Jc--74q
ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Agreement") is
entered into by and between the CITY OF FORT WORTH(the"City"),a home rule municipal ity
organized under the laws of the State of Texas, and OATLY US OPERATIONS & SUPPLY
INC., a wholly owned subsidiary of OATLY,INC.,a Delaware corporation("Company").
RECITALS
The City and Company hereby agree that the following statements are true and correct a id
constitute the basis upon which the City and Company have entered into this Agreement:
A. Company is a lifestyle branded producer of superior plant-based, alternative dairy
products,with its global headquarters in Sweden and its United States headquarters in New Yor .
B. Company is rapidly expanding its presence and market share in the United States,
with two production facilities in New Jersey and Utah.
C. Company desires to build a third production facility within an existing 280,000
square foot building located at 7550 Oak Grove Road in Fort Worth ("Development Site"), as
more specifically described in Exhibit "A", as appropriate for the Company's manufacturing
operations and office space.
D. Company has agreed use the Development Site for its manufacturing operations
and office space,along with the expenditure of at least$36,000,000 in capital improvements("Real
Property Improvements")and$48,000,000 in new taxable business personal property("Personal
Property Improvements")on the Development Site(collectively, "Required Improvements").
F The Required Improvements and Company's operations therein will benefit the
City by increasing the scope of an important commercial operation in the City with significant
opportunities for employment and tax base growth.
G. As recommended by the City's 2021 Comprehensive Plan, adopted by the City
Council pursuant to Ordinance No. 24732-032021 ("Comprehensive Plan"), and in accordance
with Resolution No. 5338-01-2021 ("Policy"),the City has established an economic development
program pursuant to which the City will, on a case-by-case basis, offer economic incenti-ves
authorized by Chapter 380 of the Texas Local Government Code that include monetary loans aid
grants of public money,as well as the provision of personnel and services of the City,to busines es
and entities that the City Council determines will promote state or local economic development aid
stimulate business and commercial activity in the City in return for verifiable commitments fr. m
such businesses or entities to cause specific employment and other public benefits to be made or
invested in the City("380 Program").
I. The City Council has determined that the feasibility of the proposed business
relocation project described herein is contingent on Company's receipt of the Program Grants.
J. The City Council has determined that the development and use of the Required
Improvements will benefit and stimulate the local economy and that the 380 Program is
appropriate means to achieve this project.
111,:FT.
CIAL.RE ORD
Economic Development Program Agreement SECR ARY
between City of Fort Worth and iA/ORTbt�aX Oatly US Operations&Supply,Inc.
c�
K. In addition,the City Council has determined that,by entering into this Agreement,
the potential economic benefits that will accrue to the City are consistent with the City's economic
development objectives, as outlined in the Comprehensive Plan.
L. This Agreement is authorized by Chapter 380 of the Texas Local Government
Code.
NOW, THEREFORE, in consideration of the mutual benefits and promises contai ed
herein and for other good and valuable consideration,the receipt and sufficiency of which is herby
acknowledged,the parties agree as follows:
AGREEMENT
1. INCORPORATION OF RECITALS.
The City Council has found, and the City and Company hereby agree,that the recitals set
forth above are true and correct and form the basis upon which the parties have entered into 1his
Agreement.
2. DEFINITIONS.
In addition to other terms defined in the body of this Agreement,the following terms Nk ill
have the definitions ascribed to them as follows:
380 Proaram has the meaning ascribed to it in Recital G.
Affiliate means all entities, incorporated or otherwise, under common control with,
controlled by or controlling Company. For purposes of this definition, "control" means fifty
percent(50%)or more of the ownership determined by either value or vote.
Base Grant Percentage has the meaning ascribed to it in Section 6.2.1.
Business Equity Firm("BEF")has the meaning assigned to it in the City of Fort WoI 's
Business Equity Ordinance(Chapter 20,Article X of the City Code),as amended.
BEF Construction Percentage has the meaning ascribed to it in Section 6.2.2.
BEF Construction Spending Commitment has the meaning ascribed to it in Section 4.4.
Certificate of Completion has the meaning ascribed to it in Section 5.
Comptroller means the Texas Comptroller for Public Accounts.
Construction Costs means the following costs expended or caused to be expended by
Company directly in connection with construction of the Required Improvements: actual site
development and construction costs,including directly-related contractor fees,costs of construction
labor, supplies and materials for site preparation, construction and landscaping, and materials
testing;engineering, architectural and other design and consulting fees; construction management
fees;and costs of related governmental permits and inspection fees. For removal of doubt,property
acquisition costs do not constitute"Construction Costs."
Economic Development Program Agreement
between City of Fort Worth and
Oatly US Operations&Supply,Inc. 2 of 20
Development Site has the meaning ascribed to it in Recital C.
Development Site Personal Property Tax Revenues means City ad valorem taxes on
New Taxable Tangible Personal Property located on the Development Site. The taxable apprai ed
value of New Taxable Tangible Personal Property located on the Development Site for any given
year will be established solely by the appraisal district that has jurisdiction over the Developrn Drit
Site at the time.
Development Site Real Property Tax Revenues means City ad valorem taxes on the
Development Site and any improvements thereon, including the Required Improvements, minus
the taxes attributable to the base collective taxable appraised value of the Development Site and all
improvements thereon for the 2025 tax year, which base collective taxable appraised valut is
Eighty-Four Million Dollars and No Cents ($84,000,000.00). The taxable appraised value of he
Development Site and any improvements located thereon, including the Required Improvements,
for any given year will be established solely by the appraisal district that has jurisdiction over he
Development Site at the time.
Director means the director of the City's Economic Development Department or that
person's authorized designee.
Effective Date has the meaning ascribed to it in Section 3.
Employment Commitment has the meaning ascribed to it in Section 4.5.1.
Employment Percentage has the meaning ascribed to it in Section 6.3.1.
First Operating Year means the first full calendar year following the year in which the
Real Property Completion Date occurred.
Full-time Job means a job provided to one (1) individual by Company for at least forty
(40)hours per week.
New Job has the meaning ascribed to it in Section 4.5.2.
New Taxable TanEible Personal Property means the Personal Property Improveme is
that(i)is subject to ad valorem taxation by the City;(ii) is located on the Development Site; (iii)is
owned or leased by Company; and (iv) was not located in the City prior to the Effective Date of
this Agreement.
Personal Property Commitment has the meaning ascribed to it in Section 4.3.
Personal Property Completion Deadline means December 31,2025.
Program Cap means One Million Ninety-Three Thousand Nine Hundred Seventy Doll irs
and No Cents ($1,093,970.00), which is the aggregate amount of Program Grants that the Ci is
obligated to pay under this Agreement
Program Grants means the annual economic development grants paid by the City to
Company in accordance with this Agreement and as part of the 380 Program.
Economic Development Program Agreement
between City of Fort Worth and
Oatly US Operations&Supply,Inc. 3 of 21)
Program Source Funds means an amount of City funds available for inclusion in a given
Program Grant, which will equal a percentage (calculated in accordance with this Agreement) of
the Development Site Real Property Tax Revenues and Development Site Personal Property Tax
Revenues received by the City during the Twelve-Month Period ending in the same year in wh ich
the Program Grant is payable.
Real Property Commitment has the meaning ascribed to it in Section 4.2.
Real Property Completion Date means the date as of which all of the Real Prop rty
Improvements have been completed and all occupiable space within the Required Improvements
has received a temporary or permanent certificate of occupancy.
Real Property Completion Deadline means December 31,2024.
Records has the meaning ascribed to it in Section 4.9.
Required Improvements has the meaning ascribed to it in Recital D.
Policy has the meaning ascribed to it in Recital G.
Salary means a cash payment or remuneration made by Company to an individual for
services rendered as an employee to Company,including any paid time off,commissions,bonuses,
or equity paid in accordance with Company's published bonus plan,but does not include the value
of any benefits provided to an employee or any reimbursements for actual and necessary expenses
incurred by the employee in the course and scope of the employee's job duties.
Salary Commitment has the meaning ascribed to it in Section 4.6.
Salary Percentage has the meaning ascribed to it in Section 6.4.
Second Operating Year means the second full calendar year following the year in which
the Real Property Completion Date occurred.
Term has the meaning ascribed to it in Section 3.
Twelve-Month Period means the period between January 1 of a given year and December
31 of the following year.
3. TERM.
This Agreement will be effective as of January 26, 2021, which is the date on which I he
City Council approved this Agreement("Effective Date"),and,unless terminated earlier pursuant
to and in accordance with this Agreement,will expire on the date as of which the City has paid all
Program Grants required hereunder"Term").
4. COMPANY OBLIGATIONS AND COMMITMENTS.
4.1. Use of Development Site.
From the Completion Date until expiration of the Term of this Agreement,
Company must use the Development Site for Company's manufacturing operations and
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office space.
4.2. Real Property Improvements.
By the Real Property Completion Date, Company must expend or cause to be
expended at least Thirty-Six Million Dollar and No Cents($36,000,000.00)in Construc ion
Costs for improvements to the Development Site, and the Real Property Completion Elate
must occur on or before the Real Property Completion Deadline (collectively, " eal
Property Commitment").
4.3. Personal Property Improvements.
New Taxable Tangible Personal Property having a value of at least Forty-E ht
Million Dollars and No Cents($48,000,000.00)must be in place on the Development ite
by Personal Property Completion Deadline, as determined solely by the appraisal district
having jurisdiction over the Development Site at the time ("Personal Property
Commitment").
4.4. Construction Spendiniz Commitment with BEF.
Company must expend or cause to be expended by the Real Property Completion
Date at least fifteen percent (15%) of all Construction Costs for the Real Property
Improvements, regardless of the total amount of such Construction Costs, with BEFs
("BEF Construction Spending Commitment").
4.5. Employment Commitment.
4.5.1. Company must employ and retain at least 50 new Full-Time Jobs at the
Development Site on or before December 31, 2025 ("Employm nt
Commitment").
4.5.2. Company must retain all 50 Full-time Jobs at the Development Site for the
Term of this Agreement(each a"New Job"). A Full-time Job will be considered
new if the individual was hired on or after Effective Date.
4.5.3. Determination each year of compliance with the Employment
Commitment will be based on the employment data provided to the City pursuant
to this Agreement for the year under evaluation.
4.6. Averaze Annual Salary.
The average annual Salary,measured on a calendar year basis, of the 50 Ful1-ti me
Jobs pursuant to the Employment Commitment outlined in Section 4.5 must equal at least
$46,325.00("Salary Commitment").
4.7. Reports.
4.7.1 Quarterly Reports.
From the Effective Date until the Real Property Completion Date,
Company must provide the Director with a calendar quarterly report in a form
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Oady US Operations&Supply,Inc. 5 of 20
reasonably acceptable to the Director that specifically outlines(i)the then-cuff nt
aggregate Construction Costs expended for the Required Improvements; and ii)
the then-current aggregate Construction Costs expended with BEFs for he
Required Improvements.
4.7.2. Final Construction Report.
Within sixty (60) calendar days following the Real Property Complet on
Date, in order for the City to assess whether the Real Property Commitment i nd
the applicable BEF Construction Spending Commitment have been met,Comp ny
must provide the Director with a report in a form reasonably acceptable to e
Director that specifically outlines (i) the total Construction Costs expended or
caused to be expended for the Real Property Improvements as of the Real Property
Completion Date and (ii) the total Construction Costs expended or caused to be
expended with BEFs for the Real Property Improvements as of the Real Property
Completion Date, together with supporting invoices and other docume,nts
necessary to demonstrate that such amounts were actually paid,including, ut with
limitation, final lien waivers signed by the general contractor for the Requi�ed
Improvements.
4.7.3. Personal Property Report.
Company must provide the Director with written notice once it has
received the appraisal notice for Company's business personal property on the
Development Site for the 2025 tax year and believes that the Personal Property
Commitment has been attained.
4.7.4. Annual Employment and Salary Report.
On or before March 31, 2025 and March 31 of each year thereafter, in
order for the City to assess the degree to which the Employment Commitment or
the previous calendar year was met,as well as to verify the average annual Sal iry
of the 50 Full-time Jobs on the Development Site, Company must provide e
Director with a report in a form reasonably acceptable to the Director that sets fo rth
the total number of individuals who held Full-time Jobs on the Development Site
up to the 50 Full-time Jobs commitment, as well as the Salary of each of the'50
Full-time Jobs, all as of December 31 (or such other date requested by Comp ny
and reasonably acceptable to the Director)of the previous calendar year,togetTer
with reasonable supporting documentation.
4.7.5. Performance by Affiliates.
The City will accept performance of any obligations set forth in this
Section 4 by an Affiliate of Company, with the understanding that Company will
be responsible for preparing and providing all reports required hereunder,
including the assembly of and access by the City to any data or information of an
Affiliate that is reflected in any such report.
Economic Development Program Agreement
between City of Fort Worth and
Oady US Operations&Supply,Inc. 6 o P 20
4.7.6. Additional Information.
Company agrees to provide the City with any additional information that the Director n Lay
reasonably require to ascertain Company's compliance with this Agreement and to assist the C ity
in properly calculating Program Grants payable in accordance with this Agreement.
4.8. Inspections of Development Site.
4.8.1 At any time during Company's normal business hours throughout the
Term and following reasonable notice to Company,the City will have the right to
inspect and evaluate the Development Site and any improvements thereon,
including the Required Improvements, and Company must provide full acces to
the same,in order for the City to monitor compliance with the terms and conditions
of this Agreement. Company will cooperate fully with the City during any such
inspection and evaluation.
4.8.2 Notwithstanding the foregoing,Company will have the right to require t riat
any representative of the City be escorted by a representative or security person ael
of Company during any such inspection and evaluation.
4.9. Audits.
The City will have the right throughout the Term to audit the financial and busin ss
records of Company or any Affiliate that relate to Construction Costs expended for fie
Required Improvements,or New Taxable Tangible Personal Property as well as any of er
documents necessary to evaluate Company's compliance with this Agreement or with he
commitments set forth in this Agreement(collectively"Records"). Company must in, e
all Records available to the City on the Development Site or at another location in the City
with reasonable advance notice that is acceptable to both parties. Company will otherwise
cooperate fully with the City during any audit assuming that reasonable advance not ce
acceptable to both parties has been provided. This section will survive the expiration or
early termination of this Agreement.
4.10 Confidentialitv.
City is a government entity under the laws of the State of Texas and all documents
held or maintained by City are subject to disclosure under the Texas Public Information
Act.In the event there is a request for information marked Confidential or Proprietary,O ty
will promptly notify Company. Company will be responsible for submitting its own
arguments objecting to disclosure to the Office of the Attorney General of the State of
Texas.A determination on whether such reasons are sufficient will not be decided by City,
but by the Office of the Attorney General of the State of Texas or by a court of competent
jurisdiction.
5. CERTIFICATE OF COMPLETION.
Within ninety (90) calendar days following receipt by the City of the filial
construction spending report for the Required Improvements and assessment by the City
of the information contained therein, if the City is able to verify attainment of the Real
Property Commitment,the Director will issue Company a certificate stating the amount of
Construction Costs expended for the Required Improvements and the amount of
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Construction Costs expended specifically with BEFs("Certificate of Completion"). The
Certificate of Completion will serve as the basis for determining the extent to which the
BEFs Construction Spending Commitment was met.
6. PROGRAM GRANTS.
6.1. Generally
6.1.1 As more specifically set forth herein, if both the Real Property
Commitment and the Personal Property Commitment are met in a timely manner,
Company will be entitled to receive five (5) annual Program Grants, payment of
which will begin in the Second Operating Year.
6.1.2. The amount of each Program Grant will equal a percentage of the Progr un
Source Funds available for that Program Grant,which will be based on the ex nt
to which various commitments set forth in Section 4 have been met a id,
specifically,will equal the sum of the Base Grant Percentage, BEFs Construct on
Percentage, Employment Percentage,and Salary Percentage.
6.1.3. In no event will any Program Grant exceed forty percent (40%) of the
Program Source Funds available for that year's Program Grant.
6.1.4. Notwithstanding anything to the contrary herein, aggregate progr m
grants payable under this Agreement will be subject to and will not exceed the
applicable Program Cap.
6.2. Allocation of Program Grants
6.2.1 Attainment of Real Property Commitment and Personal Property
Commitment(20%)
Provided that the Director is able to verify that both the Real Property
Commitment and the Personal Property Commitment are met, each ann jal
Program Grant will include twenty percent (20%) of the Program Source Funds
available for that year's Program Grant("Base Grant Percentage").
6.2.2. BEFs Construction Spending Commitment(10%)
a. Provided that the Director is able to verify that the BEF
Construction Spending Commitment is met, each annual Program Gr lit
will include ten percent(10%)of the Program Source Funds available Er
that year's Program Grant(`BEF Construction Percentage").
6.3. Employment Commitment(Up to 5%1.
6.3.1. Each annual Program Grant will include a percentage of the Prognun
Source Funds available for that year's Program Grant that is based on Company's
compliance with the Employment Commitment in the previous calendar year
("Employment Percentage").
Economic Development Program Agreement
between City of Fort Worth and
Oatly US Operations&Supply,Inc. 8 of 20
1
6.3.2. The Employment Percentage for each Program Grant will equal he
product of five percent (5%) multiplied by the percentage by which e
Employment Commitment was met in the previous calendar year, which will be
calculated by dividing the actual number of Full-time Jobs provided on e
Development Site in the previous calendar year by the Employment Commitment.
a. For example,the Employment Commitment is to employ 50 Full-
Time Jobs and retain them for the Term of the Agreement.
1. If only 40 Full-time Jobs were provided and filled on the
Development Site in a given year,the Employment Percentage for
the Program Grant payable in the following year would be %
instead of 5%(or .05 x[40/50]),or .05 x.80,or.04).
2. If the Employment Commitment is met or exceeded in
any given year, the Employment Percentage applicable the
Program Grant payable in the following year will equal five
percent(5%).
6.4. Salary Commitment(Up to 5%).
6.4.1. Each annual Program Grant will include a percentage of the Program
Source Funds available for that year's Program Grant that is based on Company's
compliance with the Salary Commitment in the previous calendar year("Salary
Percentage").
6.4.2. The Salary Percentage for each Program Grant will equal the producl of
five percent(5%)multiplied by the percentage by which the Salary Commitment
was met in the previous calendar year, which will be calculated by dividing the
actual amount of the average salary for Full-Time Jobs in the previous Galen ar
year by the Salary Commitment.
a. For example, the Salary Commitment is $46,325.00 annually for
the Term of the Agreement.
1. If the average annual salary in a given year as
$40,000.00 for the 50 Full-time Jobs on the Development Site, he
Salary Percentage for the Program Grant payable in the follow ng
year would be 4.3% instead of 5% (or .05 x [$40,000/$46,32 ]),
or .05 x.86,or.043).
2. If the Salary Commitment is met or exceeded in any given
year,the Salary Percentage applicable the Program Grant payable
in the following year will equal five percent(5%).
6.5. Program Cap.
6.5.1. The City's obligation to pay Company Program Grants under this
Agreement is limited by the Program Cap.
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between City of Fort Worth and
Oatly US Operations&Supply,Inc. 9 of 20
6.5.2. If, in any Program Year, the amount of the Program Grant calculated in
accordance with this Agreement would cause aggregate Program Grants paid by
the City to exceed the Program Cap,the amount of the Program Grant payable in
that Program Year will be limited to equal only the difference between the
aggregate amount of all Program Grants previously paid and the Program Cap
amount,in which case,upon payment of such Program Grant,this Agreement will
expire automatically.
6.6. Deadline for Payments and Source of Funds.
6.6.1. The first Program Grant payable hereunder will be paid by the City o1i or
before June 1 of the Second Operating Year.
6.6.2 Each subsequent annual Program Grant payment will be made by the City
to Company on or before June 1 of the year in which such payment is due.
6.6.3. It is understood and agreed that all Program Grants paid pursuant to this
Agreement will come from currently available general revenues of the City and
not directly from ad valorem taxes on the Development Site or improvements
thereon or on New Taxable Tangible Personal Property that are received by the
City.
6.6.4. Company understands and agrees that any revenues of the City other than
those dedicated for payment of a given annual Program Grant pursuant to an in
accordance with this Agreement may be used by the City for any lawful purpose
that the City deems necessary in the carrying out of its business as a home rule
municipality and will not serve as the basis for calculating the amount of any fut ire
Program Grant or other obligation to Company.
7. APPLICATION FEE AND FEE CREDIT.
7.1. Company has paid an economic development incentive application fee, of
$5,000.00.
7.2. Of that amount, $2,000.00 is non-refundable and will be used to offset costs
incurred by City staff in processing the application and preparing this Agreement.
7.3. In accordance with Section 18.2 of the Policy, the remaining $3,000.00 may be
used by Company for application toward any fees charged by the City in connection ith
the Required Improvements on or before the Personal Property Completion Deadline.
7.4. After the earlier of the Personal Property Completion Deadline or issuance of he
Certificate of Completion,any unused balance of this credit will be refunded to CompE ny
within thirty (30) days following receipt of a written request from Company, but only if
such written request is submitted to the Director within ninety(90)calendar days follow ng
the Personal Property Completion Date.
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between City of Fort Worth and
Oatly US Operations&Supply,Inc. 10 of 20
8. DEFAULT,TERMINATION AND FAILURE BY COMPANY TO MEET
VARIOUS DEADLINES AND COMMITMENTS.
8.1. Failure to Meet Real Property Commitment or Personal Property
Commitment.
Notwithstanding anything to the contrary herein, the City will have the righ to
terminate this Agreement upon provision of written notice to Company, without fu er
obligation to Company hereunder, if the Real Property Commitment or Personal Property
Commitment have not been met.Upon written notice,Company will have 30 days to meet
the obligations under the Real Property Commitment and/or Personal Property
Commitment or the Agreement will be terminated.
8.2. No Default for Failure to Meet BEF Construction Spendine Commitment
Employment Commitment,or Salary Commitment.
If the BEF Construction Spending Commitment is not met, Employment
Commitment, or Salary Commitment are not met in any given year, such failure will riot
constitute a default hereunder or provide the City with the right to terminate 1his
Agreement, but, rather, will only cause the amount of the Program Grant that the City is
required to pay in the following year to be reduced in accordance with this Agreement.
8.3. Failure to Use Development Site for Business Operations.
If Company (i) fails to use the Development Site for, at a minimum, its
manufacturing operations and office for Company's business operations for more than
thirty (30) consecutive calendar days at any time during the Term of this Agreement for
any reason (other than on account of Company's temporary displacement caused by a
casualty to such location and resulting ongoing repairs or restoration to that locat on
necessitated by such casualty), Company will be in default under this Agreement and the
City will have the right to terminate this Agreement following provision of notice and
opportunity to cure in accordance with Section 8.5.
8.4. Failure to Submit Reports.
If Company fails to submit any report required by and in accordance with Section
4.7,the City's obligation to pay any Program Grants at the time, if any,will be suspended
until Company has provided all required reports; provided, however, that if any report
required hereunder is delinquent by more than one(1)year,the City will have the right to
terminate this Agreement following provision of notice and opportunity to cure in
accordance with Section 8.5.
8.5. General Breach.
Unless stated elsewhere in this Agreement,Company will be in default under t us
Agreement if Company breaches any term or condition of this Agreement. In the ev nt
that such breach remains uncured after thirty(30)calendar days following receipt of writ en
notice from the City referencing this Agreement (or, if Company has diligently d
continuously attempted to cure following receipt of such written notice but reasonably
requires more than thirty(30) calendar days to cure,then such additional amount of thne
as is reasonably necessary to effect cure, as determined by both parties mutually and in
Economic Development Program Agreement
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good faith), the City will have the right to terminate this Agreement immediately by
providing written notice to Company.
8.6. Knowine Employment of Undocumented Workers.
8.6.1 Company acknowledges that 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 2264.00](4)of the T
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. Sect on
1324a(g (relating to federal criminal penalties and injunctions for a pattern or
practice of employing unauthorized aliens):
a. if such conviction occurs during the Term of this Agreement, is
Agreement will terminate contemporaneously upon such conviction
(subject to any appellate rights that may lawfully be available to and
exercised by Company), and Company must repay, within one hund ed
twenty (120) calendar days following receipt of written demand from he
City,the aggregate amount of the Program Grants received by Company
hereunder, if any,plus Simple Interest at a rate of four percent(4%)per
annum;or
b. if such conviction occurs after expiration or termination of t
Agreement based on conduct that occurred during the term of
Agreement,subject to any appellate rights that may lawfully be available
to and exercised by Company, Company must repay,within one hundred
twenty (120) calendar days following receipt of written demand from the
City, the aggregate amount of the Program Grants received by Comp ny
hereunder, if any,plus Simple Interest at a rate of four percent(4%) er
annum.
8.6.2. For the purposes of this Section 8.6, "Simple Interest"is defined as a rate
of interest applied only to an original value,in this case the aggregate amount of Jobs
Grants paid hereunder. This rate of interest can be applied each year,but will o lly
apply to the aggregate amount of Program Grants paid hereunder and is not_appl ed
to interest calculated. For example, if the aggregate amount of the Program Grants
paid hereunder is $10,000 and such amount is required to be paid back with fur
percent (4%) interest five years later, the total amount would be $10,000 + [ x
($10,000 x 0.04)],which is$12,000. This Section 8.6 does not apply to convictions
of any subsidiary or affiliate entity of Company,by any franchisees of Company,or
by a person or entity with whom Company contracts. Notwithstanding anything to
the contrary herein,this Section 8.6 will survive the expiration or termination of is
Agreement.
9. INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Company will operate as an independent
contractor in each and every respect hereunder and not as an agent, representative or employee of
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the City. Company will have the exclusive right to control all details and day-to-day operations
relative to the Required Improvements and the Development Site and any improvements thereon
and will be solely responsible for the acts and omissions of its officers,agents,servants,employees,
contractors, subcontractors, licensees and invitees. Company acknowledges that the doctrine of
respondeat superior will not apply as between the City and Company,its officers,agents,servai ts,
employees, contractors, subcontractors, licensees, and invitees. Company further agrees at
nothing in this Agreement will be construed as the creation of a partnership or joint enterp se
between the City and Company.
10. INDEMNIFICATION.
COMPANY, AT NO COST TO THE CITY, AGREES TO DEFEND, INDEMNIFY,
AND HOLD THE CITY, ITS OFFICERS, AGENTS, SERVANTS, REPRESENTATIV
AND EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUI S,
ACTIONS, COSTS AND EXPENSES OFANYKIND,INCLUDING,BUT NOT LIMITED O,
THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE R
LOSS TO COMPANY'S BUSINESS AND ANY RESULTING LOST PROFITS) AND
PERSONAL INJURY,INCLUDING,BUTNOTLIMITED TO,DEATH, THA TMA YRELA TE
TO,ARISE OUT OF OR BE OCCASIONED BY(i) COMPANY'S BREACH OFANYOF THE
TERMS OR PROVISIONS OF THIS AGREEMENT OR (ii) ANY NEGLIGENT ACT OR
OMISSION OR INTENTIONAL MISCONDUCT OF COMPANY,ITS OFFICERS,AGENTS,
ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE CIT19 OR
SUBCONTRACTORS, RELATED TO THE DEVELOPMENT SITE, OR ANY
IMPROVEMENTS THEREON,INCLUDING THE REQUIRED IMPROVEMENTS, ORA.NY
OTHER NEGLIGENT ACTOR OMISSION OF THE COMPANY THAT IS RELATED O
THE PERFORMANCE OF THIS AGREEMENT. THE COMPANY HAS O
INDEMNIFICATION OBLIGATION BEYOND THAT WHICH IS SET FORTH IN
CATEGORIES (i) AND (Y) ABOVE. BY WAY OF EXAMPLE, THE COMPANY HAS O
DUTY TO INDEMNIFY THE CITY, ITS OFFICERS, AGENTS, SERVAN S,
REPRESENTATIVES OR EMPLOYEES FOR ANY NEGLIGENT ACT OR OMISSION R
INTENTIONAL MISCONDUCT OF THE CITY, ITS OFFICERS, AGENTS, SERVAN S,
REPRESENTATIVE, OR EMPLOYEES.
11. NOTICES.
All written notices called for or required by this Agreement must be addressed to he
following, or such other party or address as either party designates in writing, by certified mi il,
postage prepaid,electronic transmittal or by hand delivery:
City: Company:
City of Fort Worth Oatly US Operations& Supply Inc.
Attn:City Manager Attn: Tim Johnson
200 Texas Street 419 Park Avenue S. I I'Floor
Fort Worth,TX 76102 New York,NY 10016
tim johnson2oatl_y com
Economic Development Program Agreement
between City of Fort Worth and
Oatly US Operations&Supply,Inc. 13 o 20
with copies to: with copies to:
the City Attorney at the same address Brian Corde
and the following: Atlas Insight LLC
10 Apache Trail
City of Fort Worth Freehold, NJ 07728
Attn: Director
Economic Development Department site address:
1150 South Freeway 7550 Oak Grove Road
Fort Worth,TX 76104 Fort Worth,TX 76140
12. ASSIGNMENT AND SUCCESSORS.
Company may,at any time assign, transfer,or otherwise convey any of its rights or
obligations under this Agreement to an Affiliate without the approval of the City so long
as Company,the Affiliate and the City first execute an agreement under which the Affiliate agrees
to assume and be bound by all covenants and obligations of Company under this
Agreement. Otherwise, Company may not assign,transfer or otherwise convey any of its rights or
obligations under this Agreement to any other person or entity without the prior consent of the City
Council,which consent will not be unreasonably withheld,conditioned on(i)the prior 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 agreement with the City under which the
proposed assignee or successor agrees to assume and be bound by all covenants and obligati 'ns
of Company under this Agreement. Any attempted assignment without the City Council's pr or
consent will constitute grounds for termination of this Agreement following ten(10)calendar dE ys
of receipt of written notice from the City to Company. Any lawful assignee or successor in interest
of Company of all rights under this Agreement will be deemed"Company" for all purposes under
this Agreement.
13. 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.
14. 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.
15. 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 will not constitute a waiver of that p 's
right to insist upon appropriate performance or to assert any such right on any future occasion.
16. VENUE AND CHOICE OF LAW.
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 will lie in state courts located in Tarrant
Economic Development Program Agreement
between City of Fort Worth and
Oatly US Operations&Supply,Inc. 14 of 20
i
County,Texas or the United States District Court for the Northern District of Texas—Fort Worth
Division. This Agreement will be construed in accordance with the laws of the State of Texas.
17. NO THIRD PARTY RIGHTS.
The provisions and conditions of this Agreement are solely for the benefit of the City
and Company,and any lawful assign or successor of Company, and are not intended to create any
rights,contractual or otherwise,to any other person or entity.
18. INTERPRETATION.
In the event of any dispute over the meaning or application of any provision of this
Agreement, this Agreement must be interpreted fairly and reasonably, and neither more strongly
for or against any party, regardless of the actual drafter of this Agreement.
19. CAPTIONS.
Captions and headings used in this Agreement are for reference purposes only and will not
be deemed a part of this Agreement.
I
20. SEVERABILITY.
If any provision of this Agreement is held to be invalid, illegal or unenforceable,the
validity,legality and enforceability of the remaining provisions will not in any way be affected or
impaired.
21. ENTIRETY OF AGREEMENT.
This Agreement, including any exhibits attached hereto and any documents incorpora ed
herein by reference, contains the entire understanding and agreement between the C'ty
and Company, and any lawful assign and successor of Company, 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 1he
contrary herein, this Agreement may 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.
22. COUNTERPARTS.
This Agreement may be executed in multiple counterparts, each of which will be
considered an original,but all of which will constitute one instrument.
23. ELECTRONIC SIGNATURES
This Agreement may be executed by electronic signature, which will be considered as an
original signature for all purposes and have the same force and effect as an original signature. I or
these purposes, "electronic signature"means electronically scanned and transmitted versions(e.g.
via pdf file or facsimile transmission)of an original signature,or signatures electronically inseried
via software such as Adobe Sign.
-SIGNATURE PAGE TO FOLLOW-
Economic Development Program Agreement
between City of Fort Worth and
Oatly US Operations&Supply,Inc. 15 of 20
EXECUTED as of the last date indicated below:
CITY OF FORT WORTH: OATLY US OPERATIONS & SUPPLY,
INC.,
a Delaware corporation
Ntvss[Shcu t wt
By: 01---
jesJsBy:
JrEirapa gec�in Mike Messersmith
W1 NS4. +h"q City Manager UU General Manager
Date: Date:
APPROVED AS TO FORM AND LEGALITY
By:
T 1 allach
Assistant City Attorney ®�(F....
ATTEST•
U=, _
' �annu-#e Faood�� ••ram ,.
Ci Secretary
M&C: 21-0071 (January 26, 2021)
Form 1295: 2021-703268
OFFICIAL RECORD
CITY SECRE rARY
Economic Development Program Agreement FT. WORTH,TX
between City of Fort Worth and
Oady US Operations&Supply,Inc.
CONTRACT COMPLIANCE MANAGER:
By signing below,I hereby acknowledge that I
am the person responsible for the monitoring
and administration of this contract, including
ensuring all performance and reporting
requirements:
r-
By:
Michael Henni
Economic Development Manager
OFFICIAL.I ECORD
CITY SECI ETARY
FT. WOR H,TX
Economic Development Program Agreement _
between City of Fort Worth and
Oatly US Operations&Supply,Inc. 17 of 20
EXHIBIT`rA"
Description and Map Depicting the Development Site
EXHIBIT A4
Leon Dendptlon of the ProJed
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COIRMY
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3M.a dMtrttra d NAO ktN b fr PONE CF�G wd maleMdrM N00.AwN Nt w 0.1N
ale tf lend.
MOTE:ODMPAW DOU NOT REFtIEl W TENT TILE AWA ACREAGE ANDIOR EOUM!
FOOTAGE CALCULAT O M ME COMMI
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Economic Development Program Agreement
between City of Fort Worth and Oatly US Operations&Supply,Inc. 18 of 20
FOSUJTY MAMMAL IWIJ MOURAfiCE Me.:EAM120111416
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MOTs:COhrAHT DiOW NOT REPrAMW THAT THE ABOVE AMEMM ANOM SQUARE
FOOTAGE CALMAATtOM ARE COAIMCT.
@M pf SC !A
Economic Development Program Agreement
between City of Fort Worth and Oatly US Operations&Supply,Inca
1
���'! v. I=7 •�'� ` •� � t w ram• + _
`' � � 75;50 C7ak Grove Road ``�� i
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Location Map
r
41
Economic Development Pr1• Agreement
between City of Fort1 1 Oatly US OperationsI I
4/21/22, 1:10 PM M&C Review
official site of the ,
CITY COUNCIL AGENDA FORT WO RT11
Create New From This MSC
DATE: 1/26/2021 REFERENCE NO.: **M&C 21-0071 LOG NAME: 17EDPAOATLY
CODE: C TYPE: CONSENT PUBLIC HEARING: NO
SUBJECT. (CD 8) Authorize Execution of an Economic Development Program Agreement with gatly,
Inc., or an Affiliate, for the Development of a Manufacturing Production Facility Locat d at
7550 Oak Grove Road
RECOMMENDATION:
It is recommended that the City Council authorize the execution of an Economic Development Program
Agreement with Oatly, Inc., or an Affiliate, for the development of a manufacturing production facility located
at 7550 Oak Grove Road.
DISCUSSION:
Oatly, Inc. is a lifestyle branded producer of superior, plant-based, alternative dairy products. The parent
company is based in Malmo, Sweden, where it originated for about 25 years. The United States (U.S.)
headquarters are based in New York and the parent company is located in Sweden.
Oatly is rapidly expanding its presence and market share in the U.S. Oatly currently has two production
facilities in New Jersey and Utah and is looking to build a third production facility in Fort Worth.
Following a multi-state site selection process, an existing facility located at 7550 Oak Grove Road (Project
Site) in south Fort Worth was identified for the third location (280,000 square feet).
In order to facilitate the expansion, the City proposes to provide five annual Economic Development Program
grants to Oatly, as authorized by Chapter 380, Texas Local Government Code. The grant funds will be built
into the City's long-term financial forecast for the General Fund with an estimated grant award of
$1,093,970.00. The grants will be tied to the amount of investment made by Oatly and satisfaction of other
project and spending requirements, as follows:
Investment:
1. Oatly must expend a minimum of $36,000,000 in total construction costs at the Project Site on or
before December 31, 2024;
2. Oatly must locate taxable business personal property (BPP) that is new to the City of Fort Worth at
the Project Site having a minimum taxable appraised value of $48,000,000 by December 31,
2025.
3. Oatly will be required to spend 15 percent of hard and soft construction costs with contractors that
are Certified Minority-Owned Business Enterprise - Failure to meet this requirement will result in a
reduction of the grant by 10 percent.
Oatly must provide a minimum of 50 full-time jobs on the Project Site as of December 31, 2025 and maintain
a minimum total 50 full-time jobs on the Project Site for the term of the agreement.
Average annual salary for all full-time jobs must be a minimum of$46,325.00.
"Salary" includes direct pay and planned bonuses, but not benefits, expense reimbursements, or
discretionary bonuses.
City Commitments:
The City will make up to five annual Economic Development Program grants to the company equal to up to
40 percent of City's ad valorem tax revenue subject to the following conditions. Grant payments will be
calculated based on the City's incremental ad valorem taxes attributable to the taxable real and
business and personal property that are new to the City of Fort Worth located on the Project Site. Except for
apps.cfwnet.org/council_Packet/mc_review.asp?ID=28623&councildate=l/26/2021 1/2
4/21/22, 1:10 PM M&C Review
cases of default, failure to meet a commitment will result in a reduction of the corresponding component of
the grant for that year as guided by table I below.
TABLE I Maximum Potential Grant with Corresponding Components:
Property Owner or Company Commitment Potential
Grant
$84M Real and Business Personal Property Investment 20 percent
(Base Commitment)
Average Annual Salary > $46,325 5 percent
Overall Employment >=50 (as applicable) 15 percent
MBE Commitments 110 percent
Total 40 percent
The City of Fort Worth is prepared to submit an application for an Enterprise Zone Project Designation on
behalf of Oatly, Inc. based upon eligible project investment and the creation/retention of jobs. The Enterprise
Zone Program rebates the state's 6.25\% sales tax back to the designee over a five-year period. Investment
amounts that exceed $100,000,000.00 can receive a rebate up to $1,250,000.00 over a five-year program
period. The maximum refund per job allocated is $2,500.00
The company is located in District 8.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that approval of this agreement will have no material effect on the Fiscal
Year 2021 Budget. While no current year impact is anticipated from this action, any effect on expenditures
and revenues will be budgeted in future Fiscal Years and will be included in the long-term financial forecast.
TO
Fund Department Account Project Program Activity Budget Reference# Amount
ID ID Year Chartfield 2
FROM
Fund Department Account Project Program Activity Budget Reference# Amount
ID ID Year Chartfield 2)
Submitted for City Manager's Office by_ Jay Chapa (5804)
Originating Department Head: Robert Sturns (2663)
Additional Information Contact: Robert Sturns (2663)
ATTACHMENTS
201102 75500akGrove SiteMap.pdf (CFW Internal)
Venti -TX ethics commission 1295.pdf (CFW Internal)
apps.cfwnet.org/council_packet/mc_review.asp?ID=28623&councildate=1/26/2021 2/2