HomeMy WebLinkAboutContract 59668STATE OF TEXAS §
COUNTY OF TARRANT
TAX ABATEMENT AGREEMENT
CSC No. 59668
This TAX ABATEMENT AGREEMENT ("Agreement") is entered into by and between
the CITY OF FORT WORTH, TEXAS ("City"), a home -rule municipality organized under the
laws of the State of Texas, and BEAUTY MANUFACTURING SOLUTIONS CORP., a Texas
corporation ("Company").
RECITALS
A. On January 29, 2021, the City Council adopted Resolution No. 5337-01-2021,
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 parties,
entitled "General Tax Abatement Policy" ("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 ("Code").
C. On November 29, 2022, the City Council adopted Ordinance No. 25887-11-2022
("Ordinance") establishing Tax Abatement Reinvestment Zone No. 104, City of Fort Worth, Texas
("Zone").
D. Company, which specializes in manufacturing personal care products, owns
property located at 5650 Alliance Gateway, which is located within the Zone and is more specifically
described in Exhibit "A" ("Land"), attached hereto and hereby made a part of this Agreement for
all purposes.
E. Contingent upon the receipt of a tax abatement, Company intends to construct a
facility of at least 400,000 square feet on the Land for its manufacturing operations.
F. On October 18, 2022, Company submitted an application for tax abatement
("Application") to the City concerning plans for development of the Land, including construction
of the Required Improvements (as defined below), which Application is attached hereto as Exhibit
"B" and hereby made a part of this Agreement for all purposes.
G. The contemplated use of the Land and the terms of this Agreement are consistent
with encouraging development of the Zone and generating 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, the Ordinance and other applicable laws, ordinances, rules and
regulations.
H. Under this Agreement, Company is committed to invest a total of at least $70 million
as follows: at least $30 million in Construction Costs for the Real Property Improvements and at least
Tax Abatement Agreement between OFFICIAL RECORD
City of Fort Worth and Beauty Manufacturing Solutions Corp. CITY SECRETARY I of 20
FT. WORTH, TX
$40 million in New Taxable Tangible Personal Property to be installed on the Land in connection
with manufacturing business operations within the Real Property Improvements (the "Required
Improvements"). Company is also committing to provide at least 250 new Full-time Jobs whose
average annual Salaries will equal at least $65,800.00. Therefore, the provisions of this Agreement,
as well as the proposed use of the Land and nature of the proposed Required Improvements, as defined
herein, satisfy the eligibility criteria for commercial/industrial tax abatement pursuant to Section 4 of
the Policy.
I. Written notice that the City intends to enter into this Agreement, along with a copy
of this Agreement, have been furnished in the manner prescribed by the Code to the presiding officers
of the governing bodies of each of the taxing units that have jurisdiction over the Land.
NOW, THEREFORE, in consideration of the mutual benefits and promises contained
herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
AGREEMENT
1. INCORPORATION OF RECITALS.
The City Council has found, and the City and Company agree, that the recitals set forth
above are true and correct and form the basis upon which the parties have entered into this
Agreement.
2. DEFINITIONS.
In addition to terms defined in the body of this Agreement, the following terms have the
definitions ascribed to them as follows:
Abatement means the abatement of a percentage (not to exceed 70 percent (70%) in any
year of the Abatement Term) of the City's incremental ad valorem real property taxes on any
improvements located on the Land (but not on the Land itself, which taxes will not be subject to
Abatement hereunder) and of the City's incremental ad valorem taxes on New Taxable Tangible
Personal Property, all calculated in accordance with this Agreement.
Abatement Can means Two Million Dollars and No Cents ($2,000,000.00), which is the
aggregate amount of Abatement, which may be increased to Three Million Five Hundred Thousand
Dollars and Zero Cents ($3,500,000.00) if Company expends at least $90 million (in aggregate) on
Required Improvements on or before December 31, 2028.
Abatement Term means the term of 10 consecutive years, commencing on January 1 of
the Second Operating Year and expiring on December 31 of the tenth (loth) year thereafter, in
which Company will receive the Abatement in accordance with this Agreement.
Affiliate means all entities, incorporated or otherwise, under common control with,
controlled by, or controlling Company. For purposes of this definition, "control" means more than
fifty percent (50%) of the ownership determined by either value or vote.
Annual Salary Commitment has the meaning ascribed to it in Section 4.5.
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 2 of 20
Annual Salary Percentage has the meaning ascribed to it in Section 6.5.
Applications has the meaning ascribed to it in Recital F.
Business Equity Firm(s) ("BEFs") has the meaning assigned to it in the City of Fort
Worth's Business Equity Ordinance, as amended (Chapter 20, Article X of the City Code).
BEF Construction Commitment has the meaning ascribed to it in Section 4.3.
BEF Construction Percentage has the meaning ascribed to it in Section 6.3.
Certificate of Completion has the meaning ascribed to it in Section 5.
Code has the meaning ascribed to it in Recital B.
Completion Date means the date as of which all occupiable space within the Required
Improvements have received a permanent certificate of occupancy.
Completion Deadline means December 31, 2024.
Compliance Auditing Term means the term of ten consecutive years, commencing on
January 1 of the First Operating Year and expiring on December 31 of the tenth (10th) year
thereafter, in which the City will verify and audit Company's compliance with the various
commitments set forth in Section 4 that form the basis for calculation of the amount of each annual
Abatement percentage hereunder.
Construction Costs means the following costs expended directly for the Required
Improvements: actual site development and construction costs, site work, infrastructure
improvements, facility modernization, utility installation and including directly -related contractor
fees, labor costs, plus costs of supplies and materials, engineering fees, architectural and design
fees, and permit fees. Construction Costs specifically excludes any real property acquisition costs
or rent payments or other costs required by a lease.
Director means the director of the City's Economic Development Department.
Effective Date has the meaning ascribed to it in Section 3.
Event of Default means a breach of this Agreement by a party, either by act or omission,
as more specifically set forth in Section 7 of this Agreement.
First Operating Year means the first full calendar year following the year in which the
Completion Date occurred.
Full-time Job means a job provided to one (1) individual by Company on the Land for at
least forty (40) hours per week.
Land has the meaning ascribed to it in Recital D.
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 3 of 20
Legal Requirements means 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.
New Job has the meaning ascribed to it in Section 4.4.2.
New Taxable Tangible Personal Property means 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 used by Company for the business purposes outlined
in this Agreement; and (iv) was not located in the City prior to period covered by this Agreement.
Ordinance has the meaning ascribed to it in Recital C.
Overall Emplovment Commitment has the meaning ascribed to it in Section 4.4.1.
Overall Emplovment Percentage has the meanings ascribed to it in Section 6.4.1.
Overall Improvement Percentage — Remaining has the meaning ascribed to it in
Section 6.2.2.
Overall Improvement Percentage — Year 1 has the meaning ascribed to it in
Section 6.2.1.
Personal Property Improvement Commitment has the meaning ascribed to it in
Section 4.2.1.
Policy has the meaning ascribed to it in Recital A.
Real Property Improvement Commitment has the meaning ascribed to it in
Section 4.1.1.
Real Property Improvements means manufacturing and office facilities constructed on the
Land consisting of at least 400,000 square feet, as verified in the Certificate of Completion issued
by the Director in accordance with this Agreement.
Records has the meaning ascribed to it in Section 4.8.
Required Improvements has the meaning ascribed to it in Recital E.
Salary means the cash payment or remuneration made to a person holding a Full-time Job,
including paid time off, commissions, and non -discretionary bonuses. A Salary does not include
any benefits, such as health insurance or retirement contributions, reimbursements for employee
expenses, or any discretionary bonuses.
Second Operating Year means the second full calendar year following the year in which
the Completion Date occurred.
Term has the meaning ascribed to it in Section 3.
Zone has the meaning ascribed to it in Recital C.
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 4 of 20
3. TERM.
This Agreement takes effect on the date as of which the City and Company have all
executed this Agreement ("Effective Date") and, unless terminated earlier in accordance with its
terms and conditions, expires simultaneously upon expiration of the Abatement Term ("Term").
4. OBLIGATIONS AND COMMITMENTS RELATED TO ABATEMENT.
4.1. Real Property Improvements.
4.1.1. Company must expend or cause to be expended at least Thirty Million
Dollars and Zero Cents ($30,000,000.00) in Construction Costs for the Real Property
Improvements by the Completion Date, and the Completion Date for the Real Property
Improvements must occur on or before the Completion Deadline ("Real Property
Improvement Commitment"). Failure to meet the meet this obligation constitutes an Event
of Default.
4.2. Personal Property Improvements.
4.2.1. New Taxable Tangible Personal Property having a value of at least Forty
Million Dollars and Zero Cents ($40,000,000.00) ("Personal Property Improvement
Commitment") must be in place on the Land by January 1, 2026. Failure to meet the meet
this obligation constitutes an Event of Default.
4.2.2. The value of the New Taxable Tangible Person Property is determined
solely by the appraisal district having jurisdiction over the Land at the time and reflected in
the certified appraisal roll received by the City from such appraisal district in such year.
4.3. Construction SDendina Commitment for BEFs.
By the Completion Date, Company must expend or caused to be expended at least
fifteen percent (15%) of all Construction Costs for the Real Property Improvements with
BEFs, regardless of the total amount of such Construction Costs ("BEF Construction
Commitment").
4.4. Employment Commitment.
4.4.1. Company must employ a minimum of 250 Full -Time Jobs on the Land by
December 31, 2025 and maintain such jobs as set forth below for each year of the
Abatement Term ("Overall Employment Commitment").
4.4.2 Company must maintain a minimum of 250 new Full -Time Jobs on the Land
from and after the date set forth above, for each year of the Abatement Term (each
a "New Job"). A Full -Time Job will be considered new if the individual was hired
on or after January 1, 2023 and held the Full -Time Job as of December 31 of the
previous calendar year.
4.4.3 Determination each year of compliance with this Overall Employment
Commitment will be based on the employment data in the Annual Employment
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 5 of 20
Report required by Section 4.6.2 and provided by Company to the City for the year
under evaluation.
4.5. Average Annual Salarv.
4.5.1 In each year of the Compliance Auditing Term, the average annual Salary,
measured on a calendar year basis, for all new Full -Time Jobs provided and filled
on the Land, regardless of the total number of such Full-time Jobs, must equal at
least Sixty -Five Thousand Eight Hundred Dollars and Zero Cents ($65,800.00)
("Annual Salary Commitment").
4.5.2. Determination each year of compliance with the following Annual Salary
Commitment will be based on the employment data provided by Company to the
City for the year under evaluation.
4.6. Reports and Filings.
4.6.1. Final Construction Report.
Within sixty (60) calendar days following the Completion Date, in order
for the City to assess whether Company expended or caused to be expended at least
Thirty Million Dollars and Zero Cents ($30,000,000.00) in Construction Costs for
the Real Property Improvements, and the extent to which the BEF Construction
Commitment was met, Company must provide the Director with a report in a form
reasonably acceptable to the City that specifically outlines the total Construction
Costs expended for the Real Property Improvements and the total Construction
Costs expended with BEFs for the Real Property 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 the general contractor for the Real Property Improvements.
4.6.2. Annual Emplovment Report.
On or before February 1 of the Second Operating Year, and of each year
thereafter for the remainder of the Compliance Auditing Term, in order for the City
to assess the degree to which Company met in the previous year the Overall
Employment Commitment and the Annual Salary Commitment, Company must
provide the Director with a report in a form reasonably acceptable to the City that
sets forth the total number of individuals who held new Full -Time Jobs on the
Land, as well as the Salary of each, all as of December 31 (or such other date
requested by Company and reasonably acceptable to the City) of the previous
calendar year, together with reasonable supporting documentation.
4.6.3. General.
Company will supply any additional information reasonably requested by
the City that is pertinent to the City's evaluation of compliance with each of the
terms and conditions of this Agreement.
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 6 of 20
4.7. Inspections of Land and Improvements
4.7.1. At any time during Company's normal business hours throughout the
Term, the City will have the right to inspect and evaluate the Land, and any improvements
thereon, and Company will provide full access to the same, in order for the City to monitor
compliance with the terms and conditions of this Agreement. Company will use reasonable
efforts to cooperate fully with the City during any such inspection and evaluation.
4.7.2. Notwithstanding the foregoing, Company may require that any
representative of the City be escorted by a Company representative or security personnel
during any such inspection and evaluation and abide by any site policies and protocols
regarding health, safety, and treatment of Company's confidential information. In addition,
upon request of the City at any time during the Term and the year following the Term, and
following reasonable advance notice.
4.8. Audits.
The City has the right throughout the Term to audit the financial and business
records of Company that relate to the Real Property Improvements, Personal Property, and
the Land and any other documents necessary to evaluate Company's compliance with this
Agreement or with the commitments set forth in this Agreement, including, but not limited
to construction documents and invoices (collectively, "Records"). Company must make
all Records available to the City on the Land or at another location in the City acceptable
to both parties following prior notice and will otherwise use reasonable efforts to cooperate
fully with the City during any audit.
4.9. Use of Land.
The Land and any improvements thereon, including, but not limited to, the Real
Property Improvements, must be used at all times during the Term of this Agreement for
Company's lawful business operations, as set forth in this Agreement, and otherwise in a
manner that is consistent with the general purposes of encouraging development or
redevelopment of the Zone.
4.10. Abatement Application Fee.
4.10.1. 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 strictly nonrefundable and will be used by the City for the purposes set forth
in the Policy.
4.10.2. If construction work on the Real Property Improvements begins within one
(1) year from the date the Applications were filed (i.e., November 18, 2021), the remaining
Three Thousand Dollars ($3,000.00) of such fee will be credited to Company's benefit
against any permit, impact, inspection or other lawful fee required by the City in connection
with the Required Improvements.
4.10.3. If construction work for the Real Property Improvements does not begin
within one (1) year from the date the Applications were filed, Company will not receive a
credit or refund of any portion of the fee.
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 7 of 20
4.10.4 If there is a balance of any of the remaining Application fee funds after the
date on which the Director issues a Certificate of Completion, Company will be entitled to
a refund of such remaining Application fee funds, but only if Company submits a letter to
the Director requesting such refund within ninety (90) calendar days following the date of
issuance of the Certificate of Completion.
5. CERTIFICATE OF COMPLETION.
Within ninety (90) calendar days following receipt by the City of the final construction
spending report for the Real Property Improvements submitted in accordance with this Agreement,
and assessment by the City of the information contained therein, if the City is able to verify that
the Company met all requirements for the Real Property Improvement, the Director will issue
Company a certificate stating the amount of Construction Costs expended for the Real Property
Improvements, as well as the amount of Construction Costs expended for the Real Property
Improvements specifically with BEFs ("Certificate of Completion"). The Certificate of
Completion will serve as the basis for determining whether the BEF Construction Commitment
was met.
6. TAX ABATEMENT.
6.1. Generally.
6.1.1. Subject to the terms and conditions of this Agreement, provided that the
Company met both the Real Property Improvement Commitment and Personal Property
Improvement Commitment, the City will grant an Abatement to the Company in each year
of the Abatement Term.
6.1.2. The amount of each Abatement that the City grants during such years will
be a percentage of the City's ad valorem taxes on any improvements located on the Land
(but not on the Land itself, which taxes will not be subject to Abatement hereunder) and
on New Taxable Tangible Personal Property attributable to increases in the value of such
improvements, which percentage will equal the sum of the Overall Improvement
Percentage — Year 1 or Overall Improvement Percentage — Remaining (as applicable), the
BEF Construction Percentage, Overall Employment Percentage, and the Annual Salary
Percentage, as set forth below (not to exceed seventy percent (70%)).
6.2. Real Property Imnrovement and Personal Proaerty Commitments.
6.2.1 Year 1 the Abatement Term. During first year of the Abatement Term,
City will grant an abatement to Company equal to sixty percent (60%) of the overall
Abatement ("Overall Improvement Percentage — Year 1") if Company meets both the
Real Property Improvement Commitment and Personal Property Improvement
Commitment.
6.2.2 Years 2-10 of the Abatement Term. During the remaining term of the
Abatement Term (Years 2-10), City will grant an abatement to Company equal to forty
percent (40%) of the overall Abatement ("Overall Improvement Percentage -
Remaining") if Company meets both the Real Property Improvement Commitment and
Personal Property Improvement Commitment.
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 8 of 20
6.3. BEF Construction Cost SiDendine (10%).
A percentage of the Abatement will be based on the whether the Company met the
BEF Construction Commitment ("BEF Construction Percentage"). If Company meets
the BEF Construction Commitment, the BEF Construction Percentage for each Abatement
hereunder will be ten percent (10%). If the Company does not meet the BEF Construction
Commitment, the BEF Construction Percentage for each Abatement hereunder will be zero
percent (0%).
6.4. Overall Emglovment (10%)
6.4.1. A percentage of the Abatement will be based on the extent to which the
Company meets the Overall Employment Commitment ("Overall Employment
Percentage"). The Overall Employment Percentage in a given year will equal the product
of ten percent (10%) multiplied by the percentage by which the Company met the Overall
Employment Commitment 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 number of Full -Time Jobs constituting the Overall Employment Commitment for that
year.
6.4.2. For example, if Company only employed 200 individuals with Full -Time
Jobs on the Land in 2028 instead of the required 250, the Overall Employment Percentage
for the following year would be 48% instead of 10% (or .1 x [200/250]), or .1 x .80, or
.08. If the Overall Employment Commitment is met or exceeded in any given year, the
Overall Employment Percentage for the Abatement in the following year will be eight
percent (8%).
6.5. Annual Salary (10%)
A percentage of the Abatement will be based on whether Company meets the
Annual Salary Commitment ("Annual Salary Percentage"). If Company meets the
Annual Salary Commitment in a given year, the Annual Salary Percentage for the
Abatement in the following year will be ten percent (10%).
6.6. Abatement Limitations.
6.6.1 The amount of real property taxes to be abated in a given year will not
exceed one hundred fifty percent (150%) of the amount of the minimum Real Property
Improvement Commitment and the Personal Property Improvement Commitment
multiplied by the City's tax rate in effect for that same year. As a formula, this would be
expressed as $70,000,000 (minimum Real Property Improvement and Personal Property
Improvement Commitments) x 1.5 x City's Tax Rate (then in effect).
6.6.2 Notwithstanding anything to the contrary, aggregate Abatements will be
subject to and will not exceed the applicable Abatement Cap.
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 9 of 20
7. DEFAULT, TERMINATION AND FAILURE TO MEET VARIOUS DEADLINES
AND COMMITMENTS.
7.1. Failure to Meet Real Property Imnrovement and Personal Property
Commitments.
Notwithstanding anything to the contrary herein, if the Company does not meet
both the Real Property Improvement Commitment and Personal Property Improvement
Commitment, an Event of Default will occur and the City will have the right to terminate
this Agreement, effective immediately, by providing written notice to Company without
further obligation to Company hereunder.
7.2 Failure to Meet BEF Construction and Overall Emplovment Commitments.
If the Company does not meet the BEF Construction Commitment, or the Overall
Employment Commitment in any given year, such event will not constitute an Event of
Default hereunder or provide the City with the right to terminate this Agreement, but,
rather, will only cause the percentage or amount of Abatement available pursuant to this
Agreement to be reduced in accordance with this Agreement.
7.3 Forfeiture for Failure to Meet Annual Salary Commitment.
Notwithstanding anything to the contrary herein, if the Company fails to meet the
Annual Salary Commitments in any year of the Compliance Auditing Term, an Event of
Default will not occur, but the Abatement for that applicable year will be reduced by the
percentage set forth in Section 6.5.
7.4. Knowine Emplovment 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 2264.00](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(l) (relating to federal criminal penalties and injunctions for
a pattern or practice of employing unauthorized aliens) and such violation occurs during
the Term of this Agreement.
if such conviction occurs during the Term of this Agreement, this 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 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 two percent (2%) 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
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 10 of 20
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 must 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 two percent (2%) per annum based on the amount of Abatement received in
each previous year as of December 31 of the tax year for which the Abatement was
received
For the purposes of this section, "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 two percent (2%) interest five years later, the
total amount would be $10,000 + [5 x ($10,000 x 0.02)], which is $11,000. This Section 7.6
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, the parties agree that the Abatement is a
"public subsidy" (as that term is defined in Section 2264.001, Texas Government Code) for
the benefit of Company. This Section will survive the expiration or termination of this
Agreement.
7.5. Foreclosure on Land or Reauired Improvements.
Subject to Section 11, the City will have the right to terminate this Agreement
immediately upon provision of written notice to Company of any of the following events:
(i) the conveyance of the Land or the Real Property Improvements pursuant to an action to
foreclose or otherwise enforce a lien, mortgage or deed of trust on the Land or the Real
Property Improvements; (ii) the involuntary conveyance to a third party of the Land or the
Real Property Improvements; (iii) execution of any assignment of the Land or Real
Property Improvements or deed in lieu of foreclosure to the Land or Real Property
Improvements; or (iv) appointment of a trustee or receiver for the Land or Real Property
Improvements and such appointment is not terminated within one hundred twenty (120)
calendar days after the appointment occurs.
7.6. Failure to Pav Taxes or Non -Compliance with Other Leval Rea uirements.
An Event of Default will occur if any ad valorem taxes owed to the City by Company
becomes delinquent and Company does not timely and properly follow the legal procedures
for protest or contest of any such ad valorem taxes, or Company is in violation of any material
Legal Requirement due to any act or omission connected with Company's operations on the
Land; provided, however, that an Event of Default will not exist under this provision unless
Company fails to cure the applicable failure or violation within thirty (30) calendar days (or
such additional time as may be reasonably required) after Company receives written notice
of such failure or violation.
7.7. General Breach.
In addition to Sections 7.1 — 7.6 and subject to Section 7.4, an Event of Default
under this Agreement will occur if either party breaches any term or condition of this
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 11 of 20
Agreement, in which case the non -defaulting party must provide the defaulting party with
written notice specifying the nature of the Default. Subject to Sections 7.1, 7.2, and 7.3, in
the event that any Event of Default hereunder remains uncured after thirty (30) calendar
days following receipt of such written notice (or, if the defaulting party has diligently and
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 time
as is reasonably necessary to effect cure, as determined by both parties mutually and in
good faith), the non -defaulting party will have the right to terminate this Agreement,
effective immediately, by providing written notice to the defaulting party.
7.8. Statutory Damages.
7.8.1 Company acknowledges and agrees that termination of this Agreement
due to an Event of Default by Company 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 business entities and corporate relocation
professionals, and Company agrees that the exact amounts of actual damages sustained by
the City therefrom will be difficult or impossible to ascertain.
7.8.2 Therefore, upon termination of this Agreement for any Event of Default,
and as authorized by Section 312.205(b)(6) of the Code, Company must pay the
City, as damages authorized by the Code, an amount equal to 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.
7.8.3 The City and Company agree that the above -stated 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 7.8 is intended to provide the City with
compensation for actual damages, as authorized by the Code, and is not a penalty.
7.8.4 The above -stated 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 will be due, owing, and paid to
the City within sixty (60) calendar days following the effective date of termination
of this Agreement.
7.8.5 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 will 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).
8. 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 agents, representatives or employees of
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 12 of 20
the City. As to the City, Company will have the exclusive right to control all details and day-to-
day operations relative to the Land and any improvements thereon and will be solely responsible
for the acts and omissions of their 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, their officers, agents, servants, employees, contractors,
subcontractors, licensees, and invitees. Company further agrees that nothing in this Agreement
will be construed as the creation of a partnership or joint enterprise between the City and Company.
9. INDEMNIFICATION.
COMPANY, AT NO COST TO THE CITY, AGREES TO DEFEND, INDEMNIFYAND
HOLD THE CITY, AND ITS RESPECTIVE OFFICERS, AGENTS SERVANTS,
REPRESENTATIVES, AND EMPLOYEES, HARMLESSAGAINSTANYAND ALL CLAIMS,
LAWSUITS, ACTIONS, COSTS AND EXPENSES OF ANY KIND, INCLUDING, BUT NOT
LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED
DAMAGE OR LOSS TO COMPANY'S BUSINESS AND ANYRESUL TING LOST PROFITS)
AND PERSONAL INJURY, INCLUDING DEATH, THAT MAY RELATE TO, ARISE OUT
OF OR BE OCCASIONED BY (i) COMPANY'S BREACH OF ANY OF 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 CITY) OR SUBCONTRACTORS,
RELATED TO THE REQUIRED IMPROVEMENTS; THE LAND AND ANY OPERATIONS
AND ACTIVITIES THEREON; OR THE PERFORMANCE OR NON-PERFORMANCE OF
THIS AGREEMENT OTHERWISE. THIS SECTION WILL SUR VIVE ANY TERMINATION
OR EXPIRATION OF THIS AGREEMENT.
10. NOTICES.
All written notices called for or required by this Agreement must 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
200 Texas Street
Fort Worth, Texas 76102
With copies to:
City Attorney at the same address and the
Director at:
City of Fort Worth
Attn: Director
Economic Development
1150 South Freeway
Fort Worth, Texas 76104
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp.
Company:
Beauty Manufacturing Solutions Corp.
Attn: Peter Song, CEO
1250 Freeport Parkway
Coppell TX 75019
With copies to:
Geary, Porter, & Donovan, P.C.
Attn: Casen Gregg
16475 Dallas Parkway
Suite, 400
Addison, Texas 75001
13 of 20
11. EFFECT OF SALE OF LAND OR REOUIRED IMPROVEMENTS;
ASSIGNMENT AND SUCCESSORS.
11.1. Company may assign this Agreement, and all or any of the benefits provided
hereunder, without the consent of the City Council to (a) an Affiliate (including, but not limited to,
Fort Song, LLC) that leases, owns or takes title to the Land and owns or leases any New Taxable
Tangible Personal Property or (b) a successor to Company by merger or consolidation only if (i)
prior to or contemporaneously with the effectiveness of such assignment, Company provides the
City with written notice of such assignment, which notice must include the name of the Affiliate
and a contact name, address and telephone number for the Affiliate, and (ii) the Affiliate agrees in
writing to assume all terms and conditions of Company under this Agreement.
11.2. 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 proposed assignee
or successor agrees and proceeds to lease or take title to the Land and any New Taxable Tangible
Personal Property; (ii) the proposed assignee or successor is financially capable of meeting the terms
and conditions of this Agreement; and (iii) 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 obligations of Company under this Agreement. Any attempted
assignment without the City Council's prior consent constitutes an Event of Default under this
Agreement. 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.
12. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND REGULATIONS.
This Agreement is subject to all applicable Legal Requirements.
13. GOVERNMENTAL POWERS.
It is understood that by execution of this Agreement, the City does not waive or surrender
any of its governmental powers or immunities.
14. SEVERASILITY.
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.
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 party'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 County,
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 14 of 20
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 assignee or successor of Company, and are not intended to create any
rights, contractual or otherwise, to any other persons or entities.
18. FORCE MAJEURE.
It is expressly understood and agreed by the parties to this Agreement that if the
performance of any obligations hereunder is delayed by reason of war, government action or
inaction, orders of the government, epidemics, pandemics, civil commotion, acts of God, strike,
inclement weather, shortages or unavailability of labor or materials, unreasonable delays by the
City (based on the then -current workload of the City department(s) responsible for undertaking the
activity in question) in issuing any permits, consents, or certificates of occupancy or conducting
any inspections of or with respect to the Land, Real Property Improvements, Personal Property
Improvements, or other circumstances that are reasonably beyond the control of the party obligated
or permitted under the terms of this Agreement to do or perform the same, regardless of whether
any such circumstance is similar to any of those enumerated or not, the party so obligated or
permitted will be excused from doing or performing the same during such period of delay, so that
the time period applicable to such design or construction requirement and the Completion Deadline
will be extended for a period of time equal to the period such party was delayed. Notwithstanding
anything to the contrary herein, it is specifically understood and agreed that any failure to obtain
adequate financing necessary to meet the Real Property Improvement Commitment or the Personal
Property Improvement Commitment will not be deemed to be an event of force majeure and will
not operate to extend the Completion Deadline in such an event.
19. INTERPRETATION.
In the event of any dispute over the meaning or application of any provision of this
Agreement, this Agreement will be interpreted fairly and reasonably, and neither more strongly for
or against any party, regardless of the actual drafter of this Agreement. In the event of any conflict
between the body of this Agreement and the Applications, the body of this Agreement will control.
20. CAPTIONS.
Captions and headings used in this Agreement are for reference purposes only and will
not be deemed a part of this Agreement.
21. 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.
22. BONDHOLDER RIGHTS.
The Real Property Improvements will not be financed by tax increment bonds. This
Agreement is subject to the rights of holders of outstanding bonds of the City.
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 15 of 20
23. CONFLICTS OF INTEREST.
Neither the Land nor any improvements thereon 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.
24. 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. For
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
inserted via software such as Adobe Sign.
25. 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, 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 the contrary
herein, this Agreement will 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.
EXECUTED as of the last date indicated below:
[SIGNATURES IMMEDIATELY FOLLOWING]
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 16 of 20
CITY:
By: William Johnson (M 26, 2023 07:01 EDT)
William Johnson
Assistant City Manager
Date:
BEAUTY MANUFACTURING
SOLUTIONS CORP.
A Texas corporation
By.
Name: pe-De ✓ 5orz)-
Title: CC—D
Date: �11Z3
FOR CITY OF FORT WORTH INTERNAL PROCESSES:
Approval Recommended:
By:
Name: Robert Sturns
Title: Director, Economic Development
Approved as to Form and Legality:
By: d uJ��
Name: Tyler F. Wallach
Title: Assistant City Attorney
Contract Authorization:
M&C: 22-0959
Form 1295: 2022-942953
Selena Ala
Senior Executive Assistant to City Management
May 30, 2023
Selena Ala (May 3CDT)
Contract Number:
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp.
Contract Compliance Manager:
By signing I acknowledge that I am the
person responsible for the monitoring and
administration of this contract, including
ensuring all performance and reporting
requirements.
Cheh'e 60140ir
By: Cherie Gordon (May 24, 202313:57 CDT)
Name: Cherie Gordon
Title: Business Development Coordinator
City Secretary:
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o�PRYP�SELENA ALA
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* * STATE OF TEXAS
�9��� Notary I.D. 132422528
OF
My Comm. Exp. Mar. 31, 2024
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
17 of 20
STATE OF TEXAS
COUNTY OF TARRANT
BEFORE ME, the undersigned authority, on this day personally appeared William Johnson,
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 day of
.202.
Notary Public in and for
the State of Texas
Notary's Printed Name
Beauty Manufacturing Solutions Corporation
a Texas corporation:
STATE OF
COUNTY OF
BEFORE ME, the undersigned authority, on this day personally appeared Pp- tet-
56+� , Ce—c0 of Beauty Manufacturing Solutions Corp., a Texas
corporation, known to me to be the person whose name is subscribed to the foregoing instrument,
and acknowledged to me that s/he executed the same for the purposes and consideration therein
expressed, in the capacity therein stated and as the act and deed of Beauty Manufacturing Solutions
Corp..
GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of
AA 111 O 12023.
Ky'P�'�i ISABEL C ROSALES
e'
Notary Public in and forP Notary Public, State of Texas
the State Of t ExAtS 9r' +P Comm. Expires 07-24-2023
°;,i�`�� Notary ID 13210950-0
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Notary's Printed Name
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 18 of 20
EXHIBIT A
DESCRIPTION AND MAP DEPICTING THE LAND
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 19 of 20
GENERAL NOTES
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EXHIBIT B
TAX ABATEMENT APPLICATION
Tax Abatement Agreement between
City of Fort Worth and Beauty Manufacturing Solutions Corp. 20 of 20
FORT WORTH.
Economic Development Incentive Application
Date 10/18/2022
Project name Project Foundation
Applicant Information Consultant Information
Beauty Manufacturing Solutions Corp
Company / Fort Song LLC Company
Contact Name Peter Song Contact Name
Title CEO Title
Address 1250 Freeport Pkwy Address
City, State ZIP Coppell, TX 75019 City, State ZIP
Phone 972-241-9665 x204 Phone
Email psong@beautymanufacture.com Email
Project Description
Development of a Personal Care and Cosmetic Manufacturing Plant at 5650 Alliance Gateway. The factory would make products
ranging from Shampoo to serums from mixing formulas to filling bottles, jars and tubes. The plan would encompass the total
process of creating products from development of new products through an innovation lab and R&D center, commercialization and
scale up, manufacturing, quality and distribution. Support functions including Sourcing, Purchasing, Accounting, and Sales would
also be part of the plant.
The project would involve a rennovation of the existing building at 5650 Alliance Gateway to add infrastruction to support
manufacturing and remodeling to add laboratory space. Adding of state of the art automation through robotics and processing
equipment.
Project Impact:
The project would bring hundreds of new jobs to the area, additionally over 100 million units of perosnal care products would be
made each year at this plant, resulting in potental development of upstream and downstream suppliers to support production.
Financial Gap, Project Impediment, or Multi -region Competition:
Manufacturing is a cost -driven sector and one where tax incentives drive investment into technologies that allows sites to be
competitive. Seperately, the increase in property values in the City of Fort Worth have made it challenging to look at sites for
development as surrounding cities have offered green field site for devlopment at no cost.
Business Expansion or Relocation
Continue to next section if not applicable
Form of Business
Publicly Traded
Corporation
No
If other, describe
Ticker Symbol
Years in Operation
Industry
Expansion or Relocation
28 Years
Manufacturing
Expansion
Parent Company
NA I CS 325620
Current Location: Coppell, TX
If Investment Fund (Including PE, VC, Family Office, Institutional, Infrastructure Fund, etc.):
Assets Under Mgmt.
Portfolio Size (Cos.)
Describe the Company's Principal Business:
Manufacturing of Personal Care and Cosmetic Product for the World's top Beauty Brands
Describe the Company's International Presence, if any:
BMSC supplies products globally including Europe, Asia, South America and throughout North America.
Describe the Company's Corporate Citizenship Practices:
BMSC believe stronging in setting the standard for Corporate Citizenship. We a part of the UN Global Compact for Corporate
Governance. We also report to EcoVadis and CDP to be good stewards of our business.
Real Estate Development
Continue to next section if not applicable
Describe the Development Team:
BMSC has built several plants throughout the DFW Metroplex including Farmers Branch and Coppell. Our current manufacturing
plant in Coppell is over 320,000 square feet.
Project Partners:
PDMS
Site Plan, Illustrations, and Other Documents
Attach: 1) Site Plan, 2) Illustrations or Renderings, 3) Environmental Documents, 4) Survey, 5) Legal Description
Project Financial Statements:
Attach documents outlining project Sources & Uses, Capital Stack, and Pro Forma, if available.
If Hotel Project:
Total Number of Keys
Project Site Details
Project Site Address 5650 Alliance Gateway
Total SF Meeting Space
Project Site Acreage
Existing or New Remodel / Adaptive Reuse Historic Designation(s) [Select]
Page 2 of 4
Current Land Valuation
Improvements Valuation $70,000,000
Project Type
Industrial
If Other, Describe:
Est. Start Date
11/15/2022
Est. Completion Date 12/31/2024
Project Type
Industrial
If Other, Describe:
Anticipated Ownership
Currently Own
Term of Lease (Years)
Current Zoning
Light Industrial
Requested Zoning
Variances Required
No
Describe Variances:
Capital Improvement & Investment Details
Total Construction Costs
$30,000,000
Hard Construction Costs
New Personal Property
$40,000,000
Historic Tax Credits
Annual R&D Expenses
$1 M
Annual Patents $0
Value of Inventory
$10M-40M
Value of Supplies
Est. Value of Imports
$4M
Est. Value of Exports $15M
Employment and Job Creation
Current Employment 403
Avg. Wage (of Current)
New Employees (FTEs) 250
Avg. Wage (of New) $65,800
Description of Existing Positions and New Positions to be Added and Hiring Schedule:
Please utilize the "Employment Info" tab to outline the number and average annual salaries of existing, as well as new employees,
by job category (executive, professional, etc.), as well as hiring schedule for new positions (i.e. how many new employees at
Project Completion, Year 1, Year 3, and so forth.)
Other Incentive Requests
Do you intend to pursue abatement of County taxes? Yes
Do you intend to pursue State Economic Development incentives? Yes
Description of Other Incentives:
[Desribe State or County incentives pursued]
Page 3 of 4
Confidentiality & Disclosures
State Law and City of Fort Worth practices and procedures guard the confidentiality of information and materials submitted in
application or negotiation for economic development incentives (Section 552.131. Confidentiality of Certain Economic Development
Negotiation Information). Unlesss otherwise permitted by or coordinated with the applicant, all information will be kept in strict
confidence except where required under applicable state or federal law. City staff will coordinate with the applicant on information
disclosures as necessary to the incentive review and approval process.
Disclosure of Financial Interest
[Is any person or firm receiving any form of compensation, commission or other monetary benefit based on the level of incentive
obtained by the applicant from the City of Fort Worth? If yes, please explain and/or attach details.] None
Form 1295 Certificate of Interested Parties
State law (Chapter 2264, Texas Government Code) requires that all parties entering into an incentive agreement with the City of
Fort Worth must complete and submit a Form 1295 Certificate of Interested Parties. Certain exceptions apply. City of Fort Worth
Economic Development staff must receive a completed copy of the Form 1295 (which may be delivered by email as a PDF) or an
explanation of why Company is excepted from this requirement (to be confirmed by the City Attorneys Office before any proposal
for incentives may be presented to the City Council. The Form 1295 can be completed electronically at:
http://www.ethics.state.tx.us/whatsnew/elf—info—form1295.htm
Application Fee
The company is responsible for paying $5,000 as an application fee. If the application is withdrawn before the project is presented
to City Council in Executive Session, the fee is refunded. Upon presentation to City Council in Open Session, $2,000 is
non-refundable and is applied to offset costs incurred by the Economic Development Department. Upon approval by City Council,
the balance of $3,000 can be credited towards required building permits, inspections fees, replatting fees, and other costs of doing
business with the City related to the development. Any unused credit balance upon completion of the project will be refunded upon
request from the company.
Certification
On behalf of the applicant, I certify the information contained in this application, including all attachments to be true and correct. I
further certify that, on behalf of the applicant, I have read the current Incentive Policy and all other pertinent City of Fort Worth
policies and I agree with the guidelines and criteria state therein.
Signature
Peter Song
Printed Name
10/18/22
Date
CEO
Title
Page 4 of 4
M&C Review
Page 1 of 3
A CITY COUNCIL AGEND
Official site of the City of Fort Worth, Texas
FORTWORTH
Create New From This M&C
DATE: 11/29/2022 REFERENCE NO.: M&C 22-0959 LOG NAME: 17BMSCEDPA
CODE: C TYPE: NOW PUBLIC CONSENT HEARING:
NO
SUBJECT: (CD 7) Authorize Execution of a Ten -Year Tax Abatement Agreement with Beauty
Manufacturing Solutions Corp, or Affiliate, for the Development of a 400,000 Square Foot
Manufacturing Facility Having a Cost of at Least $70 Million, Located at 5650 Alliance
Gateway in Tax Abatement Reinvestment Zone No. 104, City of Fort Worth, Texas
RECOMMENDATION:
It is recommended that the City Council:
Authorize the execution of a ten-year tax abatement agreement with Beauty Manufacturing
Solutions Corp, or affiliate, for the development of a minimum 400,000 square foot
manufacturing facility having a cost of at least $70 million, located at 5650 Alliance
Gateway in Tax Abatement Reinvestment Zone No. 104, City of Fort Worth, Texas ; and
Find that the terms of, and the property subject to, the Tax Abatement Agreement meet the
criteria and guidelines set forth in the City of Fort Worth's General Tax Abatement Policy
(Resolution No. 5337-01-2021).
Beauty Manufacturing Solutions Corp (BMSC) is a high-tech manufacturer of beauty products. BMSC
was founded in 1922, and purchased by the Song family in 1994 based in Coppell, Texas. BMSC has
outgrown their current location and is expanding their presence and market share in the United States
(U.S). BMSC is a certified minority -owned firm with 70\% women in the workforce.
Following a multi -state site selection process, with Oklahoma and Mansfield, Texas, as competing
sites, an existing facility located at 5650 Alliance Gateway (Project Site) in Fort Worth was identified
for the minimum 400,000 square foot manufacturing location. The property will be owned by BMSC or
an affilate.
In order to facilitate the establishment of BMSC's premier manufacturing operation, the City proposes
to enter into a tax abatement agreement with BMSC. The tax abatement will be tied to the amount of
investment made by BMSC and satisfaction of other project and spending requirements, as follows:
Investment:
BMSC must expend a minimum of $30 million in total construction costs at the Project Site
on or before December 31, 2024;
BMSC must locate taxable business personal property (BPP) that is new to the City at the
Project Site having a minimum taxable appraised value of $40,000,000.00 by January 1,
2026;and
BMSC will be required to spend at least15 percent of hard and soft construction costs with
contractors that are Business Equity Firms. Failure to meet this requirement will result in a
reduction of the grant by 10 percent.
BMSC must provide a minimum of 250 full-time jobs on the Project Site by December 31, 2025, with
average annual salaries of at lest $65,800.00.
Citv Commitments:
http://apps.cfwnet.org/council_packet/mc review.asp?ID=30512&councildate=l1/29/2022 6/22/2023
M&C Review Page 2 of 3
1. The City will enter into a Tax Abatement Agreement with BMSC for a term of ten years.
2. The amount of City real property and BPP taxes to be abated in a given year will be equal to
up to seventy percent (70\%).
3. The total value of taxes abated under the agreement will be capped at $2,000,000.00 (Cap).
4. If BMSC invests at least $90 milliion (in aggregate) by December 31, 2028, the Cap will be
increased to be $3,500,000.00.
TABLE - Maximum Potential Abatement with Corresponding Components:
Year 1
Year 2 -10
Company Commitment
Potential
Potential
Abatement
Abatement
Base Commitment:
(Real and Business Personal II
Property Investment = $70M
60.0 percent
40.0 percent
PBEF Commitments (15\% of
10.0 percent
10.0 percent
otal Construction Costs)
Annual Commitments:
Average Annual Salary for 250
10.0 percent
Full -Time Jobs > $65,800.00
(Overall Employment>=250 (as II
II
10.0 percent
applicable
Total 11
70.0 percent
70.0 percent
The project is located in COUNCIL
DISTRICT 7.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that approval of this agreement will have no material effect on the
Fiscal Year 2023 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
ID ID
Submitted for Citv Manager's Office bv:
Originating Department Head:
Additional Information Contact:
ATTACHMENTS
Program Activity Budget Reference # Amount
Year (Chartfield 2)
William Johnson (5806)
Robert Sturns (2663)
Cherie Gordon (6053)
Form 1295 Certificate 100966373.pdf (CFW Internal)
http://apps.cfwnet.org/council_packet/mc review.asp?ID=30512&councildate=l1/29/2022 6/22/2023
M&C Review
Page 3 of 3
Location mn.iDdf (Public)
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=30512&councildate=l1/29/2022 6/22/2023