HomeMy WebLinkAboutContract 22239 CITE( SECRETARY '���� �• �'�
CONTRACT NO
STATE OF TEXAS § TAX ABATEMENT AGREEMENT BETWEEN
COUNTY OF TARRANT § THE CITY OF FORT WORTH, J. C. PENNEY
CITY OF FORT WORTH § COMPANY, INC. and J.C. PENNEY
PROPERTIES INC
This Tax Abatement Agreement (this "Agreement") is entered
into by and between the City of Fort Worth, Texas (the "City") ,
duly acting herein by and through its City Manager, J.C. Penney
Company, Inc. ("Penney") , a Delaware corporation, and Penney' s
wholly=owned subsidiary, J.C. Penney Properties, Inc.
("Properties" ) , a Delaware corporation. Penney and Properties are
collectively referred to herein as "Owner" , each in good standing
to do business in the State of Texas, duly acting by and through
their authorized officers .
WHEREAS, the City has adopted a resolution stating that it
elects to be eligible to participate in tax abatement; and
WHEREAS, on the 13th day of February, 1996, the City Council
of the City of Fort Worth, Texas ("City Council") adopted a
"Policy Statement : Tax Abatement for Qualifying Development
Projects" (the "Policy Statement") , attached hereto and
incorporated herein as Exhibit "A" ; and
WHEREAS, the Policy Statement constitutes appropriate "guide-
lines and criteria" governing tax abatement agreements to be
entered into by the City as contemplated by the Texas Tax Code, as
amended (.the "Code,') ; and
WHEREAS, . on' the 13th day of August, 1996, the Fort Worth City
Council adopted Ordinance No. 12622 (the "Ordinance") establishing
tax abatement Reinvestment Zone No. 25 ("the Zone" ) ; and
WHEREAS, Owner owns certain real property, more particularly
described in Exhibit "B" attached hereto and incorporated herein
by reference (the "Premises") , located totally within the Zone;
and
WHEREAS, the Premises and the Zone are both located in the
extra territorial jurisdiction of the City; and
WHEREAS, on the 5th day of August, 1996, Owner submitted an
application for tax abatement with various attachments to the City
concerning the contemplated use of the Premises (the "Application
for Tax Abatement" or the "Application") , attached hereto and
incorporated herein as Exhibit "C" ; and
WHEREAS, the contemplated use of the Premises, the Required
Improvements (as hereinafter defined in paragraph I .A below) to
the Premises as forth in this Agreement, and the other terms
hereof are consistent with encouraging development of said Zone in
OFF!'CL RECORD.
CRY SECRETARY
FT. ORTH9 U EX.
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accordance with the purposes for its creation and are in
compliance with the Policy Statement and the Ordinance and similar
guidelines and criteria adopted by the City and all applicable
laws; and
WHEREAS, the City Council finds that the terms of this
Agreement, and the Premises and Required Improvements (as
hereinafter defined in paragraph I .A below) , satisfy the
eligibility criteria, of the Policy Statement; and
WHEREAS, written notice that the City intends to enter into
this Agreement, along with a copy of this Agreement has been
furnished, in the manner prescribed by the Code, to the presiding
officers of the governing bodies of each of the taxing units in
which the Premises is located; and
WHEREAS, this agreement shall apply to taxes of the City only
if the City annexes the Premises during the term of this
Agreement .
NOW, THEREFORE, the City and Owner for and in consideration
of the premises and the promises contained herein, do hereby
contract, covenant and agree as follows :
I .
OWNER' S COVENANTS
A. Owner shall construct, or cause to be constructed, on and
within the Premises, improvements ( "Required Improvements") con-
sisting of a 900, 000 square foot (plus or minus ten percent)
warehouse distribution facility, and tangible personal property,
excluding inventory and supplies, having a combined cost upon
completion of at least one hundred seventeen million dollars
($117, 000, 000) .
The kind, number and location of the Required Improvements is more
particularly described in the Application for Tax Abatement . As
long as the conditions in the first sentence of this Paragraph I .A
are met and the Required Improvements are used for the purposes
and in the manner described in the Application for Tax Abatement,
variations in the kind, number and location of the Required
Improvements from the description provided in the Application
shall not be an Event of Default (as hereinafter defined in
paragraph V below) .
B. Owner covenants to commence construction during calendar
year 1997 and shall substantially complete said construction
within twenty-four (24) months; provided that Owner shall have
such additional time to complete the Required Improvements as may
be required in the event of "force majeure" if Owner is diligently
and faithfully 'pursuing completion of the Required Improvements .
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For this purpose, "force majeure" shall mean any contingency or
cause beyond the reasonable control of Owner including, without
limitation, acts of God or the public enemy, war, riot, civil
commotion, insurrection, governmental or de facto governmental
action (unless caused by acts or omissions of Owner) , fires,
explosions or floods and strikes .
C. Owner covenants that the Required Improvements shall be
constructed and the Premises shall be used in accordance with the
description of the project . set forth in the Application for Tax
Abatement. The Owner covenants to comply with and satisfy all of
the provisions and requirements for Tax Abatement, including but
not limited to (i) (subject to paragraph I .A above) , the
description and location of the Required Improvements; (ii) the
activities to be performed; (iii) the eligibility criteria for the
Required Improvements; (iv) the employment impact from
construction including the number of construction jobs, payroll
for the jobs, amounts to be spent with Fort Worth contractors,
subcontractors and certified Minority Business Enterprises and
Women Business Enterprises; (v) the employment impact from perma-
nent employment, including the number of jobs, annual payroll for
the jobs, and number of jobs to be held by Fort Worth residents;
(vi) the cost and fiscal impact of the Required Improvements; and
(vii) the dollar amount and type of annual supplier and profes-
sional service contracts that will be awarded to both Fort Worth
companies and certified Minority and Women Owned Enterprises .
D. As part of its obligations under Paragraph I .C, Owner
covenants that, in connection with operations on the Premises,
Owner shall create a minimum of 100 new full time jobs . with
twenty-five percent (25%) of such jobs consisting of Fort Worth
residents. For purposes of complying with the provisions of this
paragraph, a job shall be equal to one "Employment Unit" (as
defined by Exhibit D to this agreement) .
E. As a condition precedent to any tax abatement pursuant
to this agreement, Owner shall submit to the City payroll
information from the first biweekly payroll period occurring in
March (whether or not this includes hours worked in February) of
each year throughout the term of this Agreement.
F. Owner covenants that (i) as of January 1, 1996, there
were no existing Improvements on the Premises; (ii) all Required
Improvements and any other improvements to the Premises (all
improvements to the Premises, including Required Improvements,
shall be referred to as "Improvements") shall comply with all
applicable City building codes and ordinances, including, but not
limited to, subdivision, building, electrical, plumbing, and fire
prevention codes and ordinances; (iii) construction of the
Improvements will be in accordance with all applicable federal and
state laws and regulations; and (iv) throughout the Term (as
hereinafter defined in paragraph III .F) of the Abatement, the
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Required Improvements shall be operated and maintained for the
purposes set forth herein so that the uses of the Premises shall
be consistent with the general purposes of encouraging development
or redevelopment of the Zone, except as otherwise authorized or
modified by this Agreement.
II .
GENERAL PROVISIONS
A. The City has adopted guidelines and criteria governing
tax abatement agreements for the City and is authorized to enter
into this Agreement.
B. Procedures followed by the City shall conform to the
requirements of the Code, and have been and will be undertaken in
coordination with Owner' s corporate, public, employee, and
business relations requirements.
C. The Premises are not an improvement project financed by
tax increment bonds.
D. Neither the Premises nor any of the Improvements covered
by this Agreement are owned or leased by any member of the City
Council, any member of the City Plan or Zoning Commission or any
member of ' the governing body of any taxing units joining in or
adopting this Agreement.
E. This Agreement is ' subject to rights of holders of out-
standing bonds of the City. The City hereby represents to Owner
that the City is not aware of any conflict between the terms of
this Agreement and the rights of holders of outstanding bonds of
the City existing on the date hereof.
F. In the event of any conflict between the City zoning
ordinances, or other City ordinances or regulations, and this
Agreement, such ordinances or regulations shall control.
G. A portion or all of the Premises and/or Improvements. *may
be eligible for complete or partial exemption from ad valorem
taxes, as a result of existing law or future legislation. This
Agreement is not to be construed as evidence that no such exemp-
tions apply to the Premises and/or Improvements.
III .
ABATEMENT TERMS AND CONDITIONS
A. The City hereby grants a tax abatement ("Abatement") to
(i) Owner relative to the Premises and the Improvements, and to
(ii) Owner relative to the personal property located on the
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Premises, excluding inventory and supplies, such Abatement to be
subject to the terms and conditions herein. The Abatement shall
apply to taxes of the City only if the City annexes the property
during the term of this Agreement .
B. The amount of the Abatement on the increased value of
the Premises and the Improvements over their value on January 1,
1996, the year in which this agreement is executed, shall be
granted based upon the number of "Employment Units" reported by
Owner (in the manner and time described in Paragraph 'I .E hereof)
and certified by the City each year during the term of the
agreement . The abatement percent amounts shall be as follows :
(i) 25 employment units equal 30. abatement .
(ii) each additional employment unit up to 100 total units
equal 0 .2. abatement per employment unit .
(iii) each additional employment unit above 100 total units
equal 0 . 150 abatement per employment unit .
In no event shall the abatement percent amount exceed ninety-
percent (90.) .
C. The amount of the Abatement on the tangible personal
property located on the Premises over its value on January 1,
1996, the year in which this Agreement is executed, shall be
granted based upon the number of "Employment Units" reported by
Owner (in the manner, and time described in Paragraph I .E. hereof)
and certified by the City each year during the term of the
agreement . The abatement percent amounts shall be as follows :
(i) 25 employment units equal 30. abatement .
(ii) each additional employment unit up to 100 total units
equal 0 .2. abatement per employment unit .
(iii) each additional employment unit above 100 total units
equal 0 . 15. abatement per employment unit .
In no event shall the abatement percent amount exceed ninety-
percent (900-.) .
D. As a condition precedent to any tax abatement under
this agreement, on or before July ist of every year throughout the
term of the abatement (as described in Paragraph III .F below) , the
City shall certify the level of Employment Units and notify, in
writing, Owner and Tarrant County Appraisal District and, if
applicable, Denton County. Appraisal District of the amount to be
abated according to the terms described in Paragraphs III .B. and
III .C. hereof.
E. Owner shall have the right to protest and contest any
or all appraisals or assessments of the Premises and/or
Improvements, or of the tangible personal property on the
Premises .
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F. The term of the Abatement (the "Term") shall begin on the
latter of: (i) January 1 of the year following the year in which
the Certificate of Occupancy is issued or (ii) the date on which
the City annexes the Premises. (The applicable date specified in
the immediately preceeding sentence shall be referred to as the
"Beginning Date".. ) Unless sooner terminated as herein provided,
this Agreement shall end on the December 31st immediately
preceding the tenth (10th) anniversary of the Beginning Date, but
in no event shall this Agreement extend beyond December 31, 2010 .
The Abatement shall not begin, however, unless and until the City
annexes the Premises.
G. The City acknowledges receipt from Owner of the required
application for Tax Abatement fee of 10 of project cost, not to
exceed $15, 000 . If construction on the project is begun within
one year from the date of application (with or without a tax
abatement) , such fee shall be creditable in full to the benefit of
Owner against any permit, impact, inspection or other lawful fee
required by the City in connection with the project, and any
remaining amounts shall be refunded to Owner.
IV.
RECORDS, AUDITS AND EVALUATION OF PROJECT
A. Subject to applicable law governing financial disclosure
by the Owner, the City shall have the right to review the
financial condition of the project to determine compliance with
this Agreement'. The City shall annually (or such other times
deemed appropriate by the City) evaluate the project to insure
compliance with this Agreement . On or before April 5th of every
year during the life of the agreement, Owner shall 'provide
information and documentation which details Owner' s compliance
with each applicable term of the agreement. Failure to provide
this information shall be considered an event of default as
defined in paragraph V. The information shall include, but not be
limited to, the following:
(i) the number and dollar amounts of all construction
contracts and subcontracts awarded on the project, specifying
which companies are Fort Worth entities;
(ii) the total number of employees who work on the
premises, their total salaries, the number of employees who reside
in Fort Worth, and the gross salaries of each. These jobs shall
be reported in job classifications appropriate to the employees;
(iii) the gross dollars spent on supplier and profes-
sional service contracts, with detail sufficient to demonstrate
the amounts by contract awarded and performed by Fort Worth
individuals and entities;
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(iv) the dollar amount of both construction and supply
and service contracts awarded to Minority Business Enterprises and
Women Business Enterprises; and
(v) if the dollars or percentages do not equal the
original . (as detailed in Exhibit C, "Application for Tax
Abatement) or City Council modified requirements of this
Agreement, Owner shall explain the reason for the failure to meet
the requirements and state a recommended course of rectification.
B. The City shall make a decision and rule on the eligi-
bility of the project for tax abatement, based on the information
furnished each year, on or before July 1st of the taxable year and
shall so notify the Owner. The City Council ' s decision on the
matter shall be binding, final and not appealable, except for
arbitrary and capricious acts and actions, gross negligence or
willful misconduct, and any appeal shall be under the substantial
evidence rule.
C. During normal office hours throughout the Term of this
Agreement, providing reasonable notice is given to owner, the City
shall have access to the Premises by City employees for the
purpose of inspecting the Premises and the Required Improvements
to ensure that the Required Improvements or repairs are made in
accordance with the specifications and conditions of this
Agreement and to verify that the conditions of this Agreement are
being complied with.
V.
BREACH
A. In the event that (i) the Required Improvements for which
an abatement has been granted are not completed in accordance with
this Agreement; or (ii) the completion schedule of Improvements
listed in Paragraph I .B is not satisfied; or (iii) owner allows
its ad valorem real property taxes with respect to the Premises or
Improvements, or its ad valorem taxes with respect to the tangible
personal property to become delinquent and fails to timely and
properly follow the legal procedures for protest and/or contest of
any such ad valorem real property or tangible personal property
taxes; or (iv) owner breaches any of the other terms or conditions
of this Agreement, then Owner shall be in default of this
Agreement (an "Event of Default" ) . Should an Event of Default
occur, the City shall give owner written notice of such Event of
Default and if Owner has not cured such Event of Default within
ninety (90) days of. said written notice, this Agreement may be
terminated by the City; provided, however, that if such Event of
Default is not reasonably susceptible of cure within such ninety
(90) day period and Owner has commenced and is pursuing the cure
of same, then after first advising City Council of the efforts to
cure same, Owner may utilize an additional ninety (90) days. Time
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in addition to the foregoing 180 days may be authorized by the
City Council . As liquidated damages for an Event of Default after
the expiration of the applicable notice and cure periods, all
taxes which otherwise would have been paid to the City for each
year when an Event of Default existed, without the benefit of
Abatement (after taking into account any applicable exemptions' ) ,
and penalties and interest thereon charged at the statutory rate
for delinquent taxes as determined by Section 33 . 01 of the Code,
as in effect at the time of the payment of such penalties and
interest, for each such year for which such taxes were abated,
will become a debt to the City. Such amount shall be due, owing
and paid to the City within sixty (60) days of the expiration of
the above-mentioned applicable cure period(s) as the sole and
exclusive remedy of the City, subject to any and all lawful
offsets, settlements, deductions, or credits to which owner may be
entitled. The parties acknowledge that actual damages in the
event of default and termination would be speculative and diffi-
cult to determine.
B. Notwithstanding the foregoing paragraph, if the City
and owner mutually determine that the development or use of the
Premises or Required Improvements as contemplated herein is no
longer appropriate or feasible or that -a higher or better use is
preferable, the parties may terminate this Agreement by a writing
signed by both parties, the period of Abatement shall expire as of
the effective date of the termination, there shall be no recapture
of amounts previously abated, and neither party shall have any
further rights or obligations hereunder.
VI .
EFFECT OF SALE, ASSIGNMENT OR LEASE OF PROPERTY
The abatement shall vest in Owner and cannot be assigned to a
new owner or lessee of all or a portion of the Premises and/or
Improvements, and any such assignment shall be grounds for
termination of this Agreement and the tax abatement hereunder upon
ten (10) days' written notice from the City to Owner.
VII .
NOTICE
All notices called for or required by this Agreement shall be
addressed to the following, or such other party or address as
either party designates in writing, by certified mail postage
prepaid or by hand delivery:
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OWNER:
J.C. Penney Company, Inc.
6501 Legacy Dr.
Plano, Texas 75024-3698
Attn: Mr. James N. Evatz, Mgr. of Ad Valorem Taxes
PROPERTIES:
J.C. Penney Properties, Inc.
6501 Legacy Dr.
Plano, Texas 75024-3698
Attn: Mr. James N. Evatz, Mgr. of Ad Valorem Taxes
CITY:
City Manager
1000 Throckmorton Street
Fort Worth, Texas 76102
VIII .
CITY COUNCIL AUTHORIZATION
This Agreement was authorized by the City Council at its
meeting on the 27th day of August, 1996, by Council approving
Mayor and Council Communication No. C- /57&o?? authorizing the City
Manager to execute this Agreement on behalf of the City.
Ix.
BOARD AUTHORIZATION
A. This agreement is entered into by Penney pursuant to
authority granted by its Board of Directors on July 28, 1987,
whereby one or more of the officers of J.C. Penney Company, Inc.
were authorized, by corporate resolution, to execute instruments
relating to real estate. A certificate evidencing the Penney
resolution is attached hereto as Exhibit E-1 .
B. This Agreement is entered into by Properties pursuant
to authority granted by its Board of Directors on July 7, 1970,
whereby one or more officers of Properties were authorized, by
corporate resolution, to execute instruments relating to the real
estate. A certificate evidencing the Properties resolution is
attached hereto as Exhibit E-2 .
X.
SEVERABILITY
In the event any section, subsection, paragraph, sentence,
phrase or word is held invalid, illegal or unconstitutional, the
balance of this Agreement shall stand, shall be enforceable and
shall be read as if the parties intended at all times to delete
9
said invalid section, subsection; paragraph, sentence, phrase or
word. In the event that W the Term of the Abatement with
respect to any property is longer than allowed by law, or (ii) the
Abatement applies to a broader classification of property* than is
allowed by law, then the Abatement shall be valid with respect to
the classification of property abated hereunder, and the portion
of the Term, that is allowed by law.
XI .
ESTOPPEL CERTIFICATE
Any party hereto may request an estoppel certificate from
another party hereto so long as the certificate is requested in
connection with a bona fide business purpose. The certificate,
which if requested will be addressed to the Owner, shall include,
but not necessarily be limited to, statements that this Agreement
is in full force and effect without default (or if default exists
the nature of default and curative action, which should be under-
taken to cure same) , the remaining term of this Agreement, the
levels and remaining term of the Abatement in effect, and such
other matters reasonably requested by the party(ies) to receive
the certificates .
XII .
OWNER STANDING
Owner, as a party to this Agreement, shall be deemed a proper
and necessary party in 'any litigation questioning or challenging
the validity of 'this Agreement or any of the underlying ordi-
nances, resolutions, or City Council actions authorizing same and
Owner shall be entitled to intervene in said litigation.
XIII .
APPLICABLE LAW
This Agreement shall be construed under the laws of the State
of Texas . Venue for any action under this Agreement shall be the
State District Court of Tarrant County, Texas. This Agreement is
performable in Tarrant County, Texas.
XIV.
AMENDMENT
.This Agreement may be modified by the parties hereto to
include other provisions which could have originally been included
in this Agreement or to delete provisions that were not originally
necessary to this Agreement pursuant to the procedures set forth
in Title 3 , Chapter 312 of the Code.
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XV.
EFFECTIVENESS
This Agreement shall constitute a valid and binding agreement
between the City and Owner when executed in accordance herewith,
regardless of whether any other taxing authority enters into a
similar arrangement with Owner.
EXECUTED this day of 1996, by
the City.
EXECUTED this day of 1996, by
J.C. Penney Company, Inc.
EXECUTED this day of 1996, by
J.C. Penney Properties, Inc.
ATTEST: CITY OF FORT WORTH, TEXAS
Bylu
City Secretary ssistant City Manager
APPROVED AS TO FORM AND LEGALITY;
City Attorney
Date: 36 - V6
t .&uthori
zatIOU
Date
11
J.C. PENNEY COMPANY, INC.
By.
Printed Nome: DFl.MER R. _P.-gyp UL
Title: J[/ PR:5Sjp&-V l- JD LAC' R OF /`AXES
Attest :
Assistant Sec tary
J.C. PENNEY PROPERTIES, INC.
By: - - _--
M PriiVed Name: ,SACK to
aTDFNEY Title: VICE ''HESIDEXTII
Attest :
Assiq ant Secretary
12
STATE OF TEXAS
COUNTY OF TARRANT
BEFORE ME, the undersigned authority, on this day personally
appeared Mike Groomer, Assistant City Manager of the CITY OF FORT
WORTH, a municipal corporation, known to me to be the person and
officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that. the same was the act of the said CITY OF
FORT WORTH, TEXAS, a municipal corporation, that he was duly
authorized to perform the same by appropriate resolution of the
City Council of the City of Port Worth and that he executed the
same as the act of the said City for the purposes and
consideration therein expressed and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of
199600—lo,
NIA J. 0
'Ry P N-? a�y Public o ary Public and nd for
n a
the State of Texas
Z-S
% F of -Notary' s Printed Name
b
STATE OF TEXAS
0-01Lk,11V 4 a A.4
COUNTY OF TFAR�'
BEFORE ME, the undersigned authority, on this day personally
appeared 15AM,5R R. *I-WCA-7)'. Ilz, Vice President of J.C. Penney
Company, Inc. , a Delaware" corporation, known to me to be the
person whose name is subscribed to the foregoing instrument,. and
acknowledged to me that he executed the same for the purposes and
consideration therein expressed, in the capacity therein stated
and as the act and deed of said corporation.
GIVEN UNDER MY HAND -AND SEAL OF OFFICE this /7P/ day
of 1996 .'
Notary Publi/6 and
the State of 42as
TRENA KAY HAGGARD
Notar X tWT6ffih8U13LIC
BL1C
My Co n exas
13
STATE OF TEXAS
COUNTY OF _T_ g
BEFORE ME, the--undersigned authority, on this day personally
appeared JACK GARVIET Vice President of J.C. Penney
Properties, Inc. , a Delaware -corporation, known to me to be the
person whose name is subscribed to the foregoing instrument, and ,
acknowledged to me that he executed the same for the 'purposes and
consideration therein expressed, in the capacity therein stated
and as the act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this IyI day
of
1996 .
Notary Public in and for
the State of Texas
CAAOLE 1). CHAMBERS
Notary' s Printed Name
My Commission Expires :
CAROLE D. CHAMBERS
N otary Public,State
of Texas
10
My Commission Expires 3.22.97
14
EXHIBIT 6699
TAX ABATEMENT POLICY
CITY OF FORT WORTH
POLICY STATEMENT:
TAX ABATEMENT FOR QUALIFYING
DEVELOPMENT PROJECTS L203196)
I. GENERAL PURPOSE AND OBJECTIVES
Certain types of investment result in the.creation of new jobs, new income and provide for
positive economic growth and inner-city economic stabilization which is beneficial to the City as
a whole. The City of Fort Worth is committed to the promotion of high quality development in
all parts of the City and improvement in the quality of life for its citizens.
The City of Fort Worth will, on a case-by-case basis, give consideration to the granting of
property tax incentives to eligible residential, commercial, and industrial development projects.
It is the policy of the City of Fort Worth that consideration of eligible projects will be provided
in accordance with the guidelines and criteria outlined in this document. Texas law authorizes
the City of Fort Worth to grant tax abatement on the value added to a particular property by a
specifie'development project which meets the economic goals and objectives of the City, and the
requirements of the statute (Vernon's Tax Code Ann. Section 312.001, et. seq.).
As mandated by state law, this policy applies to the owners of real property. It is not the
policy of the City of Fort Worth to grant property tax abatement to any development
project for which a building permit has been previously issued by the City's Department of
Development. Nothing in the policy shall be construed as an obligation by the City of Fort
Worth to approve any tax abatement application.
Although all applications which meet the eligibility criteria(Section 111.) of this policy statement
will be reviewed, it is the objective of the City of Fort Worth to encourage applications from
projects that:
(a) are located in enterprise zones or other designated target areas; or
(b) result in a development with little or no additional cost to the City; or
(c) result in 1,000 or more new jobs, with a commitment to hire Fort Worth and inner city
residents.
11. DEFINITIONS
"Abatement" means the full or partial exemption from ad valorem taxes on eligible properties for
a period of up to ten years and an amount of up to 100% of the increase in appraised value (as
reflected on the certified tax roll of the appropriate county appraisal district) resulting from
improvements begun after the execution of the tax abatement agreement. Eligible properties
must be located in a reinvestment zone.
"Reinvestment Zone" is an area designated as such by the City of Fort Worth or State of Texas in
accordance.with the Texas Property Redevelopment and Tax Abatement Act, Sections 312.001
through 312.209 of the Tax Code.
"Residential Development Project" is a development project which proposes to construct or
renovate multi-family residential living units on property that is (or meets the requirements to be)
zoned multi-family as defined by the City of Fort Worth Zoning Ordinance.
"Fort Worth Company" is a business which has a principal office located within the city limits of
Fort Worth.
"Minority Business Enterprise (MBE) and Women Business Enterprise (WBE)" is a minority or
women owned business that has received certification as either a MBE or WBE by either the
North Texas Regional Certification Agency (NTRCA) or the Texas Department of
Transportation(TxDOT), Highway Division.
"Capital Investment" includes only real property improvements such as new facilities and
structures, site improvements, facility expansion, and facility modernization. Capital investment
does NOT include land acquisition costs and/or any existing improvements, or personal property
(such as machinery, equipment, and/or supplies and inventory).
"Facility Expansion" is a new permanent real property improvement such as a building or
buildings constructed to provide additional square footage to accommodate increased space
requirements of a Fort Worth company.
"Facility Modernization" is a new permanent real property improvement under taken to provide
increased productivity for a new or existing Fort Worth company.
"Supply and Service.Expenses"are discretionary expenses incurred during the normal
maintenance and operation activities of a business.
I11. ELIGIBILITY CRITERIA
A. RESIDENTIAL PROJECT ELIGIBILITY
A residential development project is eligible for property tax abatement if-
1. The project is located in any of the following census tracts: 1002.02, 1010,
1011, 1016, 1017, 1018, 1019 (partial), 1025, 1028 (partial), 1029, 1030,
1031, 1033, 1035, 1036.01, 1037.01, 1038, 1040, 1041 (partial) (see Map-
Exhibit"A"); AND
2. a. The project will construct or renovate no less than 50 residential
living units of which no less than 20% shall be affordable (as defined
by the U.S. Department of Housing and Urban Development) to
persons with incomes at or below 80%of median family income; OR
b. The project has a minimum capital investment of$5 million
(excluding acquisition costs for land and any existing
improvements).
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III. ELIGIBILITY CRITERIA
B. COMMERCIAL/INDUSTRIAL ELIGIBILITY
1. New Projects
In order to be eligible for property tax abatement, a new
commercial/industrial development project must satisfy one of the
following three criteria:
a. Upon completion will have a minimum capital investment of$10
million and commits to hire an agreed upon percentage of residents
from an eligible inner city census tract (as identified on Exhibit
"A") for full time employment.; OR
b. Is' located in the "inner city" (as identified on Exhibit "A") or
property immediately adjacent to the major thoroughfares which
serve as boundaries to any of these inner city census tracts and
commits to hire an agreed upon percentage of residents from an
eligible inner city census tract(as identified on Exhibit"A") for full
time employment.; OR
C. Is located outside of the "inner city", has a minimum capital
investment of less than $10 million, and commits to hire an agreed
upon percentage of residents from an eligible inner city census tract
(as identified on Exhibit"A")for full time employment.
2. Existing Business Expansion and/or Modernization
In order to be eligible for property tax abatement, a facility expansion
and/or modernization by an existing commerciallindustrial business
a. Upon completion will have a minimum capital investment of$10
million.; OR
b. Must result in increased employment for which the business
commits'to hire and retain an agreed upon percentage of residents
from an eligible inner city census tract (as identified on Exhibit
"A") for new, full time positions;AND
C. Must have a minimum capital investment of(1) $500,000, OR (2)
an amount equal to or greater than 25% of the appraised value, as
certified by the appropriate appraisal district, of real property
improvements on the property for the year in which the abatement
is requested.
C. PROOF TESTS
1. Building Permits
No tax abatement will be granted to any development project which has
applied for or received a building permit from the City's Department of
Development.
-3-
2. Evidence of Need for Tax Abatement
The applicant must provide evidence to substantiate and justify the tax
abatement request including (but not limited to) an analysis demonstrating
the tax abatement is necessary for the financial viability of the project.
IV. ABATEMENT GUIDELINES
The tax abatement agreement must provide that the applicant:
(1) Hire Fort Worth residents for an agreed upon percentage (at least 25%) of new full
time jobs to be created and .make a good faith effort to hire 100% Fort Worth
residents for all new jobs created as a result of the abatement,
(2) Commit to hire an agreed upon percentage of Fort Worth residents from an eligible
inner city census tract (as identified on Exhibit "A") for all new jobs created as a
result of the project. The agreed upon percentage shall be determined by negotiation.
(3) Utilize Fort Worth companies for an agreed upon percentage of the total costs for
construction and Supply and Service Contracts, and
(4) Utilize Minority and Women owned Business Enterprises (M&WBEs) for an agreed
upon percentage of the total costs for construction and supply and service contracts in
the manner provided in the City of Fort Worth's Minority and Women Business
Enterprise ordinance.
In addition to the above,the abatement must comply with the following guidelines:
A. State law prohibits abatement of taxes levied on inventory, supplies or the existing
tax base. City policy is not to abate taxes on personal property located within Fort
Worth prior to the date of the tax abatement agreement.
B. Unless otherwise specified in the agreement, the amount of the taxes to be abated
shall in no event exceed the amount of the capital investment (as specified in the
application) multiplied by the City's tax rate in effect for the year in which the
calculation is made.
C. In certain cases, the City may consider a tax abatement application from the
owner of real property who serves as a landlord or lessor for a development
project which meets the eligibility criteria of this section.
D. The City may consider an application from the owner or lessee of real property
requesting abatement of real and or personal property owned or leased by a
certificated air carrier on the condition that the certificated air carrier make
specific real property improvements or lease real property improvements for a
term of 10 years or more.
E. For an eligible development project to be considered for tax abatement, the
"Application for Tax Abatement" form must be completed and submitted to the
Office of Economic Development.
-4-
F. An application fee must accompany the application. The fee is calculated at the
lesser of. (i) 1% of the project capital investment, or(ii) $15,000.
If construction on the project is begun on the site specified in the application
within a one (1) year period from the application submittal date (with or without a
tax abatement), this fee shall be credited to any permit, impact, inspection or any
other lawful fee required by the City of Fort Worth. If the-project is not
constructed on the site specified in the application or if construction takes place at
the specified site more than one (1) year after the application submittal date, the
application fee shall not be refunded or otherwise credited.
G. If requested, the applicant must provide evidence that there are no delinquent
property taxes due on the property on which the development project is to occur.
H. The tax abatement agreement shall limit the uses of property consistent with the
general purpose of encouraging development or redevelopment of the zone during
the period that property tax abatements are in effect.
I. Tax abatement may only be granted for projects located in a reinvestment or
enterprise zone. For eligible projects not currently located in such a zone, the City-
Council may choose to so designate the applicant's properly in order to allow for a
tax abatement.
J. The owners of all projects receiving tax abatement shall properly maintain the
property to assure the long term economic viability of the project.
V. PROCEDURAL STEPS
Each request for'-property tax abatement shall be processed according to the following
procedural guidelines.
A. Application Submission:
Provided that the project meets the criteria detailed in Section III of this policy,
the Applicant must complete and submit a City of Fort Worth "Application For
Tax Abatement" form (with required attachments) and pay the appropriate
application fee.
B. Application Review and Evaluation:
The Economic Development Office will review the application for accuracy and
completeness. Once complete,the application will be evaluated based on:
1. Types of new jobs created, including respective wage rates, and
employee benefits packages such as health insurance, day care
provisions, retirement package(s), transportation assistance, and . any
other.
2. Percent of new jobs committed to Fort Worth residents.
3. Percent of new jobs committed to Fort Worth"Inner City"residents.
-5-
4. Percent of construction contracts committed to:
a. Fort Worth based*firms, and
b. Minority and Women owned Business Enterprises (MBEs and WBEs).
5. Percent of supply and service contract expenses committed to:
a. Fort Worth based firms, and
b. Minority and Women owned Business Enterprises (MBEs and WBEs).
6. The project's increase in the value of the tax base.
7. Costs to the City(such as infrastructure participation, etc.).
8. Other items which may be negotiated by the City and the applicant.
Based upon the outcome of the evaluation, the Economic Development Office
may present the application to the City Council's Expanding Economic
Opportunities Committee.
C. Consideration by Council Committee
Should the Economic Development Office present the application to the City
Council's Expanding Economic Opportunities Committee, the Committee will
consider the application at an open meeting. The Committee may:
(1) Approve the application. Staff will then incorporate the application into a
tax abatement agreement which will be sent to the City Council with the
Committee's.recommendation to approve the agreement; or
(2) kequest'modifications to application. .Economic Development staff
will discuss the suggested modifications with the applicant and then, if the
requested modifications are made, resubmit the modified application to the
Committee for consideration; or
(3) Deny the application. The applicant may appeal the Committee's finding
by requesting the City Council to: (a) disregard the Committee's finding
and (b) instruct city staff to incorporate the application into a tax
abatement agreement for future consideration by the City Council.
D. Consideration by the City Council
The City Council retains sole authority to approve or deny any tax abatement
agreement and is under no obligation to approve any tax abatement application or
tax abatement agreement. The City of Fort Worth is under no obligation to
provide tax abatement in any amount or value to any applicant.
E. Effective Date for Approved Agreements
All tax abatements approved by the City Council will become effective on
January I of the year following the year in which a Certificate of Occupancy (CO)
is issued for the qualifying development project (unless otherwise specified in the
tax abatement agreement). Unless otherwise specified in the agreement, taxes
levied during the construction of the project shall be due and payable.
-6-
VI. RECAPTURE
If the terms of the tax abatement agreement are not met, the City Council has the right to
cancel or amend the abatement agreement. In the event of cancellation, the recapture of
abated taxes shall be limited to the year(s) in which the default occurred or continued.
VII. INSPECTION AND FINANCIAL VERIFICATION
The terms of the agreement shall include.the City of Fort Worth's right to: (1)*review and
verify the applicant's financial statements in each year during the life of the agreement
prior to granting a tax abatement in any given year, (2) conduct an on site inspection of
.the project in each year during the life of the abatement to verify compliance with the
terms of the tax abatement agreement.
VIII. EVALUATION
Upon completion of construction of the facilities, the City shall no less than annually
evaluate each project receiving abatement to insure compliance with the terms of the
agreement. Any incidents of non-compliance will be reported to all affected taxing units.
On or before March 31St of every year during the life of the agreement, any
individual or entity receiving a tax abatement from the City of Fort Worth shall
provide information and documentation which details the property owner's
compliance with the terms of the respective agreement-and shall certify that the
owner is in compliance with each applicable term of the agreement. Failure to
report this information and .to provide the required certification by the above
deadline shall result in any taxes abated in the prior year being due and payable.
IX. EFFECT OF SALE, ASSIGNMENT OR LEASE OF PROPERTY
No tax abatement rights may be sold, assigned or leased unless otherwise specified in the
tax abatement agreement. Any sale, assignment or lease of the properly which is not
permitted in the tax abatement agreement results in cancellation of the agreement and
recapture of any taxes abated after the date on which an unspecified assignment occurred.
-7-
T - INNER CITY
ELIGIBLE
CENSUS P
1�
1
t1 /v 11 AREAS
EXHIBIT "A"
4i""•^�"■' `-@�`0 � Eti Fi �,�►pie + °�aaro' — LEGEND
►�.a.{.... � E/ ® ®114!1 Ao9p91;a r
Residential Tax Abatement :
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E!'w �{p`eat tt ®<lprer..q®11
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Commerl cat/Industrial
r i C111.1w psi, ®i
Tax Abatement :
1� Eligible Census Areas
Resident !at Tax Abatement :
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EXHIBIT "B"
LEGAL DESCRIPTION . .
LEGAL DESCRIPTION
100.000 ACRE TRACT
BEING a tract of land situated in the Greenberry Overton Survey, Abstract No. 972, Denton
County, Texas and being a portion of that tract of land as described by deed to FEllwood/822,
Ltd. and recorded in Volume 10839, Page 2231, County Records, Tarrant County, Texas, said
tract being more particularly described by metes and bounds as follows:
COMMENCING at the northerly right-of-way line of Intermodal Park-way (formerly Westport
Parkway) at its west terminus as recorded in Volume 11536, Page 1770, said County Records;
THENCE EAST 1802.10 feet along the northerly right-of-way line of said Intermodal Parkway
to a 5/8 inch iron rod with cap stamped"Carter&Burgess" set, the POINT OF BEGINNING,
the beginning of a curve to the right ;
THENCE 689.98 feet along the arc of said curve to the right through a central angle of
03'15'23", a radius of 12139.73 feet and along chord of 0, 1'37'36"W, 689.89 feet to a 5/8
inch iron rod with cap stamped"Carter& Burgess" set;
THENCE N 00000'06"E, 1323.95 feet to a 5/8 inch iron rod with cap stamped "Carter&
Burgess" set;
THENCE EAST, 2165.54 feet to a 5/8 inch iron rod with cap stamped"Carter&Burgess" set;
THENCE.SOUTH, 2013.56 feet to a 5/8 inch iron rod with cap stamped "Carter&Burgess" set
in the northerly right-of-way line of the aforementioned Intermodal Parkway;;
THENCE WEST, 2146.00 feet along said northerly right-of-way line to the PONT OF
BEGINNING and containing 100.000 acres of land, more or less.
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EXHIBIT "C"
ABATEMENT APPLICATIO
JUL-25-96 THU 8:18 FTW CITY MANAGERS OFFICE FAX NO.. 8178716134 P• 03
City of Fort Worth
• APPLICATION FOR
COM MERCIAt./INDU MIAL TAX ABATEMENT
1. Applicant Information:
Name J. C. Penney Company, Inc. and
J. C. Penney Properties, Inc.
Address _6501 Legacy Drive
City, State Zip Code Piano Texas 75024-3698
Telephone ( 214 431 2118 ext.
Fax ( 911. ext.
Internet E-mail Address (if available):
Contact Person (include title/position)-James N. Evatz, Manager of Ad Valorem Taxes
Name of property owner _if this site is chosen, then J. C, Penn ay--would acquire
the land from Alliance Development Company.
2. Property Description
Attach legal description or surveyor's metes & bounds description.
3. Current Appraised Value of Property
Attach latest copy of property tax statement from the County Appraisal District.
4. Attach a brief description of the project Including: services provided or products
manufactured, major customers and locations,etc.
See Attachment A - Page I
5. Project Description
See Attachment A - Page I
A. New Facilities
1. Size sq.ft
2. Cost of construction
B. Site Development (parking, fencing, landscaping, etc.):
1. Type of work to be done
2. Projected costs $
C. Personal Property:
1. Value of:
a. Inve6tory$
b. Supplies
JUL-25-96 THU 8: 19 FTW CITY MANAGERS OFFICE FAX NO. 8178716134 P, 04
2. Percent of inventory eligible for freeport exemption (inventory exported from
Texas within 175 days) %
S. Value of equipment, machinery, furnishings, etc.$
B. Project Construction: See Attachment A — Page 1
A. What percent of the construction costs (5A. &B. above) will you commit to spent!with:
1. Fort Worth businesses?
2. Minority and Women owned Business Enterprises? °lo
B. When will construction start? end?
C. How many construction jobs will be created?
D. What is the estimated payroll for these jobs?
7. Employment
A. Is this project an expansion or modernization of an existing facility? If so, please
answer the following: No
1. Flow many persons are currently employed?
2. What percent of 1, above are:
a. Ft.Worth residents? %
b. inner City residents? %
B. Please complete the following table.
Project Start Fifth Year Tenth Year
New Jobs to
be Created 400 400 400
Less
Transfers* 25 25 25
Net
Jobs 375 375 375
% of Net Jobs to
be filled by Ft.
Worth Residents" *** *** ***
% of Net Jobs to
be filled by Inner
City Residents *** *** ***
* If any employees will be transfering,please describe where they will be transfering from.
** Must be at least 25%. ***See Attachment A — Page 2
C. Attach a description of the jobs to be created (technician, engineer, machinist, etc.),
task(s) to be performed by each, and wage rate for each classification. See
Attachment A — Page 3
2
1UL-26-96 THU 8:20 FTW CITY MANAGERS OFFICE FAX NO, 8178716134 P. 05
D. Attach a brief description of the employee benefit package(s) offered (le.health
Insurance, retirement, public transportation assistance, day care provisions, etc.)
including portion paid by employee and employer respectively.
See Attachment A - Page 3
8. Regarding supply and service expenses(ie. landscaping, office or manufacturing
supplies, janitorial services, etc.)- See Attachment A - Page 3
A. What is the annual amount of non-sole source supply and service expenses?
B. What percentage of 8A.will be committed to Fort Worth businesses? 0
C. What percentage of 8A. will be committed to Minority and Women Owned
Businesses? %
9. Is the property appropriately zoned for this project?
At the time of City annexation, site will be appropriately zoned.
10. Is the property platted? If yes,will replatting be necessary?
At the time of City annexation, required plotting will be completed.
11. Attach a description of any environmental Impacts associated with this project.
12. Attach a description of any direct benefits to the City of Fort Worth as a result of
this project(le. sales tax, Inventory tax, development fees, etc.)
13. Do you Intend to pursue abatement of.,
County taxes?* 0 Yes 0 No
School taxes? 0 Yes No
*Denton County
14. That level of abatement do you request: Years? io Percentage? 3o%-go
as set forth in response to Question 7B.
15. On an attachment, explain why tax abatement Is necessary for the success of
this project. Include a business pro forma or other documentation to substanti-
ate your request.
See Attachment A - Page 3
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 "Policy Statement:Tax Abatement For Qualified Development Projects"and agree
to comply with the guidelines and criteria stated therein.
Manager of Ad Valorem Taxes
Name Title
August 5, 1996 which was presented on July 30, 1996 to the
Date Expanding Economic opportunities Committee.
3
l
�
,
City of Fort Worth
JCPennmy Application for Tax Abatement
Attachment A - Page Iof3
Description:
Proposed 900,000,square foot, state-of-the�ad Warehouse Distribution Center to
service JCPenney stores in Texas and the Southeast and possibly other areas on 100
acres of property.
This unique, state-of-the-art distribution system with o'posaib|e 1OO foot high rack
supported roof and wall system will utilize cargo sorting and. conveying equipment.
|nVoet[OeOt:
Duetothe-pn]b@ble interrelationship oJthe building and load-bearing equipment, only
eatiDlabao for the distinction between improvements and penaonal property are
available regarding initial cost estimates which assume o 900.000 eq. ft. facility.
* Personal Property $70 Million
* Improvements 47 Million
+ Inventory /$5O million less
Freeport exemption of$25K8\ .25 Million
Estimated Cost $142 Million
^
Due tothe unique design and construction requirements of the project, it is difficult to ascertain
what specific percentage of construction by Ft. Worth or MWBE contractors may be available at
this point.
JCPenney is thoroughly aware of the City Council's policy regarding construction and MWBE
commitments and support this local vendor (both Ft. Worth and MWBE) policy.
JCPenney has historically been aggressive in promoting MWBE and other minority business
opportunities. Specific corporate information for 1995; nationally $579 million was expended
directly with various minority vendors, locally /M8t[o\ $45 million was spent iOthis category.
Should the determination be made to construct this facility in Ft. Worth, an aggressive effort to
obtain competitive bids from Ft, Worth contractors and MWBE vendors can be anticipated from
J{}Penney.
'
City mfFort Worth
JCF»enney Application for Tax Abatement
Attachment A - Page 2 of
#713
" /f18DFtN/br�� [�a�hantaNx�r� (25% of"� ~.~~. .. ..~ "Illustration . __- ' _,—' -- `_-� '
abated tax would be $506,250. If however, 200 Ft. Worth residents were employed, the abated
toXNmUk/be $875,000
Initial Related Tax (400) Per
Asset Investment Tax 10g0X� Equivalent Job
UNV $ 25 Million $ 240.000 $ 600.00
FIX/PP 70 Million 875.000 1.687.50
K0}P 47 Million 450,000 1,125.00
Total $ 142 Million $ 1365000 $ 3412.50
1O Years -Annually Calculated
Abatement on FIX/PP/IMPG30% + 15% per 1OOOf Ft. Worth Residents Vpto 90%
Summary Above: FIX/PP ($G75.00[) + IMP /$45O.00O\ = $1.125.000
Illustration Table
City Tax Total
Abatement Nos. Jobs Abated Tax Revenue Tax
`
30%: $ 337.500 $ 1.027'500 $ 1'365.000
+1596=45%: 1OOF\8/Jobs = $ 508.250 $ 858.750 $ 1.365.000
+15%=60%: 20OF\8/Jobs = $ 875.000 $ 690.000 $ 1.385.000
+159&=7596: 3OOF\8/Jobs = $ 843.7500 $ 521.250 $ 1.365.000
+1596=90%: 4OOF\8/Jobs = $ 1.012.500 $ 352.500 $ 1.385.000
Number of Fort Worth residents (employment unit) is calculated annually using the first
biweekly payroll period ending in March (whether or not this two week period includes hours
worked in February) plus any monthly and weekly paid employees working during this two-week
period. The calculation byJCPeOOeytobe certified by the City Auditor by April 5. Either party
may appeal certification to City Council no later than the last working day in April and their
decision would be binding on both parties. Definition of employment unit:
1 unit= Full benofibad (JCPenney policy) minimal 25 hours per week including salaried employees.
Full benefibadfrom dafined Inner City Census Tracts 1 x2 = units*.
.5 unit= Average 1G hours per week but less than quaUfiedfor full benefit.
Average 15 hours per week from defined Inner City Census Tnaut.5x2 = 1unit.
.25 unit Averaging less than 1b hours per week.
Average less than 15 hours per week from defined Inner City Census Tract.25 x 2= .5 unit.
Employment units from temporary services etc. would be treated as outlined above - 20% of
representative category. Overtime, sick and vacation pay are tVbe included iD hours worked.
*A great deal of focus has gone into the objectives of creating Ft. Worth job opportunities
coupled with this incentive for successful Inner City e[Dp|oynl8Ot recruitment efforts.
City of Fort Worth
JCPenney Application for Tax Abatement
Attachment A - Page 3 of 3
#7C
A wide variety of jobs will be created that are normally associated with the operation of a
complex distribution center. Most would be loading/unloading trailers and merchandise
picking/routing.
Skills for some jobs (number dependent on ultimate design) would be required for:
*Equipment Operators
*Mechanical/Electrical Maintenance
*Computer/Communication Equipment Operators
*Order Processing/inventory Control Support
The wage rate for these jobs would be based on a salary survey of prevailing market wages at
the time of employment.
#71)
JCPenney's current employee benefit package has options for medical, dental, term life,
accidental death/dismemberment, long-term disability, sick pay, vacation, savings plan, and
retirement.
#8A-C
As this state-of-the-art proposed facility is more fully designed/developed, these amounts would
be available. As previously discussed in our response to Question #6, JCPenney is aware and
supports the City's MWBE commitments and policy.
#12
As summarized in the response to Question#713: Inventory taxes not subject to abatement in
the amount of$240,000 plus nonabated property taxes on improvements/personal property for
a total range of$352,500 to $1,027,500. Land taxes are unknown since purchase price is
unknown. Also, local fees related to permits etc.
#16
The economic feasibility of major projects are dependent on initial and transitional costs which
are paramount to its success as well as an inducement to increasing/expanding operations at
this proposed facility. The stabilization of these costs are critical elements in the overall site
selection process. A copy of JCPenney's most current annual report is enclosed.
c:\...\evatz\prop\fvrtxab.doc 8/5/96
EXHIBIT 6699
DEFINITION OF EMPLOYMENT UNITS
r
EXHIBIT D
Definition of Employment Units
The following defines the methodology to be used in calculating
an "employment unit" from payroll records of Owner' s first
biweekly payperiod during the month of March (whether or not this
includes hours worked in February) .
1 unit= Defined as a Fort Worth resident working in a
position that is eligible for company benefits
(health, retirement, etc . ) . Current (1996)
company policy grants benefit eligibility to
employees working an average of 25 hours or more
per week, during the biweekly pay period,
including salaried employees .
Fort Worth residents who meet the above criteria
and reside in any Inner City zip codes* shall
count as 2 units .
. 5 unit= Fort Worth residents who average, during the
biweekly payperiod, at least 15 hours of work per
week but less hours than the minimum hours
required to be eligible for company employee
benefits .
Fort Worth residents who meet the above criteria
and 'reside in any Inner City zip codes* shall
count as 1 unit.
.25 unit= Fort Worth residents who average, during the
biweekly payperiod, less than 15 hours of work per
week.
Fort Worth residents who meet the above criteria
and reside in any Inner City zip codes* shall
count as one-half (0 . 5) unit
Inner City zip codes include: 76102, 76103, 76104, 76105,
76106, 76107, 76110 76111, 76112, 76115, 76119) .
The above described methodology shall also be used to calculate
"Employment Units" for Fort Worth residents working on the
Premises but under contract to an agency other - than Owner
(temporary services, etc. ) . However, the total "Employment
Units" for such residents working on the Premises but under
contract to an agency other than owner shall be reduced or
discounted twenty percent (200-.) .
EXHIBIT "E-V
Corporate Resolution/J.C. Penney Company, Inc,
J. C. PENNEY COMPANY, INC.
Certificate of Assistant Secretary
I, T. M. Comerford, an Assistant Secretary of J. C. PENNEY
COMPANY, INC. , a Delaware corporation ( "Company" ) , DO HEREBY
CERTIFY as follows :
(1) The following is a true and correct copy of resolutions
duly adopted by the Board of Directors of the Company at a meeting
duly called and held on July. 28, 1987, at which a quorum was
present and acting throughout, and said resolutions have not been
modified or rescinded but remain in full force and effect, except
as set forth in the November 9, 1994 resolution below:
RESOLVED that effective August 1, 1987, the Chairman of the
Board, any Vice Chairman of the Board, any President, and any
Vice President ( "Authorized Officers" ) be, and each of them hereby
is, authorized to execute and deliver, on behalf of the Company'
any contract of purchase or sale, deed, lease, mortgage,,. or other
instrument relating to real estate, including without limitation,
any guarantee of, or other instrument making the Company liable
with respect to, obligations incurred by any subsidiary of the
Company under any such contract of purchase or sale, deed, lease,
mortgage, or other instrument relating to real estate; and that the
Secretary and any Assistant Secretary be, and each of them hereby
is, authorized to affix and attest the corporate seal of the
Company to any such contract of purchase or sale, deed, lease,
mortgage, or other instrument executed as aforesaid;
RESOLVED that the foregoing resolution shall be effective
prospectively only and shall not be deemed to amend, change, or
revoke any action previously taken by the Board of Directors; and
RESOLVED that the officers of the Company be, and each of them
hereby is, authorized to take all such further actions, to execute
and deliver all such further instruments and documents, in the name
and on behalf of the Company, and under its corporate seal or
otherwise, and to pay all such expenses as shall in the judgment of
any of them be necessary, proper, or advisable in order fully to
carry out the intent and effectuate the purposes of the foregoing
resolutions and each of them.
y:\CORP\CTHAC1\CERT.SEC\REALESTATE
(2) The following is a true and correct copy of a resolution
duly adopted by the Board of Directors of the Company at a meeting
duly called and held on November 9, 1994, at which all directors
were present and acting throughout, and said resolution has not
been modified or rescinded but remains in full force and effect:
RESOLVED that, effective January 1, 1995, all resolutions
previously adopted by the Board of Directors of the Company
authorizing, among others, "any Vice Chairman of the Board" to act
on behalf of the Company or the Board, be, and each of them hereby
is, amended to delete such title and ' substitute the following
titles therefor: "the Vice Chairman of the Board and Chief
Executive Officer, the President and Chief operating Officer" .
IN WITNESS WHEREOF, I have hereunto affixed my signature and
the corporate seal of the Company this 13th day of August, 1996 .
C �-
Assistant Se retary
Y:\CORP\CTHACI\CERT.SEC\RFALESTATE 2
EXHIBIT 66E_2"
Corporate Resolution/J.C. Penney Properties, In.c.
J. C. PENNEY PROPERTIES, INC.
Certificate of Assistant Secretary
I, T. M. Comerford, an Assistant Secretary of J. C. PENNEY
PROPERTIES, INC. , a Delaware corporation ( "Corporation") , DO HEREBY
CERTIFY that the following is a true and correct copy of a
resolution duly adopted by the Board of Directors of the
Corporation by Unanimous Written Consent, dated July 7, 1970, and
said resolution has not been modified or rescinded but remains in
full force and effect:
. RESOLVED that the President and any Vice President of the
Corporation be, and each of them hereby is, authorized to execute
and deliver, on behalf of the Corporation, any contract of purchase
or sale, deed, lease, mortgage, or other instrument relating to
real estate; and that the Secretary and any Assistant Secretary be,
and each of them hereby is, authorized to affix and attest the
corporate seal of the Corporation to any such contract of purchase
or sale, deed, lease, mortgage, or other instrument executed as
aforesaid.
IN WITNESS WHEREOF, I have hereunto affixed my signature and
the corporate seal of the Company this 13th day of August, 1996 .
Ass i"st-an cretary
Y:\CORP\CTHACI\CERT.SEC\REALESTATE.PROP.
JCPenney
January 6, 1999
Mr. Tom Higgins
Office of the City Manager
City of Fort Worth, Texas
1000 Throckmorton Street
Fort Worth, Texas 76102
Dear Tom:
This letter is to confirm the matters we discussed by telephone on December 29,
1998 regarding J. C. Penney Company, Inc.'s ("Penney") and J. C. Penney
Properties, Inc.'s ("Properties") start-up activities at the Alliance facility. (As you
know, the Alliance facility is the subject of the tax abatement agreement between
Penney, Properties and the City of Fort Worth.)
As I described to you, Penney and Properties will form a general partnership
between the two corporations and that partnership will own certain tangible
property (e.g., a conveyor system). Because the tax abatement agreement was
executed by both,Penney and Properties, you agreed that the new partnership
could own the conveyor system (and any other property at the Alliance facility as
Penney and Properties deems suitable) without jeopardizing any of the benefits
conveyed by reason of the tax abatement agreement.
If the foregoing summary correctly sums up the City of Fort Worth's position
relating to this matter, please indicate your agreement with it where indicated
below and return one copy of this letter to me at your earliest convenience.
Thank you for your consideration of this matter. Please contract me if you have
any questions.
Sincerely,
James N. Evatz
Manager of Tax Compliance
Agreed this� (Tay of _1�.,J 1999
City of Fort Worth
By:
J.C. Penney Company, Inc., P.O. Box 10001, Dallas,TX 75301-0001
i 1 V J
�Zt of Fort Worth, Texas
Mayor and Council is t
DATE REFERENCE NUMBER LOG NAME PAGE
08/27/96 C-15628 02JC 1 of 3
SUBJECT MAKE FINDINGS CONCERNING A PROPOSED TAX ABATEMENT AGREEMENT WITH
J.C. PENNEY COMPANY,_ INC. AND J.C. PENNEY PROPERTIES, INC. AND
AUTHORIZE EXECUTION OF THE AGREEMENT
RECOMMENDATION:
It is recommended that the City Council:
1 . Find that the improvements contained within the attached agreement are feasible and
practical and would be a benefit to the land and to the City after the expiration of the tax
abatement agreement; and
2. Find that written notice of the City's intent to enter into the attached Tax Abatement
Agreement and copies of the agreement were delivered by certified mail to all affected
taxing units in accordance with state law; and
3. Find that the terms and conditions of the Agreement and the property subject to the
Agreement meet the City's Policy Statement for Tax Abatement as established in M&C G-
11389 (Resolution No. 2142); and
4. Authorize the City Manager to enter into the attached Tax Abatement Agreement with J.C.
Penney Company, Inc. and J.C. Penney Properties, Inc. in accordance with the Tax
Abatement Policy (Guidelines and Criteria).
DISCUSSION:
The property subject to abatement is located just north of Intermodel Parkway, west of 1-35W
near the Burl ington-Sante Fe Intermodal. The City Council has designated this property as Tax
Abatement Reinvestment Zone Number 25. The property is to be owned by J.C. Penney
Properties, Inc. Currently, this property is in the extraterritorial jurisdiction (ETJ) of the City.
However, a voluntary annexation petition will be submitted requesting this property be annexed
into the corporate limits of the City of Fort Worth. Should this agreement be approved, the
abatement of City taxes will occur following annexation of the property.
J.C. Penney, based in Piano, Texas, operates retail stores throughout the U.S. J.C. Penney has
identified this 100 acre site for a new 900,000 square foot, state-of-the-art warehouse
distribution center to service the Southeastern Region for J.C. Penney retail outlets. This unique,
state-of-the-art distribution system will feature a 100 foot high rack supported roof and wall
system.
The facility and its tangible personal property, excluding inventory and supplies is valued at an
estimated $117 million. In addition, approximately $50 million in inventory will be located at the
site. Approximately $25 million in inventory will not be subject to the freeport (in transit
inventory) tax exemption. J.C. Penney will create at least 375 new jobs at the site.
Printed on Recycled Paper
city ®,f Fort Worth, Texas
Council Mayor and s C t
DATE REFERENCE NUMBER LOG NAME PAGE
08/27/96 C-15628 02JC 2 of 3
SUBJECT MAKE FINDINGS CONCERNING A PROPOSED TAX ABATEMENT AGREEMENT WITH
J.C. PENNEY COMPANY, INC. AND J.C. PENNEY PROPERTIES, INC. AND
AUTHORIZE EXECUTION OF THE AGREEMENT
J.C. Penney representatives are thoroughly aware of the City Council's policy regarding
commitments to Fort Worth based and M/WBE contractors and subcontractors and have
expressed support for this policy. However, due to the unique design and construction
requirements of the project, it is difficult to ascertain what specific percentage of construction
by Fort Worth or M/WBE contractors may be available at this point.
J.C. Penney has historically been aggressive in promoting M/WBE and other minority business
opportunities. Based on corporate information for 1995, nationally $579 million was expended
directly with various minority vendors, with $45 million being spent in this category in the local
(Metro) area.
Should the determination be made to construct this facility in Fort Worth, an aggressive effort
to obtain competitive bids from Fort Worth contractors and M/WBE vendors can be anticipated
from the company.
The recommended abatement includes a base abatement of thirty (30%) with incremental
percentage increases awarded for each Fort Worth job. The increment would be determined
annually based on the first biweekly payroll period ending in March (plus salaried employees for
the same period). To determine this increment, J.C. Penny payroll audits will be submitted to
the City for evaluation and certification no later than April 5. The percentage of abatement will
not exceed ninety percent (90%).
Absent any tax abatement, the $142 million project would generate an estimated $1,368,170
in property tax revenue. Based upon the abatement schedule described above, the expected
abatement is as follows:
Real and Per. Prop.
Fort Worth Abatement — Net CFW Tax
JOBS Percent Abatement Unabated Revenue*
Amount Amount
Base 30% $ 338,189 $ 789,107 $1,029,982
100 45% $ 507,283 $ 620,012 $ 860,887
200 60% $ 676,377 $ 450,918 $ 691 ,793
300 75% $ 845,471 $ 281,824 $ 522,699
400+ 90% $1,014,566 $ 112,730 1 $ 353,605
Printed on Recycled Paper
City of Fort Worth., Texas
Mayor and Council Communication
DATE 08/27/96 1 REFEREXCE NUMBER C-15628 I LOG NAME 02JC I PAGE 3 of 3
SUBJECT MAKE FINDINGS CONCERNING-A PROPOSED .TAX ABATEMENT AGREEMENT WITH
J.C.-PENNEYCOMPANY, INC. AND J.C. PENNEY PROPERTIES, INC. AND
AUTHORIZE EXECUTION OF THE AGREEMENT
Includes Inventory tax at $240,875 (annually) which is not subject to abatement.
For purposes of this agreement, a Fort Worth job is characterized in terms of "employment
units". A Fort Worth resident working enough hours to qualify for company benefits (currently
25 hours per week) would qualify as one (1) "employment unit". A Fort Worth resident
averaging at least 15 hours of work per week but less hours than the minimum hours required
to be eligible for company employee benefits would qualify as 0.5 (one-half) of an "employment
unit". Fort Worth residents who average, during the biweekly payperiod, less than 15 hours of
work per week would qualify as 0.25 (one-quarter) of an "employment unit".
For each of the categories above, Fort Worth residents who reside in any Inner City zip code will
be given double weight (2 units, 1 unit, and 0.5 unit respectively).
Fort Worth residents working on the premises but under contract to an agency other than Owner
(temporary services, etc.) will qualify as employment units. However, the total "Employment
Units" for these residents will be reduced or discounted twenty percent (20%).
FISCAL INFORMATION/CERTIFICATION:
The Director of Fiscal Services certifies that no expenditure of City funds is associated with
approval of this agreement.
BT:f
Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY
Office by: (to)
Mike Groomer 6140 APPROVED
Originating Department Head: CITY COUNCIL
Tom Higgins 6192 (from) AUG 27 1996
For Additional Information City,seaj'ery
Contact: city of rort
Paul Cain 8003
0 Printed on Recycied Paper