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HomeMy WebLinkAboutContract 26341 CITY SECRETARY 10-31-00 P02 :25 IN CONTRACT NO. STATE OF TEXAS § TAX ABATEMENT AGREEMENT BETWEEN COUNTY OF TARRANT § THE CITY OF FORT WORTH AND CITY OF FORT WORTH § COTTON DEPOT,LLC This Tax Abatement Agreement("Agreement") is entered into by and between the City of Fort Worth, Texas (the "City"), duly acting by and through its City Manager, and Cotton Depot, LLC ("Owner"), a Texas corporation in good standing to do business in the State of Texas, duly acting by and through its 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 29th day of February, 2000, the City Council of the City of Fort Worth, Texas ("City Council") adopted Resolution No. 2617, entitled a Tax Abatement Policy Statement for Qualifying Development Projects (the "Policy Statement"), attached hereto as Attachment A and hereby made a part of this Agreement for all purposes; and WHEREAS,the Policy Statement constitutes appropriate guidelines and criteria governing tax abatement agreements to be entered into by the City as contemplated by Chapter 312 of the Texas Tax Code,as amended(the"Code"); and WHEREAS, on the 15th day of August, 2000, the Fort Worth City Council adopted Ordinance No. 14296 (the "Ordinance") establishing Tax Abatement Reinvestment Zone No. 36 (the"Zone"); and WHEREAS, Owner owns certain real property located entirely within the Zone, more particularly described in Attachment B attached hereto (the "Premises") and hereby made a part of this Agreement for all purposes; and WHEREAS, on the 3rd day of July 2000, Owner submitted an application for tax abatement, with an incorporated supplement and exhibit, to the City concerning the contemplated use of the Premises (collectively, the "Application for Tax Abatement"), which is attached hereto as Attachment C and hereby made a part of this Agreement for all purposes; and WHEREAS, the contemplated use of the Premises, the Required Improvements (as hereinafter defined) and the terms of this Agreement are consistent with encouraging development of the Zone in accordance with the purposes for its creation and are in compliance with the Policy Statement,the Ordinance and other applicable law; and WHEREAS,the City Council finds that the terms of this Agreement, and the Premises and Required Improvements, 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; 001FRINAL RECORD Page I of 10 cc:Q TVY�EE QP E a�a y L !If'.NY LJ 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 certain improvements (i) consisting of at least two hundred (200) residential urban lofts and live/work spaces (ii)having a cost upon completion of at least Seventeen Million One Hundred Thousand Dollars ($17,100,000) including site development costs (the "Required Improvements"). The construction of the Required Improvements in accordance with this Agreement shall be referred to hereinafter as the "Project". The kind,number and location on the Premises of the Required Improvements are more particularly described in the Application for Tax Abatement. As long as the conditions in the first sentence of this Paragraph 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 Required Improvements from the description provided in the application shall not be an Event of Default, as defined in Section V of this Agreement. B. Owner covenants to complete substantially, as determined by the City in its sole and reasonable discretion, the construction of Required Improvements on or before December 31, 2002. C. Owner understands and agrees that tangible personal property located on the Premises shall not be subject to any tax abatement. D. 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 the project as set forth in the Application for Tax Abatement, including, but not limited to, (i) the description and location of the Required Improvements; (ii) the activities to be performed; (iii) the eligibility criteria for the Required Improvemments; (iv) the impact from construction, including amounts to be spent with Fort Worth companies, contractors, subcontractors, and certified Minority Business Enterprises and Women Business Enterprises; (v) the employment impact from permanent employment, including the number of jobs to be held by Fort Worth residents and number of jobs to be held by inner city residents, as defined by the Policy Statement; (vi)the cost and fiscal impact of the Required Improvements; and (vii)the amount and type of annual supplier and professional service contracts that will be awarded to both Fort Worth companies and certified Minority Business Enterprises and Women Business Enterprises. E. Owner covenants that throughout the Term, the 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. i�q�BC�5,�G'E]a. CN�tif ° Page 2 of 10 , H. GENERAL PROVISIONS A. The City has adopted guidelines and criteria governing tax abatement agreements for the City and may enter into this Agreement containing the terms set forth herein. B. The Premises are not an improvement project financed by tax increment bonds. C. 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. D. This Agreement is subject to the rights of holders of outstanding bonds of the City. E. 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. F. A portion or all of the Premises and/or improvements thereon 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 such exemptions do not apply to the Premises and/or improvements thereon. III. ABATEMENT TERMS AND CONDITIONS A. The City hereby grants to Owner a real property tax abatement ("Abatement") relative to Owner's Premises, the Required Improvements, excluding inventory and supplies, subject to the terms and conditions of this Agreement. B. The amount of the Abatement shall be based upon a percentage of the increase in value of the Premises, the improvements thereon, over their respective values on January 1, 2000, but excludes any tangible personal property that may be located on the Premises, and shall be calculated as follows: Up to one hundred percent (100%) of the increase in value of the Premises based upon the abatement schedule set forth in Exhibit 1 to the Application for Tax Abatement (Attachment C); and Provided, that the increase in value subject to abatement in any one year shall be limited to no more than Thirteen Million Seven Hundred Eighty Thousand Dollars ($13,780,000), which is the estimated cost of construction of the Required Improvements. (03 LIM Page 3 of 10 t WK)(.lH9 7 E%o C. Owner shall have the right to protest and contest any or all appraisals or assessments of the Premises and/or improvements thereon. D. January 1st of the year following the year in which a final certificate of occupancy is issued for the Required Improvements will constitute the start of auditing for compliance of this Agreement("Compliance Auditing Term"). Taxes will not be abated during the first year of the Compliance Auditing Term. The term of the Abatement benefit (the "Term") shall begin on January 1st of the year following the year that the Compliance Auditing Term begins (the "Abatement Beginning Date"). Unless sooner terminated as herein provided, the Term and the Compliance Auditing Term shall end on the December 31 st immediately preceding their respective tenth (10th) anniversaries. Information for the last Compliance Auditing Term shall be submitted as indicated in paragraph IV.A. E. The City acknowledges receipt from Owner of the required application fee of one percent (1%) of project cost, not to exceed$15,000. If construction on the required Improvements is begun within one year from August 15, 2000 (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 February 1st of every year of the Term, Owner shall provide information and documentation about the previous calendar year of the Compliance Auditing Term which details Owner's compliance with each applicable provision of this Agreement. Information provided by Owner to the City shall be considered confidential and shall not be disclosed to outside parties, except to the extent required by applicable law. Failure to provide this information shall be considered an Event of Default, as defined by Section V of this Agreement. The information that Owner must submit to the City 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 to businesses which are Fort Worth companies, certified Minority Business Enterprises, and certified Women Business Enterprises; and (ii) the total number of employees who work on the Premises, the number of employees who are Fort Worth residents, and the number of employees who reside in designated inner city areas, as defined by the Policy Statement. These jobs shall be reported in job classifications appropriate to the employees; and Fc11 coAL c,Ec(0Ro Page 4 of 10 (iii) the gross dollars and supporting details showing the amounts spent on supply and service contracts with Fort Worth companies, certified Minority Business Enterprises, and certified Women Business Enterprises. B. The City shall make a decision and riling on the actual annual percentage of tax abatement for the Project based on the information furnished by Owner each year on or before August 1st of the taxable year and shall notify Owner of such decision and ruling. The actual percentage of the Abatement for a taxable year during the Tenn shall therefore be based upon the Owner's performance with regard to the commitment categories as provided in Exhibit 1 to the Application for Tax Abatement(Attachment C) for the preceding year of the Compliance Auditing Tenn. C. During normal office hours throughout the Term and the year following the Tenn, 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. Such inspections shall be conducted in accordance with Owners standard security procedures as may be mandated by company policy and United States government security requirements. 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 schedule for completion of the Required Improvements listed in Section I.B of this Agreement is not satisfied; or (iii) Owner allows its ad valorem real property taxes with respect to the Premises or the project 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 taxes; or (iv) Owner breaches any of the other terns or conditions of this Agreement, then Owner shall be in default of this Agreement (collectively, each 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 to cure such Event of Default. Time in addition to the foregoing 180 days may be authorized by the City Council in a public meeting. Owner acknowledges and agrees that the City will suffer damage and that the public purposes and benefits accruing to the City will be thwarted if Owner fails to cure an Event of Default as required by this Agreement, and the parties agree that the amount of such damage is speculative and difficult or impossible to quantify. Therefore, Owner agrees that if Owner fails to cure an Event of Default after the expiration of the applicable notice and cure periods, Owner shall pay the City as liquidated damages, and not as a penalty, all taxes which �U� �Inl� )l�rt�✓�(e1�i Page 5 of 10 otherwise would have been paid to the City for each year when an Event of Default existed or occurred, without the benefit of any Abatement (after taking into account any applicable exemptions). Such liquidated damages may be recovered by the City through adjustments made to Owner's ad valorem property tax appraisal by the applicable Appraisal District, or if not so recovered shall be due, owing and paid to the City within sixty (60) calendar days following delivery by the City of an invoice for such amounts 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. In the event that such amounts are not paid as prescribed herein, Owner shall in addition be liable for all penalties and interest on such amounts, 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. 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 farther 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 of all or a portion of the Premises and/or improvements,without the prior consent of the City Council, which consent shall not be unreasonably withheld provided that the Council determines that the proposed assignee is financially capable of meeting the terms and conditions of this Agreement and that the proposed Assignee agrees hi writing with the City to assume all terns and conditions of this Agreement. Any attempted assignment without such prior consent shall be grounds for termination of this Agreement and the Abatement hereunder upon ten (10) calendar days written notice from the City to Owner. Notwithstanding the above, this Agreement may be assigned by Owner to an entity controlling, controlled by or under common control with Owner without prior consent, provided that (i) the assignee is the owner of the Premises; (ii) the assignee agrees in writing with the City to ass-Lune all terns and conditions of this Agreement; and(iii) Owner gives thirty(3 0) days prior written notice of the assignment to the City. ocx Odd Page 6 of 10 VII. NOTICES 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: OWNER: CITY: Cotton Depot, LLC City of Fort Worth 3637 Watonga Avenue Economic Development Office Fort Worth,Texas 76107 1000 Throckmorton Street Fort Worth,Texas 76102 VIII. CITY COUNCIL AUTHORIZATION This Agreement was authorized by the City Council at its meeting on the 291h day of August 2000, by City Council's approval of Mayor and Council Communication No. C- /,?20 y authorizing the City Manager to execute this Agreement on behalf of the City. IX. 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 liinited 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 undertaken to cure same), the remaining term of this Agreement, the levels and remaining Tenn of the Abatement in effect, and such other matters reasonably requested by the party(ies)to receive the certificates. X. 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 ordinances, resolutions, or City Council actions authorizing same and Owner shall be entitled to intervene in said litigation. UFFICNAU Cc TTV c L'CGEYAG)V Page 7 of 10 Fx �6`'��s �� o XI. 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. XII. RECORDATION OF AGREEMENT A certified copy of this Agreement in recordable form shall be recorded in the Deed Records of Tarrant County,Texas. XIII. 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. Page 8 of 10 EXECUTED this day of 2&z o�,2000,by the City of Fort Worth,Texas. EXECUTED this ZS day of USA' by Cotton Depot,LLC. AT-TEST: CI VFFO =()�ITHTEXAS bu a J00 aA" G aria Pearson, ' Secretary 0--1—a M&Groomer,As istant City Manager APPROVED AS TO FORM AND LEGALITY: Assistant City Attorn Date: C-19201 f-Zy-(ID ATTEST: COTTON DEPOT, C By: � r UNVO Name: -QWGT Anna e. P;U _ Name: Mlfg Title: f&CUda Title: � � Ell) 7 Date: b �'00 PPage 9 of 10 (1 p�y�� fr�^Mr�E VDIVV U�a VE311111H VEX 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 Fort 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. N UNDER MY AND SEAL OF OFFICE thi / day of 2000 Public mand ���� the State of Texas ,��"' SARAH ^� �� NOTARY PUBLIC Notary's Printed Name STATE OF TEXAS § COUNTY OF TARRANT § B W - ME, the undersigned authority, on this day personally appeared ` MY)U-) , an officer of Cotton Depot, LLC, a Texas corporation, known to me to be the person whose naive is subscribed to the foregoing instrument, and acknowledged to me that he/she 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 day of , 2000. 'Ic"e-, Notary Public in and for PAULA ANN�TTE BETTANY�� the State of T-es MAR", (g ca�} f ll� COMMA 1169610 nG, , , C /h )-1Ae NOTARY PUBLIC CALIFORNIA Notary's Printed Name Comm.t>tpitba Jail,18,2002 �C0R�D Page 10 of 10 ��I, WV''�1" H9 7 EX Exhibit I Cotton Depot Lofts Tax Abatement Structure The proposed tax abatement percentage is based on a level established from the amount of participation of M/WBE companies and Fort Worth companies in the construction of the project, removal of two billboards which are in the reinvestment zone (RZ#36), and environmental remediation of the property. This percentage will then be the base level of abatement for the term of the abatement. If any of the base abatement commitments are not met,the base abatement will be zero. Each year for the term of the abatement, an annual audit will be conducted to verify compliance to commitments for an additional abatement percentage. If it is determined the commitments have been met in the employment and supplies & services expenditures categories, an additional abatement percentage will be earned for that year. In any year that the commitments are not met in either category, the abatement is reduced to zero. At no time will the abatement exceed 100%. The proposed schedule for the establishment of the tax abatement percentage is as follows: Abatement Commitments Abatement % Base Abatement 75% 20% of construction expenditures to MIWBE companies 30% of construction expenditures to Fort Worth companies Removal of the two billboards that are currently on the property Environmental remediation of the property Additional Abatement 25% Employment Total Employment: 7 Fort Worth Residents: 5 (67%) Inner City Residents: 2 (30%) Annual Supplies & Services Expenditures Total Expenditures: $200,000 Fort Worth Companies: $140,000 (70%) MIWBE Companies: $ 60,000 (30%) Total Abatement 100% ATTACHMENT A CITY OF FORT WORTH TAX ABATEMENT POLICY STATEMENT FOR QUALIFYING DEVELOPMENT PROJECTS Adopted:February 29,2000 1. 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 bene ficial 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 specific 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 III.) 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. Page 1 of 6 o "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. III. 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). B. COMMERCIAUINDUSTRIAL 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 Page 2 of 6 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 "X') 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 "k) 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 commercial/industrial business must: a. Upon completion have a minimum capital investment of$10 million; OR b. 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 "X') for new, full,time positions; AND C. 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. 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 "X') 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. Page 3 of 6 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. 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 property 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: Page 4 of 6 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. 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 Economic Development Committee. C. Consideration by Council Committee Should the Economic Development Office present the application to the City Council's Economic Development 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) Request modifications to the 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: (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 Page 5 of 6 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 1 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. 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. V111. 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 31't' 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 property 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. Page 6 of 6 ATTACHMENT B Legal Description for Reinvestment Zone Number 36 REMAINING "H" ZONING CLASSIFICATION BEING a 4.560 acre tract of land in the R. Briggs Survey, Abstract No. 116 situated in the City of Fort Worth, Tarrant County, Texas and being a portion of Block 1 -of the NBC Warehouse Site (Corrected Plat), an addition to the City of Fort Worth as recorded in Volume 388-136, Page 32 of the Plat records of Tarrant County, Texas and being more particularly described as follow: COMMENCING at a 1/2" iron pin found at the southwest corner of said Block 1, NBC Warehouse Site, said point being on the northern right-of-way line of State Highway Spur No. 280 (right-of-way varies) and the east line of the Santa Fe Railroad; THENCE N62005'09"E along the northern right-of-way line of said State highway Spur No. 280, 229.13 feet to the POINT OF BEGINNING; THENCE N29050'53"W, 188.21 feet to a 5/8" iron pin found; THENCE N60 01041"Ef 2.17 feet to a 5/8" iron pin found; THENCE N2902921"Ef 2.57 feet to an "x" found cut in concrete; THENCE N60030'39"E, 814.74 feet to a 5/8" iron pin found; THENCE N29056'16"W, 7.51 feet to an 'Y' found cut in concrete; THENCE N60009'07"E, 233.63 feet to a 5/8" iron pin found on the western right- of-way line of the Fort Worth & Denver Railroad (ROW Varies); THENCE S02043'00"w along the western right-of-way line of said Fort Worth and Denver Railroad, 198.45 feet to an "x" found cut on a boulder; THENCE S1305343"E along the western right-of-way line of said Fort Worth and Denver Railroad, 165.64 feet to a 1/2" iron pin found on the northern right-of- way line of said State Highway Spur No. 280; THENCE N89014'57"W along the northern right-of-way line,of said State Highway Spur No. 280, 197.48 feet to a 1/2" iron pin found; THENCE S7101753"W along the northern right-of-way line of said State Highway Spur No. 280, 246.87 feet to a 1/2" iron pin found; Page 1 of 2 THENCE S63047'19" along the northern right-of-way line of said State Highway Spur No. 280, 108.65 feet to a 1/2" iron pin found; THENCE S58029'37"W along the northern right-of-way line of said State Highway Spur No. 280, 235.10 feet to a 3/4" iron pin found; THENCE S51038'13"W along the northern right-of-way line of said State Highway Spur No. 280, 80.89 feet to a 3/4" iron pin found; THENCE S62005'09"W along the northern right-of-way line of said State Highway Spur No. 280, 62.65 feet to the POINT OF THE BEGINNING and containing 4.560 acres of land, more or less. Page 2 of 2 ATTACHMENT C kO' T WOP,THO Application for RESIDENTIAL, tax abatement 1. Applicant Information: Name Cotton Depot, L.L.C. Address 3637 Wat.onga Avenue City, State, Zip Code Fort Worth, Texas 76107 Telephone 817 738 - 3445 ext. Fax ( 17 ) 738 - 2515 ext. Internet E-mail addresses (if available): poole2@aol.com Contact Person(include title/position): PhiLlip Poole 2. Property Description Attach legal description or surveyor' 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: number of units to be constructed, number of units to be renovated, size of units,number of affordable housing units (f applicable), rental rates per unit, amenities, etc. 5. Project Description A. Cost of construction $ 13,780,000 B. Site Development (parking, fencing, landscaping, etc.): 1. Type of work to be done Enviromental Cleanup, utility Rework, Street Vacation, Pedestrian Crossings, Fencing 2. Projected costs $1 ,950,000 Site Improvements ($17,100,000 Total Costs) C. Personal Property: Value of furnishings, office equipment, etc. $ 250,000 (HSE Parcel) 6. Project Construction: A. What percent of the construction costs (5A.&B. above)will you commit to spend with: 1. Fort Worth businesses? 30 % Goal of 35% 2. Minority and Women owned Business Enterprises? 20 % Goal of 30% B. When will construction start? January 1 , 2001 C. How many construction jobs will be created? 330 D. What is the estimated payroll for these jobs? $8,268,000 7. Employment: A. How many new full time jobs will be created? 7 B. What percent of 7A. will you commit to be filled with: 1. Fort Worth residents? 67 % 2. Inner City residents? 30 C. Attach a description of the jobs to be created(technician, engineer, manager, etc.),tasks to be performed for each, and wage rate for each.classification. D. Attach a brief description of the employee benefit package(s) offered (i.e. health insurance, retirement, public transportation assistance, day care provisions, etc.) including portion paid by employee and employer respectively. 8. Regarding supply and service expenses (i.e. landscaping, office or manufacturing supplies,janitorial services, etc.): A. What is the amount of non-sole source supply and service expenses? $ 200,000 B. What percentage will be committed to Fort Worth businesses? 70 % C. What percentage will be committed to Minority and Women Owned Businesses? 30 % 9. Is the property appropriately zoned for the project? Yes 10.Is the property platted? If yes,will replatting be necessary? Yes, into two parcels. Lot 1 - HSE Historic Terminal, Lot 2 - Added Loft Development 11.Attach a description of any environmental impacts associated with this project. TNRCC Cleanuo Program Certificate Due by September 1 , 2000 12.Attach a description of any direct benefits to the City of Fort Worth as a result of this project (i.e. sales tax, inventory tax, development fees, etc.) 13. Do you intend to pursue abatement of. County Taxes? EM Yes ❑ No School Taxes? ❑ Yes 19 No Not Available 14.What level of abatement do you request: Years? 10 Years Percentage? 100 15.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 attach details. No 16. On an attachment, explain why tax abatement is necessary for the success of this project. Include a business pro-forma or other documentation to substantiate your request. 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: ne;s a n riteria stated therein. Cotton Depot, L.L.C. Develop. Manager Name Title 'J tiL.Y -5 . 20o D Date 2. Property Desclliption con z Mazes A ONIam a ` 6 A ° A . a ° E � O w C7 W 0. O O s C9 O A N A� cimuo " �Z low x W 6 �q w y � N I G ^+ U 2 Property Description REMAINING "H" ZONING CLASSIFICATION BEING a 4.560 acre tract of land in the R. Briggs Survey, Abstract No. 116 situated in the City of Fort Worth, Tarrant County, Texas and being a portion of Block 1 of the NBC Warehouse Site (Corrected Plat), an addition to the City of Fort Worth as recorded in Volume 388-136, Page 32 of the Plat Records of Tarrant County, Texas and being more particularly described as follows. COMMENCING at a 112" iron pin found at the southwest corner of said Block 1, NBC Warehouse Site, said point being on the northern right—of—way line of State-- Highway Spur No. 280 (right—of—way varies) and the east line of the Santa Fe Railroad; THENCE N6205'09"E along the northern right—of—way line of said State Highway Spur No. 280, 229.13 feet to the POINT OF BEGINNING; THENCE N29 50'53"W, 188.21 feet to a 518" iron pin found, I THENCE N6070'41 E, 2.17 feet to a 518" iron pin found; I THENCE S2929'21"E, 2.57 feet to an °x" found cut in concrete; THENCE N6030'39"E, 814.74 feet to a 518" iron pin found, THENCE N2956'16"W, Z51 feet to an X' found cut in concrete; THENCE N60'09'07"E, 233.63 feet to a 518" iron pin found on the western right—of—way line of the Fort Worth & Denver Railroad (ROW Varies); THENCE S0243'00"W along the western right—of—way line of said Fort Worth and Denver Railroad, 198.45 feet to an "x" found cut on a boulder; THENCE S135343E along the western right—of—way line of said Fort Worth and Denver Railroad, 165.64 feet to a 112" iron pin found on the northern right—of—way line of said State Highway Spur No. 280; THENCE N89'14 57"W along the northern right-of—way line of said State Highway Spur No. 280, 197.48 feet to a 112" iron pin found, THENCE S71'17'53"W along the northern right—of—way line of said State Highway Spur No. 280, 246.87 feet to a 112" iron pin found, THENCE S6347'19"W along the northern right—of—way line of said State Highway Spur No. 280, 108.65 feet to a 112" iron pin found, THENCE S582937 W along the northern right—of—way line of said State Highway Spur No. 280, 235.10 feet to a 314" iron pin found, THENCE 55138'13"W along.the northern right—of—way line of said State Highway Spur No. 280, 80.89 feet to a 314" iron pin found; THENCE S62'05'09"W along the northern right—of—way line of said State Highway Spur No. 280, 62.56 feet to the POINT OF BEGINNING and containing 4.560 acres of land, more or less. DUN&WAY A SOCIAYEs INC Engineers • landscape Architects • Planners • Surveyors PHONE(mi)33a-irztu�o(eij+zs°Ri1 FAX(�enj 335-ia7 ' 2. PropertyDescithption EXIS77NG "H' ZONING CLASSIFICATION PROPOSED "HC" ZONING CLASSIFICATION BEING a 1.229 acre tract of land in the N. Bough Survey, Abstract No. 106 and the R. Briggs Survey, Abstract No. 116 situated in the City of Fort Worth, Tarrant County, Texas and being a portion of Block 1 of the NBC Warehouse Site (Corrected Plat), an addition to the City of Fort Worth as recorded in Volume 388-136, Page 32 of the Plat Records of Tarrant County, Texas and being more particularly described as follows: BEGINNING at a 112" iron pin found at the southwest corner of said Block 1,, NBC Warehouse Site, said point being on the north right—of—way line of State Highway Spur No. 280 (right—of—way varies) and the east line of the Santa Fe Railroad; THENCE N29 48'33'W along the eastern line of said Santa Fe, 30.30 feet to a railroad spike found,• THENCE N09 J4'38'W along the eastern line of sold Santa Fe, 266.51 feet to a railroad spike found at the intersection of the eastern line of said Santa Fe and the southern right—of—way line of East Fourth Street (60' ROW), THENCE N60 09'07"E along the southern right—of—way line of said East Fourth Street, 136.64 feet to a 518 iron pin found, THENCE S2950'53"E, 288.04 feet to a point on the northern right—of—way line of said State Highway Spur No. 280, THENCE 562'05'09"W along the northern right—of—way line of said State Highway Spur No. 280, 229.13 feet to the POINT OF BEGINNING and containing 1.229 acres of land, more or less. ]DUNAWAY ASSOCYkT'BS YNC Engineers • Landscape Architects • Planners • Surveyors PHONE(en)y3 1121 SLATE 4�2i�N(((W)335-1437 3 Current Appraised Value j w C' � fidx�EPr^"��',i pgp {rte t�s� ��tZ"�gg`t '"`��' ,�.�' '��s•�::rrta2' .w .. �. [[ O , f q q33 .Lk a CL LL P cli. CD co r } } O CR gg Co 4CV. a o ►—YO +r ' ia� ty cle RE t m xwi .• y Ox i x,' s riflf ,. C) ML Ln t i �j r �� y-�r•.�! j 6i MY, N V LL �� O 0f 1LI1 l 0 r- O x N ( i t _ Q O� OOOx, L- � 3. Current Appraised Value or 0 0 0 0: o 0 g 'r m } 5 CL -C tv pg Fi n ?'•. 5'��v` ,,Ire'" � 4 � E � ;J •� . 1Y was G r. g , Co. O ti m xi° "fin LL co,:to 4'J M N G? N O t �.'r-- OD N O M M CO CC' O �• 'CJD...C1Ll' C1D cli s i" d y 33 - j .O O: C3. O O :-:.O" O O O O O O" O O I r±y C7��`• 'co O �O O O•.O O co O .O' O' O. O w ` ini ol. O Y o 0 0 o CD: 0 0 o 0 0 C3 0.: 0 C3. 3 Ln co fl- cli t i I v �cn- T. m O- O O 0 0 0 0 0 CM O.O:. O. / r a Q t fu M k�Y� l � 5. Ku5� (A Co W r OW M;zt NO V r fw E u 1 O+ ii" T _ �s LL O x h' LL C/) 0 Q GY3 O's,v y E 6? co Cfl tt7': w M' t- I- a-t Q tD et tn cu t00',1 Im4�'�'>s'�- O i O•. 07 �;.+ � -� yr'.� U 1 1`ti ,O` (v Ln O t Cn o D U- o TAR RANT Appraisal District Property Information This information current as of 05/18/2000. TAD Number: 01861808 PII)N: 278251 A Owner's Name COTTON DEPOT, and Mailing 740 FRANCISCO BLVD W Address SAN RAFAEL CA 94901-3927 Location 000701 E 5TH ST Fort Worth, TX Legal N B C WAREHOUSE SITE Description BLK I LOT A School IlFort Worth Isd (905) City 1117ort Worth (26) Special Districts n This information is intended for reference only and is subject to change. It may not accurately reflect the complete status of the account as actually carried in Tarrant Appraisal District's database and may not be used as a basis of protest or appeal. Properties which do not have 2000 Proposed values will be shown with a zero value. This does not mean that the value for 2000 is zero, it only means that we have not yet sent a 2000 value notice. PROPERTY VALUES PROPERTY INFORMATION Tax Year 2000 Proposed Value Year Built 0 Building Value $350,996 Pool Land Value $949,004 Mapsco 63W Market Value $1,300,000 TAD Map 2048396+ Appraised Value* $1,300,000 Class 100- ---= Exemptions 000 Value/SF or Unit $17 State Code F1 Building Units 78,208 SQFT No. of Bedrooms 0 Land Acres 5.4400 No. of Bathrooms 0 Land Square Feet 237,251 No. of Garage Bays 0 Central Heat Deed Date 02211997 Central Ai ,11Deed Volume 0012745 Tax Agent Code 0 Deed Page 00001191 TA NT Appraisal District Property Information This information current as of 05/18/2000. TAD Number: 00004952 PIDN: 14437 915 20 Owner's Name COTTON DEPOT, and Mailing 740 FRANCISCO BLVD W Address SAN RAFAEL CA 94901-3927 Location 1000000 E 4TH ST Fort Worth, TX Legal FORT WORTH ORIGINAL TOWN Description BLK 91 LOTS 5 & 6 LESS R R Jchool Fort Worth Isd (905) City JIFort Worth (26) Special Districts 099 This information is intended for reference only and is subject to change. It may not accurately reflect the complete status of the account as actually carried in Tarrant Appraisal District's database and may not be used as a basis of protest or appeal. Properties which do not have 2000 Proposed values will be shown with a zero value. This does not mean that the value for 2000 is zero, it only means that we have not yet sent a 2000 value notice. PROPERTY VALUES PROPERTY INFORMATION Tax Year 2000 Proposed Value Year Built 9999 Building Value $6,750 Pool Land Value $50,184 Mapsco 63W Market Value $56,934 TAD Map 2048 396 Appraised Value* $56,934 Class 000 -- — -- Exemptions 000 State Code F1 Building Units 0 SQFT No. of Bedrooms 0 Land Acres 0.2800 No. of Bathrooms 0 Land Square Feet 12,546 No. of Garage Bays 0 -- — I Central Heat Deed Date 02211997 Central Air Deed Volume 0012745 Tax Agent Code 0 Deed Page 0000119 4. Site / Land Summary COTTON DEPOT FREIGHT TERMINAL BUILDING Location 701 East Fifth Street Tarrant County, Fort Worth, Texas "Gateway" site at primary entrance to the Fort Worth Central Business District (Northeast corner of State Highway Spur 280 and Santa Fe Railroad ROW). Site Data Land Areas: 5.789 Acres / 252,168 SF Total Land Area 4.56 Acres / 198,633 SF Non-Historic Frontages: 1,161 Feet - North Line of State Highway Spur 280 107 Feet - South Line of 4' Street (West Entry) 298 Feet - South Line of 4' Street(East Entry) 483 Feet -West Line of Fort Worth and Denver Railroad Street Improvements: State Highway Spur 280 (Extension of U.S. 287) is an 8-lane divided concrete interstate highway; 4' Street is a 2-lane asphalt street; 5' Street is a 2-lane asphalt street that dead-ends into the site; Nearby 4-lane 3 d Street is grade-separated from (goes under) the Santa Fe Railroad tracks and is planned to be a main entrance from the east into the entertainment area of Downtown (nearby Sundance Square). Utilities: All utilities are available and extended to the site. Zoning: H Commercial Downtown (Recommended for HSE Historic -Highly Significant Endangered (Tax Credit Overlay Pending) Land Area Not 4.90 Acres Currently Under Roof. Environmental: TNRCC Voluntary Clean-up Underway. Asbestos abated in historic building. Media Structures: Two 14'x40' Billboards - Currently Income Producing ---------- 4. Description of Project PROJECT SLTND4ARY Acreage /Location 5.789 Acres Located At 701 E. Fifth Street, Fort Worth, Texas - 4.56 Acres Non Historic Site Owner/Developer Cotton Depot, L.L.0 Development Manager G. Phillip Poole, Poole2 Real Estate Consultants, Fort Worth, Texas Architect James, Harwick + Partners, Dallas, Texas Community The Cotton Depot Residential Community will consist of at least 200 Urban Lofts and Live/Work spaces. Built in three and four story buildings. Loft mix and rental rate breakdowns are contained on an attached spreadsheet.' Features -Amenities Over one hundred lofts will feature an attached Direct access garage. The Historic Cotton Depot Terminal Building will be used as the Resident Community Center and Leasing Center. A Pool, Jacuzzi, Exercise Room, Business Center and'Security Systems will also be developed. Projected Start January, 2001 Projected Completion March, 2002 Projected Costs $18,250,000 Total - $17,100,000 Non-Historic Site 4 Project Description -Unit Mix � M �D N �O Vn 00 O y,.i M 0 0 0 0 0 C • O ai Sq 6O� 6F} 69 4u} 64 6q 6F} to to V1 O O U1 O C• N C� V 1 in .�, W) O 00 00 O� O 6F} 'U 6R 6A Gq 6s 4t} ip. O to O d 00 O O O ON u 00 W) in O N M I r- O C� M �G H CZ y N 0 \O O N O O -,e 00 00 — O 00 O O M O to t- 00 O*, C1 �t O\ CIO - ^' �W 0 N �- N-, O N � s.+ a� Cy Z P, a c A G ® d C4 C4 W U c U ► �D H 7.0 Employment and Construction Economic Benefits Cotton Depot Lots Economic Benefit Analysis,for 200 Lofts Adaptive Reuse of Historic Freight Terminal Construction Activity Site Improvements $ 1,950,000 Structure Hard Cost $11,680,000 Demolition $ 150,000 Construction Budget $13,780,000 Labor: @ 60% Percent $ 8,268,000 Materials: @ 40% Percent 5,512,000 Total Construction Activity $13,780,000 Economic Impact Multiplier @ 1.47 x Construction Cost $20,256,600 Total Construction Economic Benefit $34,036,600 Construction Jobs Created $8,268,000 / $25,000 = 330 Material Sales Tax $5,512,000 x .02 = $110,240 Permanent Jobs Manager $ 44,000 Assistant Manager $ 30,000 Leasing Associate $ 26,000 Maintenance Lead $ 36,000 Maintenance Assistant $ 26,000 Porter $ 18,000 Housekeeping $ 18,000 Annual Payroll 7 Permanent Jobs $ 198,000 Economic Impact Multiplier 1.14 x Annual Payroll $ 225,720 Annual Payroll Economic Benefit $ 423,720 U.S. Department of Commerce Bureau of Economic Analysis 7.D Employee Benefits N .0 hG Cd W ° 0 -1 O Q" Qom., o U 0 0 Cd a a o b Q Q cd x 0. � cd cd bn o A A > y cd M Q aH i w a a 0. a o cu 4L4 4- Cd o o° ° o 0 U a a `° o ,o E" A (Q W U Q v' TJ ^CJ W > 40a . � �3 as ti Q °' b a o cd U o w b A a. o .s o -d vR w N w cd v W v� > �� `� A �' o V-4 C a 0 z 9 Property ZOilW9 The property is currently zoned "H" Business. It was recommended for approval by the Zoning Commission on August 12, 1998 under Case Number Z98-100 and approved by City Council on September 8, 1998. The Landmarks.Commission recommended a 1.229 portion of the site (Historic Terminal) as HSE (Highly Significant Endangered). Approved by Zoning Commission July 12, 2000. 10 Property Platting The site is currently platted. However, it will be replatted into two lots in order to divide the property between the Historic Cotton Depot Terminal Building, which will be restored for use under a HSE overlay, from the adjacent larger parcel to be used for Residential dwelling units and zoned H (Central Business District). 11 Environmental Impact An independent Phase I Environmental Site Assessment summary was performed by Camp Dresser & McKee, Inc. This report outlined in detail the environmental problems discovered on this site. A Phase II site assessment was also completed. A TNRCC Voluntary Clean-up Program was then undertaken and completed. The final Certificate of Completion is pending and due from the State of Texas by September 1, 2000. This final report will complete all necessary environmental remedation and allow for full use of the site for all purposes including residential and mixed use. 12. Direct Benefits to the City of Fort Worth The City of Fort Worth in granting a tax abatement to this project is adding the needed support to a public / private partnership focused on central city revitalization. The City's $151,335 per year tax relief will offset in part the extraordinary expense of the reclamation of this abandoned, contaminated site along with the removal and restoration of 100-year-old utilities. The Cotton Depot site is unusable in its current condition. Fort Worth will reap the long-term gains of a "clean" development site within the Central Business District as well as completing the residential neighborhood that the Hillside Apartment development began. Without this partnership, the project becomes economically unfeasible for current development, and the added benefits to the City are unrealized. The City will derive numerous other direct benefits: • Impact fees, tap fees, and building permit fees will total approximately $155,000. • Two unsightly billboards will be removed from the site's scenic corridor frontage. A major visitor entryway into the City. • The abandoned, tilt-up concrete warehouse will be removed, thereby eliminating an eyesore at a main downtown entry point, Spur 280. • The adaptive reuse of the Cotton Depot Terminal building preserves a unique Fort Worth Historic landmark and complements the Warehouse District. • Numerous environmental concerns such as lead, asbestos containing materials, hydrocarbons, arsenic, and heavy metals are abated to provide a clean site. • Several,turn-of-the-century pubic utilities in need of repair, removal, or replacement will be included in the development's scope of work. • This project would complete the City's plan for 1,000 housing units in the CBD. • The Cotton Depot Lofts Development will create seven permanent jobs as well as over three hundred construction jobs. • A residential community in this area will promote pedestrian activity and increased use of the nearby Sundance Square entertainment district. • This project will provide an additional housing choice - Live / Work Lofts - for downtown living. • The creation of a residential community on this site is in keeping with the surrounding neighborhood and creates a unified appearance for the area, using an architectural form compatible with the surrounding warehouse district and in scale with the Rock Island Hillside residential community. 16. Abatement Needed for Development Success The proposed tax abatement application for the Cotton Depot Lofts comes after over three years of development study where a number of alternative uses for the site were considered. They included mixed tenant retail, a limited service hotel, a city market - utilizing the existing structure, and finally the demolition of the entire building and use as an office building site. The viability of each use was explored and numerous design options considered. The limited access of the site and the rail lines bordering it, created severe limitations for all potential uses. The highest and best use currently for the site is proposed in this application. It includes a historic renovation of the depot terminal building, the use of a connecting link utilizing salvaged historic materials and the construction of loft-style housing on the remainder of the site. The site is long and narrow and bounded on all sides by existing uses including a main highway entry into the City (State Hwy. 280), the adjacent Hillside Residential Community and two rail lines which border the east and west boundaries. Because of the large amount of land available (nearly 6 acres) and the limited possibility of subdividing the land, the value of the site is substantial. The property owners felt its close proximity to downtown and Sundance Square, and borne out by the prices of comparable adjacent properties has created a high basis in the land. The.land value has also been increased substantially to cover the cost of the environmental clean up. The completion of the TNRCC Voluntary Clean-up Program has increased the cost of the land by nearly $400,000. In creating the most attractive and viable development on this gateway site, the best development program provides for residential lofts, which will allow the limited access to become a positive factor. Because of its close proximity to downtown, this site offers high walkability and quick connection to jobs downtown as well as Sundance Square. Due to the land cost, the economic impact of environmental clean up, and the constraints of the land's shape, the investment return without tax abatements is limited. Also with the high cost of removal and retrofitting of old utilities and infrastructure, the return on investment is just over 8%. This is a non-feasible amount for equity investment, construction or permanent mortgage lending. With the city and county supported abatement, the return is increased to 9.3%, which meets the very minimum viability threshold of the Developer and their lenders. In addition, a limited window of opportunity now presents itself for the development of additional downtown housing. The city in the last year has absorbed over 800 units housing near the CBD. The lack of available residential development will leave a significant amount of proven demand unmet and create a lull in downtown residential absorption. The success of this project, because of its closer proximity to downtown and its unique design program, will be made possible and enhanced by the abatement of city property taxes. CITY GATEWAY BEAUTIFICATION To create a significant gateway into this discarded area of the city, where over 30,000 vehicles pass daily, the development program also includes the removal of two, large y 14'x40' billboards, currently on the site. The developer proposes to remove these two billboards, which leaves only one remaining billboard on the northern face of Hwy.. 280 as visitors enter the city. This third billboard is on railroad-controlled land. The developer commits to work with Scenic Fort Worth and other groups in soliciting its removal as well. The income from these two structures over the 50-year land lease is in excess of $400,000. The termination of these two billboard leases is a substantial financial loss to the site's owners and constitutes a major investment in the beautification of the city's gateway. Incentives for the re-development of CBD and Tier 1 Residential Communities creates as an additional by-product to the city an increase in sales tax revenue, street level pedestrian activity, and further completes a highly visible development area of the city. C) C) C) C) C) CD C) 00 t- t- V- C� C) C) CD C:) CD C:) CD V. oo oo `o (=) C) C) C;� C) C) C) C=) �o C� 5 lz cu C5 C6 C; 6 C5 0 kr) t-7 C', 1' 06 W) C) in W) 00 N t17 c1r) It C) Cf) cli t� ci m ZO .6S b4 609- 64 64 64 6s V- 6q 6 � 6q C) C:) C) C) C) C) C) O 'd. oc N e4 'd, C) C) C) C) C) C:D CD CD r., oo tr) "o e,4 N C:) ri C� c� C=� ck ck (=� (=� ck "o -1 60 od r,� C) 2LI C:) CD c) c) C:, C) C) rz zf r-- 6 C� W) wl CD in W) 00 —4 c1r) m N o M 't N --4 � m r-I It 00 th "It cq m C4 � cli ri cl� 0 E! 0 64 64 4E • 64 64 64 16S 609- 64 sFr -6S iO9r sR � > 00000 00o "It oo tn oo C7.1 C) C) C:) CD C:) C) (D C) c= oc �10 en (Z Wl C) c= 00000 000 —I 00000 C5 tri t4 rz N C W) In 0 to In 00 �c m d C71% .-I m d" cq 00 to d^ > C'4 1-4 64 64 SS 464 U • 64 64 fA- 64 69 64 64 fjq- 6R 64 co 04 0 0 Q4 z x =4 4) GV W XC14 Cr 3 C� 14 Eo- uc,) E-04 C" 84 z Exhibit 1 Cotton Depot Lofts Tax Abatement Structure The proposed tax abatement percentage is based on a level established from the amount of participation of M/WBE companies and Fort Worth companies in the construction of the project, removal of two billboards which are in the reinvestment zone (RZ#36), and environmental remediation of the property. This percentage will then be the base level of abatement for the term of the abatement. If any of the base abatement commitments are not met,the base abatement will be zero. Each year for the term of the abatement, an annual audit will be conducted to verify compliance to commitments for an additional abatement percentage. If it is determined the commitments have been met in the employment and supplies & services expenditures categories, an additional abatement percentage will be earned for that year. In any year that the commitments are not met in either category, the abatement is reduced to zero. At no time will the abatement exceed 100%. The proposed schedule for the establishment of the tax abatement percentage is as follows: Abatement Commitments Abatement % Base Abatement 75% 20% of construction expenditures to M/WBE companies 30% of construction expenditures to Fort Worth companies Removal of the two billboards that are currently on the property Environmental remediation of the property Additional Abatement 25% Employment Total Employment: 7 Fort Worth Residents: 5 (67%) Inner City Residents: 2 (30%) Annual Supplies & Services Expenditures Total Expenditures: $200,000 Fort Worth Companies: $140,000 (70%) M/WBE Companies: $ 60,000 (30%) Total Abatement 100% City of Fort Forth, Texas 4"FAY)OW sped coundl Communication DATE REFERENCE NUMBER LOG NAME PAGE 8/29/00 C-18209 1 02DEPOT 1 of 3 SUBJECT FINDINGS CONCERNING AND EXECUTION OF A TAX ABATEMENT AGREEMENT WITH COTTON DEPOT, LLC RECOMMENDATION: It is recommended that the City Council: 1. Find that the improvements described below, contained within the attached agreement, are feasible and practical and would be a benefit to the land and to the City after expiration of the tax abatement agreement; and 2. Find that the property subject to abatement, in its current state, retards the provision of much- needed housing accommodations in and near downtown Fort Worth and constitutes an economic and social liability due to the presence of deteriorating structures and inadequate sidewalk facilities for pedestrians in the area; and 3. Find that written notice of the City's intent to enter into the attached Tax Abatement Agreement and copies of the Agreement were delivered to all affected taxing units in accordance with state law; and 4. Find that the terms and conditions of the Agreement and the property subject to the Agreement meet the criteria of the City's Tax Abatement Policy Statement for Qualifying Development Projects (the "Tax Abatement Policy") as approved on February 29, 2000 (M&C G-12829, Resolution No. 2617); and 5. Authorize the City Manager to enter into the attached Tax Abatement Agreement with Cotton Depot, LLC in accordance with the Tax Abatement Policy. DISCUSSION: The property subject to abatement is located at 701 East Fifth Street in downtown Fort Worth, COUNCIL DISTRICT 9. The City Council has designated this property as Tax Abatement Reinvestment Zone Number 36. Project Cotton Depot, LLC proposes to develop at least 200 residential lofts and live/work spaces utilizing a historically significant building while beautifying a highly visible gateway to the city. The development will include a swimming pool, jacuzzi, exercise room, business center, and security systems. In preparing the property for construction, the company began environmental remediation, which is estimated to have a final cost of $400,000. Additionally, the company will remove the two billboards on the property, which will result in the loss of approximately $400,000 of income to the owners. The total investment is estimated at $17,100,000. Employment Cotton Depot, LLC plans_ to hire 7 employees, of whom 67% will be Fort Worth residents, and 30% will be "inner city" residents. City of Fort Worth, Texas 4VIANOW CAnd Coundt Communication DATE REFERENCE NUMBER LOG NAME PAGE 8/29/00 02DEPOT 2 of 3 C-18209 I SUBJECT FINDINGS CONCERNING AND EXECUTION OF A TAX ABATEMENT AGREEMENT WITH COTTON DEPOT, LLC Utilization of Fort Worth Businesses The company has committed 30% of total construction spending to Fort Worth based construction contractors and/or subcontractors. Additionally, the company has committed 70% of total supply and service expenditures to Fort Worth companies. Utilization of M/WBE Businesses Cotton Depot, LLC has committed 20% of total construction spending to certified Minority and Women Business Enterprises (M/WBE) construction contractors and/or subcontractors. Additionally, the company has committed 30% of total supply and service expenditures to certified M/WBE companies. ABATEMENT TERMS - Cotton Depot, LLC will receive a graduated ten-year tax abatement on real property that could reach a maximum of 100% annually. Personal property is not abated. The abatement incorporates Cotton Depot's construction expenditures, total supply and service spending, and employment. The abatement is structured as follows: Base abatement of 75% for the following: ® 20% of construction expenditures to certified M/WBE companies; and ® 30% of construction expenditures to Fort Worth companies; and ® Removal of the two billboards that are currently on the property; and 0 Environmental remediation of the property. If any of the base abatement commitments are not met, the base abatement will be zero. Additional abatement of 25% for the following: Annual Employment Total employment - 7 Fort Worth residents - 5 "Inner City" residents - 2 Annual Supply & Service Expenditures Total expenditures $ 200,000 Fort Worth companies $ 140,000 Certified M/WBE companies $ 60,000 In any year that the annual commitments are not met in either the employment or supply and service expenditures categories, the additional abatement percentage will be zero. The total tax abatement has a cap of 100% per annum. If the maximum abatement is reached, the abated taxes are projected to be $151,335 annually. City of Fort Worth, Texas ovarjor 619d couwil Communication DATE REFERENCE NUMBER I LOG NAME PAGE 8/29/00 C®1 8209 02DEPOT 3 of 3 SUBJECT FINDINGS CONCERNING, AND EXECUTION OF A TAX ABATEMENT AGREEMENT WITH COTTON DEPOT, LLC FISCAL INFORMATION/CERTIFICATION: The Finance Director certifies that no expenditure of City funds is associated with approval of this agreement. MG-.j Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY Office by: (to) APPROVED Mike Groomer 6140 CITY COUNCIL Originating Department Bead: AUG 29 2000 Tom Higgins 6192 (from) Additional Information Contact: Ciey Sacrarg of the amity at t=ar'Worth.',,-,:,,. Ardina Washington 8003