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HomeMy WebLinkAboutContract 27982 ti CCITY ONTRACT NO Y ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Agreement") is made and entered into by and between the CITY OF FORT WORTH ("City"), a home rule municipal corporation organized under the laws of the State of Texas, and RADIOSHACK CORPORATION ("RadioShack"), a Delaware corporation. RECITALS WHEREAS, the City has created an Economic and Community Development Department in order to, among other things, oversee economic development programs authorized by Texas law and approved by the City Council, including those authorized by Chapter 380 of the Texas Local Government Code, to promote state and local economic development and to stimulate business and commercial activity in the City; and WHEREAS, in accordance with the 2000 Comprehensive Plan adopted by the City Council pursuant to M&C G-12975 on August 1, 2000, the City's economic development programs are based on a model of custom-designed incentives and partnership programs with private businesses on a case-by-case analysis of individual projects to help ensure the growth and diversification of the local economy; and WHEREAS, the City Council has found and determined that by entering into this Agreement, the potential economic benefits that will accrue to the City under the terms and conditions of this Agreement are consistent with the City's economic development objectives; Page 1 I(J� u` r'` 'Uie. � Economic Development Program Agreement between City of Fort Worth and RadioShack CorporationY�'�-'�'�-i� NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: AGREEMENT SECTION 1. INCORPORATION OF RECITALS The City Council hereby finds that the recitals set forth above are true and correct and form the basis upon which the City has entered into this Agreement. SECTION 2. PURPOSE 2.1. Obiectives. RadioShack's current corporate headquarters are located in what is commonly referred to as the Tandy Center in downtown Fort Worth. RadioShack has sold the Tandy Center to a third party and intends to build a new corporate headquarters at another location. RadioShack is exploring a number of locations for construction of a state-of-the-art corporate campus, including locations outside of the City. One of the locations that RadioShack is considering for this purpose is property in downtown Fort Worth that is the current site of the Ripley Arnold Apartments (the "Downtown Site") as well as certain other real property adjacent to the Downtown Site already owned by RadioShack. The Fort Worth Local Development Corporation ("LDC"), a Texas non-profit corporation, owns the Page 2 Economic Development Program Agreement between City of Fort Worth and RadioShack Corporation VL 'i, A Downtown Site and has entered into an agreement with RadioShack dated October 30, 2001 ("Purchase and Put Option Agreement") under which, among other things, RadioShack may acquire the Downtown Site in accordance with the terms and conditions of the Purchase and Put Option Agreement. The City believes that the well-being of the north portion of downtown rests, in large part, on the continued presence of RadioShack's corporate headquarters in that area. Consequently, the City strongly favors RadioShack's relocation to the Downtown Site. The parties acknowledge that the present infrastructure in the vicinity of the Downtown Site is insufficient to support anticipated development by RadioShack and that the costs of development at the Downtown Site will greatly exceed the costs of comparable development on raw land at another site. RadioShack wishes to continue its historical presence in the City's downtown area and to play a significant role in its future revitalization. However, in order to justify a relocation to the Downtown Site, RadioShack has requested an economic assistance package from the City so that its costs for development, improvement and expansion of the Downtown Site will be more comparable with,rather than greatly exceeding, those associated with raw land. 2.2. Concept. The parties have jointly developed the concept behind the Program outlined in this Agreement. The Program is designed to make up for the increased costs that RadioShack will incur as a result of its relocation to the Downtown Site rather than at a suburban site in the City or another municipality. Page 3 Economic Development Program Agreement t` between City of Fort Worth and RadioShack Corporation 2.3. Structure. RadioShack's development of the Downtown Site will result in increased property tax revenues to the City and other taxing units with jurisdiction in that area. Under the Program, a portion of this new tax revenue will be used to support the development of infrastructure in and around the Downtown Site, which in turn will enhance additional development in the area, and to fund an economic development grant to RadioShack in order to help RadioShack offset its increased costs associated with its development of the Downtown Site. To accomplish these objectives, the City will provide RadioShack with an economic development grant based on the amount of revenue received by the City from RadioShack's property taxes on the Downtown Site and on compliance by RadioShack with various commitments that will benefit the City, as further provided in this Agreement. In addition, pursuant to Chapter 311 of the Texas Tax Code, the City will establish a tax increment reinvestment zone that includes the Downtown Site (the "TIF", as more specifically defined in Section 2 hereof) in order to finance public work and public improvement projects in the TIF or that directly benefit the TIF. Although the City will not participate in the TIF, the City will use reasonable efforts to negotiate interlocal agreements with Tarrant County and other eligible taxing entities to participate in the TIF. Property taxes of RadioShack and other TIF property owners that are paid into the TIF by taxing units that are participating in the TIF will be used to pay for these projects. Both RadioShack and the City anticipate (i) that tax revenues paid into the TIF, Page 4 :u, 'il Economic Development Program Agreement U_L Y between City of Fort Worth and RadioShack Corporation -L . .,...��7 !!;'tip u�SW. E including those generated by RadioShack, will be sufficient to pay for these public work and public improvement projects and (ii) that rebated RadioShack- generated tax revenues and the economic development grant will help offset the additional costs incurred by RadioShack as a result of its relocating to the Downtown Site rather than on raw land elsewhere. Under this structure, the City will only commit funds to RadioShack that are brought to the City by RadioShack. SECTION 3. DEFINITIONS Capped Taxable Appraised Value means the maximum taxable appraised value of RadioShack Property for a given tax year, as set forth in Exhibit "B", attached hereto and hereby made a part of this Agreement for all purposes, on which the City will calculate its Program Grant to RadioShack for that tax year. Central City means the area of the corporate limits of the City within Loop 820 (i) consisting of all Community Development Block Grant ("CDBG") eligible census block groups; (ii) all state-designated enterprise zones; and (iii) all census block groups that are contiguous by seventy-five percent (75%) or more of their perimeter to CDBG eligible block groups or enterprise zones, as well as any CDBG-eligible block in the corporate limits of the City outside Loop 820, as more specifically depicted in the map of Exhibit "A", attached hereto and hereby made a part of this Agreement for all purposes. Central City Resident means an individual whose principal place of residence is at a location within the Central City. Page 5 Economic Development Program Agreement i between City of Fort Worth and RadioShack Corporation Certified M/WBE means a minority or woman-owned business that has received certification as either a minority business enterprise (MBE) or a woman business enterprise (WBE) by either the City, the North Texas Regional Certification Agency (NTRCA) or the Texas Department of Transportation(TxDOT), Highway Division. Excess RadioShack Property Taxes means the positive difference, if any, between property tax revenue received by the City in a given tax year which is based on the entire taxable appraised value of RadioShack Property and that which is based on the Capped Taxable Appraised Value for the same tax year in accordance with Exhibit `B". For example, and as an example only, if the Capped Taxable Appraised Value in a given tax year is $500,000 and the entire taxable appraised value of RadioShack Property for that tax year is actually $750,000, Excess RadioShack Property Taxes would be the tax revenue received by the City for that tax year based on the $250,000 difference between $750,000 and$500,000. Fort Worth Company means a business that has a principal office located within the corporate limits of the City. Fort Worth Resident means an individual whose principal place of residence is located within the corporate limits of the City. Full-time Job means a job filled by one (1) individual for a period of not less than forty(40) hours per week. Program means the economic development program authorized by Chapter 380 of the Texas Local Government Code and established and outlined in this Agreement. Program Grants means the annual economic development grants paid by the City to RadioShack in accordance with this Agreement and as part of the Program. Page M Economic Development Program Agreement „ U`, I between City of Fort Worth and RadioShack Corporation L' RadioShack means RadioShack Corporation, and all companies under common control with, controlled by, or controlling RadioShack Corporation. For purposes of this definition, "control' means fifty percent (50%) or more of the ownership determined by either value or vote. RadioShack Propert y means real and personal property owned or leased by RadioShack (i) on which RadioShack is required to pay real and/or personal property taxes to the City and (ii) that is located on the Downtown Site. RadioShack Property Taxes means the amount of real and personal property tax paid in a given tax year by RadioShack to the City based on the lesser of(i) the entire taxable appraised value of RadioShack Property or (ii) the Capped Taxable Appraised Value. The entire taxable appraised value of RadioShack Property will be established solely by the appraisal district that has jurisdiction over the TIF at the time, with the understanding that RadioShack shall retain all rights to protest and contest any such appraisals. With respect to property leased by RadioShack, RadioShack Property Taxes include that portion of annual property tax, prorated on a daily basis, which is attributable to the period during which RadioShack was the lessee of such property. TIF means the geographic area designated by the City as a Reinvestment Zone eligible for tax increment financing under § 311.003 of the Texas Tax Code, which will include the Downtown Site and is more specifically set forth on Exhibit "C", attached hereto and hereby made a part of this Agreement for all purposes. Page 7 Economic Development Program Agreement between City of Fort Worth and RadioShack Corporation ...._ �. ;. �� ri��. SECTION 4. TERM This Agreement shall be effective as of the date of execution by both parties and shall expire upon payment by the City to RadioShack of the thirtieth (30th) annual Program Grant, as provided by Section 6 hereof(the "Term"), unless terminated earlier as provided by and in accordance with this Agreement. SECTION 5. RADIOSHACK OBLIGATIONS 5.1. Required Improvements. The commitments set forth in Sections 5.1.1, 5.1.2 and 5.1.3 may hereafter be referred to, either in an individual or a collective sense, as the "Base Commitments". 5.1.1. Construction of Corporate Campus. RadioShack will make real and personal property investments at the Downtown Site of at least $200 million, including site development costs and as further depicted in Exhibit "D", attached hereto and hereby made a part of this Agreement for all purposes (the "Required Improvements"), by June 30, 2005. 5.1.2. Use of Fort Worth Companies. Without regard to the actual amount of dollars spent on the Required Improvements, RadioShack will spend at least twenty-five Page 8 Economic Development Program Agreement --. 6. between City of Fort Worth and RadioShack Corporation percent (25%) of its construction costs for the Required Improvements with contractors that are Fort Worth Companies. 5.1.3. Use of Certified M/WBEs. Without regard to the actual amount of dollars spent on the Required Improvements, RadioShack will spend at least ten percent (10%) of its construction costs for the Required Improvements with contractors that are Certified M/WBEs. Dollars spent with a Certified M/WBE that is also a Fort Worth Company will be calculated at 1.5 times their face value (so that if, for example, RadioShack spends $1,000 with a Certified M/WBE that is also a Fort Worth Company, RadioShack will be deemed to have spent $1,500 with such Certified M/WBE for purposes of determining whether RadioShack has met its ten percent (10%) Certified M/WBE spending requirement under this Section 5.1.3. 5.2. Employment Commitments. As of the date of execution of this Agreement, RadioShack employs approximately 2,300 employees in its headquarters location in the Charles D. Tandy Center and Technology Center. Determination of compliance with this Section 5.2 shall be based on RadioShack's employment data as of August 1 of each year for which the requirements under this Section 5.2 are in effect. 5.2.1. Fort Worth Residents. At all times during each of the calendar years 2005 through 2014, RadioShack will provide at least 1,000 Full-time Jobs on the Downtown Site to Fort Worth Residents. At all times during each of the calendar Page 9 Aa Economic Development Program Agreement between City of Fort Worth and RadioShack Corporation , years 2015 through 2024, RadioShack will provide at least 750 Full-time Jobs on the Downtown Site to Fort Worth Residents. At all times during each of the calendar years 2025 through 2034, RadioShack will provide at least 500 Full-time Jobs on the Downtown Site to Fort Worth Residents. 5.2.2. Central City Residents. At all times during each of the calendar years 2005 through 2014, RadioShack will provide at least 250 Full-time Jobs on the Downtown Site to Central City Residents. At all times during each of the calendar years 2015 through 2024, RadioShack will provide at least 200 Full-time Jobs on the Downtown Site to Central City Residents. At all times during each calendar years 2025 through 2034, RadioShack will provide at least 150 Full-time Jobs on the Downtown Site to Central City Residents. 5.3. Supply and Service Expenditures. 5.3.1. Fort Worth Companies. Beginning with calendar year 2005, and each year for a period of ten (10) years thereafter, RadioShack will spend at least $1.2 million in local discretionary funds for supplies and services directly provided in connection with the operation of the Required Improvements with Fort Worth Companies. 5.3.2. Certified MIWBEs. Beginning with calendar year 2005, and each year for a period of ten (10) years thereafter, RadioShack will spend at least $200,000 in local discretionary funds for supplies and services directly provided in Page 10 Economic Development Program Agreement �•- 6 between City of Fort Worth and RadioShack Corporation r connection with the operation of the Required Improvements with Certified M/WBEs. Dollars spent with a Certified M/WBE that is also a Fort Worth Company will be calculated at 1.5 times their face value (so that if, for example, RadioShack spends $1,000 with a Certified M/WBE that is also a Fort Worth Company, RadioShack will be deemed to have spent $1,500 with such M/WBE for purposes of determining whether RadioShack has met its $200,000 Certified M/WBE spending requirement under this Section 5.3.2. 5.4. Employment Opportunities. From the effective date of this Agreement until at least August 7, 2006, RadioShack will (i) on a regular basis identify and make known to the Fort Worth Housing Authority ("FWHA") available employment positions and/or training programs with RadioShack and (ii) give preference to qualified FWHA residents for placement in such positions and/or programs, as specifically provided in that Memorandum of Agreement between RadioShack and FWHA dated on or about August 8, 2001, attached hereto as Exhibit "E" and hereby made a part of this Agreement for all purposes. 5.5 Audits. RadioShack agrees that the City will have the right to audit the financial and business records of RadioShack that relate to the Downtown Site and the Required Improvements (collectively "Records") at any time during the first ten (10) years of the Term of this Agreement in order to determine compliance with this Agreement. RadioShack shall make all Records available eta the-City at the Page 11 Economic Development Program Agreement between City of Fort Worth and RadioShack Corporation Downtown Site or at another location in the City acceptable to both parties following reasonable advance notice by the City and shall otherwise cooperate fully with the City during any audit. SECTION 6. PROGRAM GRANTS Beginning in calendar year 2006 and without regard to the date of termination of the TIF, the City will pay to RadioShack thirty (30) annual Program Grants calculated in accordance with this Section 6. 6.1. Base Benefit. The amount of each annual Program Grant paid during the Term of this Agreement shall be based on the Base Benefit. The "Base Benefit" shall equal (i) the RadioShack Property Taxes for the previous tax year multiplied by (ii) the Compliance Percentage, as defined in and calculated in accordance with Section 6.2. The Compliance Percentage shall be determined on the earlier of June 30, 2005 or the date of issuance of a final certificate of occupancy for all of the Required Improvements. 6.2. Compliance Percentage. The Compliance Percentage shall equal (i) one hundred percent (100%) minus (ii) the aggregate percentages, if any, by which RadioShack failed to meet its Base Commitments, as specifically set forth in Sections 5.1.1, 5.1.2 and 5.1.3 (each a "Commitment Non-compliance Percentage"). The aggregate Commitment Non-compliance Percentage shall be the sum of the following: a P' Page 12 Economic Development Program Agreement between City of Fort Worth and RadioShack Corporation =- j➢ D ^e 6.2.1. Commitment With Regard to Construction (Section 5.1.1). If RadioShack fails to spend at least $200 million on the Required Improvements by June 30, 2005, the Commitment Non-compliance Percentage related to Section 5.1.1 shall equal the difference between (i) one hundred percent (100%) and (ii) a fraction where (a) the numerator is the actual amount of dollars spent by RadioShack on the Required Improvements as of June 30, 2005 and where (b) the denominator is $200 million. In other words, by way of example only, if as of June 30, 2005 RadioShack had spent only $190 million on the Required Improvements, the Commitment Non-compliance Percentage under this Section 6.2.1 would be five percent (5%), which is 100% minus [$190 million/$200 million, or 95%]. 6.2.2. Commitment with Regard to Use of Fort Worth Companies (Section 5.1.2). If RadioShack fails to spend at least at least twenty-five percent (25%) of its construction costs for the Required Improvements with contractors that are Fort Worth Companies, the Commitment Non- compliance Percentage related to Section 5.1.2 shall equal the difference between (i) one hundred percent (100%) and (ii) a fraction where (a) the numerator is the number of dollars actually spent with contractors that are Fort Worth Companies in the construction of the Required Improvements and where (b) the denominator is the product of the total number of dollars actually spent in the construction of the Required Improvements multiplied by .25 (25%). In other words, by way of example only, if z Page 13 Economic Development Program Agreement f between City of Fort Worth and RadioShack Corporation 1�5 June 30, 2005 RadioShack had spent $200 million on the Required Improvements, $45 million of which was with Fort Worth Companies, the Commitment Non-compliance Percentage under this Section 6.2.2 would be ten percent (10%), which is 100%minus [$45 million divided by {$200 million x .25}, or$45 million/$50 million, or 90%]. 6.2.3. Commitment with Retard to Use of Certified M/WBEs (Section 5.1.3). If RadioShack fails to spend at least at least ten percent (10%) of its construction costs for the Required Improvements with contractors that are Certified M/WBEs, the Commitment Non-compliance Percentage related to Section 5.1.3 shall equal the difference between (i) one hundred percent (100%) and (ii) a fraction where (a) the numerator is the number of dollars actually spent with contractors that are Certified M/WBEs in the construction of the Required Improvements and (b) the denominator is the product of the total number of dollars actually spent in the construction of the Required Improvements multiplied by .10 (10%). In other words, by way of example only, if as of June 30, 2005 RadioShack had spent $200 million on the Required Improvements, $16 million of which was with Certified M/WBEs, the Commitment Non-compliance Percentage under this Section 6.2.3 would be twenty percent (20%), which is 100% minus [$16 million divided by {$200 million x .10}, or $16 million/$20 million, or 80%]. Page 14 Economic Development Program Agreement between City of Fort Worth and RadioShack Corporation �` 6.2.4. Cumulative Nature. The Commitment Non-Compliance Percentage shall be cumulative for purposes of determining the Compliance Percentage. In other words, taking the examples used in Sections 6.2.2 and 6.2.3, if RadioShack spent $200 million on the Required Improvements, $45 million of which was with Fort Worth Companies and $16 million of which was with Certified M/WBEs, the aggregate Commitment Non-compliance Percentage would equal thirty percent (30%), which is the sum of the 10% Commitment Non-Compliance Percentage under Section 6.2.2 and the 20% Commitment Non-Compliance Percentage under Section 6.2.3. Therefore, under that example, the Compliance Percentage would be seventy percent (70%) and the Base Benefit would be seventy percent (70%) of the RadioShack Property Taxes for the previous tax year. 6.2.5. No Offsets. A deficiency in attainment of one Base Commitment may not be offset by exceeding another Base Commitment. In other words, if RadioShack exceeded its Base Commitment to spend at least twenty-five percent (25%) of its construction costs on the Required Improvements with Fort Worth Companies by five percent (5%) but failed to attain its Base Commitment to spend at least ten percent (10%) of its construction costs on the Required Improvements with Certified M/WBEs by five percent (5%), the Commitment Non-Compliance Percentage would still be Page 15 u, f Economic Development Program Agreement { �� between City of Fort Worth and RadioShack Corporation five percent (5%) on account of RadioShack's failure to meet the latter Base Commitment. 6.3. Program Grants During 2006-2015. Each annual Program Grant paid by the City to RadioShack during calendar years 2006 through 2015 shall be based on a combination of the Base Benefit and RadioShack's compliance with its commitments under Sections 5.2.1, 5.2.2, 5.3.1 and 5.3.2, as follows: 6.3.1. Base Benefit Component(50%). RadioShack shall automatically receive fifty percent (50%) of the applicable Base Benefit as part of each annual Program Grant paid during calendar years 2006 through 2015. 6.3.2. Fort Worth Resident Employment (25%). If during the previous tax year RadioShack has complied with its commitment to provide at least the number of Full-time Jobs on the Downtown Site to Fort Worth Residents required for that year, as set forth in Section 5.2.1 of this Agreement, RadioShack's Program Grant for the next calendar year shall be increased by an amount equal to twenty-five percent(25%) of the applicable Base Benefit. 6.3.3. Central City Resident Employment (15%). If during the previous tax year RadioShack has complied with its commitment to provide at least the number of Full-time Jobs on the Downtown Site to Central City Residents required for that year, as set forth in Section 5.2.2 of this Agreement, RadioShack's Program Grant for Page 16 Economic Development Program Agreement between City of Fort Worth and RadioShack Corporation J U r the next calendar year shall be increased by an amount equal to fifteen percent (15%) of the applicable Base Benefit. 6.3.4. Discretionary Spending with Fort Worth Companies (5%). If during the previous calendar year RadioShack has complied with its commitment to spend at least $1.2 million in local discretionary funds for supplies and services directly provided in connection with the operation of the Required Improvements with Fort Worth Companies, as set forth in Section 5.3.1 of this Agreement, RadioShack's Program Grant for the next calendar year shall be increased by an amount equal to five percent (5%) of the applicable Base Benefit. 6.3.5. Discretionary Spending with Certified M/WBEs (5%). If during the previous calendar year RadioShack has complied with its commitment to spend at least $200,000 in local discretionary funds for supplies and services directly provided in connection with the operation of the Required Improvements with Certified M/WBEs, as set forth in Section 5.3.2 of this Agreement (and as adjusted as provided in Section 5.3.2 for any Certified MWBE that is also a Fort Worth Company), RadioShack's Program Grant for the next calendar year shall be increased by an amount equal to five percent (5%) of the applicable Base Benefit. 6.3.6. No Offsets. A deficiency in attainment of any of the commitments set forth in Sections 5.2.1, 5.2.2, 5.3.1 and/or 5.3.2 may not be offset by exceeding another of such commitments. In other words, if in a given year Page 17 Economic Development Program Agreement .1 between City of Fort Worth and RadioShack Corporation RadioShack exceeded its commitment, as set forth in Section 5.3.1, to spend at least $1.2 million in discretionary funds for supplies and services with Fort Worth Companies by $100,000 but spent only $100,000 in discretionary funds for supplies and services with Certified MJWBEs instead of$200,000, as required by Section 5.3.2, RadioShack's Program Grant would still be reduced in the next calendar year by five percent (5%) for its failure to meet its commitment under Section 5.3.2. 6.4. Program Grants During 2016-2035. Each annual Program Grant paid by the City to RadioShack during calendar years 2016 through 2035 shall be based on a combination of the Base Benefit and RadioShack's compliance with its commitments under Sections 5.2.1 and 5.2.2, as follows: 6.4.1. Base Benefit Component(50%). RadioShack shall automatically receive fifty percent (50%) of the applicable Base Benefit as part of each annual Program Grant paid during calendar years 2016 through 2035. 6.4.2. Fort Worth Resident Employment(30%). If during the previous tax year RadioShack has complied with its commitment to provide at least the number of Full-time Jobs on the Downtown Site to Fort Worth Residents required for that year, as set forth in Section 5.2.1 of this Agreement, RadioShack's Program Grant for the next calendar year shall be increased by an amount equal to thirty percent (30%) of the applicable Base Benefit. Page 18 II 5 t �_ e Economic Development Program Agreement between City of Fort Worth and RadioShack Corporation ^;�1�ISZ, 6.4.3. Central City Resident Employment (20%). If during the previous tax year RadioShack has complied with its commitment to provide at least the number of Full-time Jobs on the Downtown Site to Central City Residents required for that year, as set forth in Section 5.2.2 of this Agreement, RadioShack's Program Grant for the next calendar year shall be increased by an amount equal to twenty percent (20%) of the applicable Base Benefit. 6.4.4. No Offsets. A deficiency in attainment of a commitment set forth in either Section 5.2.1 or 5.2.2 may not be offset by exceeding a commitment in the other Section, as illustrated, by way of example only, in Section 6.3.6. 6.5. Excess RadioShack Property Taxes Excluded for Program Grants. RadioShack understands and agrees that any Excess RadioShack Property Taxes received by the City shall remain the property of the City; that the City will not at any time be required to pay RadioShack any Excess RadioShack Property Taxes as part of the Program; and that Excess RadioShack Property Taxes received in one year will not in any manner be applied to or carried over to any Program Grant to RadioShack in a subsequent year. 6.6. Deadline for Payment. Annual Program Grants will be paid to RadioShack on or before June 1 of 2006 and of each subsequent calendar year during the Term of this Agreement. Page 19 r" Economic Development Program Agreement N �` between City of Fort Worth and RadioShack Corporation SECTION 7. THE TIF 7.1. TIF Formation. The City will use reasonable efforts to form the TIF in accordance with Section 311,005 of the Texas Tax Code and to secure the participation of all eligible taxing jurisdictions in the TIF. It is anticipated that the term of the TIF will expire upon the earlier of(i) thirty (30) years from the effective date of the City ordinance creating the TIF or (ii) the date on which all TIF project costs, tax increment bonds and interest on those bonds have been paid in full. 7.2. TIF Board. The City will use reasonable efforts to give RadioShack appropriate representation on the TIF's board of directors. 7.3. TIF Proiects. TIF Funds may be used by the .TIF to pay for public works or public improvements within the TIF or that directly benefit the TIF or as otherwise allowed by Section 311.014 of the Texas Tax Code. The City and RadioShack anticipate that various TIF projects will benefit the Downtown Site and result in lower costs of development of the Downtown Site by RadioShack than would otherwise occur without the TIF's existence. However, this Agreement does not and shall not be construed to obligate the City to use City funds for any public works or public improvements within the TIF or that directly benefit the TIF, whether or not the City would or could be reimbursed by the TIF's board of directors for such projects. At the same time, subject to applicable law, this ' �fG Page 20 Economic Development Program Agreement s between City of Fort Worth and RadioShack Corporation 5rlyq Agreement does not and shall not be construed to prohibit the City from electing, in the City's sole discretion, to use City funds for any such public works or public improvements. SECTION 8. OTHER CITY OBLIGATIONS 8.1. Waiver of Development Fees. The City will waive all development, building, permit and similar fees at the Downtown Site. 8.2. Fast-Track Development Approvals. The City will provide a procedure to expedite all development approvals for the Downtown Site. 8.3. Enterprise Zone. The City will use reasonable efforts to obtain Enterprise Zone designation for the Downtown Site. SECTION 9. TERMINATION RadioShack may terminate this Agreement by providing written notice to the City (i) in the event that the City fails to establish the TIF as provided in Section 7.1 or (ii) on or before completion of the Required Improvements (as evidenced by issuance of any required certificate of occupancy) should RadioShack fail to obtain a commitment satisfactory to it for the reimbursement of any or all of the costs of constructing the Page 21 Economic Development Program Agreement between City of Fort Worth and RadioShack Corporation Required Improvements pursuant to a development contract, lease financing agreement or other arrangement between RadioShack and a bank or group of banks, developer, leasing company or other third party with resources sufficient to fund such costs. The City may terminate this Agreement at any time after June 30, 2005 or the date on which a final certificate of occupancy is issued for all of the Required Improvements, whichever is earlier, in the event that the Base Benefit, as calculated in accordance with Section 6.1, is zero (0) or less. Subject to the preceding sentence, RadioShack's failure in any given year to comply with all or any of the Base Commitments or the commitments set forth in Section 5.2.1, 5.2.2, 5.3.1 and 5.3.2 shall not place RadioShack in default hereunder or provide the City with the right to terminate this Agreement, but, rather, shall only be weighed against the amount of the Program Grant that the City is required to pay RadioShack in accordance with this Agreement and as specifically provided in Sections 6.3 and 6.4. SECTION 10. MUTUAL ASSISTANCE. The City and RadioShack will do all things reasonably necessary or appropriate to carry out the objectives, terms and provisions of this Agreement and to aid and assist each other in carrying out such objectives, terms and provisions. Page 22 � Economic Development Program Agreement between City of Fort Worth and RadioShack Corporation y SECTION 11. REPRESENTATIONS AND WARRANTIES. The City represents and warrants to RadioShack that the Program and this Agreement are within the scope of its authority and the provisions of the charter and code of the City and that it is duly authorized and empowered to establish the Program and enter into this Agreement. RadioShack represents and warrants to the City that it has the requisite authority to enter into this Agreement. SECTION 12. SECTION OR OTHER HEADINGS. Section or other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. SECTION 13. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the parties with respect to the transaction contemplated herein. Page 23 Economic Development Program Agreement U7 �Iji � between City of Fort Worth and RadioShack Corporation SECTION 14. AMENDMENT. This Agreement may only be amended, altered, or revoked by written instrument signed by the City and RadioShack. SECTION 15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and inure to the benefit of the parties, their respective successors and assigns. Provided that RadioShack is not in default at the time, RadioShack may assign all or part of its rights and obligations hereunder without the approval or consent of the City. SECTION 16. NOTICE. Any notice and/or statement required and permitted to be delivered shall be deemed delivered by depositing same in the United States mail, certified with return receipt requested, postage prepaid, addressed to the appropriate party at the following addresses, or at such other addresses provided by the parties in writing: RADIOSHACK: RadioShack Corporation 100 Throckmorton St., Suite 1800 Fort Worth, Texas 76102 Attn: Chief Executive Officer Page 24 Economic Development Program Agreement between City of Fort Worth and RadioShack Corporation With a copy to: RadioShack Corporation 100 Throckmorton St., Suite 1800 Fort Worth, Texas 76102 Attn: General Counsel CITY: Director Economic & Community Development Department City of Fort Worth 1000 Throckmorton Fort Worth, Texas 76102 With a copy to: City Attorney Law Department 1000 Throckmorton Street Fort Worth, Texas 76102 SECTION 17. INTERPRETATION. Regardless of the actual drafter of this Agreement, this Agreement shall, in the event of any dispute over its meaning or application, be interpreted fairly and reasonably, and neither more strongly for or against any party. SECTION 18. APPLICABLE LAW. This Agreement is made, and shall be construed and interpreted under the laws of the State of Texas, and venue shall lie in state courts located in Tarrant County, Texas or in the United States District Court for the Northern District of Texas, Fort Worth Division. Page 25 Economic Development Program Agreement .1 ; 11� between City of Fort Worth and RadioShack Corporation -- -- SECTION 19. SEVERABILITY. In the event any provision of this Agreement is illegal, invalid, or unenforceable under present or future laws, then, and in that event, it is the intention of the parties hereto that the remainder of this Agreement shall not be affected thereby, and it is also the intention of the parties to this Agreement that in lieu of each clause or provision that is found to be illegal, invalid, or unenforceable a provision be added to this Agreement which is legal, valid and enforceable and is as similar in terms as possible to the provision found to be illegal, invalid or unenforceable. SECTION 20. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall be considered an original, but all of which shall constitute one instrument. EXECUTED as of the last date indicated below: CITY OF FORT WORTH: RADIOSHACK CORPORATION: By: zf� By Reid Rector ark C. Hill Assistant City Manager Senior Vice President Corporate Secretary/General Counsel Date: Date: j.. 1IL Page 26 Economic Development Program Agreement between City of Fort Worth and RadioShack Corporation APPROVED AS TO FORM AND LEGALITY: By: Peter Vaky Assistant City Attorney M&C: 0-/36 6 of 7-9- 02 ATMED Page 27 Economic Development Program Agreement - between City of Fort Worth and RadioShack Corporation ' 7 } EXHIBITS "A"—Map of Central City "B"—Capped Taxable Appraised Values for Each Year "C"—Delineation of the TIF "D"—Required RadioShack Improvements "E"—Memorandum of Agreement between FWHA and RadioShack Economic Development Program Agreement between City of Fort Worth and RadioShack Corporation era;. r :. •�� ..F��,� I ' a a _ +Y.:�•q• ry ED (56 QD At J Exhibit "B" Maximum Taxable Appraised Value of RadioShack Property City's Fiscal Maximum Year in Taxable which Taxes Assessed Are Received Value 2006 200,000,000 2007 256,250,000 2008 262,656,250 2009 269,222,656 2010 275,953,223 2011 282,852,053 2012 289,923,355 2013 297,171,438 2014 304,600,724 2015 312,215,742 2016 320,021,136 2017 328,021,664 2018 336,222,206 2019 344,627,761 2020 353,243,455 2021 362,074,542 2022 371,126,405 2023 380,404,565 2024 389,914,679 2025 399,662,546 2026 409,654,110 2027 419,895,463 2028 430,392,849 2029 441,152,671 2030 452,181,487 2031 463,486,025 2032 475,073,175 2033 486,950,005 2034 499,123,755 2035 511,601,849 r EXHIBIT "C" DELINEATION OF THE TIF V5 a� AUSTIN S? ,,j `fir � '+ fir•„� - ��,c WOODWARD ST ZI c 4-- a a N O C cl o � W • p9 Y '� s � ,, 'b"� ♦ L o �o n 1-l-', IPA Y' • T� Y a � p 5 sr is � O ►may O d� � � w j CD a a s 1 f�0s� Sys ►� 3 EXHIBIT D— REQUIRED RADIOSHACK IMPROVEMENTS RadioShack is developing their new corporate headquarters within the boundary of Belknap Street, Henderson Street, Taylor Street, and the Trinity River, which will consist of, as currently envisioned, approximately 900,000 SF of office buildings and structured parking to accommodate approximately 2,400 cars. The campus will also include the following: Cafeteria & Food Service Large Meeting Area/Clustered Conference Area Health and Fitness Area Broadcasting/Multi-media Production Facility Data Center Products Testing Area I � ' Z-. 1!a • • PRELIMINARY SITE PLAN VIr',v,1 i r EXHIBIT "E" MEMORANDUM OF AGREEMENT This Memorandum of Agreement is intended to reflect the good faith intentions of RadioShack Corporation("RadioShack") and the Fort Worth Housing Authority ("FWHA') to implement the terms below regarding RadioShack's proposed utilization of the Ripley Arnold housing complex pursuant to and as part of the FWHA's redevelopment plan(the"Redevelopment Plan'. 1. BACKGROUND The FWHA has developed and adopted the Redevelopment Plan for three of its housing complexes to improve the quality of life for its residents. As part of the Redevelopment Plan, the FWHA has recommended the sale of one of those complexes. This sale will generate the funds needed to build new housing units and to renovate existing complexes. The Redevelopment Plan also provides for the development and implementation of a self- sufficiency program (the "Self-Sufficiency Prograrn') to identify and provide training and employment opportunities for qualified FWHA residents. The FWHA Board of Commissioners has voted and accepted RadioShack's proposed utilization of the Ripley Arnold housing complex pursuant to and as part of the Redevelopment Plan. 2. RADIOSHACK'S PARTICIPATION IN THE SELF-SUFFICIENCY PROGRAM RadioShack is an outstanding corporate citizen and is supportive of the FWHA's effort to improve the quality of life for residents of the Ripley Arnold housing complex (the "Residents"). As part of RadioShacles_pro_posed utilization of the Ripley Arnold housing complex,RadioShack will participate in the Self-Sufficiency Program as follows: a. RadioShack will identify and make known to the FWHA available employment positions and/or training programs; and b, The FWHA will provide RadioShack with'a list of qualified Residents for those positions and/or programs; and C. RadioShack will give preference to qualified Residents for placement in such positions and/or programs. 3. GOAL OF EMPLOYMENT It is the goal of RadioShack and the FWHA to have Residents placed in employment positions and/or training programs within the first year of RadioShack's participation in the Self-Sufficiency program. i - h s y=-._' Page 1 JL1,=lF WDTCA\PMW M=,,\FWM MEMORANDUM OF UNDOMANDINGIdx J , EXHIBIT "E" 4. TERM RadioShack will participate in the Self-Sufficiency Program in the manner set forth above for a period of five years commencing on the effective date of this Memorandum of Understanding. This Memorandum of Agreement is to be effective as of the day of August,2001. RadioShack Corporation The Fort Worth Housing Authority BE. By: Name: Mark C.Hill Name: Title: Sr.Vice President, Corporate Secretary Title: ` and General Counsel R�\Fin\C TrQiCa MuLawwwHA MFMOMNMU of UNDM v MMI.&C Page 2 City of Fort Worth, Texas Mayor and Council Communication DATE REFERENCE NUMBER LOG NAME PAGE 7/9/02 G-13668 C 17RADIOSHACK 1 of 2 SUBJECT ECONOMIC DEVELOPMENT PROGRAM AGREEMENT WITH RADIOSHACK CORPORATION RECOMMENDATION: It is recommended that the City Council: 1. Find that the terms and conditions of the attached Economic Development Program Agreement with RadioShack Corporation (RadioShack) constitute a custom-designed economic development program as outlined in the 2000 Comprehensive Plan; and 2. Authorize the City Manager to execute the attached Economic Development Program Agreement with RadioShack (the Agreement). DISCUSSION: Under the attached Agreement, RadioShack has committed to (i) make at least $200 million in real and personal property investments on the Ripley Arnold property (the Property) by June 30, 2005; (ii) spend at least 25% of its construction costs in making those improvements with Fort Worth contractors; and (iii) spend at least 10% of its construction costs in making those improvements with contractors that are certified as M/WBE companies. These collectively will be referred to as the Construction Commitments. RadioShack has also committed to employ on the Property at least 1,000 Fort Worth residents and 250 Central City residents in calendar years 2005-2014, at least 750 Fort Worth residents and 200 Central City residents in calendar years 2015-2024, and at least 500 Fort Worth residents and 150 Central City residents in calendar years 2025-2034. In addition, in calendar years 2005-2014, RadioShack has committed to spend at least $1.2 million per year with Fort Worth companies and $200,000 per year with certified M/WBE companies for various supplies and services used in connection with its business operations on the Property. These collectively will be referred to as the Employment and Spending Commitments. In return for the economic benefits that will accrue as a result of RadioShack's redevelopment of the Property and its operation of a corporate campus on the Property, beginning in 2006 the City will make thirty (30) annual economic development program grants to RadioShack, as authorized by Section 380 of the Texas Local Government Code. The amount of the grants will depend upon a combination of the tax revenue that the City has received from the Property in the previous tax year and the extent to which RadioShack has met the commitments outlined above. RadioShack will receive a minimum benefit that is based on the degree to which RadioShack is able to meet its Construction Commitments. If RadioShack meets all of its Construction Commitments, it will receive 50% of the taxes it pays to the City on the Property and any taxable personal property located on the Property, subject to an annual cap based on the taxable appraised value of the Property as outlined in Exhibit "B" of the Agreement (the Property Taxes). If RadioShack fails to meet its Construction Commitments, this minimum benefit will be reduced by the cumulative percentage that City of Fort Worth, Texas Mayor and Council Communication DATE REFERENCE NUMBER LOG NAME PAGE 7/9/02 G-13668Cti' 17RADIOSHACK 2 of 2 SUBJECT ECONOMIC DEVELOPMENT PROGRAM AGREEMENT WITH RADIOSHACK CORPORATION RadioShack failed to meet the Construction Commitments. This component of the grants will be referred to as the Base Benefit. In addition to the Base Benefit, RadioShack will be able to earn additional sums based on the degree to which RadioShack is able to meet the Employment and Spending Commitments required for a specific year. These additional sums will be a percentage of the Base Benefit, as outlined for each given year in the Agreement. However, these additional sums will never exceed 50% of the Base Benefit. And overall, the City will never make a grant to RadioShack that is in excess of the Property Tax revenue that the City received from RadioShack in the previous tax year. The Agreement is authorized by Chapter 380 of the Texas Local Government Code and is consistent with the City's commitment to use custom-designed incentives and partnership programs with private businesses on a case-by-case basis to help ensure the growth and diversification of the local economy, as stated in the 2000 Comprehensive Plan adopted by the City Council on August 1, 2000 (M&C G- 12975). FISCAL INFORMATION/CERTIFICATION: , 3x � b r� � dIr tl ash ,n.,, a � RR:k Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY Office by: (to) Reid Rector 6140 Originating Department Head: Tom Higgins 6192 (from) APPROVED 07/09/02 (CORRECTED) Additional Information Contact: Ardma Washington 8003