HomeMy WebLinkAboutContract 28283 QTY SECRETAII
CONTRACT No' J�
AMENDMENT NO. 1 TO CITY SECRETARY CONTRACT NO. 26341
TAX ABATEMENT AGREEMENT BETWEEN
CITY OF FORT WORTH AND COTTON DEPOT, LLC
This AMENDMENT NO. 1 TO CITY SECRETARY CONTRACT NO.
26341 ("Amendment") is 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 COTTON DEPOT, LLC ("Owner"), a Texas limited liability company.
The following statements are true and correct and form the basis upon which the
parties have entered into this Amendment:
A. On or about November 1, 2000 the City and Owner entered into a Tax
Abatement Agreement ("Agreement"), which is a public document on file in the City
Secretary's Office as City Secretary Contract No. 26341. Under the Agreement, Owner
agreed to construct at least two hundred (200) residential urban lofts and live/work
spaces, as.more specifically provided in the Agreement (the "Required Improvements",
the construction of which is defined as the "Project") on property that Owner owns in
the downtown area of the City(the "Premises"). In return, the City agreed to abate up to
one hundred percent (100%) of the real property taxes generated from the increase in the
taxable value of the Premises, as more specifically provided in the Agreement.
B. The Agreement requires that the value of the Required Improvements
upon completion be at least $17,100,000. In addition, the Agreement requires that Owner
substantially complete the Project by December 31, 2002. Failure to construct the
Required Improvements with a minimum value of $17,100,000 and to complete
substantially the Project by December 31, 2002 constitutes a breach of the Agreement by
Owner and gives the City the right to terminate the Agreement.
C. The parties acknowledge that the intended cost of the Project under the
Agreement should be $13,780,000, not $17,100,000 as stated in the Agreement, which
value also includes Owner's costs of acquiring the Premises. In addition, various
unforeseen circumstances have delayed Owner's initiation of the Project. As a result,
Owner has requested that the Agreement be amended to reflect the actual intended costs
of the Project and that Owner be given additional time to complete substantially the
Project. Because the City believes that the City will benefit by having additional
residential units in and around downtown and therefore supports the Project, the City is
willing to amend the Agreement as requested by Owner:
NOW, THEREFORE, the City and Owner, for and in consideration of the
mutual promises, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged.
agree as follows: p rjECOO RD }
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1. The first sentence of Section I.A of the Agreement is hereby amended to read as
follows:
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 apartments and/or live/work spaces (ii) having a
cost upon completion of at least Thirteen Million Seven Hundred Eighty
Thousand Dollars ($13,780,000), including site development costs (the
Required Improvements").
2. Section I.B of the Agreement is hereby amended to read as follows:
Owner covenants to complete substantially, as determined by the
City in its sole and,reasonable discretion, the construction of the Required
Improvements on or before December 31, 2004.
3. All terms,conditions and provisions of the Agreement not specifically amended
in this Amendment shall remain in full force and effect. Any capitalized terms not
defined herein shall have the meanings assigned to them in the Agreement.
EXECUTED as of the last date set forth below:
CITY OF FORT WORTH: COTTON DEPOT,L, C.
By:
Reid Rector Name .f
Assistant City Manager Title
Date: 7—o' , Date:
APPROVED AS TO FORM AND LEGALITY: AITERE
Peter Vaky
Assistant City Attorney
M&C: C-/7tl-D 2 /Z-/7-'D Z
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STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, on this day personally appeared Reid
Rector, Assistant City Manager of the CITY OF FORT WORTH, a municipal
corporation organized under the laws of the State of Texas, known to me to be the person
and officer whose name is subscribed to the foregoing instrument, and acknowledged to me
that the same was the act of the CITY OF FORT WORTH, that he was duly authorized to
perform the same by appropriate resolution of the City Council of the City of Fort Worth
and that he executed the same as the act of the CITY OF FORT WORTH for the
purposes and consideration therein expressed and in the capacity therein stated.
GIVEN ,UNDER MY HAND AND SEAL OF OFFICE this o?l#day of
2002.
� Ype ROSELLA BARNES
Notary Public in and for 20� ••��,
the State of Texas _ S NOTARY PUBLIC
9 .:.•••'�Pf•
X05 e/lA dqRNoF C State of Texas
omm.Exp.03-31-2005
Notary's Printed Name
STATE OF t §
COUNTY OF
BEFORE ME, the unde=iped au thority, on this day personally appeared
ft�nnw �' .St _ of COTTON DEPOT, LLC, known
to me to be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that s/he executed the same for the purposes and consideration therein
expressed, in the capacity therein stated and as the act and deed of COTTON DEPOT,
LLC.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this
} day of r 6u, , 2002.
a-yb A,.� oDj-(.
Notary Public in and d for
the State of CA
kAAJO- hOC
Notary's Printed Name
City of Fort Worth, Texas
Mayor and Council Communication
DATE REFERENCE NUMBER LOG NAME PAGE
12/17/02 C-19402 17COTTON 1 of 3
SUBJECT AMENDMENT TO CITY SECRETARY CONTRACT NO. 26341, TAX ABATEMENT
AGREEMENT WITH COTTON DEPOT, LLC
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to execute the attached
amendment to City Secretary Contract No. 26341, a tax abatement agreement with Cotton Depot, LLC
(Cotton Depot), extending the amount of time required for completion of various real property
improvements and revising the minimum cost required for those improvements.
DISCUSSION:
Under City Secretary Contract No. 26341 (M&C C-18209 dated August 29, 2000), the City Council
granted a tax abatement to Cotton Depot contingent on the construction of 200 residential lofts with
live/work space. Under the terms of the original tax abatement agreement, Cotton Depot was to invest
$17,100,000 in improvements, remove the billboards on the property, and create seven new jobs.
During the past two years, Cotton Depot has experienced unanticipated delays as a result of the
environmental remediation process that began in 2000 to ready the property for construction of the
lofts. The remediation process was recently completed. However, sufficient time was not available for
the lofts to be substantially, completed by December 31, 2002, as required by the agreement. In
addition, the minimum investment requirement of $17,100,000 under the agreement erroneously
included land acquisition costs, which should not be figured into this transaction. The correct value of
the real property improvements is $13,780,000.
On November 12, 2002, the Economic and Community Development Committee recommended that the
City amend the tax abatement agreement to extend the construction deadline from December 31, 2002,
to December, 31, 2004, and to clarify that the value of the improvements to be constructed on the
property should be at least $13,780,000, not $17,100,000.
The structure of the abatement will remain the same:
® Cotton Depot will receive a graduated ten-year tax abatement-on real property that could reach
a maximum of 100% annually. Personal property will not be abated. The abatement is based
on Cotton Depot's commitments with regard to construction expenditures, total supply and
service spending, and employment.
City of Fort Worth, Texas
Mayor and Council Communication
DATE REFERENCE NUMBER LOG NAME PAGE
12/17/02 C-19402 17COTTON 2 of 3
SUBJECT AMENDMENT TO CITY SECRETARY CONTRACT NO. 26341, TAX ABATEMENT
AGREEMENT WITH COTTON DEPOT, LLC
The abatement is structured as follows:
Base abatement of 75% for the following:
• 20% of construction expenditures to 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
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 and Service Expenditures
Total expenditures - $200,000
Fort Worth companies - $140,000
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 1006/6 per annum. If the maximum abatement is reached, the
abated taxes are projected to be $151,335 annually.
City of Fort Worth, Texas
Mayor and Go,uncil Conimurlication
DATE REFERENCE NUMBER LOG NAME PAGE
12/17/02 C-19402 1 17COTTON 3 of 3
SUBJECT AMENDMENT TO CITY SECRETARY CONTRACT NO. 26341, TAX ABATEMENT
AGREEMENT WITH COTTON DEPOT, LLC
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that no expenditure of funds is associated with approval of this
amendment.
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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 12/17/02
Additional Information Contact:
Ardina Washington 8003