HomeMy WebLinkAboutContract 30735 CITY SECRETARY�SM
CONTRACT NO.
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 RAILHEAD INDUSTRIAL PARK INVESTORS, L.P.
("Railhead"), a Texas limited partnership.
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 2004 Comprehensive Plan adopted by the
City Council pursuant to M&C G-14276 on February 24, 2004, 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, as part of the economic development programs recommended by
the 2004 Comprehensive Plan and in accordance with Resolution No. 2704, adopted by
the City Council on January 30, 2001, the City has established a program pursuant to
which the City will, on a case-by-case basis, offer economic incentive packages
authorized by Chapter 380 of the Texas Local Government Code that include monetary
loans and grants of public money, as well as the provision of personnel and services of
the City, to businesses and entities that the City Council determines will promote state or
local economic development and stimulate business and commercial activity in the City
in return for verifiable commitments from such business or entities to cause specific
infrastructure, employment and other public benefits to be made or invested in the City;
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;
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 are hereby acknowledged, the parties agree as follows:
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Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
AGREEMENT
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.
2. PURPOSE.
2.1. Objectives.
Railhead is the owner of certain unimproved land in the City in the
industrial area generally known as the Railhead Business Park (the "Business
Park"). Railhead would like to install various infrastructure in and around a
currently unimproved portion of the Business Park (the "Development Site") in
order to entice various businesses to locate in the Development Site and to
otherwise stimulate potential development elsewhere within the Business Park.
The Development Site is more specifically depicted in the map and described in
the property description attached hereto as Exhibit "A", which is hereby made a
part of this Agreement for all purposes. The City Council believes that the
construction of infrastructure improvements in and around the Development Site
will foster increased development in the Development Site and elsewhere in the
Business Park and its vicinity; contribute to significant job growth in the City; and
afford residents of the Central City, as that term is defined in Section 3 hereof,
increased employment opportunities. The parties acknowledge that the present
infrastructure in and around the Development Site is insufficient to support
anticipated corporate and industrial development within the Development Site. In
order to encourage Railhead's expansion of the Business Park and to make the
Development Site more attractive to businesses seeking to relocate their facilities
from locations outside the City or to establish new facilities, Railhead has
requested an economic assistance package from the City under which Railhead
will receive an economic development grant in an amount not to exceed the cost
of construction and installation of certain Infrastructure Improvements, as defined
in Section 3 hereof, in and around the Development Site, thereby making
expansion of the Business Park financially feasible to Railhead.
2.2. Concept and Structure.
The parties have jointly developed the concept behind the Program
outlined in this Agreement. The Program is designed to provide gap financing to
Railhead in order to secure the expansion of the Business Park. Under the
Program, Railhead will pay for the construction and installation of certain
Infrastructure Improvements located in and around the Development Site and will
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Economic Development Program Agreement �J��1�'JL'�ti=!� ����� ''�>>•'�
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
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develop or cause development of the Development Site. In return, the City will
provide Railhead with annual economic development grants based on (i) the
actual costs of construction and installation of the Infrastructure Improvements;
(ii) the amount of revenue received by the City from increased real and personal
property taxes attributable to certain property within the Business Park that
currently is undeveloped, including Development Site; and (iii) compliance with
various commitments that will benefit the City, as further provided in this
Agreement.
3. DEFINITI®NS.
In addition to terms defined in the body of this Agreement, the following terms
shall have the definitions ascribed to them as follows:
Affiliate means all entities, incorporated or otherwise, under common control
with, controlled by or controlling Railhead. For purposes of this definition, "control"
means fifty percent(50%) or more of the ownership determined by either value or vote.
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"B", 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.
Construction Costs means site pre-development and development costs,
including construction costs, contractor fees, construction manager and developer fees
not to exceed $165,387, engineering costs, governmental permit fees, fees for any
required bonds, and the costs of supplies and materials in constructing the Infrastructure
Improvements.
Director means the director of the City's Economic and Community
Development Department or his or her authorized designee.
Excess Source Property Tax Increment means the positive difference between
the Source Property Tax Increment received by the City in a given Program Year and the
amount of the Program Grant that the City is obligated to pay Railhead in the same
Program Year.
Fort Worth Company means a business that has a principal office located within
the corporate limits of the City.
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U°?K NOI
Fort Worth Certified MIWBE Company 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 North Texas Regional Certification
Agency (NTRCA) or the Texas Department of Transportation (TxDOT), Highway
Division, and whose principal business office is 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 or another measurement used to define full-time
employment by the respective business or businesses located and operating on the Source
Property in accordance with their then-current corporate-wide personnel policies and
regulations.
Infrastructure Improvements means that infrastructure to be constructed and
installed in and around the Development Site, as more specifically described in Exhibit
"C", attached hereto and hereby made a part of this Agreement for all purposes.
Infrastructure Investment means the lesser of the actual Construction Costs of
the Infrastructure Improvements, as certified by the Director in accordance with Section
5.1.8 of this Agreement, or$4,900,000.
Maximum Program Grant Amount means the Infrastructure Investment plus
interest thereon, calculated at a fixed rate equal to five percent (5%) and accruing on the
date of payment of the City's first Program Grant pursuant to and in accordance with
Section 6.5 of this Agreement, which interest shall be simple interest, compounded
annually and based on the difference between the Infrastructure Investment plus interest
and the then-current cumulative amount of Program Grant Payments received by
Railhead.
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 Railhead in accordance with this Agreement and as part of the Program until
Railhead has received the Maximum Program Grant .Amount or this Agreement expires
or is terminated.
Program Year means a calendar year in which the City is obligated to pay
Railhead a Program Grant, beginning with calendar year 2006 (based upon Source
Property Tax Increment attributable to calendar year 2005 and received as of January 31,
2006).
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Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
Source Property means (i)the real property described in and depicted on Exhibit
"W', attached hereto and hereby made a part of this Agreement for all purposes and (ii)
any personal property owned or leased by an entity that is taxable by the City and is
located on such real property.
Source Property Improvements means real property improvements constructed
on the Source Property.
Source Property Project Costs means pre-development and development costs;
testing, architectural, design, engineering, landscaping and other consultants' fees and
costs; construction costs; contractor, construction manager and developer fees;
governmental permit fees; fees for any required bonds; and the costs of supplies and
materials in constructing the Source Property Improvements.
Source Property Tax Increment for any given year(the"Subject Year") means
(i) the amount of real and personal property tax (excluding any agricultural roll back
taxes)paid by any entity or entities to the City based on the entire taxable appraised value
of the Source Property for the Subject Year less the amount of real and personal property
tax (excluding any agricultural roll back taxes) paid by any entity or entities to the City
based on the entire taxable appraised value of the Source Property for the 2004 tax year,
plus (ii) any agricultural roll back taxes attributable to the Source Property and paid by
any entity or entities to the City in the Subject Year. The taxable appraised value of the
Source Property will be established solely by the appraisal district that has jurisdiction
over the Source Property at the time. With respect to any leased Source Property, Source
Property Tax Increment will include that portion of annual property tax, prorated on a
daily basis, which is attributable to the period during which an entity located on the real
Source Property was the lessee of such property.
4. TERM.
This Agreement shall be effective as of the date of execution by both parties and
shall expire upon the earlier of (i) the date as of which Railhead has received the
Maximum Program Grant Amount or (ii) the date as of which Railhead has received the
tenth (10th) Program Grant payment pursuant to and in accordance with this Agreement,
regardless of whether Railhead has received the Maximum Program Grant Amount (the
"Term"), unless terminated earlier or extended as provided by and in accordance with
this Agreement.
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Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
5. RAILHEAD OBLIGATIONS.
5.1. Infrastructure Improvement Commitments.
5.1.1. Construction of Infrastructure Improvements.
Railhead will make or cause to be made the Infrastructure
Improvements by July 1, 2006 in order for the Development Site to be
used for warehouse/industrial and related uses at all times during the Term
of this Agreement. Prior to the undertaking of or letting of any contracts
for any work on the Infrastructure Improvements, Railhead will notify the
City in writing and request a written opinion as to whether a Community
Facilities Agreement ("CIA") or other written document with the City is
required with respect to the proposed construction work. If any such
document is required, Railhead will not undertake or cause to be
undertaken any affected work until the CFA or other required written
document has been executed by all parties and is in fall force and effect.
Railhead hereby agrees to comply and require compliance with all terms
and conditions of any CFA or other required document with the City
covering the affected work.
5.1.2. Use of Fort Worth Companies.
Without regard to the actual amount of dollars spent on the
Infrastructure Improvements, Railhead will spend or cause to be spent at
least twenty percent (20%) of Construction Costs for the Infrastructure
Improvements with Fort Worth Companies.
5.1.3. Use of Fort Worth Certified M/WBE Companies.
Without regard to the actual amount of dollars spent on the
Infrastructure Improvements, Railhead will spend or cause to be spent at
least fifteen percent (15%) of Construction Costs for the Infrastructure
Improvements with Fort Worth Certified NVWBE Companies.
5.1.4. Contracts for Construction of Infrastructure Improvements.
Railhead will enter into a contract or contracts with third party
contractors (each a "Contractor") for all work on the construction and
installation of the Infrastructure Improvements (each a "Infrastructure
Improvement Contract"). All Infrastructure Improvement Contracts
must meet the requirements of Sections 5.1.5 and 7 of this Agreement.
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Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
C,
5.1.5. Bonds.
Prior to initiation of work on the Infrastructure Improvements,
Railhead shall provide to the City payment and performance bonds, in a
form reasonably satisfactory to the City and executed by a corporate
surety in accordance with Texas Government Code, Chapter 2253, in the
full amount of the cost and installation of the Infrastructure Improvements
that guarantee (i) the faithful performance and completion of all work
comprising the Infrastructure Improvements and (ii) full payment for all
wages for labor and services and of all bills for materials, supplies and
equipment used in the undertaking of the construction and installation of
the Infrastructure Improvements. In addition, prior to initiation of any
work under a Infrastructure Improvement Contract, Railhead shall require
the Contractor to provide Railhead with payment and performance bonds,
executed by a corporate surety in accordance with Texas Government
Code, Chapter 2253, in the full amount of all work performed by the
Contractor and any subcontractor under the Infrastructure Improvement
Contract that guarantee (i) the faithful performance and completion of all
work specified in the Infrastructure Improvement Contract and (ii) full
payment for all wages for labor and services and of all bills for materials,
supplies and equipment used in the undertaking of all work specified in
the Infrastructure Improvement Contract. Such bonds shall name both the
City and Railhead as dual obligees. Railhead shall forward such bonds to
the Director.
5.1.6. Mannement of Project.
Railhead shall perform the usual and necessary management
services incident to projects of the nature and scope of the construction
and installation of the Infrastructure Improvements. Railhead shall
thoroughly inspect the work of all Contractors and all subcontractors
undertaking work on the Infrastructure Improvements. In addition,
Railhead shall fully and completely settle, by litigation or otherwise, any
claims of any Contractor or subcontractor relating to or arising out of the
construction and/or installation of the Infrastructure Improvements or
performance or non-performance under any Infrastructure Improvement
Contract without involving the City.
5.1.7. Monthly Certificates Related to Infrastructure Imiprovements.
Railhead shall submit monthly certificates in the form attached
hereto as Exhibit "E", signed by an officer of Railhead and any applicable
Contractor, to the Director that state, as of a date certain, (i) the specific
work on the Infrastructure Improvements that has been completed since
the last monthly report; (ii) the amount of money that Railhead has paid
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Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
for completion of such work and that Railhead intends to claim as a
Construction Cost, organized by line item showing Construction Costs
expended with Fort Worth Companies and with Fort Worth Certified
M/WBE Companies; and (iii) Railhead's calculation of the estimated cost
to complete the construction and installation of the Infrastructure
Improvements. Upon receipt of any such certificate, the Director shall
have ten (10) calendar days to notify Railhead in writing of any objection
that he or she may have as to the amount of money that Railhead has paid
or as to Railhead's calculation of the estimated cost to complete the
construction and installation of the Infrastructure Improvements. The
grounds for any such objection shall be limited, respectively, to a good
faith determination by the Director that the amount of money paid by or
on behalf of Railhead is not sufficiently supported by a respective
Infrastructure Improvement Contract or does not otherwise qualify as a
Construction Cost under Section 3 of this Agreement. If Railhead
disagrees with such objection, the City and Railhead shall diligently work
in good faith to resolve the dispute. If resolution is not achieved, Railhead
may petition the City Council to make a determination, which
determination shall be final.
5.1.8. Certificates of Completion.
As of July 1, 2006, based on the monthly certificates submitted
by Railhead in accordance with Section 5.1.7 and provided that Railhead
has submitted final lien waivers related to the Infrastructure
Improvements, the City will certify the portion of the Infrastructure
Improvements that have been completed, the total amount of the
Infrastructure Investment and the amount of Construction Costs for such
Infrastructure Improvements that were expended with Fort Worth
Companies and Fort Worth Certified M/WBE Companies (the
"Certificate of Completion"). The verification process set forth in
Section 5.1.7 with respect to the monthly certificates shall apply with
respect to the final Certificate of Completion. The Infrastructure
Improvements other than railroad spurs will be dedicated to and accepted
by the City in accordance with applicable law and City policy following
issuance of the Certificate of Completion.
5.1.9. Inspections of Work on Infrastructure Improvements.
At any time prior to the issuance of the Certificate of Completion,
the City and any authorized designee shall have the right to inspect any
work on the Infrastructure Improvements, and Railhead shall provide
access to the Development Site for the City and any authorized designee to
undertake any such inspection and shall otherwise cooperate fully with the
City in any such inspection.
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Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors L.P.
5.2. Source Property Improvement Commitments.
Railhead shall require any third party that purchases or leases all or any
portion of the Source Property to provide Railhead with information relating to
Source Property Project Costs by such third party for Source Property
hnprovements sufficient for Railhead to complete the annual report to the City, as
required by and in accordance with Section 5.4.1 of this Agreement.
5.2.1. Use of Fort Worth Companies.
Without regard to the actual amount of Source Property Project
Costs incurred and without regard to the party contracting for such Source
Property Project Costs, at least twenty percent (20%) of all Source
Property Project Costs shall be spent with Fort Worth Companies.
Determination of compliance with this commitment shall be measured on
an annual basis but will be based on spending in all previous years of the
Tenn. For example, when determining compliance with this commitment
for purposes of calculating the amount of the Program Grant payable by
the City in 2007, the City will evaluate whether twenty percent (20%) of
all Source Property Project Costs expended for Source Property
Improvements in 2004, 2005 and 2006 were spent with Fort Worth
Companies.
5.2.2. Use of Fort Worth Certified M/WBE Companies.
5.2.2.1. By Railhead.
Without regard to the actual amount of Source
Property Project Costs incurred by Railhead or any Affiliate on the
Source Property Improvements, at least fifteen percent(15%) of all
Source Property Project Costs shall be spent with Fort Worth
Certified M/WBE Companies. Determination of compliance with
this commitment shall be measured on an annual basis but will be
based on spending in all previous years of the Tenn. For example,
when determining compliance with this commitment for purposes
of calculating the amount of the Program Grant payable by the
City in 2007, the City will evaluate whether fifteen percent (15%)
of all Source Property Project Costs expended directly by Railhead
or any Affiliate in 2004, 2005 and 2006 were spent with Fort
Worth Certified M/WBE Companies.
5.2.2.2. By Third Parties.
Railhead shall cause to be established as a goal for
any third party which is not an Affiliate of Railhead and which has
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Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
purchased or leased all or a portion of the Source Property that at
least ten percent (10%) of any Source Property Project Costs that
may be expended by such third party in any calendar year of the
Term shall be spent with Fort Worth Certified M/WBE
Companies. Determination of compliance with this commitment
shall be based on spending in the previous calendar year only and
not in any other calendar years of the Term.
5.3. Source Property Employment Commitments.
Railhead shall require any third party that purchases or leases all or any
portion of the Source Property to provide Railhead with annual employment data
sufficient for Railhead to complete the annual report to the City, as required by
and in accordance with Section 5.4.2 of this Agreement.
5.3.1. Fort Worth Residents.
Beginning on January 1, 2005, and at all times thereafter for the
remainder of the Term, at least one (1) Full-time Job on the Source
Property per 33,000 square feet of gross completed space of Source
Property Improvements for which final certificates of occupancy have
been issued shall be filled by Fort Worth Residents.
5.3.2. Central City Residents.
Beginning on January 1, 2005, and at all times thereafter for the
remainder of the Term, at least one (1) Full-time Job on the Source
Property per 83,000 square feet of gross completed space of Source
Property Improvements for which final certificates of occupancy have
been issued shall be filled by Central City Residents.
5.4. Annual Reports.
On or before February 1, 2006 and each February 1 thereafter throughout
the Term, Railhead will provide the City with the following reports in a form
reasonably acceptable to the City in order for the City to assess the degree to
which the commitments set forth in Section 5.2.1, 5.2.2, 5.3.1 and 5.3.2 were met
during the previous calendar year and to determine the amount of the Program
Grant that will be payable hereunder in the same respective calendar year:
5.4.1. Source Property Construction Spending Report.
Railhead shall provide the City with a report that sets forth (i) the
specific Source Property Improvements that have received final
certificates of occupancy during the previous calendar year; (ii) the actual
Source Property Project Costs expended both by Railhead and by third
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Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
parties for construction of such Source Property Improvements, together
with other documents necessary to demonstrate that such amounts were
actually paid by Railhead or such third parties (as the case may be),
including without limitation, final lien waivers signed by Railhead's or
such third parties' general contractors. This report shall also include
actual Source Property Project Costs expended by Railhead and actual
Source Property Project Costs expended by third parties for construction
of Source Property Improvements with Fort Worth Companies and with
Fort Worth Certified MIWBE Companies, together with other documents
necessary to demonstrate that such amounts were actually paid by
Railhead or such other third parties (as the case may be) to such
companies. In the event that a third party did not meet its goal to expend
at least ten percent (10%) of its Source Property Project Costs for Source
Property Improvements with Fort Worth Certified M/WBE Companies, as
outlined in Section 5.2.2, the report shall include a written statement
signed by an officer or authorized representative of the third party that
explains what steps it took to fulfill that goal and why it believes that the
goal was not met.
5.4.2. Employment Report.
Railhead shall provide the City with a report that sets forth the
aggregate square footage of Source Property Improvements that have
received final certificates of occupancy through December 31 of the
previous calendar year, the number of Full-time Jobs on the Source
Property that were held in the previous calendar year by Fort Worth
Residents and Central City Residents, together with the zip codes of
residency of each such employee (provided, however, that if any of the
reported zip codes cover areas both within and outside of the City limits or
the Central City, as the case may be, then Railhead shall also provide
reasonable additional documentation to assist the City in determining
whether the employees within those zip codes are Fort Worth Residents or
Central City Residents, as applicable), which report shall be based on
employment data as of December 31 of the previous calendar year or such
other date as may be reasonably acceptable to the City.
5.5. Audits.
Railhead agrees that the City will have the right to audit the financial and
business records in the possession of Railhead or any property owners'
association for the Business Park (collectively, the "Railhead Records") that
relate to (i) the construction of the Infrastructure Improvements; (ii) the
construction of the Source Property Improvements; and (iii) the residency and
number of Full-time Jobs held on the Source Property at any time during the Term
of this Agreement in order to determine compliance with this Agreement.
Railhead shall make all Railhead Records available to the City on property
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located in the Business Park 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.
5.6. Support of Fort Worth Opportunity Center.
5.6.1. Fundins?.
Within forty-five (45) calendar days following receipt of an annual
Program Grant payment from the City pursuant to this Agreement,
Railhead will make a grant to the Fort Worth Opportunity Center (the
"Opportunity Center") (or, if directed by the City, another entity whose
mission is similar to that of the Opportunity Center) in an amount that is
not less than five percent (5%) of the amount of such Program Grant.
Notwithstanding anything to the contrary herein, the City may withhold
payment of any Program Grant to Railhead if at the time such Program
Grant is due Railhead has failed to make any grant to the Opportunity
Center in accordance with this Section 5.6.1.
5.6.2. Program Development and Support.
Throughout the Term of this Agreement, Railhead shall work
diligently and in good faith with the Opportunity Center (or, if directed by
the City, another entity whose mission is similar to that of the Opportunity
Center) to establish ongoing programs sponsored by the Opportunity
Center that will provide job recruiting and tailored job training
opportunities for customers of the Opportunity Center with businesses
located in the Business Park. These programs shall be offered at both the
Opportunity Center itself as well as at various businesses located in the
Business Park.
5.7. Exclusive Incentive.
Railhead understands and agrees that the Program Grants paid by the City
pursuant to this Agreement are intended to be the exclusive incentive that the City
will offer with respect to the Source Property so long as this Agreement is in
effect. Accordingly, Railhead hereby agrees that during the Term of this
Agreement Railhead and any affiliate thereof shall not request or lead any other
party to request any further incentives from the City with respect to the Source
Property, including, but not limited to, tax abatements, tax exemptions, economic
development grants and fee waivers, whether for the benefit of Railhead and/or an
affiliate thereof or a third party purchaser or lessee, or potential purchaser or
lessee, of any portion of the Source Property.
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6. PROGRAM GRANTS.
Beginning in calendar year 2006, and in each subsequent Program Year, the City
will pay to Railhead annual Program Grants, calculated in accordance with this Section 6.
The maximum amount of any annual Program Grant shall be an amount equal to ninety
percent (90%) of the Source Property Tax Increment received by the City in the one year
period prior to February 1 of the respective Program Year, plus any interest payable in
accordance with Section 6.5 hereof on (i) the difference between the amount of the
Infrastructure Investment and the amount of cumulative Program Grant payments that
Railhead has received in all previous Program Years and (ii) previously accrued interest
(the"Infrastructure Investment Balance"). The actual amount of each annual Program
Grant, excluding interest, shall be based on (i) the average percentage by which the
Construction Cost spending commitments for the Infrastructure Improvements, as
outlined in Sections 5.1.2 and 5.1.3, were met; (ii) the average percentage by which the
Source Property Project Cost spending commitments for the Source Property
Improvements, as outlined in Sections 5.2.1 and 5.2.2.1, were met in the previous
calendar year; and (iii) the average percentage by which the employment commitments
relative to the Source Property, as outlined in Sections 5.3.1 and 5.3.2, were met in the
previous calendar year. Notwithstanding anything to the contrary, in no event shall the
aggregate amount of Program Grants paid hereunder exceed the Maximum Program
Grant Amount. A deficiency in attainment of one commitment in one year may not be
offset by exceeding another commitment in that same year. If the Term of this
Agreement expires prior to Railhead's receipt of the Maximum Program Grant Amount,
the City's obligation to pay Railhead any remaining Infrastructure Investment Balance,
plus any interest accrued thereon, shall automatically be extinguished.
6.1. Component Based. on Infrastructure Improvement Construction
Spending (Maximum 30% Component).
Each annual Program Grant payable hereunder shall include an amount
that is based on the average percentage by which the Construction Cost spending
commitments for the Infrastructure Improvements, as outlined in Sections 5.1.2
and 5.1.3, were met (the "Infrastructure Improvement Percentage"). This
Infrastructure Improvement Percentage will be determined at the time that the
Certificate of Completion is issued for the Infrastructure Improvements, in
accordance with Section 5.1.8, and shall remain constant throughout the Program.
The amount of the Infrastructure Percentage shall equal the product of 30%
multiplied by the Infrastructure Improvement Commitment Attainment. The
"Infrastructure Improvement Commitment Attainment" shall equal the
average of the percentages by which the Construction Cost spending
commitments for the Infrastructure Improvements, as outlined in Section 5.1.2
and 5.1.3, were met.
For example, suppose that the Infrastructure Investment, as reflected in the
Certificate of Completion, is $4 million, of which $1 million in Construction
Costs were spent with Fort Worth Companies but only $400,000 in Construction
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Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
Costs were spent with Fort Worth Certified M/WBE Companies. In this case, the
Infrastructure Improvement Commitment Attainment would equal the average of
100% (because the 20% commitment to Fort Worth Companies was met) plus
66.6% (because only $400,000 of the $600,000 necessary for attainment of the
15%commitment to Fort Worth Certified M/WBE Companies was spent), or 83%
(100% + 66.6% divided by 2). Therefore, pursuant to the calculation above, the
Infrastructure Improvement Percentage would equal the product of 30%
multiplied by 83%, or 24.9% (30 x .83).
6.2. Component Based on Source Property Project Cost Spending
(Maximum 30% Component).
Each annual Program Grant payable hereunder shall include an amount
that is based on the percentage by which the cumulative Source Property Project
Cost spending commitments for the Source Property Improvements, as outlined in
Sections 5.2.1 and 5.2.2.1 (but not the goal for third party spending with Fort
Worth Certified M/WBE Companies, as outlined in Section 5.2.2.2), were met
(the "Source Property Improvement Percentage"). The Source Property
Improvement Percentage will be determined each Program Year within thirty(30)
calendar days of receipt by the City of the Source Property Project Cost spending
report required by Section 5.4.1, subject to any extensions that may reasonably be
required on account of requests for clarifications and audits undertaken in
accordance with this Agreement, and shall equal the product of 30%multiplied by
the Source Property Improvement Commitment Attainment. The "Source
Property Improvement Commitment Attainment" shall equal the average of
the cumulative percentage in all previous years of the Term by which the Source
Property Project Cost spending commitments for the Source Property
Improvements, as outlined in Section 5.2.1 and 5.2.2.1,were met.
For example, suppose that all Source Property Project Costs for Source
Property Improvements in 2004, 2005 and 2006 were $20 million, of which $5
million in Source Property Project Costs were spent with Fort Worth Companies
but only$1 million in Source Property Project Costs directly incurred by Railhead
or an Affiliate were spent with Fort Worth Certified M/WBE Companies. In this
case, the Source Property Improvement Commitment Attainment for the 2007
Program Year would equal the average of 100% (because the 20% commitment to
Fort Worth Companies was met) plus 33.3% (because only $1 million of the $3
million necessary for attainment of the 15% commitment to Fort Worth Certified
M/WBE Companies was spent), or 66.6% (100% + 33.3% divided by 2).
Therefore, pursuant to the calculation above, the Source Property Improvement
Percentage for the 2007 Program Year would equal the product of 30%multiplied
by 66.6%, or 19.98% (.30 x .666).
Page 14
Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P. 11� U."I P12 V
RE"t
6.3. Component Based on Source Property Employment (Maximum 40%
Component).
Each annual Program Grant payable hereunder shall include an amount
that is based on the average percentage by which the commitments for
employment on the Source Property, as outlined in Sections 5.3.1 and 5.3.2, were
met (the "Employment Percentage"). The Employment Percentage will be
determined each Program Year within thirty (30) calendar days of receipt by the
City of the Source Property employment report required by Section 5.4.2, subject
to any extensions that may reasonably be required on account of requests for
clarifications and audits undertaken in accordance with this Agreement, and shall
equal the product of 40% multiplied by the Employment Commitment
Attainment. The "Employment Commitment Attainment" shall equal the
average of the percentages by which the commitments for employment on the
Source Property, as outlined in Section 5.3.1 and 5.3.2,were met.
For example, suppose that as of December 31, 2006 there are 4 million
square feet of Source Property Improvements for which final certificates of
occupancy have been issued and that there are 150 individuals with Full-time Jobs
on the Source Property who are Fort Worth Residents, of which 36 are Central
City Residents. In this case, the Employment Commitment Attainment for the
2007 Program Year would equal the average of 100% (because the commitment
for employment of one Fort Worth Resident for every 33,000 square feet was
met) plus 75% (because the commitment for employment of at least one Central
City Resident for every 83,000 square feet, or in this case 48 Central City
Residents, fell short by 12 individuals), or 87.5% (100% + 75% divided by 2).
Therefore, pursuant to the calculation above, the Employment Percentage for the
2007 Program Year would equal the product of 40%multiplied by 87.5%, or 35%
(.40 x .875).
6.4. Calculation of Program Grant.
As stated in the introductory paragraph of this Section 6 and in accordance
with the provisions of Sections 6.1, 6.2 and 6.3, each annual Program Grant,
excluding interest payable in accordance with Section 6.5 on the Infrastructure
Investment Balance, shall equal the product of (i) ninety percent (90%) of the
Source Property Tax Increment received by the City in the one year period prior
to February 1 of the same Program Year, which is the maximum available annual
Program Grant amount authorized by this Agreement, multiplied by (ii) the sum
of the Infrastructure Improvement Percentage, plus the Source Property
Improvement Percentage applicable to that Program Year, plus the Employment
Percentage applicable to that Program Year.
In other words, suppose that between February 1, 2006 and January 31,
2007 the City received $1 million in ounce PropQrty_T_ax-laczement,-JJsing the
Page 15
Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
examples provided in Sections 6.1, 6.2 and 6.3, the Program Grant payable for the
2007 Program Year, excluding interest, would equal the product of (i) ninety
percent(90%) of the Source Property Tax Increment received by the City between
February 1, 2006 and January 31, 2007, or$900,000, multiplied by(ii) the sum of
the Infrastructure Improvement Percentage (24.9%), plus the Source Property
Improvement Percentage (19.98%), plus the Employment Percentage (35%), or
$900,000 x 79.88%, meaning that the Program Grant payable for the 2007
Program Year, excluding interest, would be $718,920. The difference between
the total $1 million in Source Property Tax Increment received by the City and the
$718,920 Program Grant amount (or $281,080) would constitute Excess Source
Property Tax Increment for Program Year 2007.
6.5. Interest on Infrastructure Investment.
Beginning on September 1, 2006 (the day as of which the first Program
Grant must be paid by the City), the Infrastructure Investment Balance shall bear
simple interest calculated at a fixed rate equal to five percent (5%), compounded
annually. Payments on interest accrued hereunder shall be included with Program
Grants paid by the City, with the understanding that, notwithstanding anything to
the contrary herein, the amount of interest paid by the City in any given Program
Year shall not exceed the amount of Excess Source Property Tax Increment
received by the City in the same Program Year, as more specifically set forth in
Section 6.6. In other words, suppose that as of January 31, 2007 accrued interest
on the Infrastructure Investment Balance is $300,000. Therefore, using the same
examples as those provided in Section 6.4, where the City received $281,080 in
Excess Source Property Tax Increment for the 2007 Program Year, the City
would pay Railhead a total Program Grant in 2007 equal to the base $718,920
Program Grant amount plus $281,080 in interest (which is the fall amount of
Excess Source Property Tax Increment received by the City for that Program
Year). Notwithstanding anything to the contrary herein, interest shall not accrue
hereunder to the extent that (i) in accordance with Section 6, a Program Grant is
reduced below the maximum amount that would otherwise be available on
account of a failure to meet any of the commitments set forth in Sections 5.1.2,
5.1.3, 5.2.1, 5.2.2.1, 5.3.1 and 5.3.2, or (ii) an owner or lessee of any Source
Property fails to pay the City the fall amount of real and personal property tax
(including any agricultural roll back taxes) on such Source Property by the date
that such amount is first due.
6.6. Excess Source Property Tax Increment.
The City's obligation to make interest payments in any given Program
Year on the Infrastructure Investment Balance shall, as stated in Section 6.5, arise
only to the extent that the City receives Excess Source Property Tax Increment in
a subsequent Program Year or Years. In the event that the City retains any Excess
Source Property Tax Increment in a Program Year after paying the Program Grant
plus any accrued interest for that Program Year, and the amount of accrued
Page 16 �
Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
HH, Mt
interest owed by the City in a subsequent Program Year is greater than the amount
of Excess Source Property Tax Increment received by the City in that same
Program Year, the City shall have no obligation to make payments toward the
balance of such unpaid interest with any Excess Source Property Tax Increment
previously retained.
6.7. Source of Program Grant Payments.
Notwithstanding anything that may be interpreted to the contrary herein,
all Program Grants and any interest payable by the City under this Agreement
shall come from then-currently available general revenues of the City and not
directly from the Source Property Tax Increment received by the City.
6.8. Deadline for Payment.
Annual Program Grants will be paid to Railhead on or before September
1, 2006 and on or before June 1 of each subsequent calendar year during the
Term. Each annual Program Grant payment made by the City shall be
accompanied by an accounting showing the City's calculation of such payment.
7. LIABILITY AND INDEMNIFICATION.
RAILHEAD SHALL BE LIABLE FOR AND HEREBY AGREES TO
DEFEND, INDEMNIFY AND HOLD THE CITY, ITS OFFICERS, AGENTS AND
EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS,
COSTS AND EXPENSES FOR PERSONAL INJURY (INCLUDING DEATH,
PROPERTY DAMAGE OR OTHER HARM FOR WHICH RECOVERY OF
DAMAGES IS SOUGHT THAT MAY ARISE OUT OF OR BE OCCASIONED BY
RAILHEAD'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS
AGREEMENT, OR BY ANY NEGLIGENT ACT OR OMISSION OF RAILHEAD,
ITS OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS
(OTHER THAN THE CITY) OR SUBCONTRACTORS, IN THE PERFORMANCE
OF THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, THE
UNDERTAKING OF ANY OF THE INFRASTRUCTURE IMPROVEMENTS,
EXCEPT THAT THE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH
SHALL NOT APPLY TO ANY LIABILITY RESULTING FROM THE SOLE
NEGLIGENCE OF CITY, ITS OFFICERS,AGENTS,EMPLOYEES OR SEPARATE
CONTRACTORS, AND IN THE EVENT OF JOINT AND CONCURRENT
NEGLIGENCE OF BOTH RAILHEAD AND THE CITY, RESPONSIBILITY, IF
ANY, SHALL BE APPORTIONED COMPARATIVELY IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS.
In addition, Railhead will cause any Infrastructure Improvement Contract to
contain an indemnification provision, in substantially the same form as that set forth
above, under which the Contractor and any subcontractors involved in any work on the
Page 17
g
Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P. C p ii ic,r
Infrastructure Improvements agree to indemnify and hold harmless the City for any
negligent acts or omissions or intentional misconduct of the Contractor or any
subcontractors, their officers, agents, servants and employees that is related to or arises
from work on the Infrastructure Improvements.
8. DEFAULT, TERMINATION AND FAILURE TO MEET VARIOUS
OBLIGATIONS.
8.1. Termination by Railhead.
Railhead may terminate this Agreement at any time by providing written
notice to the City;provided, however, that nothing herein shall relieve Railhead or
any bonding company that has issued bonds pursuant to Section 5.1.5 of the
obligation to complete any Infrastructure Improvements on which construction
work has commenced and that all provisions and conditions of this Agreement
related to such obligation, including, but not limited to, Sections 5.1.5 and 7, shall
survive the termination of this Agreement pursuant to this Section 8.1.
8.2. Termination by the City.
8.2.1. Failure to Complete Infrastructure Improvements.
If none of the Infrastructure Improvements have been completed in
accordance with the procedures set forth in Sections 5.1.7 and 5.1.8 by
July 1, 2006, the City shall have the right to terminate this Agreement
immediately by providing written notice of such intent to Railhead.
8.2.2. Failure to Pay City Taxes.
An event of default shall occur under this Agreement if any ad
valorem taxes on any portion of the Source Property that is owned by
Railhead or arising on account of operations on any portion of the Source
Property that is owned by Railhead and owed to the City become
delinquent and Railhead does not properly follow the legal procedures for
protest and/or contest of any such taxes. Upon the occurrence of such
default, the City shall notify Railhead in writing and Railhead shall (i)
have thirty (30) calendar days to cure such default or (ii) if Railhead has
diligently pursued cure of the default but such default is not reasonably
curable within thirty (30) calendar days, then such amount of time that the
City reasonably agrees is necessary to cure such default. If the default has
not been fully cured by such time, the City shall have the right to
terminate this Agreement immediately by providing written notice to
Railhead and shall have all other rights and remedies that may be available
to it under the law or in equity.
Page 18
Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
8.3. Failure by Railhead to Meet Infrastructure Improvement
Commitments, Source Property Improvement Commitments and/or
Employment Commitments.
Subject to Section 8.2, Railhead's failure in any given year to meet any or
all of the commitments set forth in Sections 5.1.2, 5.1.3, 5.2.1, 5.2.2.1, 5.3.1 and
5.3.2 shall not place Railhead 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 Grants that the City is required to pay Railhead in
accordance with this Agreement. Failure by any third party to meet the goal set
forth in Section 5.2.2.2 to spend at least ten percent (10%) of Source Property
Project Costs for the Source Property Improvements with Fort Worth Certified
M/WBE Companies shall not place Railhead in default hereunder or be weighed
in any manner against the amount of the Program Grants that the City is required
to pay Railhead in accordance with this Agreement.
8.4. Estoppel Certificates.
Upon written request by Railhead to the City, no more frequently than
once per year, the City shall provide Railhead with a certificate stating, as of the
date of the certificate, (i) whether this Agreement is in fall force and effect and, if
Railhead is in breach of this Agreement, the nature of that breach; (ii) the
aggregate amount of Program Grants that the City has previously paid to
Railhead; and (iii)the remaining balance of Program Grants anticipated to be paid
to Railhead.
9. INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Railhead shall operate as an
independent contractor as to all rights and privileges granted herein, and not as an agent,
representative or employee of the City. Railhead shall have the exclusive right to control
the details of all work on the Infrastructure Improvements and of all operations and
activities undertaken by Railhead on the Source Property and shall be solely responsible
for the acts and omissions of its officers, agents, servants, employees, contractors,
subcontractors, patrons, licensees and invitees. Railhead acknowledges that the doctrine
of respondeat superior shall not apply as between the City and Railhead, its officers,
agents, employees, contractors and subcontractors. Railhead further agrees that nothing
herein shall be construed as the creation of a partnership or joint enterprise between the
City and Railhead.
Page 19
Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
10. MUTUAL ASSISTANCE AND FAST-TRACK DEVELOPMENT
APPROVALS.
The City and Railhead 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. In addition, the City
will use reasonable efforts to provide a procedure to expedite all Development
Department and Transportation/Public Works Department approvals directly related to
the construction and acceptance by the City of the Infrastructure Improvements.
However, Railhead understands and agrees that the City has entered into development
agreements for several other major projects in the City and that expedited approvals will
be reasonably subject to the then-current workloads and staffing capacity of such
Departments.
11. REPRESENTATIONS AND WARRANTIES.
The City represents and warrants to Railhead 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. Railhead represents and warrants to the City that it has the
requisite authority to enter into this Agreement.
12. SUCCESSORS AND ASSIGNS.
Prior to issuance of the Certificate of Completion, Railhead may not assign,
transfer or otherwise convey any of its rights or obligations under this Agreement to any
party without the prior written consent of the City, which consent shall not unreasonably
be withheld or delayed, conditioned on (i) the prior approval of the assignee or successor
and a finding by the City Council that the proposed assignee or successor is financially
capable of completing the Infrastructure Improvements and (ii) prior execution by the
proposed assignee or successor of a written agreement with the City under which the
proposed assignee or successor agrees to assume all covenants and obligations of
Railhead under this Agreement, in which case such assignee or successor shall thereafter
be deemed "Railhead" for all purposes under this Agreement. After issuance of the
Certificate of Completion and provided that Railhead is not in default at the time,
Railhead may assign all or part of its rights and obligations hereunder without the
approval or consent of the City. In any such event, Railhead shall promptly provide the
City with written notice of the name of and a local contact for any successor or assign.
This Agreement shall be binding on and inure to the benefit of the parties, their respective
successors and assigns.
Page 20 ib w� 1 1 � _J
Economic Development Program Agreement �NQp „ .� �� I[fj i�,�,\V
between City of Fort Worth and Railhead Industrial Park Investors,L.P. vJ��� �SLIt��`U' f�'V 4K
13. NOTICES.
All written 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:
City: Railhead:
City of Fort Worth Railhead Industrial Park Investors,L.P.
Attn: Director Attn: William V. Boecker
Economic &Community Dev. Dept. 420 Throckmorton, Suite 820
1000 Throckmorton Fort Worth,TX 76102
Fort Worth,TX 76102
with copies to: with copies to:
the City Manager and the City Attorney Patricia F. Meadows
at: Kelly,Hart&Hallman
201 Main St., Suite 2500
1000 Throckmorton Fort Worth, TX 76102-3194
Fort Worth,TX 76102
14. 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.
15. VENUE AND JURISDICTION.
This Agreement shall be construed in accordance with the laws of the State of
Texas and applicable ordinances, rules, regulations or policies of the City. Venue for any
action under this Agreement shall lie in the State District Court of Tarrant.County, Texas.
This Agreement is performable in Tarrant County, Texas.
16. GOVERNMENTAL POWERS.
It is understood that by execution of this Agreement, the City does not waive or
surrender any of its governmental powers.
Page 21
Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
17. NO THIRD PARTY RIGHTS.
The provisions and conditions of this Agreement are solely for the benefit of the
City and Owner, and any lawful assign or successor of Owner, and are not intended to
create any rights, contractual or otherwise, to any other person or entity.
18. FORCE MAJEURE.
It is expressly understood and agreed by the parties to this Agreement that if the
performance of any obligations hereunder is delayed by reason of war, civil commotion,
acts of God, inclement weather, governmental restrictions, regulations, or interferences,
unreasonable delays by the City in issuing any permits or certificates of occupancy or
conducting any inspections of or with respect to the Infrastructure Improvements (based
on the amount of time that the City customarily requires in undertaking such activities
and based on the then-current workload of the City department(s) responsible for
undertaking such activities), or delays caused by unforeseen construction or site issues,
fire or other casualty, court injunction, necessary condemnation proceedings, acts of the
other party, its affiliates/related entities and/or their contractors, or any actions or
inactions of third parties or other circumstances which are reasonably beyond the control
of the party obligated or permitted under the terms of this Agreement to do or perform the
same, regardless of whether any such circumstance is similar to any of those enumerated
or not, the party so obligated or permitted shall be excused from doing or performing the
same during such period of delay, so that the time period applicable to such design or
construction requirement shall be extended for a period of time equal to the period such
party was delayed.
19. COMPLIANCE WITH LAWS, ORDINANCES,RULES AND
REGULATIONS.
This Agreement is subject to all applicable federal, state and local laws,
ordinances, rules and regulations, including, but not limited to, all provisions of the
City's Charter and ordinances, as amended, and violation of same shall constitute a
default under this Agreement
20. SEVERABILITY.
If any provision of this Agreement is held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not in any way
be affected or impaired.
Page 22
Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors,L.P.
21. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and constitute one and the same instrument.
22. CAPTIONS.
The captions to the various clauses of this Agreement are for informational
purposes only and shall not alter the substance of the terms and conditions of this
Agreement.
23. ENTIRETY OF AGREEMENT.
This Agreement, including any exhibits attached hereto and any documents
incorporated herein by reference, contains the entire understanding and agreement
between the City and Railhead, their assigns and successors in interest, as to the matters
contained herein. Any prior or contemporaneous oral or written agreement is hereby
declared null and void to the extent in conflict with any provision of this Agreement.
This Agreement shall not be amended unless executed in writing by both parties and
approved by the City in an open meeting held in accordance with Chapter 551 of the
Texas Government Code.
EXECUTED as of the last date indicated below:
CITY OF FORT WORTH: RAILHEAD INDUSTRIAL PARK
INVESTORS,L.P., a Texas limited
partnership:
By: Railhead IP Genpar,LLC,
a Texas limited liability
company and its sole
general partner:
By: By: '
Dale Fisseler William V. Boecker
Acting Assistapt City Manager Manager
Date: ( (� Date: /
Page 23 �1%ILI REC-100'd
Economic Development Program Agreement •N.11 �- n �,o r�7r' r�`,
between City of Fort Worth and Railhead Industrial Park Investors,L.P. vJ�L� �5 PE �!rly
!�V ''t''J'JbP o
, �'y� c t
APPROVED AS TO FORM AND LEGALITY:
By:
Peter Vaky
Assistant City Attorney
M&C:
ATTESTED BY
Page 24
Economic Development Program Agreement
between City of Fort Worth and Railhead Industrial Park Investors L.P. U
EXHIBITS
"A"—Map and Description of the Development Site
"B"—Map of the Central City
"C"—Description of Infrastructure Improvements
"D"-Map and Description of Source Property
"E"-Form for Monthly Certificates Related to Public Infrastructure Improvements
Economic Development Program Agreement
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Exhibit C
Description of Public Infrastructure Improvements
(estimated quantities and construction cost)
Construction
Quantity Units Cost
1. Engineering and Testing:
Engineering 229,600
Reimbursable Expenses 5,000
Testing 75,000
Total Engineering and Testing 309,600
2. Excavation and Grading:
Retention Pond 79,053 cu.yds. 395,265
Cut and Fill(2 foot average) 43,070 cu.yds. 121,110
Total Excavation and Grading 516,375
3. Site Utilities:
Open Ditch 1,390 LF 27,800
Open Ditch 2,640 LF 52,800
5 ft.x 4 ft.Culvert 150 LF 45,000
Headwalls 7 14,000
72"Reinforced Concrete Pipe 550 LF 84,700
54"Reinforced Concrete Pipe 1,590 LF 174,900
48"Reinforced Concrete Pipe 1,200 LF 126,000
36"Reinforced Concrete Pipe 1,350 LF 108,000
27"Reinforced Concrete Pipe 600 LF 27,000
Manholes 1 5,000
Inlets 20 30,000
12"Water Line 6,800 LF 306,000
12"Sanitary Sewer 8,967 LF 430,416
6"Sanitary Sewer 600 LF 18,000
Manholes 6 21,000
Total Site Utilities 1,470,616
4. Paving,Base,and Street Lights:
6"Lime-treated Subgrade 31,500 sq.yds. 102,375
Street Lights 20 70,000
7"Reinforced Concrete 29,100 sq.yds. 814,800
ROW Seeding 6,500 sq.yds. 32,500
Total Paving,Base,and Street Lights 1,019,675
5. Rail Spur:
Track Work 9,950 LF 995,000
Internal Switches 1 25,000
Concrete Crossings 270 LF 108,000
Total Rail Spur 1,128,000
6. City Inspection
Inspection of Site Utilities 29,412
Inspection of Paving 20,394
Total City Inspection 49,806
7. Construction Manager and Development Fees 165,387
8. Contingency 240,542
Total Public Infrastructure Improvements and Investment 4,900,000 r nrCa--�?,
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City ®f Fort Worth, Texas
Mayor and Council Ci i
COUNCIL ACTION: Approved As Amended on 8/31/2004 - amendment to ED Program
Agreement is available
CONTINUED FROM A PREVIOUS WEEK
DATE: Thursday, August 05, 2004
LOG NAME: 17RAILHEAD REFERENCE NO.: C-20185
SUBJECT:
Authorize Execution of Economic Development Program Agreement with Railhead Industrial Park
Investors, L.P.
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to execute the attached Economic
Development Program Agreement with Railhead Industrial Park Investors, L.P., subject to subsequent non-
material changes that may be agreed to.by the parties.
DISCUSSION:
Railhead Industrial Park Investors, L.P. (Railhead) has proposed to pay for and oversee,the installation of
approximately $4.9 million in infrastructure improvements in and around currently undeveloped land in the
Railhead Business Park (the Undeveloped Property). This infrastructure includes, but is not limited to, the
installation of water lines, sanitary sewers, streets and street lighting and a rail spur (collectively, the new
infrastructure). Installation of the new infrastructure will allow for up to 5 million square feet of new industrial
development to occur within the .boundary of the undeveloped 'property. This new development will
stimulate job creation and an increase in the tax base. The undeveloped property. is depicted in Exhibit D of
the attached Economic Development Program Agreement. In 2003, the undeveloped property produced
only $1,278 in tax revenue to all taxing units with jurisdiction over that property.
Railhead will enter into a Community Facilities Agreement with the City for construction of any of the new .
infrastructure that will be dedicated to the City. In addition, Railhead will provide payment and performance
bonds to ensure that the new infrastructure is completed as anticipated. The new infrastructure must be
completed by July 1, 2006.
Pursuant to the proposed Agreement, the City will, in effect, reimburse Railhead for the cost of the new
infrastructure by paying Railhead annual economic development grants that are calculated in accordance
with the amount of growth that Railhead causes to occur within the undeveloped property. The maximum,
.aggregate amount of the grants that the City will pay under the Agreement is the lesser of (i) the actual cost
of the new infrastructure, not to exceed $4.9 million, plus accrued interest, or (ii) an amount equal to 90% of
the incremental real and personal property tax revenue attributable to the Undeveloped Property and
received by the City during the ten (10) tax years between 2006 and 2015. Following the first grant
payment, any unreimbursed balance on the cost of the New Infrastructure will carry 5% annual interest, but
interest payments will be capped each year at an amount equal to excess tax revenue attributable to the
Undeveloped Property (i.e. that tax revenue not used as a basis for calculation of a grant payment). In no
event will the City be required to pay grants to Railhead after the Agreement expires on June 1, 2015, even
if Railhead has not recouped its investment in the New Infrastructure. All grant payments to Railhead are
authorized by Chapter 380 of the Texas Local Government Code.
T,nannme- 17R ATT RF.AT) pnap 1 of 7
Railhead has committed to the utilization of Fort Worth companies and Fort Worth certified M/WBE
companies in the construction of the New Infrastructure as well as any development that occurs within the .
Undeveloped Property. In addition, Railhead has committed to the employment of Fort Worth residents and
Central City Residents with companies that locate their operations within the Undeveloped Property. These
commitments are as follows:
For the New Infrastructure, 20% of the construction costs will be expended with Fort Worth companies and
15% of the construction costs will be expended with Fort Worth certified M/WBE companies. For new.
development within the Undeveloped Property, 20% of the construction costs will be spent with Fort Worth
companies and 15% of the construction costs incurred directly by Railhead will be spent with Fort Worth
certified M/WBE companies. In addition, in instances where the Undeveloped Property is being developed
by a third party developer, Railhead shall establish as a good faith goal for that developer that 106/6 of
construction costs be spent with Fort Worth certified M/WBE companies. Railhead has also committed to
the employment of Fort Worth residents in not less than one full-time job for every 40,000 square feet of
new development within the undeveloped property and the employment of Central City residents in not less
than one full-time job for every 100,000 square feet of new development within the Undeveloped Property.
Failure to meet these commitments (excluding the good faith goal established for third party developers with .
regard to construction spending on development within the undeveloped property) shall result in reductions
to the grant payments that are calculated in accordance with the sum of all percentages by which the
commitments were missed.
This property is located in COUNCIL DISTRICT 2.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that this action will not have an impact on City funds in this fiscal year.
TO Fund/Account/Centers FROM Fund/Account/Centers
Submitted for City Manager's Office by Dale Fisseler (6140)
Originating Department Head: Tom Higgins (6192)
Additional Information Contact: Peter Vaky (7601)
T.nvnamP 17P ATT.NFAT)
Motion should be to approve M&C C-20185,with the following revisions to the
Economic Development Program Agreement attached thereto:
• That the Source Property Employment Commitments be revised to require that at
least 1 Full-time Job for every 33,000 square feet of Source Property
Improvements be given to Fort Worth Residents and at least 1 Full-time Job for
every 83,000 square feet of Source Property Improvements be given to Central
City Residents;
• That each year Railhead be required to give to the Opportunity. Center at least 5%.
of the maximum Program Grant that could be earned by Railhead in that year; and
® That Railhead agree that during the term of the Agreement it will not request any
other City incentives with respect to the Source Property.