HomeMy WebLinkAboutContract 30736 CITY SECRETARY
CONTRACT NO. EL18U
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 TARGET CORPORATION ("Target"), a Minnesota corporation.
RECITALS
The City and Target hereby agree that the following statements are true and
correct and constitute the basis upon which the City and Target have entered into this
Agreement:
A. Target owns or is under contract to purchase approximately 12.67 acres of
underdeveloped land just to the north of the historic Montgomery Wards warehouse on
West 7th Street in the City (the "Land"). The Land is specifically described in and
depicted on Exhibit "A", attached hereto and hereby made a part of this Agreement for
all purposes. Target intends to cause construction of a retail store on the Land. This
project will be part of a larger mixed-use development in the vicinity of the Land (the
cost of which is anticipated to be approximately $137 million), including a
redevelopment.of the Montgomery Wards warehouse, which was damaged in a tornado
on March 28, 2000 and is now vacant.
B. The Land is located in the corridor between the Downtown and Cultural
District areas of the City. The 2004 Comprehensive Plan, adopted by the City Council on
February 24, 2004 pursuant to M&C G-14276 (the "Comprehensive Plan"), identifies
both of these areas as mixed-use growth centers. The Comprehensive Plan defines a
mixed-use growth center as a relatively small urbanized area that contains a concentration
of jobs, housing units, schools, parks and other public facilities, public transportation
hubs and pedestrian activities. As outlined in the Comprehensive Plan, mixed-use growth
centers are beneficial to the health, economy and vitality of the City as a whole because
they enable the efficient operation of infrastructure, mass transit, recreational facilities
and other City services. A network of mixed-use growth centers can accommodate City-
wide growth with fewer environmental impacts, less land consumption and traffic
generation and less pollution than a dispersed development pattern. As a result, the City
Council has adopted a policy, as reflected in the Comprehensive Plan, that higher density
residential and commercial development and redevelopment should be encouraged in and
in the vicinity of mixed-use growth centers and especially in the corridors linking the
three major City districts: Downtown, the Stockyards and the Cultural District.
C. The City Council has found that certain commercial development in
mixed-use growth areas and in the major commercial corridors linking those areas is
necessary in order to foster in-town residential development. The City Council has
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determined that the construction of a full service grocery store is among the commercial
developments that is most needed and desired in the corridor linking Downtown and the
Cultural District. As a result, the City has requested that Target increase the scope of the
development that it originally intended for the Land to include a full service grocery store
at least 35,000 square feet in size (collectively, the Required Improvements, as more
specifically defined in Section 4.1). Target has agreed to the City's request on the
condition that the City, as a non-shareholder contribution to capital or a development
inducement, reimburse Target for a portion of the anticipated difference in costs between
the development that Target originally intended and the Required Improvements.
D. In accordance with Resolution No. 2704, adopted by the City Council on
January 30, 2001, the City has established an Economic Development 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 businesses or entities to cause specific
infrastructure, employment and other public benefits to be made or invested in the City
(the 11380 Program").
E. The City Council has determined that by entering into this Agreement, the
City's policy of encouraging appropriate commercial development in corridors linking
the major mixed-use growth centers of the City will be met. In addition, the City Council
has determined that the 380 Program is an appropriate means to achieve the construction
of the Required Improvements (as defined in Section 4.1) it has determined are necessary
and desirable, and that the potential economic benefits that will accrue to the City
pursuant the terms and conditions of this Agreement are consistent with the City's
economic development objectives as outlined in the Comprehensive Plan. This
Agreement is authorized by Chapter 380 of the Texas Local Government Code.
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
1. INCORPORATION OF RECITALS.
The City Council hereby finds, and the City and Target hereby agree, that the
recitals set forth above are true and correct and form the basis upon which the City has
entered into this Agreement.
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2. DEFINITIONS.
In addition to terms defined in the body of this Agreement, the following terms
shall have the definitions ascribed to them as follows:
Central City means the area of the corporate limits of the City within Loop 820
(i) consisting of all Community Development Block Grant (11CDBG") 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
attached hereto as Exhibit `B", which is hereby made a part of this Agreement for all
purposes.
Central City Resident means an individual whose principal place of residence is
located within the Central City.
Completion Date means the date as of which a certificate of occupancy, whether
temporary or final, has been issued for all of the Required Improvements and the Required
Improvements, as defined in Section 4.1 of this Agreement, are lawfully open for business
to the general public.
Completion Deadline means August 1, 2007, as may be extended by Force
Majeure.
Construction Costs means site development and building costs, including,
without limitation, actual construction costs, signage costs, contractor fees, third party
overhead and profit, the costs of supplies and materials, engineering fees, architectural
fees and other professional, development and permitting fees expended directly in
connection with the Required Improvements and any other improvements constructed on
the Land.
Excess Target Tax Revenues means the positive difference, if any, between the
sum of Target Personal Property Tax Revenues, Target Real Property Tax Revenues and
Target Sales Tax Revenues received by the City in a given Program Year and the amount
of the Program Grant that the City is obligated to pay Target in the same Program Year.
Force Maieure means (i) an event beyond Target's reasonable control, including,
without limitation, acts of God, fires, strikes, national disasters, wars, riots, material or
labor restrictions, delays caused by unforeseen structural issues, weather delays,
unreasonable delays by the City in issuing any permits or certificates of occupancy or
conducting any inspections of or with respect to the Required Improvements, or delays
caused by unforeseen construction or site issues, but shall not include construction delays
caused due to purely financial matters involving Target, such as, without limitation, delays
in the obtaining of adequate financing, and (ii) an event beyond the City's reasonable
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control, including, without limitation, acts of God, fires, strikes, national disasters, wars,
riots,material or labor restrictions, or acts of third parties.
Fort Worth Certified M/WBE Comoany 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 has a principal office located within the corporate limits of the City.
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 Service Grocery Store means a space with at least 35,000 square feet, either
as a component of a larger building or a stand-alone building, that is primarily used for
the retail sale of edible foods, paper products, health and beauty aids, pet foods and other
items typically sold in a grocery store such as Tom Thumb, Albertson's or Kroger, which
space may include a proportionate share of the square footage for uses that support sales
from the grocery component, such as, without limitation, a stock room, snack bar,
customer service area, checkout lanes, related common areas, restrooms and other non-
sales areas. A grocery component substantially similar to the grocery component
operating as of the Effective Date (as defined in Section 3) within the SuperTarget
located in Cityview Place on Hulen Street in the City shall be deemed to be a Full Service
Grocery Store.
Job means a job provided to an individual directly by Target.
Maximum Annual Prop-ram Grant Amount means the maximum Program
Grant that the City will pay Target for a given Program Year, as set forth in Exhibit"C",
attached hereto and hereby made a part of this Agreement for all purposes.
Proeram means the economic development program authorized by Chapter 380
of the Texas Local Government Code, established in general by City Council Resolution
No. 2704, and outlined specifically in this Agreement.
Program Grants means the annual economic development grants paid by the
City to Target in accordance with this Agreement and as part of the 380 Program.
Program Year means a calendar year in which the City is obligated to pay Target
a Program Grant, beginning with the calendar year following the year in which the
Completion Date occurs (Program Year 1).
Proiect means the construction of the Required Improvements, as defined in
Section 4.1, as well as any other improvements on the Land, all related site development
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on or related to the Land and the acquisition and installation of all personal property and
fixtures located on the Land or within such Required Improvements or other
improvements.
Tangible Personal Property means any personal property that is owned or
leased by Target and located on the Land, including, without limitation, inventory,
fixtures, store signage, checkout stands, computers, cash registers and security and
communications systems.
Target Personal Property Tax Revenues means the amount of ad valorem tax
paid by Target to the City in a given year based on the entire taxable assessed value of
Tangible Personal Property. With respect to Tangible Personal Property leased by
Target, Target Personal Property Tax Revenues will include that portion of annual
property tax, prorated on a daily basis, which is attributable to the period during which
Target was the lessee of such property. The taxable assessed value of such Tangible
Personal Property in any given year will be established solely by the appraisal district that
has jurisdiction over the Land at the time.
Target Real Property Tax Revenues means the amount of real property tax paid
by Target to the City in a given tax year based on the entire taxable assessed value of the
Land. The taxable assessed value of the Land in any given year will be established solely
by the appraisal district that has jurisdiction over the Land at the time.
Target Sales Tax Cap means the maximum $10,000,000 in Target Sales Tax
Revenues that will serve as the basis for calculating any Program Grant in accordance
with Section 5.3 of this Agreement. Once the City has received $10,000,000 in Target
Sales Tax Revenues, then Target Sales Tax Revenues will no longer serve as the basis for
calculating the amount of any Program Grant payable pursuant to this Agreement.
Target Sales Tax Revenues means the one percent (1%) available municipal
sales tax, such as that presently in effect pursuant to Texas Tax Code §§ 321.101(a) and
321.103, resulting from sales tax received by the City and collected by Target on sales
transacted on the Land for merchandise physically located on the Land from and after the
date that a Full Service Grocery Store is in operation on the Land, as provided by and in
accordance with 4.5 of this Agreement. Target Sales Tax Revenues specifically exclude
all revenues from (i) the Crime Control District Sales Tax imposed by the City pursuant
to Texas Tax Code §323.105 and Local Government Code §363.005 and (ii) the Transit
Authority Sales Tax paid to the City by the Fort Worth Transportation Authority under
City Secretary Contract No. 19689, as previously or subsequently amended or restated,
from the sales tax imposed by the Fort Worth Transportation Authority pursuant to Texas
Tax Code Chapter 322. If the City ever charges less than a one percent (1%) available
sales tax, then Target Sales Tax Revenues shall be computed to reflect that lesser
percentage. If the City ever charges less than a one percent (1%) available sales tax and
then subsequently adds a sales tax that increases such lower percentage and whose use is
not controlled or regulated, in whole or in part, by another governmental entity or
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authority, then Target Sales Tax Revenues shall be computed to reflect that increased
percentage up to a maximum aggregate of one percent(1%).
Tax Abatement Agreement means that agreement between the City and Target
under which the City will abate certain real and personal property taxes payable by
Target to the City for one (1) tax year. The Tax Abatement Agreement is a pub i
document on file in the City Secretary's Office as City Secretary Contract No.
and is incorporated herein by reference for all purposes.
3. TERM.
This Agreement shall be effective as of the date of execution by both parties (the
"Effective Date") and shall expire upon the earlier of the date as of which (i) the City
has paid to Target Program Grants and granted tax abatements under the Tax Abatement
Agreement totaling, in the aggregate, $13,000,000 gross, less any (a) reductions made
under this Agreement due to the Base Benefit Percentage being less than one hundred
percent (100%) pursuant to Section 5.2.4 and (b) any reduction of any Program Grant
payment pursuant to Section 5.5 and/or 6.5 (the "Program Cap"), plus interest payable
thereon,if any, as provided by and in accordance with Section 5.6 hereof, or(ii)June 1 of
the calendar year following the twenty-fifth (25th) anniversary of the Completion Date,
unless terminated earlier as provided by and in accordance with this Agreement (the
I'Term").
4. TARGET OBLIGATIONS AND GOALS.
4.1. Real Property Improvements.
Target shall cause improvements on the Land to be completed by the
Completion Deadline for use as a general retail store, which shall (i) contain at
least 170,000 square feet of overall interior space; (ii) contain within that
minimum 170,000 square feet a Full Service Grocery Store component
(collectively, the "Required Improvements"); and (iii), together with any other
improvements constructed on the Land, have a minimum Construction Cost upon
completion of $8,750,000. For purposes of this Agreement, the Required
Improvements shall be deemed complete on the date as of which a certificate of
occupancy, whether temporary or final, has been issued for all of the Required
Improvements and all of the Required Improvements are lawfully open for business
to the general public as contemplated herein.
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4.2. Construction Spending Commitments.
4.2.1. Fort Worth Companies.
By the Completion Date, Target shall have spent or caused to be
spent with contractors that are Fort Worth Companies the lesser of (i)
twenty percent (20%) of all Construction Costs for the Required
Improvements and any other improvements constructed on the Land, or
(ii) $2,500,000 in Construction Costs for the Required Improvements or
any other improvements constructed on the Land.
4.2.2. Fort Worth Certified M/WBE Companies.
By the Completion Date, Target shall have spent or caused to be
spent with contractors that are Fort Worth Certified M/WBE Companies
the lesser of (i) fifteen percent (15%) of all Construction Costs for the
Required Improvements and any other improvements constructed on the
Land, or (ii) $1,000,000 in Construction Costs for the Required
Improvements or any other improvements constructed on the Land.
Dollars spent with Fort Worth Certified M/WBE Companies shall also
count as dollars spent with Fort Worth Companies for purposes of the
commitment set forth in Section 4.2.1. This commitment has been
approved by the City's Minority and Women Business Enterprise
Advisory Committee.
4.3. Employment Commitments.
4.3.1. Fort Worth Residents.
From the Completion Date through the end of the Term of this
Agreement (as measured on each Annual Reporting Date, in accordance
with and defined in Section 4.6.5 hereof), the lesser of (i) fifty percent
(50%) of all Jobs on the Land, or (ii) one hundred (100) Jobs on the Land
shall be held by Fort Worth Residents.
4.3.2. Central City Residents.
From the Completion Date through the end of the Term of this
Agreement (as measured on each Annual Reporting Date, in accordance
with and defined in Section 4.6.5 hereof), the lesser of (i) twenty-five
(25%) of all Jobs on the Land, or (ii) twenty-five (25) Jobs on the Land
shall be held by Central City Residents. A Job held by a Central City
Resident shall also count as a Job held by a Fort Worth Resident for
purposes of the commitment set forth in Section 4.3.1.
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4.4. Supply and Service Spending Commitments with Fort Worth
Certified M/WBE Companies.
Beginning with the calendar year in which the Completion Date occurs,
and in each subsequent year of the Term of this Agreement, Target will spend or
cause to be spent at least $20,000 with Fort Worth Certified M/WBE Companies
for supplies and services provided directly in connection with the operation of the
Required Improvements; provided, however, that if the Completion Date occurs
on a date other than January 1, then only for the calendar year in which the
Completion Date occurs, this commitment shall be reduced to an amount equal to
the product of $20,000 multiplied by a fraction, the numerator of which is the
number of days remaining in the year after the Completion Date and the
denominator of which is 365. The City agrees that one way Target may meet this
commitment is to cause a third party to spend at least $20,000 (or for the calendar
year in which the Completion Date occurs, the prorated amount calculated in
accordance with the preceding sentence) with Fort Worth Certified M/WBE
Companies for supplies and services provided directly in connection with the
operation of the Required Improvements. This commitment has been approved
by the City's Minority and Women Business Enterprise Advisory Committee.
4.5. Operation of Grocery Store on the Land.
Beginning on the Completion Date and at all times thereafter throughout
the Term of this Agreement, a Full Service Grocery Store shall be in full
operation on the Land on days and during hours that other Full Service Grocery
Stores or SuperTargets in the same general area of the City or other Full Service
Grocery Stores or other SuperTargets located in similar mixed-used developments
are customarily open, subject to full or partial closure for a commercially
reasonable period of time or for reasonable reduced hours on account of
renovation of or repair to the Full Service Grocery Store facility.
4.6. Reports and Filings.
4.6.1. Plan for Use of Fort Worth Certified M/WBE Companies.
Within ninety (90) calendar days following execution of this
Agreement or prior to the submission of an application by or on behalf of
Target for a building permit to initiate construction of any of the Required
Improvements, whichever is earlier, Target will file a plan with the City as
to how the goals for the use of Fort Worth Certified M/WBE Companies
outlined in this Agreement will be attained. The filing of such a plan
pursuant to Section 3.3.1 of the Tax Abatement Agreement shall satisfy
this requirement. Target agrees to meet with the City's M/WBE Office
and Minority and Women Business Enterprise Advisory Committee as
reasonably necessary for assistance in implementing such plan and to
address any concerns that the City may have with such plan. --- .-
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4.6.2. Monthly Spending Reports.
From the date of execution of this Agreement until the Completion
Date, in order to enable the City to assist Target in meeting its goal for
construction spending with Fort Worth Certified M/WBE Companies,
Target will provide the City with a monthly report in a form reasonably
acceptable to the City that specifically outlines the then-current aggregate
Construction Costs expended by and on behalf of Target with Fort Worth
Certified M/WBE Companies for construction of the Required
Improvements. The filing of such reports pursuant to Section 3.3.2 of the
Tax Abatement Agreement shall satisfy this requirement. Target agrees to
meet with the City's M/WBE Office and Minority and Women Business
Enterprise Advisory Committee as reasonably necessary for assistance in
implementing such plan and to address any concerns that the City may
have with such plan.
4.6.3. Construction Spending Report.
Within ninety (90) calendar days following the Completion Date,
Target will provide the City with a report in a form reasonably acceptable
to the City that specifically outlines Construction Costs expended by
Target and on behalf of Target for construction of the Required
Improvements, together with supporting invoices and other documents
necessary to demonstrate that such amounts were actually paid by Target
and on behalf of Target, including, without limitation, final lien waivers
signed by Target's general contractor(provided that Target may bond over
any contested liens). This report shall also include Construction Costs
expended by Target and on behalf of Target for construction of the
Required Improvements with contractors that are Fort Worth Companies
and with contractors that are Fort Worth Certified M/WBE Companies,
together with supporting invoices and other documents necessary to
demonstrate that such amounts were actually paid by Target and on behalf
of Target to such contractors.
4.6.4. Ouarterly Supply and Service Spending Report.
Beginning on the Completion Date and for the remainder of the
Term, within thirty (30) calendar days following the end of each calendar
quarter Target will provide or cause to be provided a report to the City in a
form reasonably acceptable to the City that specifically outlines the
aggregate number of dollars expended in the same calendar year with Fort
Worth Certified M/WBE Companies for supplies and services provided
directly in connection with the operation of the Required Improvements.
The filing of such reports pursuant to Section 3.3.5 of the Tax Abatement
Agreement will satisfy this requirement. Target agrees to meet with the
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City's M/WBE Office and Minority and Women Business Enterprise
Advisory Committee as reasonably necessary for assistance in attaining
the supply and service spending commitment (as set forth in Section 4.4)
in a given calendar year or to address any concerns arising from the report.
The City will use each year's fourth quarter report to assess the degree to
which Target met the supply and service spending commitment (as set
forth in Section 4.4) during the previous calendar year.
4.6.5. Employment Reports.
On or before April 1 of the first full calendar year following the
Completion Date and of each succeeding year during the Term of this
Agreement, Target shall provide the City with a report that sets forth the
total number Jobs on the Land that were held as of December 1 (or another
date requested by Target and reasonably acceptable to the City) of the
previous calendar year (each an "Annual Reporting Date") by Fort
Worth Residents and by Central City Residents, together with reasonable
documentation regarding the residency of each such employee. For
purposes of measuring Target's compliance with the commitments set
forth in Sections 4.3.1 and 4.3.2, employment numbers reported for each
Annual Reporting Date shall be deemed to apply to the entire calendar
year in which the Annual Reporting Date occurs.
4.7. Audits.
The City will have the right to audit, at no cost to Target, the financial and
business records of Target that relate to the Project, the construction and operation
of the Required Improvements and any other documents necessary to evaluate
Target's compliance with this Agreement or with the goals and commitments set
forth in this Agreement (collectively "Records") up to one (1) time for each
Program Year, with the understanding that after the first audit, the City will not
audit Records that are more than three (3) years. old. Target shall make all
Records available to the City on the Land or at another location in the City
acceptable to both parties following at least thirty (30) calendar days' advance
notice by the City and shall otherwise cooperate fully with the City during any
audit.
5. PROGRAM GRANTS.
5.1. General Overview.
Subject to Sections 6.5 and 6.7 and all other terms and conditions of this
Agreement, beginning in Program Year 1 and in each subsequent year of the
Term of this Agreement, the City will pay to Target Program Grants as provided
by this Section 5. The amount of each Program Grant will be bas
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available universe of funds for a given year, as more specifically provided in
Section 5.3. The base amount of each Program Grant payable by the City to
Target will be calculated by multiplying the amount of funds available for the
Program in a given Program Year by the aggregate percentage to which Target
met its various goals and obligations pursuant to this Agreement to construct and
complete the Required Improvements and to expend minimum Construction Costs
for the Required Improvements with Fort Worth Companies and with Fort Worth
Certified M/WBE Companies. The resulting base Program Grant will be subject
to reduction each year to the extent that Target fails to meet any or all of its
various annual employment and supply/service spending goals pursuant to this
Agreement. In addition, the amount of each Program Grant is subject to a cap, as
specified in Exhibit "C" (defined in Section 2 as the Maximum Annual Program
Grant Amount), and the aggregate amount of all annual Program Grants is capped
as well by the Program Cap, as defined in Section 3, excluding any interest
payable thereon in accordance with Section 5.6.
5.2. Base Benefit Percentage.
As stated in Section 5.1, the base amount of each Program Grant payable
by the City to Target will be calculated by multiplying the amount of funds
available for the Program in a given Program Year, as more specifically provided
in Section 5.3, by the aggregate percentage to which Target (i) complied with its
requirements to complete the Required Improvements, as provided by and in
accordance with Section 4.1; and (ii) met the construction spending goals with
Fort Worth Companies and Fort Worth Certified M/WBE Companies, as provided
by and in accordance with Sections 4.2.1 and 4.2.2 (collectively, the "Base
Benefit Percentage"), calculated as follows:
5.2.1. Completion of Required Improvements (65% of Base Benefit
Percentage).
If the Completion Date occurs by the Completion Deadline, as
provided by and in accordance with Section 4.1 of this Agreement, Target
will earn sixty-five percent(65%)toward the Base Benefit Percentage. As
provided in Section 6.1, an Event of Default shall occur if the Completion
Date does not occur by the Completion Deadline.
5.2.2. Construction Spending with Fort Worth Companies (Up to
25% of Base Benefit Percentage).
If the lesser of (i) twenty percent (20%) of actual Construction
Costs for the Required Improvements and any other improvements
constructed on the Land, or (ii) $2,500,000 in Construction Costs for the
Required Improvements and any other improvements constructed on the
Land were spent with contractors that are Fort Worth Companies (the
"Fort Worth Construction Commitment"), as provided by and in
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accordance with Section 4.2.1 of this Agreement, Target will earn twenty-
five percent(25%) toward the Base Benefit Percentage.
If the Fort Worth Construction Commitment is not met, Target will
earn a lesser percentage toward the Base Benefit Percentage that is based
on the degree to which the Fort Worth Construction Commitment was
met, which lesser percentage shall equal the product of 25% multiplied by
a fraction, the numerator of which shall equal the number of dollars in
Construction Costs actually expended by or on behalf of Target for the
Required Improvements and any other improvements constructed on the
Land with contractors that are Fort Worth Companies and the denominator
of which shall equal the Fort Worth Construction Commitment. For
example, if the Fort Worth Construction Commitment was $2,500,000 and
only$1,250,000 in Construction Costs for the Required Improvements and
any other improvements constructed on the Land were spent with
contractors that are Fort Worth Companies,then the percentage toward the
Base Benefit Percentage that Target would earn pursuant to this Section
5.2.2 would equal 25%x 1/2, or 12.5%.
5.2.3. Construction Spending with Fort Worth Certified M/WBE
Companies (Up to 10% of Base Benefit Percentaae).
If the lesser of (i) fifteen percent (15%) of actual Construction
Costs for the Required Improvements and any other improvements
constructed on the Land, regardless of the total amount of Construction
Costs so incurred, or (ii) $1,000,000 in Construction Costs for the
Required Improvements and any other improvements constructed on the
Land were spent with contractors that are Fort Worth Certified M/WBE
Companies (the "M/WBE Construction Commitment"), as provided by
and in accordance with Section 4.2.2 of this Agreement, Target will earn
ten percent(10%)toward the Base Benefit Percentage.
If the M/WBE Construction Commitment is not met, Target will
earn a lesser percentage toward the Base Benefit Percentage that is based
on the degree to which the M/WBE Construction Commitment was met,
which lesser percentage shall equal the product of 10% multiplied by a
fraction, the numerator of which shall equal the number of dollars in
Construction Costs actually expended by or on behalf of Target for the
Required Improvements and any other improvements constructed on the
Land with contractors that are Fort Worth Certified M/WBE Companies
and the denominator of which shall equal the M/WBE Construction
Commitment. For example, if the M/WBE Construction Commitment
was $1,000,000 and only $600,000 in Construction Costs for the Required
Improvements and any other improvements constructed on the Land were
spent with contractors that are Fort Worth Certified M/WBE Companies,
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then the percentage toward the Base Benefit Percentage that Target would
earn pursuant to this Section 5.2.3 would equal 10% x 6/10, or 6%.
5.2.4. Final Calculation of Base Benefit Percentap-e.
The Base Benefit Percentage shall equal the sum of the
percentages earned in accordance with Sections 5.2.1, 5.2.2 and 5.2.3. In
other words, if Target met all of its goals and commitments with regard to
(i) Target's compliance with its requirements to construct and complete
the Required Improvements, as provided by and in accordance with
Section 4.1; (ii)the Fort Worth Construction Commitment, as provided by
Section 5.2.2; and (iii) the M/WBE Construction Commitment, as
provided by Section 5.2.3, then the Base Benefit Percentage throughout
the Term of this Agreement will be one hundred percent (100%).
However, by way of illustration only, if Target met its commitments with
regard to construction spending with Fort Worth Companies and Fort
Worth Certified M/WBE Companies only to the extent provided in the
examples provided in Sections 5.2.2 and 5.2.3, respectively, then the Base
Benefit Percentage throughout the Term of this Agreement would only be
eighty-three and one-half percent (83.5%) (65%+ 12.5%+6%).
5.3. Universe of Funds Available for Each Year of the Program.
As stated in Section 5.1, the base amount of each Program Grant payable
by the City to Target will be calculated by multiplying the amount of funds
available for the Program in a given year, as more specifically provided in this
Section 5.3, by the Base Benefit Percentage. The amount of funds available for
the Program each year shall be as follows:
5.3.1. Program Years 1-2.
The amount of funds available for the Program in Programs Year
1-2 shall be an amount equal to the lesser of:
• one hundred percent (100%) of the Target Sales Tax Revenues
received by the City as of March 31 of the respective Program
Year for the calendar year prior to such Program Year (subject
to the Target Sales Tax Cap),
or
• the Maximum Annual Program Grant Amount authorized for
payment in Program Years 1-2, respectively, as provided by
Exhibit"C"hereto.
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Economic Development Program Agreement
between City of Fort Worth and Target Corporation
.r
5.3.2. Program Years 3-16.
The amount of funds available for the Program in Program Years
3-16 shall be an amount equal to the lesser of
• the sum of(i) one hundred percent (100%) the Target Personal
Property Tax Revenues received by the City as of March 31 of
the respective Program Year for the calendar year prior to such
Program Year, plus (ii) one hundred percent (100%) of the
Target Real Property Tax Revenues received by the City as of
March 31 of the respective Program Year for the calendar year
prior to such Program Year, plus (iii) one hundred percent
(100%) of the Target Sales Tax Revenues received by the City
as of March 31 of the respective Program Year for the calendar
year prior to such Program Year (subject to the Target Sales
Tax Cap),
or
• the Maximum Annual Program Grant Amount authorized for
payment in Program Years3-16, respectively, as provided by
Exhibit"C"hereto.
5.3.3. Program Years 17-21.
The amount of funds available for the Program in Program Years
17-21 shall be an amount equal to the lesser of:
• one hundred percent (100%) of the Target Sales Tax Revenues
received by the City as of March 31 of the respective Program
Year for the calendar year prior to such Program Year (subject
to the Target Sales Tax Cap),
or
• the Maximum Annual Program Grant Amount authorized for
payment in Program Years 17-21, respectively, as provided by
Exhibit"C"hereto.
5.4. Calculation of Each Annual Base Program Grant.
Once again, as stated in Section 5.1, the base amount of each Program
Grant payable by the City to Target will be calculated by multiplying the amount
of funds available for the Program in a given Program Year, as provided by
Section 5.3, by the Base Benefit Percentage (the product being the "Base Annual
Page 14
Economic Development Program Agreement
between City of Fort Worth and Target Corporation
Program Grant Amount" for each respective Program Year). Therefore, by
way of example only, suppose that the Base Benefit Percentage is eighty percent
(80%) and that as of March 31 of Program Year 3 the City receives aggregate
Target Personal Property Tax Revenues, Target Real Property Tax Revenues and
Target Sales Tax Revenues of $750,000. The Base Annual Program Grant
Amount in Program Year 3, then, would be the lesser of (i) 80% of $750,000
($600,000) or(ii) 80% of the$494,000 Maximum Annual Program Grant Amount
authorized for Program Year 3, as provided by Exhibit "C" hereto ($395,200).
Therefore, under this example, the Base Annual Program Grant Amount for
Program Year 3 would be$395,200.
5.5. Calculation of Program Grant Amount.
In the event that Target met all of its employment and supply/service
spending goals, as outlined in Sections 4.3.1, 4.3.2 and 4.4, in a given calendar
year, the amount of the Program Grant payable in the following Program Year
shall equal the Base Annual Program Grant Amount available for that Program
Year. However, if Target failed to meet one or more of such employment and/or
supply/service spending goals in a given year other than the calendar year prior to
Program Year 1, then the Program Grant payable in the following Program Year
shall be reduced, as follows:
5.5.1. Failure to Meet Fort Worth Resident Employment Goals.
If as of the Annual Reporting Date of a calendar year other than
the calendar year prior to Program Year 1 fewer than (i) fifty percent
(50%) of all Jobs on the Land, or (ii) one hundred (100) Jobs on the Land,
whichever number is less, were held by Fort Worth Residents, as required
by Section 4.3.1 of this Agreement, then the amount of the Program Grant
payable in the following Program Year shall be reduced by $1,000 for
each Job by which that commitment was not met. The City and Target
acknowledge that a failure to meet this Fort Worth Resident employment
goal as of the Annual Reporting Date of the calendar year prior to
Program Year 1 shall not cause the Program Grant payable in Program
Year 1 to be reduced because such failure shall cause the tax abatement
granted to Target pursuant to the Tax Abatement Agreement to be reduced
by the same amount.
5.5.2. Failure to Meet Central City Resident Employment Goals.
If as of the Annual Reporting Date of a calendar year other than
the calendar year prior to Program Year 1 fewer than(i)twenty-five (25%)
of all Jobs on the Land, or (ii) twenty-five (25) Jobs on the Land,
whichever number is less, were held by Central City Residents, as
required by Section 4.3.2 of this Agreement, then the amount of the
Program Grant payable in the following Program Year shall be reduced by
Page 15
Economic Development Program Agreement
between City of Fort Worth and Target Corporation
,
$1,000 for each Job by which that commitment was not met. The City and
Target acknowledge that a failure to meet this Central City Resident
employment goal as of the Annual Reporting Date of the calendar year
prior to Program Year 1 shall not cause the Program Grant payable in
Program Year 1 to be reduced because such failure shall cause the tax
abatement granted to Target pursuant to the Tax Abatement Agreement to
be reduced by the same amount.
5.5.3. Failure to Meet Supply and Service Spendine Goals with Fort
Worth Certified M/WBE Companies.
If during a calendar year other than the calendar year prior to
Program Year 1 Target spent or caused to be spent less than $20,000 (or
for the calendar year in which the Completion Date occurs, the prorated
amount calculated in accordance with Section 4.4) in supply and service
expenses with Fort Worth Certified M/WBE Companies, as required by
Section 4.4 of this Agreement, then the amount of the Program Grant
payable in the following Program Year shall be reduced by the product of
the number of dollars by which that commitment was not met multiplied
by two (2). In other words, if only $15,000 in such supply and service
expenses were spent with Fort Worth Certified M/WBE Companies during
the previous calendar year, the Program Grant payable in the following
Program Year would be reduced by $10,000 (the $5,000 shortfall x 2).
The City and Target acknowledge that a failure to meet this spending goal
in the calendar year prior to Program Year 1 shall not cause the Program
Grant payable in Program Year 1 to be reduced because such failure shall
cause the tax abatement granted to Target pursuant to the Tax Abatement
Agreement to be reduced by the same amount.
5.5.4. No Offsets.
A deficiency in attainment of any of the commitments set forth in
Sections 4.3.1, 4.3.2 and/or 4.4 may not be offset by exceeding other such
commitments. In other words, if in a given year Target exceeded its
commitment with respect to the employment of Fort Worth Residents, as
set forth in Section 4.3.1, by five (5) Jobs, but failed to meet its
commitment with respect to the employment of Central City Residents, as
set forth in Section 4.3.2, by five (5) Jobs, the amount of the Program
Grant payable in the following Program Year would still be reduced by
$5,000 for that Program Year on account of Target's failure as of the
Annual Reporting Date in the previous calendar year to meet its
commitment under Section 4.3.2 for Central City Resident employment by
five(5)Jobs.
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Economic Development Program Agreement
between City of Fort Worth and Target Corporation
5.6. Program Grant Shortfalls.
5.6.1. Defined.
In the event that the amount of any Program Grant paid in a given
Program Year is less than the Maximum Annual Program Grant Amount
authorized for payment in the same Program Year, as set forth on Exhibit
"C" hereto (excluding any reductions under this Agreement, whether
factored into the Base Benefit Percentage pursuant to Section 5.2.4 or by
reduction of the Program Grant pursuant to Section 5.5 and/or 6.5), then
the difference between the amount of the Program Grant paid in any given
Program Year and the Maximum Annual Program Grant Amount
authorized for payment in the same Program Year (the "Aggregate
Program Grant Shortfall") shall be carried forward as a continuing
obligation of the City for payment in a future Program Year.
5.6.2. Calculation Assumes 100% Achievement of all Commitments
and Goals.
The calculation of any Aggregate Program Grant Shortfall must
take into account any reductions in the Program Grants payable hereunder
on account of Target's failure to meet its various Construction Cost
spending, employment and supply/service spending goals. In other words,
in order to determine whether there is an Aggregate Program Grant
Shortfall in a given Program Year, the calculation must assume that
Target's Base Benefit Percentage is 100% and that the amount of the
Program Grant payable in that Program Year was not reduced pursuant to
Section 5.5 on account of Target's failure to meet any or all of its
employment and supply/service spending goals.
In other words, going back to the example used in Section 5.4
where Target's Base Benefit Percentage is 80% and accordingly the
amount of the Program Grant payable in Program Year 3 would equal
$395,200, not the Maximum Annual Program Grant Amount of$494,000,
an Aggregate Program Grant Shortfall would not accrue in Program Year
3 because the "shortfall" was caused solely on account of Target's Base
Benefit Percentage being less than 100%.
5.6.3. Interest on Aggregate Program Grant Shortfall.
Beginning on the day following payment of a Program Grant
pursuant to this Agreement, the balance of any Aggregate Program Grant
Shortfall, whether arising in the same or a previous Program Year, shall
bear simple interest calculated at a fixed rate equal to six percent (6%),
compounded annually.
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Economic Development Program Agreement
between City of Fort Worth and Target Corporation f
5.6.4. Source of Funds for Paving Aggregate Program Grant
Shortfall and Interest Thereon.
Notwithstanding anything to the contrary herein, the City shall pay
Target the Aggregate Program Grant Shortfall plus any interest thereon
only to the extent that the City receives Excess Target Tax Revenues in a
future Program Year or Years. In other words, if there is an Aggregate
Program Grant Shortfall of$10,000 in a given Program Year and the City
receives Excess Target Tax Revenues of $25,000 in the following
Program Year, then in that latter Program Year the City would pay Target
(i) the amount of the Program Grant payable in that Program Year in
accordance with Section 5.5, plus (ii) the $10,000 principal of the
Aggregate Program Grant Shortfall, plus (iii) $600 in interest. The Target
Sales Tax Cap shall not serve as a limitation in determining the amount of
Excess Target Tax Revenues received by the City in a given year. In other
words, once the City has received $10,000,000 in Target Sales Tax
Revenues, all additional Target Sales Tax Revenues shall be considered
Excess Target Tax Revenues and may serve as the basis for calculating the
amount of any Aggregate Program Grant Shortfall that the City will pay in
a given Program Year.
5.6.5. Effect of Caps and Expiration.
The Maximum Annual Program Grant Amount shall cap only the
amount of the Program Grant that is payable for that Program Year and
shall not serve as a limitation on the amount of payment of any Aggregate
Program Grant Shortfall or interest thereon that may be paid in addition to
the Program Grant in that same Program Year. Payments on the principal
of any Aggregate Program Grant Shortfall shall be subject to the Program
Cap, as provided in Section 3 hereof,but payments of any interest thereon
shall be in addition, and not subject, to that Program Cap.
Notwithstanding anything to the contrary herein, if any balance of
Aggregate Program Grant Shortfall or interest thereon remains as of June
1 of the calendar year following the twenty-fifth (25th) anniversary of the
Completion Date, this Agreement shall expire in accordance with Section
3 hereof and the City's obligation to pay Target any such balance shall
automatically be extinguished.
5.7. Retention by the City of Excess Target Tax Revenues.
Target understands and agrees that any Excess Target Tax Revenues
received by the City in any given Program Year will be used by the City for any
lawful purpose that the City deems necessary in the carrying out of its business as
a home rule municipality. In the event that the City retains Excess Target Tax
Revenues in a Program Year and an Aggregate Program Grant Shortfall accrues
Page 18
Economic Development Program Agreement
between City of Fort Worth and Target Corporation
in a subsequent Program Year, the City shall have no obligation to use the Excess
Target Tax Revenues previously received as a basis to pay or make payments
toward such Aggregate Program Grant Shortfall or any interest thereon. Rather,
the City's obligation to pay or make payments toward such Aggregate Program
Grant Shortfall or any interest thereon shall, as stated in Section 5.6.4, arise only
to the extent that the City receives Excess Target Tax Revenues in the same or a
subsequent Program Year or Years.
5.8. Deadline for Payments and Source of Funds.
Each annual Program Grant payment and any payment of or toward an
Aggregate Program Grant Shortfall,plus any interest thereon, will be made by the
City to Target on or before June 1 of the Program Year in which such payments
are due. It is understood and agreed that all Program Grants paid and any
Aggregate Program Grant Shortfall, plus any interest thereon, paid pursuant to
this Agreement shall come from currently available general revenues of the City
and not directly from Target Personal Property Tax Revenues, Target Real
Property Tax Revenues and/or Target Sales Tax Revenues received by the City.
6. DEFAULT,TERMINATION. SUSPENSION OF OBLIGATIONS_AND
FAILURE BY TARGET TO MEET VARIOUS GOALS AND
COMMITMENTS.
6.1. Failure to Complete Required Improvements.
The City may terminate this Agreement upon written notice to Target if
the Completion Date does not occur by the Completion Deadline.
6.2. Termination of Tax Abatement Agreement.
This Agreement shall automatically terminate upon any lawful termination
of the Tax Abatement Agreement pursuant to Section 4 of the Tax Abatement
Agreement.
6.3. Failure to Pay City Taxes.
An event of default shall occur under this Agreement if any ad valorem
taxes on the Land or arising on account of operations on the Land and owed to the
City become delinquent and Target does not either pay such taxes or properly
follow the legal procedures for protest and/or contest of any such taxes. Upon the
occurrence of such default, the City shall notify Target in writing and Target shall
have (i) thirty (30) calendar days to cure such default or (ii) if Target 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
Page 19
Economic Development Program Agreement t
between City of Fort Worth and Target Corporation
fully cured by such time, the City, as its sole and exclusive remedy, shall have the
right to terminate this Agreement immediately by providing written notice to
Target and shall have all other rights and remedies that may be available to it
under the law with respect to the collection of any such delinquent taxes.
6.4. Violations of City Code,State or Federal Law.
An event of default shall occur under this Agreement if any written
citation is issued due to the occurrence of a material violation of a provision of the
City Code on the Land or on or within any improvements thereon (including,
without limitation, any material violation of the City's Building or Fire Codes and
any other material City Code violations related to the environmental condition of
the Land; the environmental condition of other land or waters which is
attributable to operations on the Land; or to matters concerning the public health,
safety or welfare) and such citation is not paid or the recipient of such citation
does not properly follow the legal procedures for protest and/or contest of any
such citation. An event of default shall occur under this Agreement if the City is
notified by a governmental agency or unit with appropriate jurisdiction that the
City (by reason of any action or inaction of Target, its officers, agents, servants,
employees, contractors and/or subcontractors); Target; a successor in interest; or
any third party with access to the Land pursuant to the express or implied
permission of Target or a successor in interest is in violation of any material state
or federal law, rule or regulation on account of the Land, improvements on the
Land or any operations thereon (including, without limitation, any material
violations related to the environmental condition of the Land; the environmental
condition of other land or waters which is attributable to operations on the Land;
or to matters concerning the public health, safety or welfare). Upon the
occurrence of an event of default under this Section 6.4, the City shall notify
Target in writing and Target shall have (i) thirty (30) calendar days to cure such
default or (ii) if Target diligently pursues 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, as its sole and exclusive remedy under
this Agreement, shall have the right to terminate this Agreement immediately by
providing written notice to Target at least thirty(30) calendar days in advance and
shall have all other rights and remedies that may be available to the City under the
law with respect to such violation of the City Code, state or federal law, rule or
regulation, as the case may be (with the understanding that if Target fully cures
such default before the expiration of such thirty (30) days, this Agreement shall
remain in full force and effect).
6.5. Failure to Operate Full-Service Grocery Store on Land.
Beginning on the Completion Date and thereafter for the remainder of the
Term of this Agreement, if a Full-Service Grocery Store is not in operation on the
Land, subject to and in accordance with Section 4.5 of this AgreemeTt�3tg�T"- --
Page 20
Economic Development Program Agreement
between City of Fort Worth and Target Corporation N __—
will not be deemed to be in default hereunder and the City will not have the right
to terminate this Agreement,but, rather, the following provisions shall apply:
6.5.1. For an Entire Calendar Year.
Subject to Section 6.7, if a Full-Service Grocery Store is not in
operation on the Land, subject to and in accordance with Section 4.5 of
this Agreement, for an entire calendar year, Target or any successor in
interest hereunder shall forfeit payment of the Program Grant payable for
the following Program Year. In such an event, the Program Year in which
payment of a Program Grant is forfeited pursuant to this Section 6.5.1
shall nevertheless count as one of the maximum possible twenty-five (25)
Program Years for purposes of calculating the Term, as set forth in
Section 3. In addition, the entire amount of the Program Grant payment
that would otherwise have been payable by the City for that Program Year
(i) shall be counted toward the Program Cap; (ii) will be treated as Excess
Target Tax Revenues, in accordance with Section 5.7; and (iii) shall not
count toward any Aggregate Program Grant Shortfall. However, the City
shall remain obligated to pay or make payments toward any existing
Aggregate Program Grant Shortfall during any Program Year in which a
Program Grant is forfeited by Target pursuant to this Section 6.5.1.
6.5.2. For a Portion of a Calendar Year.
Subject to Section 6.7, if a Full-Service Grocery Store is not in
operation on the Land, subject to and in accordance with Section 4.5 of
this Agreement, for a portion of a calendar year, then the Program Grant
payable in the following Program Year shall be reduced by multiplying
the same by a fraction, where the numerator is the number of days in that
calendar year in which a Full-Service Grocery Store was in operation on
the Land, subject to and in accordance with Section 4.5 of this Agreement,
and the denominator is three hundred sixty-five (365). In such an event,
the entire amount of the Program Grant payment that otherwise would
have been payable by the City in that Program Year shall be counted
toward the Program Cap, and the difference between that amount and the
amount actually paid as a Program Grant in that Program Year will be
treated as Excess Target Tax Revenues, in accordance with Section 5.7
and shall not count toward any Aggregate Program Grant Shortfall.
6.6. Failure to Meet Construction Cost Spending,Employment and/or
Supply and Service Spending Goals.
The failure to meet any Construction Cost spending goals, as specifically
set forth in Sections 4.2.1 and 4.2.2, or to meet any employment and/or supply
and service spending goals in any given year, as specifically set forth in Sections
4.3.1, 4.3.2, and 4.4, shall not constitute a default hereunder or provide the City
Page 21
Economic Development Program Agreement
between City of Fort Worth and Target Corporation
with the right to terminate this Agreement, but, rather, shall only serve to reduce
the amount of the Program Grants that the City is required to pay pursuant to this
Agreement, whether by factoring such failure into the Base Benefit Percentage, as
provided by Section 5.2.4, or by reducing the amount of the Program Grant
payment that would otherwise have been payable in a given Program Year, as
provided by Section 5.5.
6.7. Closure of Required Improvements for Repair or Renovation.
In the event that Target closes all or a substantial portion of the Required
Improvements for a period of six (6) months or more for remodeling, renovation
or reconstruction or for repair due to fire, windstorm or other casualty that is
beyond Target's control (a "Necessitated Closure"), and provided that Target
diligently has pursued completion of the remodeling, renovation, reconstruction
or repair, Target may elect to defer the Program Year in which either the
Necessitated Closure occurred or the Program Year in which the Required
Improvements reopened to the following calendar year by notifying the City in
writing during the calendar year in which the Necessitated Closure occurred or
during the calendar year in which the Required Improvements reopened, as the
case may be (an "Elective Deferment"). An Elective Deferment will allow
Target to avoid an unexpectedly low Program Grant payment in the Program Year
following that in which the Elective Deferment was requested on account of low
tax receipts arising because of the Necessitated Closure. For example, assuming
that Program Year 1 is calendar year 2006 and a Necessitated Closure occurs in
2009 and the Required Improvements reopen in 2010, Target could elect (i) for
Program Year 5 to occur in calendar year 2011 instead of 2010, thereby allowing
Target tax revenues received for 2010, rather than the reduced tax revenues
received for 2009, to serve as the basis for calculation of Target's Program Grant
payment in Program Year 5, or (ii) for Program Year 6 to occur in calendar year
2012 instead of 2011, thereby allowing Target tax revenues received for 2011,
rather than the reduced tax revenues received for 2010, to serve as the basis for
calculation of Target's Program Grant payment in Program Year 6. In this case,
all Target Sales Tax Revenues, all Target Personal Property Tax Revenues and all
Target Real Property Tax Revenues received for the calendar year in which the
Elective Deferment was made will be retained by the City as Excess Target Tax
Revenues. Notwithstanding anything to the contrary herein, Target may not
exercise an Elective Deferment more than two (2) times and in no event will an
Elective Deferment cause the Term to extend past June 1 of the calendar year
following the twenty-fifth(25th) anniversary of the Completion Date.
6.8. Failure to Submit Reports.
If Target fails to submit all or any reports required by Sections 4.6.1,
4.6.2, 4.6.3, 4.6.4 or 4.6.5, the City's obligation to pay any Program Grant for the
Program Year in which such report or reports are due shall be suspended until
Target has provided such report or reports.
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Economic Development Program Agreement
between City of Fort Worth and Target Corporation
a
7. INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Target shall operate as an independent
contractor in each and every respect hereunder and not as an agent, representative or
employee of the City. Target shall have the exclusive right to control all details and day-
to-day operations relative to the Land and any improvements thereon and shall be solely
responsible for the acts and omissions of its officers, agents, servants, employees,
contractors, subcontractors, licensees and invitees. Target acknowledges that the doctrine
of respondeat superior will not apply as between the City and Target, its officers, agents,
servants, employees, contractors, subcontractors, licensees, and invitees. Target further
agrees that nothing in this Agreement will be construed as the creation of a partnership or
joint enterprise between the City and Target.
8. INDEMNIFICATION.
TARGET AGREES TO DEFEND, INDEMNIFY AND HOLD THE CITY, ITS
OFFICERS, AGENTS SERVANTS AND EMPLOYEES, HARMLESS AGAINST
ANY AND ALL CLAIMS, LAWSUITS, ACTIONS, COSTS AND EXPENSES OF
ANY KIND, INCLUDING, BUT NOT LIMITED TO, THOSE FOR PROPERTY
DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO TARGET'S
BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL
INJURY, INCLUDING DEATH, THAT MAY RELATE TO,ARISE OUT OF OR BE
OCCASIONED BY (i) TARGET'S BREACH OF ANY OF THE TERMS OR
PROVISIONS OF THIS AGREEMENT OR (ii) ANY NEGLIGENT ACT OR
OMISSION OR INTENTIONAL MISCONDUCT OF TARGET, ITS OFFICERS,
AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE
CITY) OR SUBCONTRACTORS, RELATED TO THE PROJECT OR THE
PERFORMANCE OF THIS AGREEMENT, EXCEPT THAT THE INDEMNITY
PRO VIDED FOR IN THIS PARR GRAPH SHALL NOT APPLY TO ANY LIABILITY
RESULTING FROM THE SOLE NEGLIGENCE OF THE CITY OR ITS
OFFICERS, AGENTS, EMPLOYEES OR SEPARATE CONTRACTORS, AND IN
THE EVENT OF JOINT AND CONCURRENT NEGLIGENCE OF BOTH TARGET
AND CITY, RESPONSIBILITY, IF ANY, SHALL BE APPORTIONED
COMPARATIVELY IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.
9. 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:
Page 23
Economic Development Program Agreement
between City of Fort Worth and Target Corporation
City: Target:
City of Fort Worth Target Corporation
Attn: City Manager Property Development
1000 Throckmorton Attn: Property Administration
Fort Worth,TX 76102 1000 Nicollet Mall
Minneapolis,MN 55403
with copies to: with a copy to:
the City Attorney and M. Lawrence Hicks,Jr.
Economic/Community Development Thompson&Knight, LLP
Director at the same address 1700 Pacific Avenue, Suite 3300
Dallas, TX 75201
10. ASSIGNMENT AND SUCCESSORS.
Prior to the Completion Date, Target 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 be unreasonably 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
and/or operating the Required Improvements, as the case may be 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
Target under this Agreement. After the Completion Date, Target shall have the right to
assign, transfer or otherwise convey any of its rights or obligations under this Agreement
to any party without the consent of the City, with the understanding that Target shall
provide written notice to the City within thirty (30) calendar days thereafter of the name
of such party and the name and telephone number of a contact person affiliated with such
party if the party is not an individual. Any lawful assignee or successor in interest of
Target under this Agreement shall be deemed "Target" for all purposes under this
Agreement.
11. COMPLIANCE WITH LAWS, ORDINANCES,RULES AND
REGULATIONS.
This Agreement will be 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.
Page 24
Economic Development Program Agreement
between City of Fort Worth and Target Corporation
t�
12. GOVERNMENTAL POWERS.
It is understood that by execution of this Agreement, the City does not waive or
surrender any of it governmental powers.
13. NO WAIVER.
The failure of either party to insist upon the performance of any term or provision
of this Agreement or to exercise any right granted hereunder shall not constitute a waiver
of that party's right to insist upon appropriate performance or to assert any such right on
any future occasion.
14. VENUE AND JURISDICTION.
If any action, whether real or asserted, at law or in equity, arises on the basis of
any provision of this Agreement, venue for such action shall lie in state courts located in
Tarrant County, Texas or the United States District Court for the Northern District of
Texas—Fort Worth Division. This Agreement shall be construed in accordance with the
laws of the State of Texas.
15. NO THIRD PARTY RIGHTS.
The provisions and conditions of this Agreement are solely for the benefit of the
City and Target, and any lawful assign or successor of Target, and are not intended to
create any rights, contractual or otherwise, in any other person or entity.
16. FORCE MAJEURE.
In addition to those instances where Force Majeure is addressed elsewhere in this
Agreement, it is expressly understood and agreed by Target and the City that if the
performance by either party of any obligation hereunder is delayed by reason of Force
Majeure, the time period applicable to performance of such obligation shall be extended
for a period of time equal to the period of the specific event of Force Majeure.
17. INTERPRETATION.
In the event of any dispute over the meaning or application of any provision of
this Agreement, this Agreement shall be interpreted fairly and reasonably, and neither
more strongly for or against any party, regardless of the actual drafter of this Agreement.
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Economic Development Program Agreement _
between City of Fort Worth and Target Corporation
r.
18. CAPTIONS.
Captions and headings used in this Agreement are for reference purposes only and
shall not be deemed a part of this Agreement.
19. MUTUAL ASSISTANCE.
In the event that the City cannot pay Program Grants as provided by this
Agreement on account of a change in applicable law, or in the event that it appears for the
then-foreseeable future that the Program Grants paid hereunder will be materially less
than the Maximum Annual Program Grant Amounts provided for the same Program
Years, as set forth in Exhibit "C" hereof, due solely to a reduction or reductions, by
operation of law or otherwise, in the City's real property tax rates, Tangible Personal
Property tax rates and/or sales tax rates, then the City and Target agree to negotiate in
good faith a remedy that preserves the intent of the parties hereunder as much as
reasonably possible.
20. 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 Target, and any lawful assign and successor of Target, 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. Notwithstanding anything to the contrary herein, this Agreement shall not be
amended unless executed in writing by both parties and approved by the City Council of
the City in an open meeting held in accordance with Chapter 551 of the Texas
Government Code.
21. 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.
22. ENTERPRISE PROJECT DESIGNATION.
The City will use reasonable efforts in the biennium beginning in 2005 to
nominate the Required Improvements as an enterprise project subject and pursuant to and
in accordance with the Texas Enterprise Zone Act, Chapter 2303, Subchapter F of the
Texas Government Code. Target understands and agrees that the City does not warrant
and cannot guarantee such designation.
Page 26
Economic Development Program Agreement
between City of Fort Worth and Target Corporation `
23. 1031 EXCHANGE.
The City acknowledges and agrees that (i) the City has been advised by Target
that in order to facilitate Target's use of exchange proceeds (under Section 1031 of the
Internal Revenue Code) to purchase and develop the Land, fee title to the Land may be
acquired and held for a period of time prior to the Completion Date by FAE-Target
Acquisition LLC, a Minnesota limited liability company (the "Exchange Facilitator"),
during which period of time Target shall lease the Land from the Exchange Facilitator,
and (ii) the mere fact that fee title to the Land may be owned by the Exchange Facilitator
for a period of time prior to the Completion Date, and that during such period of time
Target shall be the lessee of the Land, shall not affect Target's rights under this
Agreement.
EXECUTED as of the last date indicated below:
CITY OF FORT WORTH: TARGET CORPORATION:
By: By:
Dale Fisseler Name: _
Acting Assistant City Manager Title:
Date: /0 / (�G'f'o b-e 1
Date: r 'S��,O O 4
APPROVED AS TO FORM AND LEGALITY:
By:
Peter Vaky - ATTESTED BY
Assistant City Attorney
M&C: C -Z 01 q Z 7-6-0'
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Page 27
Economic Development Program Agreement
between City of Fort Worth and Target Corporation
n ,
EXHIBITS
"A"—Legal Description of and Map Depicting the Land
"B"—Map of the Central City
"C"—Chart of Maximum Annual Program Grant Amounts
s ,
Economic Development Program Agreement
between City of Fort Worth and Target Corporation
l �
Exhibit"A"
LEGAL DESCRIPTION AND MAP DEPICTING THE LAND
BEING all that certain lot, tract or parcel of land situated in the City of fort Worth,
Tarrant County, Texas, and being a part of Lot 1 in Block 1 of Montgomery Ward &
Company Addition, an addition to the City of fort Worth, Texas, according to the plat
thereof recorded in Volume 388-138 at Page 5 of the Plat Records of Tarrant County,
Texas, and being more particularly described by metes and bounds as follows;
BEGINNING at an "x" found in concrete in the East right of way line of Carroll Street
(64 foot right of way) for the Northwest comer of said Lot 1 in Block 1 of Montgomery
Ward& Company Addition;
THENCE South 89° 55' 00" East (Bearing Basis is the plat of Montgomery Ward &
Company Addition recorded in Volume 388-138 at Page 5 of the Plat Records of Tarrant
County, Texas) along the North line of said Lot 1 in Block 1 of Montgomery Ward &
Company Addition, and being common to South line of the Weisenberger Addition, an
addition to the City of Fort Worth, Texas, according to the plat thereof recorded in
Volume 388-A at Page 120 of the plat Records of Tarrant County, Texas, for a distance
of 576.61 feet to a survey marker nail set for corner;
THENCE South and departing the North line of said Lot 1 in Block 1 of Montgomery
Ward & Company Addition for a distance of 122.31 feet to a survey marker nail set for
corner;
THENCE West for a distance of 24.39 feet to a survey marker nail set for corner;
THENCE South for a distance of 317.00 feet to a point for corner;
THENCE East for a distance of 16.71 feet to a point for corner;
THENCE South for a distance of 637.24 feet to a point for corner;
THENCE West for a distance of 372.18 feet to a survey marker nail set for corner;
THENCE North for a distance of 285.00 feet to a survey marker nail set for corner;
THENCE West for a distance of 196.75 feet to an "x" set in concrete for corner in the
East right of way line of the aforementioned Carroll Street;
THENCE North along the East right of way line of Carroll Street, same being the West
line of the aforesaid Lot 1 in Block 1 of Montgomery Ward & Company Addition, for a
distance of 792.38 feet to the POINT OF BEGINNING and CONTAINING 12.6789
ACRES OF LAND, more or less.
Economic Development Program Agreement "
between City of Fort Worth and Target Corporation '
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Exhibit"C"
CHART OF MAXIMUM ANNUAL PROGRAM GRANT AMOUNTS
Maximum Program Grant
Program Year Amount Payable in that
Program Year
1 $115,000
2 $314,000
3 $494,000
4 $539,000
5 $580,000
6 $613,000
7 $631,000
8 $650,000
9 $670,000
10 $690,000
11 $711,000
12 $732,000
13 $754,000
14 $776,000
15 $800,000
16 $824,000
17 $644,000
18 $663,000
19 $683,000
20 $704,000
21 $350,000
Economic Development Program Agreement
between City of Fort Worth and Target Corporation
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 7/6/2004
DATE: Tuesday, July 06, 2004
LOG NAME: 17EDATARGET REFERENCE NO.: C-20142
SUBJECT:
Authorize the Execution of an Economic Development Program Agreement with Target Corporation
for the Development of a SuperTarget on the Former Montgomery Ward Site
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to execute the attached Economic Development Program Agreement
(subject to non-material final changes agreed to by the parties) with Target Corporation related to the
development of a SuperTarget on a parcel located within the former Montgomery Ward site (the Property);
and
2. Find that the terms and conditions of the Agreement, as outlined below, constitute a custom-designed
economic development program, as recommended by the 2004 Comprehensive Plan and authorized by
Chapter 380 of the Texas Local Government Code.
DISCUSSION:
Under the proposed Economic Development Program Agreement (Agreement), Target Corporation (Target)
has committed to (i) spend at least $8,750,000 in construction costs for improvements to the Property by
August 1, 2007; (ii) construct a 170,000 square foot general retail store, and (iii) contain within that store a
35,000 square foot full-service grocery store.
In order to obtain the maximum benefit under this agreement, Target will be required to spend the lesser
of (i) twenty percent (20%) or $2,500,000 of its construction costs with Fort Worth companies and the
lesser of (ii) fifteen percent (15%) or $1,000,000 of its construction costs with Fort Worth Certified M/WBE
companies. In addition, Target has committed to provide the lesser of 100 or 50% of all jobs on the
Property to Fort Worth residents and the lesser of 25 or 25% of all jobs on the Property to Central City
residents. Moreover, Target has committed to spend or cause to spend at least $20,000 per year in local
discretionary funds for supplies and services with Fort Worth Certified M/WBE companies. The Minority and
Women Business Enterprise Ad Hoc Committee has reviewed and endorsed these commitments.
In return for the development of a SuperTarget with a full-service grocery store component, Target will be
eligible to receive up to 21 annual economic development program grants. The amount of the first year's
program grant will equal up to 100% of the City's 1% sales tax revenues attributable to the Property. This
grant is intended to be supplemented by a one-year tax abatement. The amount of the program grants in
years 2-15 will equal up to 100% of real and personal property tax revenues and up to 100% of the City's
1% sales tax revenues attributable to the Property. The amount of the program grants in years 16-21 will
equal up to 100% of the City's 1% sales tax revenues attributable to the Property.
The total amount of all program grants shall not exceed $13,000,000 in gross dollars inclusive of the value
of tax abatements granted in the first year of the program. In addition, each annual program grant will be
Logname: 17EDATARGET Page 1 of 2
capped in accordance with the table attached to the Agreement as Exhibit C (Maximum Annual Program
Grants). If any annual program grant is less than the Maximum Annual Program Grant for that year
(excluding reductions caused by Target's failure to meet one or more of its commitments, as explained
below), the difference shall be carried forward for payment in a subsequent program year at 6%
interest. During any time in which a full-service grocery store is not operated on the Property (other than for
temporary repairs or remodeling), program grants will be forfeited.
The actual amount of each annual program grant will depend upon the extent to which Target has met its
construction and construction spending commitments, as outlined above and allocated as follows:
An amount equal to 65% of the Maximum Annual Program Grant if Target expends at least
$8,750,000 in improvements to the Property by August 1, 2007. Failure to meet this condition is an event of
default;
An amount equal to 25% of the Maximum Annual Program Grant if Target spends the lesser of 20% or
$2,500,000 of its construction costs with Fort Worth companies; and
An amount equal to 10% of the Maximum Annual Program Grant if Target spends the lesser of 15% or
$1,000,000 of its construction costs with Fort Worth Certified M/WBE companies.
However, if Target does not meet its employment and/or service and supply spending commitments in any
given year, the grant payable in the following year will be reduced:
By $1,000 for each job by which Target missed its commitment for Fort Worth and Central City
resident employment; and
By an amount equal to the product of the number of dollars by which Target missed its commitment
for discretionary supply and service spending with Fort Worth Certified M/WBE companies multiplied by two
(2) .
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 with private developers on a case-by-case basis
to help ensure the growth and diversification of the local economy, as stated in the 2004 Comprehensive
Plan adopted by City Council on February 24, 2004 (M&C G-14276).
The proposed Project is located in COUNCIL DISTRICT 9.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that this action will require no direct expenditure from the City funds in the
current fiscal year.
TO Fund/Account/Centers FROM Fund/Account/Centers
Submitted for City Manager's Office by. Reid Rector (6266)
Originating Department Head: Tom Higgins (6192)
Additional Information Contact: Peter Vaky (7601)
Christine Maguire (8187)
Logname: 17EDATARGET Page 2 of 2