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HomeMy WebLinkAboutContract 60568STATE OF TEXAS COUNTY OF DENTON TAX ABATEMENT AGREEMENT CSC No. 60568 ,I'his TAX ABATEMENT AGREEMENT ("Agreement") is entered into by and between the CITY OF FORT WORTH, TEXAS (`City"), a home -rule municipality organized under the laws of the State of Texas; EXEL INC. d//b/a DHL Supply Chain (USA), a Massachusetts corporation ("Exel") and CAR.HARTT INC., a Michigan corporation ("Company"), RECITALS A. On February 28, 2023, the City Council adopted Resolution No. 5709-02-2023, stating that the City elects to be eligible to participate in tax abatement and setting forth guidelines and criteria governing tax abatement agreements entered into between the City and various parties, entitled "General Tax Abatement Policy" ("Policy"), which is incorporated herein by reference and hereby made a part of this Agreement for all purposes. B. The Policy contains appropriate guidelines and criteria governing tax abatement agreements to be entered into by the City as contemplated by Chapter 312 of the Texas Tax Code, as amended ("Code"). C, On April 11, 2023, the City Council adopted Ordinance No. 26087-04-2023 ("Ordinance") establishing Tax Abatement Reinvestment Zone No, 105, City of Port Worth, Texas {"Zone"). D. Exel owns property located at 16101 Wolff Crossing., which is located within the Zone and is more specifically described in Exhibit "A" ("Land"), attached hereto and hereby made a part of this Agreement for all purposes. Exel and Company are or will be parties to that certain Operating Services Agreement (the "OSA"), pursuant to which Exel will develop a state -of the -art distribution center that is approximately L2 million square feet to support Company's business operations, including the installation of certain taxable business personal property on the Land, which taxable business personal property shall ultimately be purchased by and conveyed to the Company, all as more specifically set forth in the OSA and this Agreement. Under the terms of the OSA, Exel will provide the Company with third party logistics services. E. Under the OSA, Company is responsible for the payment of real property taxes on the Land and all improvements thereon, including the Real Property Improvements, In order for the full tax abatement necessary to provide incentives for this project to be undertaken, the City has been requested to grant an abatement on taxes on New Taxable Tangible Personal Property (as defined in Section 2) located on the Land. Section 312.204(a) of the Texas Tax Code permits the City to enter into an agreement with the owner of the Land to abate taxes on the valve of tangible personal property located on the Land. Because Company must meet certain employment and spending commitments in order for the City to grant the full amount of abatement available hereunder on improvements to the Land, and because Company will be the owner or lessee of New OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX Taxable Tangible Personal Property that is subject to abatement hereunder, it is necessary that both Exel and Company be parties to this Agreement. F. As of November 3, 2022, one or more applications for tax abatement (whether one or more, and as amended, "Applieation(s)") to the City concerning plans for development of the Land, including construction of the heal Property improvements, and taxes payable by Exel and/or Company, which Applications are attached hereto as Exhibit "B" and hereby made a part of this Agreement for all purposes. G. The contemplated use of the Land and the terms of this Agreement are consistent with encouraging development of the Zone and generating economic development and increased employment opportunities in the City, in accordance with the purposes for creation of the Zone, and are in compliance with the Policy, the Ordinance and other applicable laws, ordinances, rules and regulations. H. Under this Agreement, Exel is committed to constructing the Real Property Improvements and Company is committed to investing a total of at least $50,000,000 -in New Taxable Tangible Personal Property to be installed on the Land in connection with manufacturing business operations within the Real Property Improvements, which New Taxable Tangible Personal Property will ultimately be owned by Company. Company is also committing to cause Exel to provide at least 500 new Full-time Jobs whose average annual Salaries will equal at least $55,000,00, Therefore, the provisions of this Agreement, as well as the proposed use of the Land and nature of the proposed Real Property Improvements and New Taxable Tangible Personal Property, as defined herein, satisfy the eligibility criteria in Section 4 (Target Industry) and Section 13.2 (Percentage and Amount) of the Policy, which allows for City Council to consider the percentage of tax abatement on a case -by -case basis. 1. Written notice that the City intends to enter into this Agreement, along with a copy of this Agreement, have been furnished in the manner prescribed by the Code to the presiding officers of the governing bodies of each of the taxing units that have jurisdiction over the Land. 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 I. INCORPORATION OF RECITALS. The City Council has found, and the City, Exel, and Company agree, that the recitals set forth above are true and correct and form the basis upon which the parties have entered into this Agreement. 2. DEFINITIONS. In addition to teens defined in the body of this Agreement, the following terms have the definitions ascribed to them as follows: Abatement means the abatement of a percentage (not to exceed seventy-five percent (75%) in any year of the Abatement Term) of the City's incremental ad valorem taxes on New Taxable Tangible Personal Property, calculated in accordance with this Agreement. Abatement Can means Two Million Dollars and No Cents ($2,000,000.00), which is the aggregate amount of Abatement. Abatement Term means the term of seven (7) consecutive years, commencing on January i of the First Operating Year and expiring on December 31 of the seventh (7th) year thereafter, during which Abatement Term, Company will receive the Abatement in accordance with this Agreement. For the avoidance of doubt, the Abatement `Perm shall coincide with the Compliance Auditing Term. Affiliate means all entities, incorporated or otherwise, under common control with, controlled by, or controlling Company. For purposes of this definition, "control" means fifty percent (50%) or more of the ownership determined by either value or vote. Annual Salary Commitment has the meaning ascribed to it in Section 4.5.1. Annual Salary PereentaV& has the meaning ascribed to it in Section 6.5. Annlication(s) has the meaning ascribed to it in Recital F. Certificate of Comnletion has the meaning ascribed to it in Section S. Code has the meaning ascribed to it in Recital B. Comnletion Date means the date as of which all occupiable space within the Real Property Improvements has received a permanent certificate of occupancy. Comnletion Deadline means January 21, 2025, subject to force majeure as set forth in Section 18. Compliance Auditing Tenn means the term of seven (7) consecutive years, commencing on January 1 of the First Operating Year and expiring on December 31 of the seventh (7th) year thereafter, in which the City will verify and audit Exel's and Company's compliance with the various commitments set forth in Section 4 that form the basis for calculation of the amount of each annual Abatement percentage hereunder. For the avoidance of doubt, the Compliance Auditing Term shall coincide with the Abatement Term, Construction Costs means the following costs expended directly for the Real Property Improvements: actual site development and construction costs, including directly -related contractor fees, plus costs of supplies and materials, engineering fees, architectural and design fees, and permit fees. Construction Costs specifically excludes any real property acquisition costs or rent payments or other costs required by the OSA. Director means the director of the City's Economic Development Department. Effective Date has the meaning ascribed to it in Section 3, First Operating Year means the first full calendar year following the year in which the Completion Date occurred, Fort Worth Resident means an individual whose primary residence is at a location within the corproate limits of the City within Denton, Tarrant, Johnson, Wise, or Parker Counties. Full-time Job means a job provided to one (1) individual by Company on the Land for at least forty (40) hours per week. Land has the meaning ascribed to it in Recital D. "ee al Requirements means 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. New Job has the meaning ascribed to it in Section 4.4,2. New Taxable Tangible Personal Pro er means any personal property other than inventory or supplies that (i) is subject to ad valorem taxation by the City; (ii) is located on the Land; (iii) is owned or leased by Company and used by Company for the business purposes outlined in this Agreement, and (iv) was not located in the City prior to the period covered by this Agreement. 4,2, Ordinance has the meaning ascribed to it in Recital C. Overall Emolovment Commitment has the meaning ascribed to it in Section 4,4,1. Overall Emnlovment Percentaie, has the meaning ascribed to it in Section 6.3; Overall Imnrovement Percentage has the meaning ascribed to it in Section 62. Personal Pronerty Imnrovement Comnaitrnent has the meaning ascribed to it in Section Poliey has the meaning ascribed to it in Recital A. Real Pronertv Imnrovement Commitment has the meaning ascribed to it in Section 4,1. Real Property Imorovements means a distribution facility constructed on the Land consisting of approximately 1.2 million square feet, as verified in the Certificate of Completion issued by the Director in accordance with this Agreement. Records has the meaning ascribed to it in Section 4.8. Salary means the cash payment or remuneration made to a person holding a hull -time Job, including paid time off, commissions, and non -discretionary bonuses. A Salary does not include any benefits, such as health insurance or retirement contributions, reimbursements for employee expenses, or any discretionary bonuses. Second Operating Year means the second full calendar year following the year in which the Completion Date occurred. Terra has the meaning ascribed to it in Section 3, Zone has the meaning ascribed to it in Recital C. 3. TERM. The effective date of this Agreement is April 11, 2023 ("Effective Date") and, unless terminated earlier in accordance with its terms and conditions, expires simultaneously upon expiration of the Abatement Tenn ("Term"). 4. OBLIGATIONS AND COMMITMENTS RELATED TO ABATEMENT, 4.1. Real Property Improvements. 4.1.1. Exel shall construct or cause the eorlstruetion of the Real Property Improvements by the Completion Date. The Completion Date for the Real Property Improvements must occur on or before the Completion Deadline ("Real Property Improvement Commitment'). Exel may perform this obligation in full by permitting Company to make or cause to be made the Real Property Improvements pursuant to the OSA. Failure to complete the Real Property Improvements by the Completion Date constitutes an Event of Default. 4.2. Personal Pronertv Improvements. 4.2.1. On or before the Completion Deadline, Company must ensure that Exel purchases and installs on the Land New Taxable Tangible Personal Property having a value of at least Fifty Million Dollars and Zero Cents ($50,000,000), and Company must purchase from Exel all of said New Taxable Tangible Personal Property ("Personal Property Improvement Commitment"). Exel does not have any responsibility to ensure that the New Taxable Tangible Personal Property Commitment is met. 4.2.2. The value of the New Taxable Tangible Personal Property is determined solely by the appraisal district having jurisdiction over the Land at the time and reflected in the certified appraisal roll received by the City from such appraisal district in such year. 4.3. Emnlavment Commitment. 4.3.1. Company must cause Exel or another third party logistics company to employ and retain a minimum of 500 Full -Time Jobs on the Land by the later of December 3 I, 2024, and retain such jobs for the Term of this Agreement ("Overall Employment Commitment"). The Overall Employment Commitment is an obligation of the Company only, though it may be met with the support of a third party. 4.3.2. A Full -Time Job will be considered new if the individual was hired oil or after April 11, 2023 ("New Job"). 4.3.3. Company will request that Exel or another third party logistics company use commercially reasonable efforts to (a) prioritize recruitment and employment of qualified Fort Worth Residents; and (b) aim toward fulfilling at least 30% of the Full -Time Jobs with Fort Worth Residents, Notwithstanding anything contained in this subsection to the contrary, the provisions set forth in this subsection do not require Company, Exel, or Company's third party logistics company to hire any particular Fort Worth Resident, and further, in no event will Company or Company's third party logistics company be required to hire any individual who does not meet the basic qualifications for the position, as determined by Company, Exel, or Company's third party logistics company, as applicable, in its sole and absolute discretion 4.3.4. Determination each year of compliance with the following Overall Employment Commitment will be based on the employment data provided by Company, Exel, or Company's third party logistics company to the City for the year under evaluation. 4.4. Average Annual Salary. 4.4.1. In each year of the Compliance Auditing Term, the average annual Salary, measured on a calendar year basis, for at least 500 Full -Time .lobs provided and filled on the Land, regardless of the total number of such Full -Time Jobs, must equal at least Fifty-five Thousand Dollars and Zero Cents ($55,000,00) ("Annual Salary Commltment"), The Annual Salary Commitment is an obligation of the Company, to be met through Exel or another third party logistics company's employees at the project site. 4.4.2. Determination each year of compliance with the following Annual Salary Commitment will be based on the employment data provided by Company, Exel or Company's third party logistics company to the City for the year under evaluation. 4.5. Rerrorts and Filings. 4.5.1. Certificate of Occuoanev and Report. Within sixty (60) calendar days following the later of the Completion Date or the execution of this Agreement, in order for the City to assess whether Exel and Company met the Real Property Improvement and Personal Property Improvement Commitments, Exel and Company must provide the Director with a temporary or final certificate of occupancy for the Real Property Improvements and a bill of sale or other properly authenticating documentation showing that Exel conveyed to Company the New Taxable Tangible Personal Properyt in a timely manner . 4.5.2. ,Annual Emplovment Renort. On or before February I of the Second Operating Year, and of each year thereafter for the remainder of the Compliance Auditing Term, in order for the City to assess the degree to which Company met in the previous year the Overall Employment Commitment and the Annual Salary Commitment, Company must provide the Director with a report in a form reasonably acceptable to the City that sets forth the total number of individuals who held Pull -Time lobs on the Land, as well as the Salary of each, all as of December 31 (or such other date requested by Company and reasonably acceptable to the City) of the previous calendar year, together with reasonable supporting documentation, with any sensitive information being redacted as required by law or pursuant to the policies of Company or Company's third party logistics company. 4.5.3. General, Company will supply any additional information reasonably requested by the City that is pertinent to the City's evaluation of compliance with each of the terms and conditions of this Agreement. 4.6. Iuspections of Land and Improvements 4.6.1. At any time during normal business hours throughout the Term, the City will have the right to inspect and evaluate the Land, and any improvements thereon, at the City's sole cost and expense, and Excl will provide access to the same, in order for the City to monitor compliance with the terms and conditions of this Agreement ("City Inspections"). Exel will use reasonable efforts to cooperate with the City during any such inspection and evaluation and City shall use reasonable efforts to not interfere with the operation of the Land or the business being conducted thereon. City shall provide reasonable advance notice, being no less than two (2) business days, to Exel and Company prior to visiting the Land for the purposes under this paragraph. City and Exel and, Company, if it desires, shall work in good faith to coordinate such visits at a time and in a manner that minimizes disruption to the Company's operation. 4.6.2. Notwithstanding the foregoing, each of Exel and Company may require that any representative of the City be escorted by a representative of Company or Exel and/or security personnel during any such inspection and evaluation and abide by any site policies and protocols regarding health, safety, and treatment of Company's and/or Exel's confidential information. City Inspections shall be performed at the City's sole risk and the City shall be solely responsible for the acts, omissions, faults or negligence of the City and the City's agents, contractors and consultants with respect to any such City Inspections. The City shall restore and repair any damage caused by the City or the City's agents, contractors and consultants with respect to such City Inspections. The City shall, to the extent permitted by law, indemnify, defend, and hold Exel and Company harmless from and against any and all losses, damages, costs and expenses (including, without limitation, reasonable attorneys' fees) incurred in connection with or arising out of any such City Inspections. The foregoing restoration and indemnification obligations shall survive the termination of this Agreement. Notwithstanding anything to the contrary, nothing contained in this Agreement will ever be construed so as to require City to create a sinking fund or to assess, levy, and collect any tax to fund its obligations under this. Agreement. 4.6.3. The City is a governmental entity under the laws fo the State of Texas and pursuant to Chapter 2259 of the Texas Government Code, titled "Self -Insurance by Governmental Units," is self -insured for the risks and liabilities with respect to the City's activities on the Land and under this Agreement, and therefore is not required to purchase separate, third -party insurance. City will provide a letter of self -insured status as requested by Company. 4.6.4. Notwithstanding anything contained in this Contract to the contrary, the City shall not conduct any intrusive or invasive environmental or physical testing without first obtaining Exel's written consent, which may be withheld in Exel's sole discretion. 4.7. Audits. The City has the right throughout the Term, at the City's sole cost and expense, to audit the financial and business records of Company that relate to the Real Property Improvements, New Taxable Tangible Personal Property, and the Land and any other documents necessary to evaluate Company's compliance with this Agreement or with the commitments set forth in this Agreement, including, but not limited to construction documents and invoices (collectively, "Records"). Company must make all Records available to (lie City on the Land, at another location in the City acceptable to both parties, or via a data room following prior notice, and will otherwise reasonably cooperate with the City during any audit. To the extent permitted by law, the City shall maintain the confidentiality of the Records and the information contained in the Records, but shall be permitted to disclose such information and documents on a confidential need -to -know basis to employees and consultants as the City reasonably requires to monitor compliance with this Agreement. 4.8. Use of Land. The Land and any improvements thereon, including, but not litnited to, the Real Property Improvements, must be used at all times during the Term of this Agreement for Exel's and/or Company's lawful business operations, as set forth in this Agreement, and otherwise in a manner that is consistent with the general purposes of encouraging development or redevelopment of the Zone. 4.9. Abatement Avolieation Fee. The City acknowledges receipt from Company of the required Application fee of Two Thousand Five Hundred Dollars ($2,500.00), 5. CERTIFICATE OF COMPLETION. Within ninety (90) calendar days following receipt by the City of the temporary or final certificate of occupancy for the Real Property Improvements and the bill of sale or other properly authenticating documentation for the sale of the New Taxable Tangible Personal Property, and assessment by the City of the information contained therein, if the City is able to verify that the Company and Exel met the Real Property Improvement and Personal Property Improvement Commitments by the Completion Date and that the Completion Date occurred on or before Completion Deadline, the Director will issue Exel and Company a certificate stating that both commitments have been met ("Certificate of Completion"), 6. TAX ABATEMENT. 6.1. Ceneraliv. 6.1.2. Subject to the terms and conditions of this Agreement, provided that the Real Property Improvement Commitment and Personal Property Improvement Commitment have been met, then the City will grant an Abatement in each year of the Abatement Term, 6.1.3. The amount of each Abatement that the City grants during such years will be a percentage of the City's ad valorem taxes on Now Taxable 'Tangible Personal Property attributable to increases in the value of the New Taxable Tangible Personal Property, which percentage will equal the sum of the Overall Improvement Percentage, the Overall Employment Percentage, and the Annual Salary Percentage, as set forth below (not to exceed seventy -Eve percent (75%j). 6.2. Real Property Imnrovement and Personal Prouty Commitments City will grant an abatement to Company equal to thirty percent (30%) of the overall Abatement ("Overall Improvement Percentage") if Company and Exel meet the Real Property Improvement Commitment, and Company meets the Personal Property Commitment in a timely manner. 6.3. Overall Emnlovment (Un to 20%1. 6.3.1. A percentage of the Abatement will be based on the extent to which the Company meets the Overall Employment Commitment ("Overall Employment Percentage"). The Overall Employment Percentage in a given year will equal the product of twenty percent (20%) multiplied by the percentage by which the Company met the Overall Employment Commitment in the previous calendar year, which will be calculated by dividing the actual number of Full -Time ,fobs provided oil the Land in the previous year by the number of Full -Time Jobs constituting the Overall Employment Commitment for that year. 6.3.2. For example, if Company only employed 200 individuals with Full -Time Jobs oil the Land in 2028 instead of the required 500, the Overall Employment Percentage for the following year would be 8% instead of 20% (or .2 x [200/500]), or .2 x .4, or .08. If the Company meets or exceeds the Overall Employment Commitment in any given year, the Overall Employment Percentage for the Abatement in the following year will be twenty percent (20%). 6.4. Annual Salary f25%1, 6.4.1. A percentage of the Abatement will be based on whether Company causes Exel or Company's third party logistics company to meet the Annual Salary Commitment ("Annual Salary Percentage"). The Annual Salary Percentage in a given year will equal the product of twenty-five percent (25%) multiplied by the percentage by which the Company met the Annual Salary Commitment in the previous calendar year, which will be calculated by dividing the actual average annual salary for the applicable Full -Time Jobs in the previous year by the Annual Salary Commitment. 6.4.2. For example, if Exel or Company's third party logistics company only paid an average annual salary of $50,000 in 2028 instead of the required $S5,000, the Annual Salary Percentage for the following year would be 22.5% instead of 25% (or .25 x [50,000/55,000]), or .25 x .9, or .225. If Exel or Company's third party logistics company meets or exceeds the Annual Salary Commitment in any given year, the Annual Salary Percentage for the Abatement in the following year will be twenty -Eve percent (25%). 6.5, Abatement Limitations. 6.5.1. In accordance with Section 16.5 of the Policy and notwithstanding anything to the contrary herein, the amount of New Taxable Tangible Personal Property to be abated in a given year will not exceed 150% of the minimum value of the New Taxable Tangible Personal Property required under this Agreement multiplied by the City's tax rate in effect for that same year_ 6.5.2. Notwithstanding anything to the contrary, aggregate Abatements will be subject to and will not exceed the applicable Abatement Cap, 7. DEFAULT. TERMINATION AND FAILURE TO MEET VARIOUS DEADLINES AND COMMITMENTS. 7.1. Failure to Meet Real Pronertv Imnrovement and Personal Pronerty Commitments. Notwithstanding anything to the contrary herein, if the Company or Exel, as applicable, does not meet or cause to be met both the Real Property Improvement Commitment and Personal Property Commitment, an Event of Default will occur and the City will have the right to terminate this Agreement, effective immediately, by providing written notice to Exel and Company without further obligation to Exel or Company, as applicable. 7.2. Failure to Meet the Overall Emnlovanent and Annual Salary Coin in[tin ents. If the Company does not meet or cause Exel or Company's third party logistics company to meet the Overall Employment Commitment or Annual Salary Commitment in any given year, such event will not constitute an Event of Default hereunder or provide the City with the right to terminate this Agreement, but, rather, will only cause the percentage or amount of Abatement available pursuant to this Agreement to be reduced in accordance with this Agreement. 7.3. Knowing Emnlovment of Undocumented Workers. Company acknowledges that effective September 1, 2007, the City is required to comply with Chapter 2264 of the, Texas Government Code, enacted by House Bill 1196 (80th Texas Legislature), which relates to restrictions on the use of certain public subsidies. Company hereby certift"es that Company and any branches, divisions, or departments thereof, does not and will not knowingly employ an undocumented worker, as that term is def7ned by Section 2264.001(4) of the Texas Government Code. In the event that Company, or any branch, division, or department thereof, is convicted of a violation under 8 U.S.C. Section 1324a(l) (relating to federal criminal penalties and injunctions for a pattern or practice of employing unauthorized aliens) and such violation occurs during the Term of this Agreement: if such conviction occurs during the Term of this Agreement, this Agreement will terminate contemporaneously upon such conviction (subject to any appellate rights that may lawfully be available to and exercised by Company) and Company must repay, within one hundred twenty (120) calendar days following receipt of written demand front the City, the aggregate amount of Abatement received by Company hereunder, if any, plus Simple Interest at a rate of two percent (2%) per annum based on the amount of Ahatentent received in each previous year as of December 31 of the tax year for which the Abatement was received, or if such conviction occurs after expiration or termination of this Agreement, subject to any appellate rights that stay lawfully be available to and exercised by Company, Company must repay, within one hundred thventy (120) calendar (lays following receipt of written dentand front the City, the aggregate anhou►tt of Abatement received by Company hereunder, J'any, plus Simple .Interest at a rate of two percent (2%) per annum based on the amount of Abatement received its each previous yearns ofDecember3i ofthe taxyearfor which 11teAbatement was received For the purposes of this Section 7A, "Simple Interest" is defined as a rate of interest applied only to an original value, in this case the aggregate amount of Abatement. This rate of interest can be applied each year, but will only apply to the aggregate amount of Abatement and is not applied to interest calculated. For example, if the aggregate amount of Abatement is $10,000 and it is required to be paid back with two percent (2%) interest five years later, the total arnount would be $10,000 ►� [5 x ($10,000 x 0.02)], which is $l 1,000. This Section 7.4 does not apply to convictions of any subsidiary or affiliate entity of Company, by any franchisees of Company, or by a person or entity with whom Company contracts, Notwithstanding anything to the contrary herein, the parties agree that the Abatement is a "public subsidy" (as that teen is defined in Section 2264.001, Texas Government Code) for the benefit of Company and that, accordingly, this Section 7A does not apply to Exel. This Section 7A will survive the expiration or termination of this Agreement. 7.4. Foreclosure on Land or Real Prouerty Improvements. Subject to Section 11, the City will have the right to terminate this Agreement immediately upon provision of written notice to Exel and Company of any of the following events: (i) the conveyance of the Land or the Real Property Improvements pursuant to an action to foreclose or otherwise enforce a lien, mortgage or deed of trust on the Land or the Real Property Improvements; (ii) the involuntary conveyance to a third party of the Land or the Real Property Improvements; (iii) execution of any assignment of the Land or- Real Property Improvements for the benefit of creditors or deed in lieu of foreclosure to the Land or Real Property Improvements; or (iv) appointment of a trustee or receiver for the Land or Real Property Improvements and such appointment is not terminated within one hundred twenty (120) calendar days after the appointment occurs. 7,5. Failure to Pay Taxes or Non-Comnliance with Other Legal Reauiremerrts. An Event of Default will occur if any ad valorem taxes owed to the City by Company become delinquent and Company does not timely and properly follow the legal procedures for protest or, contest of any such ad valorem taxes, or Company is in violation ofany material Legal Requirement affecting the terms of this Agreement due to any act or omission connected with Company's operations on the Land; provided, however, that an Event of Default will not exist under this provision unless Company fails to cure the applicable failure or violation within thirty (30) calendar days (or such additional time as may be reasonably required) after Company receives written notice of such failure or violation, 7.6. General Breach. In addition to Sections 7A — 7.6 and subject to Section 7.4, an Event of Default under this Agreement will occur if any party breaches any term or condition of this Agreement, in which case the non -defaulting party must provide the defaulting party with written notice specifying the nature of the Default. Subject to Sections 7.1, 7.2, and 7.3, in the event that any Event of Default hereunder remains uncured after thirty (30) calendar days following receipt of such written notice (or, if the defaulting party has diligently and continuously attempted to cure following receipt of such written notice but reasonably requires more than thirty (30) calendar days to cure, then such additional amount of time as is reasonably necessary to effect cure, as deten-nined by both parties mutually and in good faith), the non - defaulting party will have the right to terminate this Agreement, effective immediately, by providing written notice to the defaulting party. 7.7. Statutory Damages. 7.7.1: Company acknowledges and agrees that termination of this Agreement due to an Event of Default by Company will (i) harm the City's economic development and redevelopment efforts on the Land and in the vicinity of the Land; (ii) require unplanned and expensive additional administrative oversight and involvement by the City; and (iii) be detrimental to the City's general economic development programs, both in the eyes of the general public and by other business entities and corporate relocation professionals, and Company agrees that the exact amounts of actual damages sustained by the City therefrom will be difficult or impossible to ascertain. In no event shall Company be liable for special, consequential, or punitive damages hereunder. 7.7.2 Therefore, upon termination of this Agreement for any Event of Default, and as authorized by Section 312.205(b)(6) of the Code, Company must pay the City, as damages authorized by the Code, an amount equal to all taxes that were abated in accordance with this Agreement for each year in which an uncured Event of Default existed and which otherwise would have been paid to the City in the absence of this Agreement, 7.7.3 The City and Company agree that the abovc-stated amount is.a reasonable approximation of actual damages that the City will incur as a result of an uncured Event of Default and that this Section 7.8 is intended to provide the City with compensation for actual damages, as authorized by the Code, and is not a penalty. 7.7.4 The above -stated amount may be recovered by the City through adjustments made to Company's ad valorem property tax appraisal by the appraisal district that has jurisdiction over the Land and over any taxable tangible personal property located thereon. Otherwise, this amount will be due, owing, and paid to the City within sixty (60) calendar days following the effective date of termination of this Agreement. 7.7.5 In the event that all or any portion of this amount is not paid to the City within sixty (60) days following the effective date of termination of this Agreement, Company will also be liable for all penalties and interest on any outstanding amount at the statutory rate for delinquent taxes, as determined by the Code at the time of the payment of such penalties and interest (currently, Section 33.01 of the Code). 8. INDEPENDENT CONTRACTOR. It is expressly understood and agreed that Exel and Company will operate as independent contractors in each and every respect hereunder and not as agents, representatives or employees of each other or of the City. As to the City, Exel and Company will have the exclusive right to control all details and day-to-day operations relative to the Land and any improvements thereon and will be solely responsible for the acts and omissions of their officers, agents, servants, employees, contractors, subcontractors, licensees and invitees. Exel and Company acknowledge that the doctrine of respondeal superior will not apply as between the City and Exel or Company, their officers, agents, servants, employees, contractors, subcontractors, licensees, and invitees. Exel and Company further agree that nothing in this Agrcement will be construed as the creation of a partnership or joint enterprise between the City and Exel or Company. 9. INDEMNIFICATION. 9.1. EXCEPT TO THE EXTENT CAUSED BY THE NEGLIGENCE, GROSS NELIGENCE, OR WILLFUL MISCONDUCT OF THE CITY, COMPANY, AT NO COST TO THE CITY, AGREES TO DEFEND, INDEMNIFY AND HOLD THE CITY, AND ITS RESPECTIVE OFFICERS, AGENTS SERVANTS, REPRESENTATIVES, 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 COMPANY'S BUSINESS AND ANY RESULTING LOST PROFITS) AND PERSONAL INJURY, INCLUDING DEATH, THAT MAY RELATE TO, ARISE OUT OF OR BE OCCASIONED BY(!) COMPANY'S OR EXEL'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT BEYOND ANYAPPLICABLE NOTICE AND CURE PERIOD OR (ii) ANYNEGLIGENTACT OR OMISSIONOR INTENTIONAL MISCONDUCT OF EXEL OR COMPANY, ITS OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE CITY} OR SUBCONTRACTORS, RELATED TO THE REAL PROPERTY IMPROVEMENTS, THE LAND AND ANY OPERATIONS AND ACTIVITIES THEREON; OR THE PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT OTHERWISE. THIS SECTION WILL SURVIVE ANY TERMINATION OR EXPIRATION OF THIS AGREEMENT. 9.2. EXCEPT TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF EXEL, COMPANY HEREBY RELEASES EXEL FROM, AND COMPANY, AT NO COST TO EXEL, AGREES TO DEFEND, INDEMNIFY AND HOLD EXEL, AND ITS RESPECTIVE OFFICERS, AGENTS SERVANTS, REPRESENTATIVES, 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 COMPANY'S BUSINESS AND ANY RESULTING LOST PROFITS) AND PERSONAL INJURY, INCLUDING DEATH, THAT MAY RELATE TO, ARISE OUT OF OR BE OCCASIONED BY COMPANY'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT BEYOND ANYAPPLICABLE NOTICE AND CURE PERIOD. THIS SECTION WILL SURVIVE ANY TERMINATION OR EXPIRATION OF THIS AGREEMENT. 10. NOTICES. All written notices called for or required by this Agreement must 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: I Company: City of Fort Worth I Carhartt, Inc. Attn: City Manager 200 Texas Street Fort Worth, Texas 76102 With copies to: City Attorney at the same address and (lie Director at: City of Fort Worth Attn: Director Economic Development 11 SO South Freeway Fort Worth, Texas 76104 Attn: Chief Financial Officer 5800 Mercury Drive Dearborn, Michigan 48126 With copies to: Carhartt, Inc. Attn: Anna Inch, Esq. 5800 Mercury Drive Dearborn, Michigan 48126 Dickinson Wright PLLC 2600 W. Big Beaver Rd., Suite 300 Troy, Michigan 48084 Attention: Zan Nicolli Exel, Inc, d/b/a DHL Supply Chain (USA) Attn: Real Estate Solutions 360 Westar Blvd, Westerville, OH 43082-7627 Exel, file. d/b/a DHL Supply Chain (USA) Attn: Legal Real Estate 360 Westar Blvd, Westerville, OH 43082-7627 Vorys, Sater, Seymour and Pease LLP Attn: Scott J. Ziance 52 E. Gay Street Columbus, Oil 43215 11, EFFECT OF SALE OF LAND AND/OR REAL PROPERTY IMPROVEMENTS: ASSIGNMENT AND SUCCESSORS. 11.1. Exel may assign this Agreement without the consent of the City Council, provided that Exel gives written notice to the City of the name and contact information for Exel assignee or successor in interest. Any lawful assignee or successor in interest of Exel of its rights under this Agreement will be deemed "Exel" for all purposes under this Agreement, and any such lawful assignee or successor will assume, and without further action by any party, Exel will be released from, all future liability and responsibility, if any, of"Exel" under this Agreement that accrues from and after the effective date of such assignment. 11.2 Company may assign this Agreement, and all or any of the benefits provided hereunder, without the consent of the City Council to (a) an Affiliate that leases, owns or takes title to the Land and owns or leases any New Taxable Tangible Personal Property or (b) a successor to Company by merger or consolidation only if (i) prior to or contemporaneously with the effectiveness of such assignment, Company provides the City with written notice of such assignment, which notice must include the name of the Affiliate and a contact name, address and telephone number for the Affiliate, and (ii) the Affiliate agrees in writing to assume all terms and conditions of Company under this Agreement. 11.3 Otherwise, Company may not assign, transfer or otherwise convey any of its rights or obligations under this Agreement to any other person or entity without the prior consent of the City Council, which consent will not be unreasonably withheld, conditioned on (i) the proposed assignee or successor agrees and proceeds to lease or take title to the Land and any New Taxable Tangible Personal Property; (ii) the proposed assignee or successor is financially capable of meeting the terms and conditions of this Agreement; and (iii) 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 and be bound by all covenants and obligations of Company tinder this Agreement. Any attempted assignment without the City Council's prior consent constitutes an Event of Default tinder this Agreement. Any lawful assignee or successor in interest of Company of all rights under this Agreement will be deemed "Company" for all purposes under this Agreement. 12. COMPLIANCE WITH LAWS. ORDINANCES. RULES AND REGULATIONS. This Agreement is subject to all applicable Legal Requirements. 13. GOVERNMENTAL POWERS. It is understood that by execution of this Agreement, the City does not waive or surrender any of its governmental powers or immunities. 14. SEVERABILITY. If any provision of this Agreement is hold to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired. 15. NO WAIVER. The failure of either party to insist upon the'performance of any terra or provision of this Agreement or to exercise any right granted hereunder will not constitute a waiver of that parry's right to insist upon appropriate performance or to assert any such right on ally future occasion. 16. VENUE AND CHOICE OF LAW. 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 will 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 will be construed in accordance with the laws of the State of Texas. 17. NO THIRD PARTY RIGHTS. The provisions and conditions of this Agreement are solely for the benefit of the City, Exel, and Company, and any lawful assignee or successor of Exel or Company, and are not intended to create any rights, contractual or otherwise, to any other persons or entities. 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, government action or inaction, orders of the government, epidemics, pandemics, civil commotion, acts of God, strike, inclement weather, shortages or unavailability of labor or materials, unreasonable delays by the City (based on the then - current workload of the City department(s) responsible for undertaking the activity in question) in issuing any permits, consents, or certificates of occupancy or conducting any inspections of or with respect to the Land, steal Property Improvements, the placement of the New Taxable Tangible Personal Property, 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 ofthose enumerated or not, the party so obligated or permitted will 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 and the Completion Deadline will be extended for a period of time equal to the period such party was delayed. Notwithstanding anything to the contrary herein, it is specifically understood and agreed that any failure to obtain adequate financing necessary to meet the Real Property Improvement Commitment or the Personal Property Commitment will not be deemed to be an event of force majeure and that this Section 18 will not operate to extend the Completion Deadline in such an event, 19. INTERPRETATION, In the event of any dispute over the meaning or application of any provision of this Agreement, this Agreement will be interpreted fairly and reasonably, and neither more strongly for or against any party, regardless of the actual drafter of this Agreement. In the event of any conflict between the body of this Agreement and the Applications, the body of this Agreement will control. 20. CAPTIONS. Captions and headings used in this Agreement are for reference purposes only and will not be deemed a part of this Agreement. 21. ELECTRONIC SIGNATURES. This Agreement may be executed by electronic signature, which will be considered as an original signature for all purposes and have the same force and effect as an original signature. For these purposes, "electronic signature" means electronically scanned and transmitted versions (e.g. via pdf file or facsimile transmission) of an original signature, or signatures electronically inserted via software such as Adobe Sign. 22. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which will be considered an original, but all of which will constitute one instrument. 23. BONDHOLDER RIGHTS, The Real Property Improvements will not be Financed by tax increment bonds. This Agreement is subject to the rights of holders of outstanding bonds of the City. 24. CONFLICTS OF INTEREST. Neither the Land nor any improvements thereon are owned or leased by any member of the City Council, any member of the City flan or Zoning Commission or any member of the governing body of any taxing unit with jurisdiction in the Zone. 25, NO LIABLITY TO EXEL Exel is consenting to the provisions of this Agreement as an accommodation to, and at the request of, Company. Accordingly, notwithstanding anything to the contrary contained herein, in no event will Exel be responsible for any obligations hereunder, including but not limited to any damages, clawbacks, fees, penalties, interest, or increase in ad valorem taxes as a result of any default under this Agreement. 26. ENTIRETY OF AGREEMENT. This Agreement, including any exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement as between (i) the City, and (ii) Exel; and Company (together with any lawful assign and successor of Exel or Company), as to the matters contained herein. Any prior or contemporaneous oral or written agreement between (i) the City (on one hand), and (ii) Exel and Company (on the other hand), 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 will not be amended by the City, and no amendment shall be binding on the City, unless executed in writing by a]I 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. Notwithstanding the foregoing, as between Exel and Company, this Agreement shall not affect the OSA or any other agreement between or binding Exel and Company. EXECUTED as of the last date indicated below: [SIGNATURES IMMEDIATELY FOLLOW ON NEXT THREE (3) PAGES] CITY: CARHARTT INC. a Michigan corporation By: William Johnson (D c 5, 202314:20 CST) William Johnson By: Assistant City Manager Name: biGeS pr{�tpa Title: clj Date: Dec 5, 2023 Date: 074'. ti 62 7, d,DA 3 EXEL INC. d/bla DHL Supply Chain (USA), a Massachuse sprpor tion By: i Name: Title: Date: FOR CITY OF FORT WORTH INTERNAL PROCESSES: Approval Recommended: By: Robert Sturns 1, 2023 09:03 CST) Name: Robert Sturns Title: Director, Economic Development Approved as to Form and Legality: By: uJ Nance: Tyler F. Wallach Title: Assistant City Attorney Contract Authorization: M&C: 23-0286 Form 1295s: 2023-995260 and 2023-1003554 Contract Compliance Manager: By signing, I acknowledge that I am the person responsible For the monitoring and administration of this contract, including ensuring all performance and reporting requirements. By: Cherie Gordon gov 30, 2023 13:42 CST) Name: Cherie Gordon Title: Business Development Coordinator City Secretary: By: Name: Jannette Goodall Title: City Secretary v � , pORT 0 o o o0 ono o=01 °pd °°° o d ��>1 nEXA?oa OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX STATE OF TEXAS COUNTY OF TAItRANT BEFORE ME, the undersigned authority, on this day personally appeared William Johnson, Assistant City Manager of the CITY OF FORT WORTH, a municipal corporation organized under the laws of the State of Texas, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of the CITY OF FORT WORTH, that he was duly authorized to perform the same by appropriate resolution of the City Council of the City of Fort Worth and that lie executed the same as the act of the CITY OF FORT WORTH for the purposes and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAT, OF OFFICE this day of 2023. Notary Public in and for the St, e of Texas Notary's Printed Name CARHARTT INC. a Michigan corporation: STATE OF ROA1604 § COUNTY OF W WL\) L § BEFORE ME, the undersigned authority, on this day personally appeared SuSo,4 14AP-i t� U-U + $ V V9 of CARHARTT INC,, a Michigan coi•poration, known to me, to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that s/he executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of CARHARTT INC. GIVEN UNDER MY HAND AND SEAL OF OFFICE this t) day of o cr o , 2023, 5�V>f .�OM� l ean',Lo Notary Public in and for the State of �IGt'{1�t.? Notary's Printed Name STATE Or—DkZ D § COUNTY OFbe��i ,1Cam§ EEO I =igned authority, on this day personally appeared W�&Ut.x of EXEL INC, d/b/a DHL Supply Chain (USA), a Massachusetts corporation, known to me to be the person whose name is subscribed to the Foregoing instrument, and acknowledged to me that s/he executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of EXEL INC, d/b/a DHL Supply Chain (USA). GIVEN UNDER MY HAND AND SEAL OF OFFICE this 91-11- day of Ala vto 2023. W W No ary public in and for ' the State of DVj Q heather Meade Notary Public, State of Ohio My Commission ExPlres 05-1428 Notary's Printed Name` EXHIBIT A DESCRIPTION AND MAP DEPICTING THE LAND FORT WORTH. Tax Abatement Reinvestment Zone No.105 16101 Wolff Crossing Fort Worth TX 76 177 "Exhibit A" Copyright 2022 City of Fort Worth. Unauthorized reproduction is a violation ofappFcable yaws_ This product is for informational purposes and may not have been prepared for or be su"rtablefor legs! engineering or surveying purposes. It does not represent an on -the -ground survey and represents only the appropriate relative location of property boundaries. The City of Fort Worth assumes no responsibrity for the accuracy of said data. EXHIBIT B TAX ABATEMENT APPLICATION Economic Development Incentive Application FORTWORTHp ORTH Dale Project name Project DC5 Applicant Information Consultant Information Company Carhartt Inc. Company EY Contact Name Shaun Rohlig Contact Name Poonam Mahale Title Director of Tax Title Senior Manager Address 5750 Mercury Drive Address 2323 Victory Avenue Suite 2000 City, State ZIP Dearborn, MI 48126 city, Stale ZIP Dallas, Texas 75219 Phone 313.749.6330 Phone 21 4.969.6157 Email srohlig@carhartl com Email poonam.mahaleQo ey,com Project Description Please provide a genera Summary of Iho protect ro osed for consideration of Man ncsr►lrGes A[lacil additional sheets as necessary.'j Carhartt Inc. is a US based apparel manufacturer founded In 1889. It is a family -owned company with Its headquarters in Dearborn, Michigan. The company started during the time of steel, steam, and locomotives. It focused on market research and created the Cerharit bib -overall which rapidly evolved Into the standard for quality workwear, The company has since expanded and is known for Its jackets, coats, overalls, vests, shirts, leans, dungarees, fire-resistant clothing and hunting clothing. Carhartt is rapidly expanding Its U.S_ distribution footprint and Is continuously evaluating and pursuing potential expansion opportunities. With respect to the Northlake opportunity, Cerharit strategically partners with a third party logistics company ("3PL") who would be responsible for managing the buitditig construction, design, and fit -out of the building as well as employing the individuals that would operate the site. The third party logistics company would in turn work with a developer on the Construction of the distribution center facility. For these reasons, Catharft does not Currently have the insight into the real estate development process and costs. White this is a unique structure involving multiple parties, carhartt's potential project serves as the Impetus for the capital Investment coming from the real estate development as well as the job creation. The 3PL would be responsible for the design of buildings, equipment and grounds; security procedures; training and hygiene of personnel; building maintenance and housekeeping; effective pest control; proper use and storage of chemicals and cleaning agents; equipment suitability, function and maintenance; handling procedures for storage and distribution of products; and adequate record keeping. Carhartt would provide requirements to the 3PL for the building and fit out of the 1.2 million square fool facility and would effectively manage the operations such as manufacturing, processing, packaging, distribution or labeling of the products Activities at the distribution center will Include receiving, sorlation, put away, slotting, waving, picking, order pack out, auditing, cycle counting, and outbound sortation for loading and shipping of Carhartl products. The main products will consist of clothing and apparel that are expected to be distributed across U.S, and Canada. Project Impact: (€n what way w<II the project benefit the surrounding area or serve as a catalyst for additional development and/or business upportunit=es for the local economy?) The Project w,ll create an estimated 500 new jobs with salaries averaging approximately $63,529 The jobs created will include fob responsibilities such as material handlers, operators, engineers, analysts, supervisors and directors. The salaries will range from approximately $45,000 - $260,000 and are expected to increase each year. Carharlt also expeols to hire 5. 10 employees directly to fill salaried positt ris to assist In day-to-day operations The cost of construction is not known at this time as the developer will be responsible for building the facility. The facility is 12 million sqh, expected to have significant construction and one time Investment costs associated with the construction period. This will also require the involvement of a temporary construction workforce The construction activities as wall as the new employment at the facility will stimulate the local economy and surrounding areas Carharlt will be Investing In the personal property and upfitling of the facility including machinery and equipment, racking, storage and conveyor systems, sorting and handling equipment, as wall as IT and security systems. The total investment is estimated to be $90,O00.000 Financial Gap, Project Impediment, or Multi region Competition: (Describe any financial gap or other challenge that would prevent the project from being feasible without incentives. Please indicate if multiple regions or states are under consideration for the proposed project,j Multiple locations have been evaluated for this project both within the broader region and state, and incentives are a key consideration to the overall financiat model. The Company has a global footprint with many operations throughout the U5 During the preliminary evaluation, the decision to partner with a third party to coordinate construction and hiring efforts was determined to be the most efficient option. Business Expansion or Relocation Continue to next section if not applicable Form of Buslness Publicly Traded Years in Operation Corporation No 133 (founded 1889) Industry Clothing and Manufacturing Expansion or Relocation Expansion If other, describe NIA Tiaer Symbol N/A Parent Company N/A NAICS 315210 Current Location Headquarters. 6850 Mercury Dr., Dearborn, MI 46126 If Investment Fund (Including PE, VC, Family Office, Institutional, Infrastructure Fund, etc,): Assets Under Mgml, N/A Porlfolio Size (Cos ) NIA Describe the Company's Principal Susinesw Cwharti, Inc., Is a UZ.-bawd apparel manufacturer founded in 1$69. Carhartt is known for its work clothes, such as jackets, coals, overalls, coveralls, vests, shirts, jeans, dungarees, fire-resistant clothing and hunting clothing. It is a family -owned company, owned by the descendants of founder Hamilton Carhartl, with its headquarters in Dearborn, Michigan. Descrihe the Company's International Presence, if any: Cerbard has global operations in the US, Mexico, and Europe. Their international presence includes manufacturing and finishing operations in Mexico and a European headquarters In Amsterdam. Corhartt's supply chain, corporate toeations, and IT service centers are worldwide. Describe the Company's Corporate Citizenship Practices: Page 2 of 5 [DeSC(ibe any current or proposed acimi es_ programs. or commitments) As a global business, Carhadt has taken a number of steps to ensure their print€pies are upheld throughout the global network of factories and operations supporting the business. They have adopted a workplace code of conduct that establishes expectations for all supplier and licensee relationships which includes environmental protection, responsible working conditions, and fundamental human righls. All facilities are required to be audited by 3rd party companies under Carhadt approved programs to ensure compliance to the code of conduct, In addition to these assessments, Carharit sourcing and quality assurance personnel visit and work in supplier facilities on an ongoing basis. The regular presence allows them to closely monitor day-to-day work conditions, Carhartt prides themselves on working with like-minded organizations that provide them with the greatest opportunity to positively impact the communities they serve, They take time to carefully hand-pick partners who share their desire to do the right thing, and bo€rave their actions speak louder than words. The organizations they partner, with like Team Rubicon and Grow Detroi(s Young Talent, are committed to building a more diverse and sustainable future for all hardworking people They are in a multi -year partnership to preserve public lands for generations of Carharti customers. As a partner with the National Park Foundation, they support communities and workforce initiative where funds are used to support the service corps, focal community and workforce development organizations that provide on-the-job training for members, enabling them to develop leadership skills, build teamwork, and learn about public land$ career paths Carhara is involved in many corporate responsibility initiatives that would likely impact the local communities surrounding the proposed distribution center. For example, Carharh has many initiates foisted to equity, building communities, treating inclusive and accessible experfences, and sustalnabllity focused efforts, The company also places an emphasis on wellbeing and provides multiple ways to support their employees and families Real Estate Development Continue to next sectlon if root applicable Describe the Development Team: [Describe the Developer's experience and background Please include similar projects that you have constructed includlag the project type and location Attach additional sheels as necessary] The Applicant, Carhaill, is working with a third party to coordinate with the developer responsible for real estate development, As such, this section is not applicable as Carharit is only responsible for the personal property Investment. Project Partners: [Architect, Engineer, General Con(ractor, Key Consullants, Lender, etc,[ Site Plan, Illustrations, and Other Documents Attach, 1) Site plan. 2) Illustrations or Renderings, 3) Environmental Documents, 4) Survey, 5) Legal Description Project Financial Statements: Attach documents outlining project Sources & Uses, Capital Stack, and Pro Forma if available If Hotel Project: Total Number of Keys Total SF Meeting Space Project Site retails 16101 Wolff Crossing, Northloke, TX Project Site Address 76247 Protect Site Acreage -78 76 acres (building is 12 million sgfL) Existing or Now New Construction Historic Destgnation(s) [Select[ Current Land Valuation $10,234.164 Improvements Valuation Unknown Project Type Other If Other, Describe: Dist4bution center Est. Start Date 042022 Est Completion Dale 811I2023 Page 3 of 6 Project Type Other Anticipated Ownership lease Current Zoning PD 1039 Variances Required No Capital Improvement & Investment Details 11 Other, Describe Distribution center Term of Lease (Years) 10 years Requested Zoning I • light industrial Describe Variances- NIA Tolal Construction Costs NIA Hard Construction Costs N/A New Personal Property $90,000,000 Historic Tax Credits No Annual R&D Expenses NIA Annual Patents NIA Value of Inventory $375,000,000 value of supplies $7.000,000 Est Value of Imports $650,000.000 Est Vatue of Exports $11,000,000 Employment and Job Creation Current Employment 0 Avg Wage (o(Current) $0 New Employees (FTSs) 500 Avg Wage (of New) $53,529 Description of Existing Positions and Now Positions to be Added and Hiring Schsdule: Please utilize the "Employment Info" tab to outline the number and average annual salaries of existing, as well as new employees, by job category (executive professional, etc), as well as hiring schedule for new positions (I a how many new employees at Project Completion, Year 1 Year 3 and so forth ) Other Incentive Requests ,l- �.�.�......... „ Do you intend to pursue abatement of County taxes? Yes Do you inland to pursue State Economic Development incentives? No Descriptlon of Other Incentives: (Describe State or County incentives pursued] Carhartl plans to pursue the abatement of County taxes. Confidentiality & Disclosures Sta11e1and City of Fort Worth {xaetices and` ipcedures guaY�ie Gontiiierillali'ty ofinlofiriaUAn and materials submitted in �ppllcajioyii or negv00, ti an for economic development incentives (Section "2 131 Confidentiality of Certain Economic Development Nagotralron information). Unless olherwls8 permitted by or coordinated %Ih the applicant, all Informatlon will be kept in strict confidence except where required under applicable state or federal law City staff will coordinate with the applicant on information disclosures as necessary to the Incentive review and approval process Disclosure of Financial Interest Page 4 of 5 its any person or firm receiving any form of Compensation, comrnissinn or other monetary benefit based on (lie level of incentive obtained by [lie applicant from the City of Fort Worth? If yes please explain and/or attach details i No, not applicable Form 1295 Certificate of Interested Parties State law (Chapter 2254, Texas Government Code) requires that Olt parties entering into an incentive agreement with the City of Fort Worth must complete and submit a Form 1295 Certificate of Interested Parties Certain exceptions apply City of For( Worth Economic Development staff must receive a completed copy of the Form 1295 (which may be delivered by email as a PDF) or an explanation of why Company is excepted from [hiss requirement (to W confirmed by Ihz City Attorney s Office before any proposal for incentives may be presented to the City Council The Form 1295 can be completed electronically at http ItWavw ethics state tx us/whatsnew/eif_into form1295 him Application Fee Yhe t:xec Ive S ssfans he f 8lesfoefundad. Upon presentation ation fee. if'the appllc�ronsslo`lhdr „ el $SHOD n eprc t�Se (s� n, $taw 0 is non-refundable � presented to Ci �""�� on to City Council in Ope 00 before the project and is applied to offset costjls incurred by the Economic Devefopmenl Department. Upon approval by City Council, the balance of $3,000 can be credited towards required building permits, inspections fees, reputing fees, and other costs of doing business with the City related to the development, Any unused credit balance upon completion of the protect will he refunded upon request from the company. Certification On b8 �a o the applicant, !certify the intormaliori contairied In this a licalion, including to ba'lrue'and"correct I behalf of (he stale applicant, I have read the Current Incentive Policy and al other pertinent ity of Fort Worth policies and I agree with the guidelines y land 11 on cri the uidelines and — i At"M 4_2 JJAA�t_ Signature Susan Tetanq Printed flame Date Chief Financial Officer Tole Page 6 of 5 City of Fort Worth, Texas Mayor and Council Communication DATE: 04/11/23 M&C FILE NUMBER: M&C 23-0286 LOG NAME: 17CARHARTTTA SUBJECT (CD 7 / Future CD 10) Authorize Execution of a Seven -Year Tax Abatement Agreement with Carhartt Inc., or Affiliate, and Property Owner Exel Inc., or Affiliate, for a Distribution Center to be Located at 16101 Wolff Crossing in Tax Abatement Reinvestment Zone No. 105, City of Fort Worth, Texas RECOMMENDATION: It is recommended that the City Council: 1. Authorize the execution of a seven-year tax abatement agreement with Carhartt Inc., or affiliate, and property owner Exel Inc., or Affiliate, for improvements to an approximately 1.2 million square foot building with the cost of improvements of at least $50 million, located at 16101 Wolff Crossing in Tax Abatement Reinvestment Zone No. 105, City of Fort Worth, Texas; and 2. Find that the terms of, and the property subject to, the Tax Abatement Agreement meet the criteria and guidelines set forth in the City of Fort Worth's General Tax Abatement Policy (Resolution No. 5909-02-2023). DISCUSSION: Carhartt Inc., (Carhartt) is a United States based apparel manufacturer known for its work clothes. Carhartt is family -owned based in Dearborn, Michigan with annual revenue of $2 billion and over 5,000 employees. Carhartt is partnering with a third -party logistics provider, who will manage the building, construction and design of a 1.2 million square -foot building located at 16101 Wolff Crossing in Tax Abatement Reinvestment Zone No. 105, City of Fort Worth, Texas (Project Site). Carhartt will lease the property from the current property owner Exel Inc.,(Exel) for a state of the art distribution center space to meet growing, long-term market, investing in machinery and equipment. In order to facilitate the establishment of Carhartt's distribution center, the City proposes to enter into a tax abatement agreement with Carhartt and Exel. The tax abatement will be tied to the amount of investment made by Carhartt and satisfaction of other project and spending requirements, as follows: Investment 1. Carhartt must expend or cause to be expended at least $50,000,000.00 in new tangible taxable business personal property (BPP) and real property improvements by January 1, 2025; and 2. Carhartt must provide a minimum of 500 full-time jobs on the Project Site by December 31, 2024, with average annual salaries of at least $55,000.00. Citv Commitments: 1. The City will enter into a Tax Abatement Agreement (Agreement) with Carhartt and Exel for a term of seven years. 2. The amount of City BPP taxes to be abated in a given year will be equal to up to seventy percent (75%). 3. The total value of taxes abated under the Agreement will be capped at $2,000,000.00 (Cap). TABLE - Maximum Potential Abatement with Corresponding Components: Company Commitment Year 1 -7 Potential Abatement IlBase Commitment: Real and Business Personal Property 30.0 percent Investment = $50M Annual Commitments: Average Annual Salary for 500 Full -Time 25.0 percent Jobs > $55,000.00 Iloverall Employment>=500 (as applicable) 20.0 percent ITotal 75.0 percent By attracting Carhartt, an increase of $576,844.00 is anticipated in net new taxes on the BPP. The total on BPP would be $2,307,375.00 without the incentives, but is reduced by $1,730,531.00 to the $567,844.00 total. In addition, by attracting Carhartt, anticipated new taxes of $2,613,894.00 would be recognized on the real property improvements of $60,000,000.00 being constructed by the 3rd party on the Project Site Ilncremental Property Taxes from Project Real BPP Total Total Est. Incremental City Property Taxes 2,613,894.00 Produced by Project 2,307,375.00 4,921,269.00 Total Est. Abatement of City Property Taxes - (1,730,531.00) (1,730,531.00) Total Est. Net City Property Taxes During 2,613,894.00 Terre 576,844.00 3,190,738.00 Total net new taxes over seven years are estimated at $3,190,738.00. The project is located in COUNCIL DISTRICT 7 / Future COUNCIL DISTRICT 10 FISCAL INFORMATION / CERTIFICATION: The Director of Finance certifies that upon final approval of the Tax Abatement Agreement, an estimated loss of $1,730,531.00 in property tax revenue may occur over the next seven year period. This reduction in revenue will be incorporated into the long term financial forecast upon the Tax Abatement being officially granted. Submitted for Citv Manaaer's Office bv: William Johnson 5806 Oriainatina Business Unit Head: Robert Sturns 2663 Additional Information Contact: Cherie Gordon 6053 Expedited Signature: Chekle 60140il Cherie Gordon (Dec 5, 202317:44 CST) Email: cherie.gordon@fortworthtexas.gov DocuSign Envelope ID: A880FEFE-0884-46BD-A3FC-6A5056597993 Request for Contract Execution Please Docu5ign your approval to proceed with the execution of the attached agreement as outlined below. Project Contract Type Carhartt - Ft. Worth, TX (Alliance C) 'Personal Property Abatement t I Contract Summary & Terms This agreement provides the customer, Carhartt (as defined as'Company' in the agreement), as the ultimate owner of the tangible assets a 75% abatement for 7 years of the City'sportion of the property taxes on new tangible personal property (MHE) capped at $2,000,000.00 over the term of the agreement. Under this agreement, Exel is committed to constructing the Real Property Improvements and Carhartt is committed to investing a total of at least $50,000,000-in New TaxableTangible Personal Property (MHE) to be installed on the Land in connection with manufacturing business operations within the Real Property Improvements, which New Taxable Tangible Personal Property will ultimately be owned by Carhartt. Carhartt is also committing to cause Exel to provide at least 500 new Full-time Jobs whose average annual salaries will equal at least $55,000.00. The investment committments have been fulty vetted by OPs & the business and is conservative in nature. Exel will provide Carhartt employment and wage summaries as required to comply w/ this agreement. Team Economic Incentives Economic Incentives Developer Finance Manager Legal Name Karmin McWilliams Kelli Post Geoff Meyer Derek Young Barbara Jordan Regional Head t *No signature required on approval form for NORAM i Carl DeLuca where Regional Head to excuse contract l i Signature Date DocuSfgned by: fyl�' i � llA, tM.(,WIU4s 11/7/2023 -- �rroasAesral-... � Doottftnad by; 11/7/2023 oaonurr vc�car du... 1 DocuS3gnsd by: i mb4rirbxbart4 e... 11/7/2023 by; � �Uocunigned AAA*_ , 11/8/2023 6A69F�2352EC6416... 11/9/2023 5Doowelgn:dby; MM- f31bUftE42J_ f