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HomeMy WebLinkAboutContract 62773EDPA between City of Fort Worth and ITS Logistics, LLC Page 1 of 15 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This Economic Development Program Agreement (Agreement ) is entered into by and between the City of Fort Worth, a Texas home-rule and ITS Logistics, LLC, a Delaware limited liability company Company ). RECITALS City and Company hereby agree that the following statements are true and correct and constitute the basis upon which the City and Company have entered into this Agreement: A.Company is a third-party logistics company that provides supply chain solutions. B.Company intends to lease 15,000 square feet of office space at 3 rd floor of One West at 2821 West 7th Street, described in . C.At a minimum, the Company will expend or caused to be expended at least one million and 00/100 dollars ($1,000,000.00) in capital improvements at the Project Site Required Improvements D.Company commits to providing a minimum of 250 full-time jobs at an average annual salary of $100,000 at the Project Site by E.In exchange for Company fulfilling its commitments herein to the Required Improvements and Jobs, City will provide three grants to Company in amount up to eight hundred forty-seven thousand five hundred and 00/100 dollars F.All commitments and obligations set forth in this Agreement may be performed by Company, an Affiliate, on; however, Company shall remain responsible for any Affiliates in the performance of any of the commitments or obligations set forth in this Agreement. G.The Required Improvements and Company thereon will benefit the City by leading to increased employment in a target industry. H.As recommended by the Council pursuant to Ordinance No. 26050-03-2023 (), and in accordance nt Program Policy (), the City has established an economic development program pursuant to which the City will, on a case-by-case basis, offer economic incentives 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 EDPA between City of Fort Worth and ITS Logistics, LLC Page 2 of 15 return for verifiable commitments from such businesses or entities to cause specific employment and other public benefits to be made or invested in the City (). I. The City Council has determined that the feasibility of the proposed Required Improvements described herein is contingent on Company J. The City Council has determined that the development and use of the Required Improvements will benefit and stimulate the local economy and that the 380 Program is an appropriate means to achieve this project. K. In addition, the City Council has determined that, by entering into this Agreement, the potential economic benefits that will accrue to the City are development objectives, as outlined in the Comprehensive Plan. L. 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 has found, and the City and Company hereby 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 other terms defined in the body of this Agreement, the following terms will have the definitions ascribed to them as follows: a. 380 Program has the meaning ascribed to it in the Recitals. b. Affiliate means all entities, incorporated or otherwise, under common control with, controlled by, or controlling the Company. For purposes of this definition, more than fifty percent (50%) ownership in Company or Affiliate as determined by either value or vote. c. has the meaning assigned to it in the City of pter 20, Article X of the City Code), as amended. d. BEF Construction Percentage has the meaning ascribed to it below. e. BEF Construction Spending Commitment has the meaning ascribed to it below. EDPA between City of Fort Worth and ITS Logistics, LLC Page 3 of 15 f. Certificate of Completion has the meaning ascribed to it below. g. Comptroller means the Texas Comptroller for Public Accounts. h. Construction Costs means the aggregate of Hard Construction Costs and the following costs directly expended for the Required Improvements: engineering fees; architectural and design fees; real estate commissions; costs of third-party consultants, including attorneys and environmental consultants; Company fees; zoning fees; insurance and taxes directly related to the construction of the Development; and financing costs, including capitalized interest and FF&E. For removal of doubt, property acquisition costs i. Director Department or authorized designee. j. Effective Date has the meaning ascribed to it below. k. Employment Commitment has the meaning ascribed to it below. l. Employment Percentage has the meaning ascribed to it below. m. First Operating Year means the first full calendar year following the year in which the Real Property Completion Date occurred. n. Job means a job provided to one (1) individual by Company for at least forty (40) hours per week. o. Grant means the three economic development grants paid by the City to Company in accordance with this Agreement and as part of the 380 Program. p. Hard Construction Costs means the aggregate of the following costs expended by Company for the Required Improvements: actual site development and construction costs, contractor fees, and the costs of supplies and materials, but excludes land acquisition costs paid by Company for the various parcels that make up the Project Site. q. New Job has the meaning ascribed to it below. r. Policy has the meaning ascribed to it in the Recitals. s. Program Cap means eight hundred forty-seven thousand five hundred and 00/100 dollars ($847,500.00), which is the total amount of Grants that the City is obligated to pay under this Agreement t. Project Site has the meaning ascribed to it in the Recitals. EDPA between City of Fort Worth and ITS Logistics, LLC Page 4 of 15 u. Real Property Completion Deadline means December 31, 2024. v. Records has the meaning ascribed to it below. w. Required Improvements has the meaning ascribed to it in the Recitals. x. Required Improvements Completion Date means the date as of which all of the Real Property Improvements have been completed and all occupiable space within the Required Improvements has received a temporary or permanent certificate of occupancy. y. Salary means a cash payment or remuneration made by Company to an individual for services rendered as an employee to Company, including any paid time off, commissions, bonuses, or equity paid in accordance with Company but does not include the value of any benefits provided to an employee or any reimbursements for actual and necessary expenses incurred by the employee in the course z. Salary Commitment has the meaning ascribed to it below. aa. Salary Percentage has the meaning ascribed to it below. bb. Second Operating Year means the second full calendar year following the year in which the Real Property Completion Date occurred. cc. Term has the meaning ascribed to it below. dd. Twelve-Month Period means the period between January 1 of a given year and December 31 of the following year. 3. Term. This Agreement will be effective as of date this Agreement is signed by an Assistant City Manager of the City and unless terminated earlier pursuant to and in accordance with this Agreement, will expire three years after the date as of which the City has paid all Grants required hereunder (). 4. Company Obligations and Commitments. a. Use of Project Site. From the Completion Date until expiration of the Term of this Agreement, Company must use the Project Site for office, operations, and service support. b. Required Improvements. By the Required Improvements Completion Date, Company must expend or cause to be expended at least one million and 00/100 dollars ($1,000,000.00) in Construction Costs on the Required Improvements at the Project Site. The Required Improvements Completion Date must occur on or before the Required Improvements Completion Deadline (collectively, ). EDPA between City of Fort Worth and ITS Logistics, LLC Page 5 of 15 c. BEF Commitment. On or before the Required Improvements Completion Date, Company must expend or cause to be expended at least fifteen percent (15%) of all Construction Costs (both hard and soft) for the Required Improvements with BEFs, ( Construction Spending Commitm ). d. Employment Commitment. i. Company must provide a minimum of 250 full- as follows: 1. 100 Jobs by December 31, 2025; 2. 100 additional Jobs by December 31, 2026; and 3. 50 additional Jobs by December 31, 2027. ii. Company must retain for a period of no less than three years following each Employment Commitment Milestone, the minimum Jobs specified for each of the Employment Comm iii. Following the third Milestone indicated above, Company must retain all 250 Jobs at the Project New Job new if the individual was hired on or after Effective Date. iv. Determination each year of compliance with the Employment Commitment will be based on the employment data provided to the City pursuant to this Agreement for the year under evaluation. e. Average Annual Salary. The average annual Salary, measured on a calendar year basis, of the Jobs pursuant to the Employment Commitment must equal at least $100,000.00 f. Reports. i. Quarterly Reports. From the Effective Date until the Required Improvements Completion Date, Company must provide the Director with a calendar-year, quarterly report in a form reasonably acceptable to the Director that specifically outlines (i) the then-current aggregate Construction Costs expended for the Required Improvements; and (ii) the then-current aggregate Construction Costs expended with BEFs for the Required Improvements. ii. Final Construction Report. Within sixty (60) calendar days following the Required Improvements Completion Date, in order for the City to assess the Required Improvements and the applicable BEF Construction Spending Commitment have been met, Company must provide the Director with a report in EDPA between City of Fort Worth and ITS Logistics, LLC Page 6 of 15 a form reasonably acceptable to the Director that specifically outlines (i) the total Construction Costs expended or caused to be expended for the Required Improvements as of the Required Improvements Completion Date and (ii) the total Construction Costs expended or caused to be expended with BEFs for the Required Improvements as of the Required Improvements Completion Date, together with supporting invoices and other documents necessary to demonstrate that such amounts were actually paid, including, without limitation, final lien waivers signed by the general contractor for the Required Improvements. iii. Annual Employment and Salary Report. On or before March 31, 2026 and March 31 of each year thereafter, in order for the City to assess the degree to which the Employment Commitment for the previous calendar year was met, as well as to verify the average annual Salary of the Employment Commitment at the Project Site, Company must provide the Director with a report in a form reasonably acceptable to the Director that sets forth the total number of individuals who held Jobs at the Project Site up to the Employment Commitment, as well as the Salary of each of the Jobs, all as of December 31 (or such other date requested by Company and reasonably acceptable to the Director) of the previous calendar year, together with reasonable supporting documentation. Reports shall be redacted to remove confidential employee information. iv. Performance by Affiliates. The City will accept performance of any obligations set forth in this Section by an Affiliate of Company, with the understanding that Company will be responsible for preparing and providing all reports required hereunder, including the assembly of and access by the City to any data or information of an Affiliate that is reflected in any such report. v. Additional Information. Company agrees to provide the City with any additional information that the Director may reasonably require to ascertain Company to assist the City in properly calculating Grants payable in accordance with this Agreement. g. Inspections of Project Site. At any time during Company hours throughout the Term and following reasonable notice to Company, the City will have the right to inspect and evaluate the Project Site and any improvements thereon, including the Required Improvements, and Company must provide full access to the same, in order for the City to monitor compliance with the terms and conditions of this Agreement. Company will cooperate fully with the City during any such inspection and evaluation. Notwithstanding the foregoing, Company will have the right to require that any representative of the City be escorted by a representative or security personnel of Company during any such inspection and evaluation. h. Audits. The City will have the right throughout the Term to audit the financial and business records of Company or any Affiliate that relate to Construction Costs expended for the Required Improvements as well as any other documents necessary to evaluate Company EDPA between City of Fort Worth and ITS Logistics, LLC Page 7 of 15 this Agreement (collectively ). Company must make all Records available to the City at the Project Site or at another location in the City with reasonable advance notice that is acceptable to both parties. Company will otherwise cooperate fully with the City during any audit assuming that reasonable advance notice acceptable to both parties has been provided. This section will survive the expiration or early termination of this Agreement. 5. Grants. a. Generally. i. As more specifically set forth herein, if the Company completes the Required Improvements and meets each of the milestones that are a part of the Employment Commitment in a timely manner, Company will be entitled to receive three (3) annual Grants, calculated as $2,500.00 per Job which pays the required Salary as follows: 1. $250,000 by March 31, 2026; 2. $250,000 by March 31, 2027; and 3. $125,000 but up to $347,500 by March 31, 2028. ii. Notwithstanding anything to the contrary herein, aggregate Grants payable under this Agreement will be subject to and will not exceed the applicable Program Cap. iii. Clawback. If at any time following delivery of a Grant as indicated above, Company fails to meet the Employment Retention Requirement, Company will be responsible for returning, by payment to the City no later than ninety (90) days following written notice from the City, an amount equal to the Grant paid to reflect the number of years remaining under the Employment Retention Requirement as applicable to the Milestone for which the Grant was paid. For example, if Company meets the first Milestone of the Employment Commitment and receives a grant equal to $250,000 and in the following year fails to maintain the minimum number of Jobs required for the first Milestone, Company will be responsible for paying to the City an amount equal to two-thirds of the value of the respective grant payment (reflecting the two years of the Employment Retention Requirement that remain unsatisfied). In the event of a failure by Company to make payment to the City for the Clawback, City will reserve the right to pursue collection of the amount due by any means allowable under the law b. Program Cap. If, in any year, the amount of the Grant calculated in accordance with this Agreement would cause aggregate Grants paid by the City to exceed the Program Cap, the amount of the Grant payable in that year will be limited to equal only the difference between the aggregate amount of all Grants previously paid and the Program Cap amount, in which case, upon payment of such Grant, this Agreement will expire EDPA between City of Fort Worth and ITS Logistics, LLC Page 8 of 15 automatically. c. Source of Grant Funds. i. It is understood and agreed that all Grants paid pursuant to this Agreement will come from currently available general revenues of the City and not directly from ad valorem taxes on the Project Site or improvements thereon that are received by the City. ii. Company understands and agrees that any revenues of the City other than those dedicated for payment of a given annual Grant pursuant to and in accordance with this Agreement may 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 and will not serve as the basis for calculating the amount of any future Grant or other obligation to Company. iii. Non-appropriation of Funds. In the event no funds or insufficient funds are appropriated by City in any fiscal period for any payments due hereunder, City will notify Company of such occurrence and this Agreement shall terminate on the last day of the fiscal period for which appropriations were received without penalty or expense to City of any kind whatsoever, except as to the portions of the payments herein agreed upon for which funds have been appropriated. 6. Default, Termination, and Failure by Company to Meet Deadlines and Commitments. a. Failure to Meet Real Property, Employment, or Salary Commitment. Notwithstanding anything to the contrary herein, the City will have the right to terminate this Agreement upon provision of written notice to Company, without further obligation to Company hereunder, if the Real Property Commitment has not been met. Upon written notice, Company will have 30 days to meet the obligations under the Real Property Commitment, as applicable, or this Agreement will be terminated. Failure to Meet BEF Construction Spending Commitment. A percentage of the Abatement will be based on the whether the Company met the BEF Construction Commitment (). If Company meets the BEF Construction Commitment, the BEF Construction Percentage for each Abatement hereunder will be ten percent (10%). If the Company does not meet the BEF Construction Commitment, the BEF Construction Percentage for each Abatement hereunder will be zero percent (0%). b. c. Failure to Use Project Site for Business Operations. If Company (i) fails to use the Project Site for, at a minimum, its office, operations, and service support business operations for more than thirty (30) consecutive calendar days at any time during the Term of this Agreement for any reason (other than on account of Company displacement caused by a casualty to such location and resulting ongoing repairs or EDPA between City of Fort Worth and ITS Logistics, LLC Page 9 of 15 restoration to that location necessitated by such casualty), Company will be in default under this Agreement and the City will have the right to terminate this Agreement following provision of notice and opportunity to cure in accordance with Section. d. Failure to Submit Reports. If Company fails to submit any report required by and in accordance with this Agreement time, if any, will be suspended until Company has provided all required reports; provided, however, that if any report required hereunder is delinquent by more than one (1) year, the City will have the right to terminate this Agreement following provision of notice and opportunity to cure in accordance with Section 8. e. General Breach. Unless stated elsewhere in this Agreement, Company will be in default under this Agreement if Company breaches any term or condition of this Agreement. In the event that such breach remains uncured after thirty (30) calendar days following receipt of written notice from the City referencing this Agreement (or, if Company 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 determined by both parties mutually and in good faith), the City will have the right to terminate this Agreement immediately by providing written notice to Company. f. Knowing Employment of Undocumented Workers. i. Company acknowledges that 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 certifies that Company, and any branches, divisions, or departments of Company, does not and will not knowingly employ an undocumented worker, as that term is defined by Section 2264.001(4) of the Texas Government Code. In the event that Company, or any branch, division, or department of Company, is convicted of a violation under 8 U.S.C. Section 1324a(f) (relating to federal criminal penalties and injunctions for a pattern or practice of employing unauthorized aliens): 1. 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 from the City, the aggregate amount of the Grants received by Company hereunder, if any, plus Simple Interest at a rate of four percent (4%) per annum; or 2. if such conviction occurs after expiration or termination of this Agreement based on conduct that occurred during the term of this Agreement, subject to any appellate rights that may lawfully be available to and exercised by Company, Company must repay, EDPA between City of Fort Worth and ITS Logistics, LLC Page 10 of 15 within one hundred twenty (120) calendar days following receipt of written demand from the City, the aggregate amount of the Grants received by Company hereunder, if any, plus Simple Interest at a rate of four percent (4%) per annum. ii. For the purposes of this Section 8.6, is defined as a rate of interest applied only to an original value, in this case the aggregate amount of Jobs Grants paid hereunder. This rate of interest can be applied each year, but will only apply to the aggregate amount of Grants paid hereunder and is not applied to interest calculated. For example, if the aggregate amount of the Grants paid hereunder is $10,000 and such amount is required to be paid back with four percent (4%) interest five years later, the total amount would be $10,000 + [5 x ($10,000 x 0.04)], which is $12,000. This Section 8.6 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, this Section 8.6 will survive the expiration or termination of this Agreement. 7. Independent Contractor. It is expressly understood and agreed that Company will operate as an independent contractor in each and every respect hereunder and not as an agent, representative or employee of the City. Company will have the exclusive right to control all details and day-to-day operations relative to the Required Improvements and the Project Site and any improvements thereon and will be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors, subcontractors, licensees and invitees. Company acknowledges that the doctrine of respondeat superior will not apply as between the City and Company, its officers, agents, servants, employees, contractors, subcontractors, licensees, and invitees. Company further agrees that nothing in this Agreement will be construed as the creation of a partnership or joint enterprise between the City and Company. 8. INDEMNIFICATION. COMPANY, AT NO COST TO THE CITY, AGREES TO DEFEND, INDEMNIFY, AND HOLD THE CITY, ITS 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 Y RESULTING LOST PROFITS) AND PERSONAL INJURY, INCLUDING, BUT NOT LIMITED TO, DEATH, THAT MAY RELATE TO, ARISE OUT OF OR BE OCCASIONED BY (i) COMPANY BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT OR (ii) ANY NEGLIGENT ACT OR OMISSION OR INTENTIONAL MISCONDUCT OF COMPANY, ITS OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE CITY) OR SUBCONTRACTORS, RELATED TO THE PROJECT SITE, OR ANY IMPROVEMENTS THEREON, INCLUDING THE REQUIRED IMPROVEMENTS, OR ANY OTHER NEGLIGENT ACT OR OMISSION OF THE COMPANY THAT IS RELATED TO THE PERFORMANCE OF THIS AGREEMENT. THE COMPANY HAS NO INDEMNIFICATION OBLIGATION BEYOND THAT WHICH IS SET FORTH IN CATEGORIES (i) AND (ii) ABOVE. BY WAY OF EXAMPLE, THE COMPANY HAS NO EDPA between City of Fort Worth and ITS Logistics, LLC Page 11 of 15 DUTY TO INDEMNIFY THE CITY, ITS OFFICERS, AGENTS, SERVANTS, REPRESENTATIVES OR EMPLOYEES FOR ANY NEGLIGENT ACT OR OMISSION OR INTENTIONAL MISCONDUCT OF THE CITY, ITS OFFICERS, AGENTS, SERVANTS, REPRESENTATIVE, OR EMPLOYEES. 9. 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, electronic transmittal or by hand delivery: City: Company: City of Fort Worth ITS Logistics, LLC. Attn: City Manager Attn: Stan Kolev, CFO 200 Texas Street 50 West Liberty St., Suite 401 Fort Worth, TX 76102 Reno NV 89501 with copies to: with copies to: the City Attorney at the same address ITS Logistics, LLC and the following: Attn: Legal Department 50 West Liberty St., Suite 401 City of Fort Worth Reno, NV 89501 Attn: Director Economic Development Department 1150 South Freeway Fort Worth, TX 76104 10. Assignment and Successor. Company may, at any time assign, transfer, or otherwise convey any of its rights or obligations under this Agreement to an Affiliate without the approval of the City so long as Company, the Affiliate and the City first execute an agreement under which the Affiliate agrees to assume and be bound by all covenants and obligations of Company under this Agreement. 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 prior approval of the assignee or successor and a finding by the City Council that the proposed assignee or successor is financially capable of meeting the terms and conditions of this Agreement 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 and be bound by all covenants and obligations of Company under this Agreement. Any attempted assignment will constitute grounds for termination of this Agreement following ten (10) calendar days of receipt of written notice from the City to Company. Any lawful assignee or successor in interest of Company of all rights under this Agreement will Company EDPA between City of Fort Worth and ITS Logistics, LLC Page 12 of 15 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, 12. 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. 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 will not constitute a to assert any such right on any future occasion. 14. 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. 15. No Third-Party Rights. The provisions and conditions of this Agreement are solely for the benefit of the City and Company, and any lawful assign or successor of Company, and are not intended to create any rights, contractual or otherwise, to any other person or entity. 16. Interpretation. In the event of any dispute over the meaning or application of any provision of this Agreement, this Agreement must be interpreted fairly and reasonably, and neither more strongly for or against any party, regardless of the actual drafter of this Agreement. 17. Captions. Captions and headings used in this Agreement are for reference purposes only and will not be deemed a part of this Agreement. 18. Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired. 19. 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 Company, and any lawful assign and successor of Company, 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 may 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. 20. 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. EDPA between City of Fort Worth and ITS Logistics, LLC Page 13 of 15 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 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. EXECUTED as of the last date indicated below: City: By: ___________________________ Name: William Johnson Title: Assistant City Manager Date: ___________________________ Company: By: ___________________________ Name: Stan Kolev. Title: CFO Date: ___________________________ FOR CITY OF FORT WORTH INTERNAL PROCESSES: Approval Recommended: By: ___________________________ Name: ___________________________ Title: ___________________________ Approved as to Form and Legality: By: ___________________________ Name: ___________________________ Title: Assistant City Attorney Contract Authorization: M&C: NA 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: ___________________________ Name: ___________________________ Title: ___________________________ City Secretary: By: ___________________________ Name: Janette Goodall Title: City Secretary EDPA between City of Fort Worth and ITS Logistics, LLC Page 14 of 15 EDPA between City of Fort Worth and ITS Logistics15 of 15 Description and Map Depicting the Project Site City of Fort Worth, Mayor and DATE: 05/14/24 Texas Council Communication M&C FILE NUMBER: M&C 24-0381 LOG NAME: 171TSLOGISTICSEDPA SUBJECT (CD 9/ Future CD 9) Authorize Execution of an Economic Development Program Agreement with ITS Logistics LLC or an Affiliate, to Provide Three Annual Grants in an Total Amount Not to Exceed $847,500.00 for the Establishment of a Nefinrork Transportation, Drayage and Intermodal Logistics Center in the City of Fort Worth and Associated Employment Commitments RECOMMENDATION: It is recommended that the City Council authorize execution of an economic development program agreement with ITS Logistics LLC or an affiliate, to provide up to three annual grants in a total amount not to exceed $847,500.00 for the establishment of a Nefinrork Transportation, Drayage and Intermodal Logistics Center in the City of Fort Worth and associated employment commitments. DISCUSSION: ITS Logistics LLC is a supply chain logistics and technology company (Company), a third-party logsitics company that provides supply chain solutions. The company is headquartered in Reno, Nevada with a current distribution center in Fort Worth, over 1 M square feet, opened in 2022 at the Northpoint Intermodal Logistics Center north of the Burlington Northern Santa Fe intermodal facility and in proximity to Perot Field. The company is one of the fastest-growing logistics companies in America, ranked 1,751 on the Inc. 5000 fastest growing private companies list, with annual revenue over $1 B dollars. The company will establish a Network Transportation, Drayage and Intermodal Logistics Center (Center) in the City of Fort Worth, after a competitive process with alternative sites in Indiana. The Center will be located at 2821 West 7th Street, at the 3rd floor of the One West 7th office building (Project Site). The business focus at the Center will be ContainerAl, a cutting-edge container management and visibility platForm, using artificial intelligence to optimize the movement of freight. In order to facilitate the establishment of the Center, the City proposed to enter into an Economic Development Program Agreement (Agreement) to provide up to three annual grants in an aggregate amount not to exceed $847,500.00 as authorized by the Chapter 380, Texas Local Government Code, and as authorized under the City's General Chapter 380 Policy relating to incentives for Technology and Target Sector Projects (Mobility). Company's commitments under the proposed Agreement include the following: • Company must lease temporary office space of 15,000 square feet within the City on or before June 30, 2024; • Company must provide a minimum number of full-time jobs by certain deadlines � 100 full-time jobs by December 31, 2025 � 100 full-time jobs by December 31, 2026 t� A minimum of 50, and (for purposes of grant calculation) up to 139 full-time jobs by December 31, 2027 • Company must retain the jobs for at least 3 years from the year the job is added • Average annual salaries for the required jobs must be at least $100,000.00 during the entire term of the agreement. • Company will use its best efforts to hire locally with a goal of 30% employment with Fort Worth residents • Company must expend or cause to be expended 15% of all construction costs (Hard and Soft) for the Project as defined in Chapter 20, Article X of the City Code. Failure to meet this commitment will not constitute a default, but the value of grant will be reduced by 10%. City's commitments under the proposed Agreement include the following: • Year one grant up to $250,000.00 upon verification of site lease and year one employment and salary commitments; • Year two grant up to $250,000.00 upon verification of year two employment and salary commitments; • Year three grant of a minimum of $125,000.00 and up to $347,500.00 upon verification of year three employment and salary commitments; Agreement will include certain clawback provisions ensuring that jobs are maintained for a period of at least three years as outlined above. Company will initially be located in COUNCIL DISTRICT 9. FISCAL INFORMATION / CERTIFICATION: The Director of Finance certifies that approval of this agreement will have no material effect on the Fiscal Year 2024 Budget. While no current year impact is anticipated from this action, any effect on expenditures and revenues will be budgeted in future Fiscal Years and will be included in the long-term financial forecast. Submitted for City Manager's Office b� William Johnson 5806 Originating Business Unit Head: Robert Sturns 2663 Additional Information Contact: Cherie Gordon 6053 Expedited