HomeMy WebLinkAboutContract 36482 CITY SECRETARY
CONTRACT NO. _32ED11111
ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
("Agreement") is entered into by and between the CITY OF FORT WORTH, TEXAS
(the "City"), a home rule municipal corporation organized under the laws of the State of
Texas, and MUSEUM PLACE HOLDINGS, LLC ("Developer"), a Texas limited
liability company.
RECITALS
The City and Developer hereby agree that the following statements are true and
correct and constitute the basis upon which the City and Developer have entered into this
Agreement:
A. Developer owns approximately twelve (12) acres of land flanking West
7th Street in the cultural district area of the City west of the intersections of University
Drive, Camp Bowie Boulevard, West 7th Street and Bailey Avenue (the "Development
Property"). The Development Property is specifically described in Exhibit "A",
attached hereto and hereby made a part of this Agreement for all purposes.
B. Developer intends to cause construction of a mixed-use development (the
"Development") on the Development Property in four (4) phases (Phases I-IV), each of
which is more specifically defined in Section 2 of this Agreement. The proposed
Development is generally depicted in the schematic attached hereto as Exhibit "B",
which is hereby made a part of this Agreement for all purposes. Developer has
represented to the City that the Development will not be feasible financially without
public assistance due to, among other things, obsolete infrastructure on and around the
Development Property, the necessity of reconfiguring and/or relocating existing utility
facilities, the demolition of existing structures on the Development property, the need to
construct a parking garage in order to make the Development more dense, and various
environmental issues.
C. The 2007 Comprehensive Plan, adopted by the City Council on February
20, 2007 pursuant to Ordinance No. 17413-02-2007 (the "Comprehensive Plan")
defines a mixed-use growth center as a relatively small urbanized area that contains a
concentration of jobs, housing units, schools, parks and other public facilities, public
transportation hubs and pedestrian activities. Among the potential benefits of mixed-use
growth centers cited by the Comprehensive Plan are economic developmment; the
development of multifamily housing at appropriate locations; efficiency in the provision
of public facilities and services; .reduced reliance upon single-occupancy vehicles; and
the protection of the environment. Accordingly, the Comprehensive Plan c}� �,,, ra r J���
promotion of mixed-use growth center development patterns as a goal that t� ��
should embrace. The Comprehensive Plan identifies the cultural district area o tl�a� tL � n
n:i"IKI H 9 VEIL
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as a regional mixed-use growth center. In 2001 the City Council selected West 7th Street
as one of eight commercial corridors in the City where revitalization efforts were most
needed and where use of public incentives could most sensibly be focused.
D. As recommended by the Comprehensive Plan and in accordance with
Resolution No. 2704, adopted by the City Council on January 30, 2001, the City has
established an economic development program pursuant to which the City will, on a case-
by-case basis, offer economic incentive packages authorized by Chapter 380 of the Texas
Local Government Code that include monetary loans and grants of public money, as well
as the provision of personnel and services of the City, to businesses and entities that the
City Council determines will promote state or local economic development and stimulate
business and commercial activity in the City in return for verifiable commitments from
such businesses or entities to cause specific infrastructure, employment and other public
benefits to be made or invested in the City (the 11380 Program").
E. The City Council has determined that by entering into this Agreement, the
potential economic benefits that will accrue to the City under the terms and conditions of
this Agreement are consistent with the City's economic development objectives and that
promoting mixed-use development in the cultural district area of the City will further the
goals espoused by the Comprehensive Plan for positive growth in the City. In addition,
the City Council has determined that the 380 Program is an appropriate means to achieve
the construction of the Development, which the City Council has determined is necessary
and desirable, and that the potential economic benefits that will accrue to the City
pursuant the terms and conditions of this Agreement are consistent with the City's
economic development objectives as outlined in the Comprehensive Plan. This
Agreement is authorized by Chapter 380 of the Texas Local Government Code.
F. The City has determined that the feasibility of the Required Improvements
(hereinafter defined) is contingent on Developer's receipt of the Program Grants
(hereinafter defined), as provided in this Agreement. The City's analysis is specifically
based on financial information provided by Developer.
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
r 1. INCORPORATION OF RECITALS.
The City Council has fow d, and the City and Developer 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.
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2. DEFINITIONS.
In addition to terms defined in the body of this Agreement, the following terms
shall have the definitions ascribed to them as follows:
380 Program has the meaning ascribed to it in Recital D.
Affiliate means all entities, incorporated or otherwise, under common control
with, controlled by or controlling Developer and any condominium owners association
formed in connection with a condominium regime within the Development. For purposes
of this definition, "control" means fifty percent (50%) or more of the ownership
determined by either value or vote.
Affordable Housing Commitment has the meaning ascribed to it in Section 4.7.
Affordable Housing Units has the meaning ascribed to it in Section 4.7.
Certificate of Completion for a Phase of the Development has the meaning
ascribed to it in Section 5.1.
Completion Date for a Phase of the Development means the date as of which the
City receives a Notice of Completion for that Phase (as may be supplemented in
accordance with this Agreement), whether the Phase I Completion Date, the Phase II
Completion Date, the Phase III Completion Date or the Phase IV Completion Date. If a
Notice of Completion is supplemented,the Completion Date for that Phase shall be the date
of the last supplement.
Completion Deadline for a Phase of the Development, as generally used herein,
means the Phase I Completion Deadline, the Phase II Completion Deadline, the Phase III
Completion Deadline or the Phase IV Completion Deadline, as applicable.
Comprehensive Plan has the meaning ascribed to it in Recital C.
Construction Costs means Hard Construction Costs; engineering fees;
architectural fees; and other professional, development and permitting fees directly
related to the design and construction of the Required Improvements.
Development has the meaning ascribed to it in Recital B.
Development Property has the meaning ascribed to it in Recital A.
Director means the director of the City's Economic and Con inuility
Development Department or successor City department.
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Effective Date has the meaning ascribed to it in Section 3.
Employment Goal has the meaning ascribed to it in Section 4.4.
First Operating Year of a given Phase means the first full year following the
year in which the Completion Date for that Phase occurs.
Fort Worth Certified M/WBE Company means a minority or woman-owned
business that has received certification as either a minority business enterprise (MBE), a
woman business enterprise (WBE) or a disadvantaged business enterprise (DBE) by the
North Texas Regional Certification Agency (NTRCA) and that has a principal business
office located within the corporate limits of the City that performs a commercially useful
function and that provides the services for which Developer is seeking credit under this
Agreement.
Fort Worth Company means a business that has a principal office located within
the corporate limits of the City that performs a commercially useful function and that
provides the services for which Developer is seeking credit under this Agreement.
Fort Worth Construction Commitment has the meaning ascribed to it in
Section 4.2.
Fort Worth Construction Percentage has the meaning ascribed to it in Section
5.2.1.2.
Fort Worth Supply and Service Percentage has the meaning ascribed to it in
Section 5.2.1.4.
Fort Worth Supply and Service Spending Commitment has the meaning
ascribed to it in Section 4.5.
Hard Construction Costs means the actual site development and construction
costs, contractor fees and the costs of supplies and materials.
HUD means the United States Department of Housing and Urban Development or
successor agency.
HUD Units has the meaning ascribed to it in Section 4.7.
Job means a job provided to an individual by a Parcel User on any given Parcel.
M/WBE Construction Commitment has the meaning ascribed to it in Section
4.3.
M/WBE Construction Percentage has the meaning ascribed to it in Section
5.2.1.3.
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_M/WBE Supply and Service Percentage has the meaning ascribed to it in
Section 5.2.1.5.
M/WBE Supply and Service Spending Commitment has the meaning ascribed
to it in Section 4.6.
Notice of Completion has the meaning ascribed to it in Section 4.8.2.2.
_Overall Construction Percentage has the meaning ascribed to it in Section
5.2.1.1.
Parcel means, generally, a given parcel of the Development Property (i.e. Phase I
Parcel, Phase H Parcel, Phase III Parcel and Phase IV Parcel).
Parcel Personal Property Tax Revenues means ad valorem taxes on Tangible
Personal Property located on a Parcel that are received by the City. For example, Parcel
Personal Property Tax Revenues for Parcel I means the amount of ad valorem taxes paid
by all Parcel Users to the City in a given Twelve-Month Period based on the entire
taxable assessed value of Tangible Personal Property located on Parcel I. With respect to
Tangible Personal Property leased by a Parcel User, Development Personal Property Tax '
Revenues will include that portion of annual property tax paid by the Parcel User,
prorated on a daily basis, which is attributable to the period during which the Parcel User
was the lessee of such property. The taxable appraised value of such Tangible Personal
Property for any given tax year will be established solely by the appraisal district that has
jurisdiction over the Development Property at the time.
Parcel Real Property Tax Revenues means ad valorem taxes on a given Parcel
and any improvements located thereon, minus taxes payable on that Parcel and any
improvements located thereon for the 2007 tax year, based on the taxable appraised value
of that Parcel and any improvements located thereon for the 2007 tax year. The taxable
appraised value of a Parcel and any improvements located thereon for any given year will
be established solely by @the appraisal district that has jurisdiction over the Development
Property at the time.
Parcel Sales Tax Revenues means the one percent (1%) available sales tax, such
as that presently in effect pursuant to Texas Tax Code §§ 321.101(a) and 321.103,
resulting from sales taxes received by the City and collected by Developer and other
Parcel Users on Sales transacted on a given Parcel. Parcel Sales Tax Revenues
specifically excludes all revenues from (i) the Crime Control District Sales Tax imposed
by the City pursuant to Texas Tax Code § 323.105 and Texas Local Government Cod e §
36').005, as may be amended, and (ii) the Transit Authority Sales Tax paid to the City by
the Fort Worth Transportation Authority pursuant to City Secretary Contract No. 19689,
as previously or subsequently amended or restated, from the sales tax imposed by the
Fort Worth Transportation Authority pursuant to Texas Tax Code Chapter 322.
Notwithstanding anything to the contrary herein, in no event shall Parcel Sales Tax
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Revenues ever exceed a one percent (1%) sales tax imposed by the City, even if the City
at any point in the future charges more than a one percent (1%) sales tax. If the City's
sales tax rate is ever decreased to the extent that the City receives available sales tax
revenues based on less than a one percent (1%) sales tax, then the meaning of Parcel
Sales Tax Revenues shall automatically be adjusted to equal that lesser percentage. If the
City's sales tax rate is ever decreased as provided in the preceding sentence and the City
then subsequently adds a sales tax that increases such lower percentage and whose use is
not controlled or regulated, in whole or in part, by another govermnental entity or
authority or otherwise dedicated to a specific use by the City, then Parcel Sales Tax
Revenues shall be computed to reflect that increased percentage up to a maximum
aggregate of one percent(1%).
Parcel User means any person or entity that has the legal right to use all or any
portion of a particular Parcel for commercial, retail, residential or other lawful purposes,
including without limitation, Developer, third party retail and commercial businesses and
residents of the Residential Units.
Phase means a given phase of the Development, as defined in this Agreement,
whether Phase I, Phase II, Phase III or Phase IV.
Phase I or Phase I Improvements means the first phase of the Development
constructed by Developer, which, at a minimum, shall consist of at least 108,000 square
feet of commercial office space, at least 24,000 square feet of ground level retail space, at
least 75,000 square feet of residential condominiums and a parking garage with at least
four hundred (400) parking spaces, all as generally depicted in Exhibit`B".
Phase I Completion Date means the date on which the City receives the Notice
of Completion for Phase L
Phase I Completion Deadline means June 30, 2008.
Phase I Parcel means that parcel of the Development Property on which Phase I
is constructed, as specifically described in Exhibit A-1, attached hereto and hereby made
a part of this Agreement for all purposes.
Phase II or Phase U Improvements means the second phase of the Development
constructed by Developer, which, at a minimum, shall consist of at least 20,000 square
feet of commercial office space, at least 40,000 square feet of ground level retail space, at
least 180,000 square feet of Residential Apartment Units and a parking garage with at
least four hundred fifty (450) parking spaces, all as generally depicted in Exhibit`B".
Phase II Completion Date means the date on which.the City receives the Notice
of Completion for Phase II.
Phase II Completion Deadline means December 31, 2009.
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Phase H Parcel means that parcel of the Development Property on which Phase
II is constructed, as specifically described in Exhibit A-2, attached hereto and hereby
made a part of this Agreement for all purposes.
Phase III or Phase III Improvements means the tlurd phase of the Development
constructed by Developer, which, at a minimum, shall consist of 75,000 square feet of
ground level retail space, at least 220,000 square feet of Residential Apartment Units and
a parking garage with at least six hundred seventy-five (675) parking spaces, all as
generally depicted in Exhibit`B".
Phase III Completion Date means the date on which the City receives the Notice
of Completion for Phase III.
Phase III Completion Deadline means December 31, 2010.
Phase III Parcel means that parcel of the Development Property on which Phase
III is constructed, as specifically described in Exhibit A-3, attached hereto and hereby
made a part of this Agreement for all purposes.
Phase IV or Phase IV Improvements means the fourth phase of the
Development constructed by Developer, which shall consist of at least a limited service
hotel with at least one hundred twenty-five (125) guest rooms and other related
improvements.
Phase IV Completion Date means the date on which the City receives the Notice
of Completion for Phase IV.
Phase IV Completion Deadline means December 31, 2010.
Phase IV Parcel means that parcel of the Development Property on which Phase
IV is constructed, as specifically described in Exhibit A-4, attached hereto and hereby
made a part of this Agreement for all purposes.
Program Cap means Twenty-Six Million Dollars($26,000,000.00), gross.
Pro;rram Grants means the aiuzual economic development grants paid by the
City to Developer in accordance with this Agreement and as part of the 380 Program.
ProjZram Source Funds means, for any given Phase, an amount of City funds
available for inclusion in a Program Grant attributable to that Phase and payable in a
given Program Year, as follows:
II
(a) Program Source Funds for the first ten (10) Program Grants attributable to
a given Phase shall consist of an amount equal to fifty-five percent (55%) of the
Parcel Real Property Tax Revenues, plus fifty-five percent (55%) of the Parcel
j Personal Property Tax Revenues, plus fifty-five percent (55%) of the Parcel Sales
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Tax Revenues for the Parcel on which that Phase was constructed and which were
received by the City during the Twelve-Month Period ending in the same Program
Year in which a Program Grant for that Program Year is payable.
(b) Program Source Funds for the latter five (5) Program Grants attributable
to a given Phase shall consist of an amount equal to fifty percent (50%) of the
Parcel Real Property Tax Revenues, plus fifty percent (50%) of the Parcel
Personal Property Tax Revenues, plus fifty-five percent (55%) of the Parcel Sales
Tax Revenues for the Parcel on which that Phase was constructed and which were
received by the City during the Twelve-Month Period ending in the same Program
Year in which a Program Grant for that Program Year is payable.
Program Year means'a calendar year in which the City is obligated pursuant to
this Agreement to pay Developer a Program Grant, beginning with the first full calendar
year following the Phase I Completion Date.
Records has the meaning ascribed to it in Section 4.9.
Required Improvements means the iunprovements required for a given Phase.
For example, when used in context with respect to Phase I, the Required Improvements
means the Phase I Improvements; when used in context with respect to Phase II, the
Required Improvements means the Phase II Improvements; and so on.
Residential Apartment Units means residential rental apartments and shall not
include residential condominium units.
Sales means all sales of merchandise (including gift and merchandise
certificates), services and other receipts whatsoever of all business conducted in, on or
from a given Parcel, whether cash or credit, including mail, telephone, telefax, telegraph,
internet or catalogue orders received or filled at or from that Parcel, deposits not refunded
to purchasers, orders taken (although such orders may be filled elsewhere), sales to
employees, sales through vending machines or other devices. Sales will not include (i)
any sums collected and paid for any sales or excise tax imposed by any duly constituted
governmental authority, (ii) the exchange of merchandise purchased on and returned to
the Parcel, (iii) the amount of returns to shippers and manufacturers or (iv) the sale of any
Parcel User's fixtures.
Second OperatinLy Year of a given Phase means the second full year following
the year in which the Completion Date for that Phase occurs.
I
Substantially Complete means that a certificate or certificates of occupancy,
whether temporary or final, have been issued for all occupiable space within an
improvement. For example, a building would be Substantially Complete if (i) final
certificates of occupancy have been issued for all occupiable space within the building;
(ii) final certificates of occupancy have been issued for some occupiable space within the
building and temporary certificates of occupancy have been issued for all remaining
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occupiable space within the building; or (iii) temporary certificates of occupancy have
been issued for all occupiable space within the building. A building would not be
Substantially Complete if temporary or final certificates of occupancy have been issued
for some occupiable space within the building but no temporary or final certificates of
occupancy have been issued for any remaining occupiable space within the building.
Supply and Service Expenditures means all expenditures by Developer, whether
pursuant to a written contract or on an ad hoc basis, expended directly for the operation
and maintenance of the Development, including amounts paid to thud parties for the
provision of personnel services, but excluding amounts paid for electric, gas, water and
any other utility services.
Tangible Personal Property means personal property that is located on a Parcel
and is owned or leased by any Parcel User, including, without limitation, inventory,
fixtures, store signage, checkout stands, computers, cash registers and security and
communications systems.
Term has the meaning ascribed to it in Section 3.
Twelve-Month Period means the period between February 1 of a given year and
January 31 of the following year.
3. TERM.
Tlus Agreement shall be effective as of the date of execution by both parties (the
"Effective Date") and, unless terminated earlier in accordance with this Agreement, shall
expire on the earlier of (i) the date as of which the City has paid all Program Grants
required hereunder; (ii) the date as of which the amount of aggregate Program Grants
paid by the City equals Program Cap; or (iii) December 31, 2026, regardless of the
number and amount of Program Grants that may have been paid hereunder(the "Term").
4. DEVELOPER OBLIGATIONS, GOALS AND COMMITMENTS.
4.1. Real Property Improvements.
f
4.1.1. Phase I.
In accordance with the terms and conditions of this Agreement, by
the Phase I Completion Date, (i) at a minimum, all Phase I Improvements
must be Substantially Complete and (ii) Developer must have expended or
caused to be expended at least $50 million in Construction Costs for Phase
I of the Development. The Phase I Completion Date must occur on or
before the Phase I Completion Deadline.
i
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4.1.2. Phase IL
In accordance with the terms and conditions of this Agreement, by
the Phase II Completion Date, (i) at a minimum, all Phase I Improvements
and all Phase tI Improvements must be Substantially Complete and (ii)
Developer must have expended or caused to be expended at least $90
million in Construction Costs for Phase I and Phase II of the
Development. The Phase II Completion Date must occur on or before the
Phase II Completion Deadline.
4.1.3. Phase III.
In accordance with the terms and conditions of this Agreement, by
the Phase III Completion Date, (i) at a minimum, all Phase I
Improvements, all Phase II Improvements and all Phase III Improvements
must be Substantially Complete and (ii) Developer must have expended or
caused to be expended at least $125 million in Construction Costs for
Phase I, Phase II, and Phase III of the Development. The Phase III
Completion Date must occur on or before the Phase III Completion
Deadline.
4.1.4. Phase IV.
In accordance with the terms and conditions of this Agreement,by
the Phase IV Completion Date, (i) at a minimum, all Phase I
Improvements, all Phase II Improvements, all Phase III Improvements and
all Phase IV Improvements must be Substantially Complete and (ii)
Developer must have expended or caused to be expended by at least $170
million in Construction Costs for all Phases of the Development. The
Phase IV Completion Date must occur on or before the Phase IV
Completion Deadline.
4.2. Construction Spending Commitment for Fort Worth Companies.
By the Completion Date of each Phase other than Phase IV, Developer
shall have expended or caused to be expended with Fort Worth Companies at
least thirty percent (30%) of all Hard Construction Costs for the respective Phase,
regardless of the total amount of such Hard Construction Costs (for each affected
Phase, the "Fort Worth Construction Commitment"). Payments to a general
contractor who is a Fort Worth Company shall be counted toward the Fort Worth
Construction Commitment, regardless of whether subcontractors of such general
contractors are Fort Worth Companies. The Fort Worth Construction
Commitment shall not apply to or be required for Phase IV.
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4.3. Construction Spending Commitment for Fort Worth Certified
M/WBE Companies.
By the Completion Date of each Phase other than Phase IV, Developer
shall have expended or caused to be expended with Fort Worth Certified MIWBE
Companies at least twenty-five percent (25%) of all Hard Construction Costs for
the respective Phase, regardless of the total amount of such Hard Construction
Costs (for each affected Phase, the "MP"E Construction Commitment").,
Payments to a general contractor who is a Fort Worth Certified MIWBE Company
shall be counted toward the WWBE Construction Commitment, whether or not
subcontractors of such general contractor are themselves Fort Worth Certified
M/WBE Companies. In addition, dollars spent with Fort Worth Certified
M/WBE Companies shall also count as dollars spent with Fort Worth Companies
for purposes of the Fort Worth Construction Commitment outlined in Section 4.2.
The M/WBE Construction Commitment shall not apply to or be required for
Phase IV.
4.4. Employment Goal.
From and after the Phase I Completion Date, Developer will use
commercially reasonable efforts to cause at least five (5) Jobs to be provided on
the Development Property (the"Employment Goal").
4.5. Supply and Service Spending Commitments for Fort_ _Worth
Companies.
Developer hereby makes the following commitments to make certain
minimum annual Supply and Service Expenditures with Fort Worth Companies
(for each applicable time period, the "Fort Worth Supply and Service Spending
Commitment"):
4.5.1. Phase I.
From January 1 of the Second Operating Year of Phase I until
December 31 of the First Operating Year of Phase II, Developer will
spend at least $30,000.00 in annual Supply and Service Expenditures with
Fort Worth Companies.
4.5.2. Phase II.
I
From January 1 of the Second Operating Year of Phase II until
December 31 of the First Operating Year of Phase III, Developer will
expend ,at least $45,000.00 in annual Supply and Service Expenditures
with Fort Worth Companies.
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4.5.3. Phase III and Thereafter.
From January 1 of the Second Operating Year of Phase III and for
the remainder of the Term, Developer will expend at least $60,000.00 in
annual Supply and Service Expenditures with Fort Worth Companies.
4.6. Supply and Service Spending Commitment for Fort Worth Certified
M/WBE Companies.
Developer hereby makes the following commitments to make certain
minimum annual Supply and Service Expenditures with Fort Worth Certified
WWBE Companies (for each applicable time period, the "M/WBE Supply and
Service Spending Commitment"):
4.6.1. Phase I.
From January 1 of the Second Operating Year of Phase I until
December 31 of the First Operating Year of Phase II, Developer will
spend at least $20,000.00 in annual Supply and Service Expenditures with
Fort Worth Certified M1WBE Companies. Dollars spent with Fort Worth
Certified M/WBE Companies shall also count as dollars spent with Fort
Worth Companies for purposes of the Fort Worth Supply and Service
Spending Commitment outlined in Section 4.5.1.
4.6.2. Phase H. ..
From January 1 of the Second Operating Year of Phase II until
December 31 of the First Operating Year of Phase III, Developer will
expend at least $30,000.00 in annual Supply and Service Expenditures
with Fort Worth Certified MIWBE Companies. Dollars spent with Fort
Worth Certified MIWBE Companies shall also count as dollars spent with
Fort Worth Companies for purposes of the Fort Worth Supply and Service
Spending Commitment outlined in Section 4.5.2.
4.6.3. Phase III and Thereafter.
I� From January 1 of the Second Operating Year of Phase III and for
the remainder of the Term, Developer will expend at least $40,000.00 in
annual Supply and Service Expenditures with Fort Worth Certified
M/WBE Companies. Dollars spent with Fort Worth Certified MIWBE
Companies shall also count as dollars spent with Fort Worth Companies
for purposes of the Fort Worth Supply and Service Spending Commitment
outlined in Section 4.5.3.
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4.7. Affordable Housing Set-Aside.
From the Phase II Completion Date until the Phase III Completion Date, a .
number of Residential Apartment Units located on the Phase II Parcel which have
received final certificates of occupancy and contain in the aggregate the greater of
(i) 30,000 square feet or(ii) fifteen percent(15%) of the total square footage of all
Residential Apartment Units located on the Phase II Parcel, regardless of the
person or entity that owns any such Residential Apartment Units, shall be
reserved for lease exclusively as quality affordable housing units in accordance
with the provisions of this Section 4.7. From the Phase III Completion Date and
for the remainder of the Term, a nwizber of Residential Apartment Units located
on the Phase II Parcel and the Phase III Parcel which have received final
certificates of occupancy and contain in the aggregate the greater of (i) 60,000
square feet or (ii) fifteen percent (15%) of the total square footage of all
Residential Apartment Units located on the Phase II Parcel and the Phase III
Parcel, regardless of the person or entity that owns any such Residential
Apartment Units, shall be reserved for lease exclusively as affordable housing in
accordance with the provisions of this Section 4.7. The number of such
Residential Apartment Units shall hereinafter be referred to as the "Affordable
Housing Units". Four (4) of the Affordable Housing Units will be set aside
exclusively for lease to qualifying households whose adjusted incomes do not
exceed HUD's then-current sixty-five percent (65%) income limits for the Fort
Worth-Arlington, TX HUD Metro FMR Area at rents that do not exceed HUD's
then-current HOME Program Rent Limits (as adjusted by the then-current
allowance for utilities established by the Fort Worth Housing Authority) and must
satisfy the inspection conditions and criteria attached hereto as Exhibit "C",
which is hereby made a part of this Agreement for all purposes (the "HUD
Units"); a nuinber of Affordable Housing Units equal to at least one-third (1/3) of
all Affordable Housing Units, less the four (4) HUD Units, will be set aside
exclusively for lease to qualifying households whose adjusted incomes do not
exceed HUD's then-current sixty percent(60%) income limits for the Fort Worth-
Arlington, TX HUD Metro FMR Area at rents that do not exceed thirty percent
(30%) of such adjusted incomes; and the remainder of the Affordable Housing
Units will be set aside exclusively for lease to qualifying households whose
adjusted incomes do not exceed HUD's then-current eighty percent (80%) income
limits for the Fort Worth-Arlington, TX HUD Metro FMR Area at rents that do
not exceed thirty percent (30%) of such adjusted incomes (all of the preceding,
the "Affordable Housing Commitment"). For Developer's reference, HUD's
2007 HOME Program Rent Limits and HUD's 2007 60% income limits and 80%
income limits for the Fort Worth, TX HUD Metro FMR Area are attached hereto
as Exhibit "D" and are published annually by HUD (see www.hud.gov and
«yu�u.buduser.org). In the event that HUD's regulations are amended or HUD's
published data is revised to the extent that Developer's requirements hereunder
cannot be ascertained, the City and Developer will meet and in good faith
negotiate alternative requirements that can be ascertained under HUD's amended
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regulations and revised published data, with the understanding that such
alternative requirements will be consistent with the requirements set forth in this
Section 4.7 as closely as possible. On and after the Phase III Completion Date,
Developer may meet the Affordable Housing Commitment by designating the
required number of Affordable Housing Units in on the Phase II Parcel only, on
the Phase III Parcel only or on both the Phase II Parcel and the Phase III Parcel.
Developer will cooperate with the City's Housing Department in publicizing the
availability of the Affordable Housing Units.
4.8. Reports and Filings.
4.8.1. Plan for Use of Fort Worth Certified M/"E Companies.
Within thirty (30) calendar days following the Effective Date of
this Agreement, Developer will file a plan with the Director as to how
Developer intends to meet the M/WBE Construction Commitment and
M/WBE Supply and Service Spending Commitment for all Phases.
Developer agrees to meet with the City's M/WBE Office and Minority
and Women Business Enterprise Advisory Committee as reasonably
necessary for assistance in implementing such plan and to address any
concerns that the City may have with such plan.
4.8.2. Construction Spending Reports Pertaininij to Required
Improvements.
4.8.2.1. Monthly Reports.
From the Effective Date until the Phase III
Completion Date (or, subject to Section 5.2.2.1 or 5.2.2.2, the
Completion Date of the last Phase for which Developer is entitled
to receive a Program Grant under this Agreement) in order to
enable the City to assist Developer in meeting the M/WBE
Construction Commitment, Developer will provide the Director
with a monthly report in a form reasonably acceptable to the City
that specifically outlines the then-current aggregate Hard
Construction Costs expended by and on behalf of Developer with
Fort Worth Certified M/WBE Companies for construction of the
Required Improvements for the Phase in question. Developer
agrees to meet with the City's M/WBE Office and Minority and
Women Business Enterprise Advisory Committee as reasonably
necessary for assistance in meeting or exceeding the M/WBE
Construction Commitment and to address any related concerns that
the City may have.
Page 14
Economic Development Program Agreement
between City of Fort worth and Museum Place Holdings,LLC
4.8.2.2. Notices of Completion and Final Construction
Reports for Each Phase.
Once all improvements in a particular Phase that
Developer intends to complete by the Completion Deadline for that
Phase are Substantially Complete, Developer shall submit a written
notice to that effect to the Director (a "Notice of Completion").
The purpose of a Notice of Completion is to allow the City to
assess whether Developer satisfied the requirements of Section
4.1.1, 4.1.2, 4.1.3 and 4.1.4, as applicable, and (except as to Phase
IV) the extent to which Developer met the Fort Worth
Construction Commitment and the WWBE Construction
Commitment for that Phase. Each Notice of Completion will
include a final construction report in a form reasonably acceptable
to the City that specifically outlines the total Construction Costs
and Hard Construction Costs expended by and on behalf of
Developer for construction of the Required Improvements for the
Phase in question, together with supporting invoices and other
documents necessary to demonstrate that such amounts were
actually paid by Developer, including, without limitation, final lien
waivers signed by Developer's general contractor. Except as to
Phase IV, this final construction report shall also include actual
total Construction Costs and Hard Construction Costs expended by
Developer for construction of the Required Improvements for the
Phase in question with Fort Worth Companies and Fort Worth
Certified M/WBE Companies, together with supporting invoices
and other documents necessary to demonstrate that such amounts
were actually paid by Developer to such contractors.
Improvements constructed as part of a particular Phase that are
not Substantially Complete as of the date of the Notice of
Completion (the Completion Date for that Phase), and any
Construction Costs and Hard Construction Costs expended for
such improvements, shall not be considered for purposes of
determining whether Developer satisfied the requirements of
Section 4.1.1, 4.1.2, 4.1.3 and 4.1.4, as applicable, or (except as to
Phase .IV) assessing the extent to which Developer met the Fort
Worth Construction Commitment and the 11VTYBE Construction
Commitment for that Phase. For example, if Developer
expended $6 million in Construction Costs for construction a
particular building, but the building is not Substantially
Complete because a certificate of occupancy, whether temporary
or final, has not been issued for a portion of the occupiable space
within the building, none of the $6 million in Construction Costs
or related Hard Construction Costs shall be counted in
determining whether Developer satisfied the requirements set
Page 15
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
forth above, including any Construction Cost expenditures for
portions of the building that do have a certificate of occupancy.
4.8.3. Annual Employment Report.
On or before February I of the year following the Phase I
Completion Date and of each year thereafter during the Term of this
Agreement, in order for the City to assess the degree to which Developer
met the Employment Goal in the previous calendar year, Developer shall
use commercially reasonable efforts to provide the Director with a report
in a form reasonably acceptable to the City that sets forth the total number
of individuals who held Jobs on the Development Property, all as of
December I (or such other date requested by Developer and reasonably
acceptable to the City) of the previous year, together with .reasonable
supporting documentation. If Developer failed to meet the Employment
Goal in the previous calendar year, Developer shall include an explanation
as to why Developer believes it did not meet the Employment Goal and
the efforts that Developer utilized to meet the Employment Goal.
4.8.4. Quarterly Supply and Service Spending Report.
Beginning with the first calendar quarter of the Second Operating
Year of Phase I, within thirty (30) calendar days following the end of each
calendar quarter during the Term of this Agreement, Developer will
provide the Director with a report in a form reasonably acceptable to the
City that sets forth the then-aggregate Supply and Service Expenditures
made during such calendar year as well as the then-aggregate Supply and
Service Expenditures made during such calendar year with Fort Worth
Companies and with Fort Worth Certified MJWBE Companies. The City
will use each year's fourth quarter report to assess the degree to which
Developer met the Fort Worth Supply and Service Spending Commitment
and the M/WBE Supply and Service Spending Commitment for that year.
4.8.5. Annual Affordable Housing Report.
On or before February 1 of the year following the Phase II.
f Completion Date and of each year thereafter, in order for the City to assess
the degree to which Developer met the Affordable Housing Commitment
in the previous calendar year, Developer shall provide the Director with a
report in a form reasonably acceptable to the City that sets forth (i) the
total number of Residential Apartment Units on the Development Property
(excluding the.Hotel); (ii) the total ntunber of Affordable Housing Units;
(iii) the number of Residential Apartment Units that were under lease at
any time during the previous calendar year; (iv) the number of Affordable
Housing Units that were under lease at any time during the previous
calendar year; and (v) for each Affordable Housing Unit that was under
Page 16
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
lease at any time during the previous. calendar year, sufficient
documentation for the City to assess the adjusted income of the tenant
leasing such Affordable Housing Unit and the amount of monthly rent
paid by that tenant.
In addition to the above, for the HUD Units only, Developer shall
include with such report copies of all leases for the HUD Units in effect at
the time; the most recent pay stub or other evidence of employment
acceptable to the City and the most recent federal income tax return for all
occupants of the HUD Units; a Social Security determination of benefits
letter for all occupants of the HUD Units; and for any divorced tenants
with minor children who occupy the HUD Units, copies of the divorce
decrees in order to determine child support obligations for purposes of
measuring the adjusted incomes of such tenants.
4.9. Audits.
The City will have the right throughout the Term to audit the financial and
business records of Developer that relate to the Required Improvements and any
other documents necessary to evaluate Developer's compliance with this
Agreement or with the commitments set forth in this Agreement, including, but
not limited to construction documents and invoices, apartment lease agreements,
apartment rental rolls and deposit records of Developer or any entity affiliated
with Developer pertaining to the Required Improvements (including general
ledger and bank statements) (collectively "Records"). Developer shall make all
Records available to the City on the Development Property or at another location
in the City acceptable to both parties following reasonable advance notice by the
City and shall otherwise cooperate fully with the City during any audit.
5. CITY OBLIGATIONS.
5.1. Issuance of Certificates of Completion for Required Improvements.
i .
Within sixty (60) calendar days following receipt by the City of a Notice
of Completion for a given Phase, as required by and in accordance with Section
4.8.2.2, and assessment by the City of the information contained therein, if the
City is able to verify that (i) all Required Improvements for that Phase are
Substantially Complete and (ii) Developer expended or caused to be expended at
least the minimum number of dollars in aggregate Construction Costs for the
Development, as outlined in Section 4.1, the Director will issue to Developer a
certificate verifying that all such Required Improvements for that Phase are
Substantially Complete; stating the amount of aggregate Construction Costs
expended on the Development as of the Completion Date for that Phase; and
stating the amount of Hard Construction Costs expended on the Required
Improvements for that Phase, including amounts expended specifically with Fort
Page 17
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings;LLC
Worth Companies and Fort Worth Certified MIWBE Companies (each a
"Certificate of Completion"). In accordance with this Agreement, a Certificate
of Completion for a given Phase of the Development may be issued after the
Completion Deadline for that Phase.
5.2. Program Grants.
Subject the terms and conditions of this Agreement, for each Phase (i)
whose Completion Date occurs on or before the Completion Deadline specified in
Section 4.1 for that Phase and (ii) in which the minimum aggregate Construction
Costs for the Development, as specified in Section 4.1, have been expended by
the Completion Date for that Phase, Developer will be entitled to receive from the
City fifteen (15) annual Program Grants. The amount of each Program Grant
shall equal a percentage of the Program Source Funds available for that Program
Grasp. This percentage is based on the extent to which Developer meets the
various construction and operational expenditures for the Required
Improvements, as more specifically set forth in Section 5.2.1. Program Grants
may be reduced if Developer fails to complete Phase II or Phase III, as more
specifically set forth in Section 5.2.2, and Program Grants may be reduced or
forfeited for a given Program Year if Developer fails in any given year to meet
the Affordable Housing Commitment, as more specifically set forth in Section
5.2.3. Notwithstanding anything to the contrary herein, aggregate Program Grants
payable under this Agreement for all Phases shall be subject to and shall not
exceed the Program Cap.
5.2.1. Calculation of Each Program Grant Amount.
Subject to the terns and conditions of this Agreement, and subject
to reductions or forfeitures imposed pursuant to Sections 5.2.2.1, 5.2.2.2,
5.2.3 and 5.2.5, the amount of a given Program Grant for a given Phase
shall equal the sum of the Overall Construction Percentage, as defined in
Section 5.2.1.1,plus, to the extent applicable, the Fort Worth Construction
Percentage, the MIWBE Construction Percentage, the Fort Worth Supply
and Service Percentage and the M/WBE Supply and Service Percentage,
as defined in Sections 5.2.1.2, 5.2.1.3, 5.2.1.4 and 5.2.1.5, respectively,
I multiplied by the Program Source Funds available for that Program Grant,
as set forth in the definition of Program Source Fu r ds provided by Section
i
2.
5.2.1.1. Completion of Required Improvements (50% for
Phases I, II and III; 100% for Phase IV).
Each annual Program Grant shall include an amount
that is based on Developer's completion of the Required
Improvements for the Phase in question by the Completion
Deadline for that Phase. If by the Completion Date for the Phase
Page 18
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
in question Developer Substantially Completes the Required
Improvements for that Phase and has expended at least the
minimum number of dollars in aggregate Construction Costs for
the Development, and the Completion Date for the Required
Improvements for that Phase occurs on or before the Completion
Deadline for that Phase, all as outlined in Section 4.1 and as
confirmed by the City in the Certificate of Completion issued for
that Phase in accordance with Section 5.1, Developer will
automatically receive (i) for Program Grants attributable to Phase
I, II or III, fifty percent (50%) of the Program Source Funds for the
Phase in question, and (ii) for Program Grants attributable to Phase
IV, one hundred percent (100%) of the Program Source Funds for
the Phase in question (the "Overall Construction Percentage").
In no event will the Overall Construction Percentage for Phases I,
II or III exceed fifty percent (50%). Notwithstanding anything to
the contrary herein, if Developer fails to expend at least $50
million in Construction Costs for the Development by the Phase I
Completion Date or the Phase I Improvements are not
Substantially Completed by the Phase I Completion Deadline, as
confirmed by the City in the Certificate of Completion issued for
Phase I in accordance with Section 5.1, an Event of Default, as
more specifically set forth in Section 6.1.1, will occur and the City
shall have the right to terminate this Agreement without the
obligation to pay Developer any Program Grants for any of the
Phases.
5.2.1.2. Fort Worth Construction Cost Spending (20%-
25% for Phases I, H and III only).
Except for Program Grants associated with Phase
IV, each annual Program Grant shall include an amount that is
based on the percentage by which the Fort Worth Construction
Commitment, as outlined in Section 4.2, was met (the "Fort
Worth Construction Percentage"). The Fort Worth Construction
Percentage for the first Program Grant payable for Phase I will
equal the product of twenty-five percent (25%) multiplied by the
percentage by which the Fort Worth Construction Commitment
was met, which will be calculated by dividing the actual Hard
Construction Costs expended by the Completion Date with Fort
Worth Companies for the Required Improvements by the number
of dollars comprising the Fort Worth Construction Commitment,
as determined in accordance with Section 4.2. The Fort Worth
Construction Percentage for the second and all subsequent
Program Grants payable for Phase I, as well as all Program Grants
payable for Phases II and III, will equal the product of twenty
percent (20%) multiplied by the percentage by which the Fort
Page 19
Economic Development Program Agreement
,I between City of Fort Worth and Museum Place Holdings,LLC
Worth Construction Commitment was met, calculated in
accordance with the preceding sentence. For example, if the Fort
Worth Construction Commitment in a given Phase other than
Phase IV is $10,000,000.00 and only $8,000,000.00 in Hard
Construction Costs were expended with Fort Worth Companies by
the Completion Date for that Phase, the Fort Worth Construction
Percentage for all Program Grants associated with that Phase
would be 16% instead of 20%, or .20 x [$8 million/$10 million], or
.20 x .80, or .16 (or, for the first Program.Grant payable for Phase
I, 20% instead of 25%, or .25 x [$8 million/$10 million], or .25 x
.80). If the Fort Worth Construction Commitment in any given
'Phase other than Phase IV is met or exceeded, the Fort Worth
Construction Percentage will be twenty-five percent (25%) for the
first Program Grant associated with Phase I and twenty percent
(20%) for the second and all subsequent Program Grants
associated with Phase I, as well as for all Program Grants
associated with Phases II and III. In no event will the Fort Worth
Construction Percentage exceed those percentages for the
respective Program Year in which a Program Grant is payable.
5.2.1.3. Port Worth M/WBE Construction Cost
Spending (20%-25% for Phases I, H and 1H
only).
Except for Program Grants associated with Phase
IV, each annual Program Grant shall include an amount that is
based on the percentage by which the M/WBE Construction
Commitment, as outlined in Section 4.3, was met (the IINVWBE
Construction Percentage"). The M/WBE Construction
Percentage for the first Program Grant payable for Phase I will
equal the product of twenty-five percent (25%) multiplied by the
percentage by which the M/WBE Construction Commitment was
met, which will be calculated by dividing the actual Hard
Construction Costs expended by the Completion Date with Fort
Worth Certified M/WBE Companies for the Required
Improvements by the number of dollars comprising the M/WBE
Construction Commitment, as determined in accordance with
Section 4.3. The MIWBE Construction Percentage for the second
and all subsequent Program Grants payable for Phase I, as well as
all Program Grants payable for Phases II and III, will equal the
product of twenty percent (20%) multiplied by the percentage by
which the M/WBE Construction Commitment was met, calculated
in accordance with the preceding sentence. For example, if the
M1WBE Construction Commitment in a given Phase other than
Phase IV is $5,000,000.00 and only $4,000,000.00 in Hard
Construction Costs were expended with Fort Worth Certified
Page 20
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
MJWBE Companies by the Completion Date for that Phase, the
M/WBE Construction Percentage for the second and all subsequent
Program Grants associated with that Phase would be 16% instead
of 25%, or .20 x [$4 million/$5 million], or .20 x .80, or .16 (or, for
the first Program Grant payable for Phase I, 20% instead of 25%,
or .25 x [$4 million/$5 million], or .25 x .80, or .20). If the
M/WBE Construction Commitment in any given Phase other than
Phase IV is met or exceeded, the M/WBE Construction Percentage
will be twenty-five percent (25%) for the first Program Grant
associated with Phase I and twenty percent (20%) for the second
and all subsequent Program Grants associated with Phase I, as well
as all Program Grants associated with Phases II and III. In no
event will the M/WBE Construction Percentage exceed those
percentages for the respective Program Year in which a Program
Grant is payable.
5.2.1.4. Fort Worth Supply and Service Spending (5%
for Phases I, H and III only).
Except for the first Program Grant associated with
Phase I and any Program Grants associated with Phase IV, each
annual Program Grant shall include an amount that is based on the
percentage by which the Fort Worth Supply and Service Spending
Commitment, as outlined in Section 4.5, was met in the previous
calendar year (the "Fort Worth Supply and Service
Percentage"). The Fort Worth Supply and Service Percentage for
each applicable Program Grant will equal the product of five
percent(5%)multiplied by the percentage by which the Fort Worth
Supply and Service Spending Coininitment was met in the
previous calendar year, which will be calculated by dividing the
actual Supply and Service Expenditures made in the previous
calendar year with Fort Worth Companies by the Fort Worth
Supply and Service Spending Con nitment for that year, as
established and set forth in Section 4.5. For example, pursuant to
Section 4.5.3, the Fort Worth Supply and Service Spending
Commitment for the Second Operating Year of Phase III is
$60,000.00. If in that year Developer makes only $54,000.00 in
Supply and Service Expenditures with Fort Worth Companies, the
Fort Worth Supply and Service Percentage for the next Program
j Grants attributable to Phase I, Phase II and Phase III would be
j 4.5% each instead of 5% each, or .05 x [$54,000/$60,000], or .05 x
.9, or .045. If the Fort Worth Supply and Service Spending
Commitment is met or exceeded in any given year, the Fort Worth
Supply and Service Percentage for the Program Gralit payable in
the following year will be five percent (5%). In no event will the
I
1
Page 21
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
Fort Worth Supply and Service Percentage exceed 5% for any
Program Grant.
5.2.1.5. Fort Worth M/WBE Supply and Service
Spending (5% for Phases I, II and III only).
Except for the first Program Grant associated with
Phase I and any Program Grants associated with Phase IV, each
annual Program Grant shall include an amount that is based on the
percentage by which the NVWBE Supply and Service Spending
Commitment, as outlined in Section 4.6, was met in the previous
calendar year (the "M/WBE Supply and Service Percentage").
The M/WBE Supply and Service Percentage for each applicable
Program Grant will equal the product of five percent (5%)
multiplied by the percentage by which the M/WBE Supply and
Service Spending Commitment was met in the previous calendar
year, which will be calculated by dividing the actual Supply and
Service Expenditures made in the previous calendar year with Fort
Worth Certified MIWBE Companies by the Fort Worth Supply and
Service Spending Commitment for that year, as established and set
forth in Section 4.6. For example, pursuant to Section 4.6.3, the
MIWBE Supply and Service Spending Commitment for the
Second Operating Year of Phase III is $30,000.00. If in that year
Developer makes only $24,000.00 in Supply and Service
Expenditures with Fort Worth Certified M/WBE Companies, the
M/WBE Supply and Service Percentage for the next Program
Grants attributable to Phase I, Phase II and Phase III would be 4%
each instead of 5% each, or .05 x [$24,000/$30,000], or .05 x .8, or
.04. If the M/WBE Supply and Service Spending Commitment is
met or exceeded in any given year, the WWBE Supply and
Service Percentage for the Program Grant payable in the following
year will be five percent (5%). In no event will the M/WBE
Supply and Service Percentage exceed 5% for any Program Grant.
5.2.2. Reductions of Program Grants for Failure to Complete Phases
II or M.
5.2.2.1. Failure to Complete Phase II.
Notwithstanding anything to the contrary herein, in
the event that Developer completes Phase I in accordance with
Section 4.1.1, but (i) all Phase II Improvements are not
Substantially Complete as of the Phase II Completion Date or (ii)
Developer fails to expend or cause to be expended by the Phase II
Completion Date at least $90 million in aggregate Construction
Costs for Phase I and Phase II of the Development, as set forth in
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Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings.LLC
Section 4.1.2, the maximum amount of all remaining Program
Grants payable,hereunder for Phase I shall be reduced to thirty
percent (30%) of the Program Source Funds for Phase 1, subject to
further reductions unposed pursuant to Section 5.2.3, and
Developer shall not be eligible to receive any Program Grants for
Phases II, III or IV. In addition, in any year thereafter, if (i)
Developer fails to spend at least $30,000.00 in Supply and Service
Expenditures with Fort Worth Companies, the Program Grant
payable in the following year shall be further reduced by five
percent (5%) of the Program Source Funds for Phase 1, and (ii)
Developer fails to spend at least $20,000.00 in Supply and Service
Expenditures with Fort Worth Certified MIWBE Companies, the
Program Grant payable in the following year shall be further
reduced by five percent (5%) of the Program Source Funds for,
Phase I.
5.2.2.2. Failure to Complete Phase III.
Notwithstanding anything to the contrary herein, in
the event that Developer completes both Phase I and Phase II in
accordance with Sections 4.1.1 and 4.1.2, but (i) all Phase III
Improvements are not Substantially Complete as of the Phase III
Completion Date or (ii) Developer fails to expend or cause to be
expended by the Phase III Completion Date at least $125 million in
aggregate Construction Costs for Phase I, Phase II, and Phase III of
the Development, as set forth in Section 4.1.3, the maximum
amount of all remaining Program Grants payable hereunder for
Phase I and Phase II shall be reduced to thirty percent(30%) of the
Program Source Funds for such Phases, subject to further
reductions imposed pursuant to Section 5.2.3, and Developer shall
not be eligible to receive any Program Grants for Phases III or IV.
In addition, in any year thereafter, if(i) Developer fails to spend at
least $45,000.00 in Supply and Service Expenditures with Fort
Worth Companies, the Program Grant payable in the following
year shall be further reduced by five percent (5%) of the Program
Source Funds for Phase I, and (ii) Developer fails to spend at least
$30,000.00 in Supply and Service Expenditures with Fort Worth
j Certified NVWBE Companies, the Program Grant payable in the
j following year shall be further reduced by five percent (5%) of the
Program Source Funds for Phase I.
i
5.2.3. Deductions to or Forfeiture of Program Grants for Failure to
Comply with Affordable Mousing Commitment.
i
If the City determines that Developer has not complied with or is
not in compliance with the Affordable Housing Cozninitment, as outlined
Page 23
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
in Section 4.7, the City will notify Developer in writing. If Developer
disagrees with the City's determination, Developer shall have fourteen
(14) calendar days to provide the City with documentation to rebut such
determination. If Developer does not provide the City with documentation
sufficient to rebut the City's determination within such time, the City's
determination shall be deemed conclusive. In this event, notwithstanding
anything to the contrary herein, (i) if the Affordable Housing Commitment
was not met for an entire calendar year, Developer shall forfeit payment of
all Program Grants payable for the following Program Year, and (ii) if the
Affordable Housing Commitment was not met for a portion of a calendar
year, then the amounts of each Program Grant payable in the following
Program Year (as calculated in accordance with Sections 5.2.1 and 5.2.2)
shall be reduced by a fraction, to be expressed as a percentage, where the
numerator is the number of days in that calendar year in which the
Affordable Housing Commitment was met and the denominator is 365.
Any Program Grant that is forfeited in. a given Program Year pursuant to
this Section 5.2.3 shall nevertheless count as one of the fifteen (15) annual
Program Grants paid for a respective Phase in accordance with this
Section 5.2.
5.2.4. No Offsets.
A deficiency in attainment of one commitment may not be offset
by the exceeding attainment in another commitment. For example, if in a
given year Developer failed to meet the M/WBE Supply and Service
Spending Commitment by $5,000.00, but exceeded the Fort Worth Supply
and Service Spending Commitment by $5,000.00, all Program Grants
payable in the following year would still be reduced in accordance with
Section 5.2.1.5 on account of Developer's failure to meet the M/WBE
Supply and Service Spending Commitment.
5.2.5. Program Cap.
Once the City has paid Developer aggregate Program Grants equal
to the Program Cap, this Agreement shall terminate. If in any Program
Year the amount of a Program Grant calculated in accordance with
Sections 5.2.1, 5.2.2 and 5.2.3 would cause the aggregate Program Grants
paid by the City to exceed the Program Cap, the amount of the Program
Grant or Grants payable in that Program Year shall equal the difference
between the aggregate of all Program Grants paid by the City as of the
previous Program Year and the Program Cap, and this Agreement shall
terminate upon payment of such Program Grant or Grants.
i
Page 24
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
5.2.6. Deadline for Payments and Source of Funds.
The first Program Grant for a Phase shall be paid by the City on or
before June 1 of (i) the Second Operating Year of that Phase or (ii) the
First Operating Year of that Phase if requested by Developer in writing
within sixty (60) calendar days following the Completion Date of that
Phase and the City, taking into consideration its current fiscal year budget
and following fiscal year budget planning, provides Developer with
written consent to such request. Each subsequent annual Program Grant
payment will be made by the City to Developer on or before June 1 of the
Program Year in which such payment is due. It is understood and agreed
that all Program Grants paid pursuant to this Agreement shall come from
currently available general revenues of the City and not directly from
Parcel Real Property Tax Revenues, Parcel Personal Property Tax
Revenues or Parcel Sales Tax Revenues. Developer understands and
agrees that any revenues of the City other than those dedicated for
payment of a given annual Program Grant pursuant to 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 Program Grant
or other obligation to Developer.
5.3. Waiver of Encroachment Fees for Street Lane Closures.
Developer will be required to apply for, receive and comply with all
permits and other licenses and certificates required by the City with respect to the
Development. However, the City hereby agrees to waive up to $559,247.00 in
aggregate temporary encroachment fees customarily charged by the City and
directly associated with temporary street closures necessitated by construction of
the Required Improvements. If Developer exceeds the $559,247.00 temporary
encroachment fee credit granted hereunder, Developer will be required to pay any
additional temporary encroachment fees, in an amount prescribed by and in
accordance with standard City procedures.
5.4. Park Dedication Fees.
Notwithstanding anything to the contrary in the City's Neighborhood and
Community Park Dedication Policy adopted by the City Council pursuant to
M&C G-12893, as subsequently amended (the "Park Dedication Policy"),
Developer may satisfy all requirements of the Park Dedication Policy by
complying with those standards in the Park Dedication Policy applicable to
residential developments located within the Central City boundary of Park
Planning District 4, including, but not limited to, the requirement that Developer
pay the City a flat fee of $500.00 per residential unit, as defined in the Park
Dedication Policy, constructed in the Development in lieu of those requirements
that would otherwise apply to the Development, including, but not limited to, the
Page 25
Economic Development Program Agreement
between City of Port worth and Museum Place Holdings;LLC
i
requirement for land dedication and payment of other associated fees. This
Section 5.4 shall not be deemed to grant Developer any waiver of fees or other
requirements of the Park Dedication Policy applicable to residential developments
located within the Central City boundary of Park Planning District 4.
.6. DEFAULT TERMINATION AND FAILURE_BY DEVELOPER TO MEET
VARIOUS DEADLINES AND COMMITMENTS.
6.1. Failure to Complete Required Improvements.
6.1.1. Failure to Submit Notice of Completion.
If Developer fails to submit a Notice of Completion for a given
Phase to the Director by the Completion Deadline for that Phase in
accordance with Section 4.8.2.2, the City shall notify Developer in writing
and Developer shall have thirty (30) calendar days to submit such Notice
of Completion. If Developer submits such Notice of.Completion within
this thirty (30) calendar day period, the Completion Date for that Phase
shall be deemed to be the Completion Deadline for that Phase. If
Developer fails to submit such Notice of Completion within this thirty
(30) calendar day period, then the Completion Date for the Phase in
question shall be deemed to have not occurred by the Completion
Deadline for that Phase, in which case (i) if the Phase in question is Phase
I,the City shall have the right to terminate this Agreement immediately by
providing written notice to Developer and (ii) if the Phase in question is
Phase Il, Phase III or Phase IV, Sections 6.1.3, 6.1.4 and 6.1.5,
respectively, shall apply.
6.1.2. Failure to Complete Phase I.
After receipt of a timely submitted Notice of Completion for Phase
I, if the City determines that (i) all Phase I Improvements are not
Substantially. Complete or (ii) Developer has not expended or caused to be
expended at least $50 million in Construction Costs for Phase I of the
Development, the City shall notify Developer in writing and Developer
shall have the greater of: (i) such time as necessary (but in no event
beyond the Phase I Completion Deadline), or (ii) thirty (30) calendar days
following receipt of such notice, to supplement the Notice of Completion
in order to demonstrate to the satisfaction of the City that as of the Phase I
Completion Date (i) all Phase I Improvements have been Substantially
Completed and (ii) Developer has expended or caused to be expended at
least $50 million in Construction Costs for Phase I of the Development. If
the City still determines that as of the Completion Deadline (i) all Phase I
Improvements were not Substantially Complete or (ii) Developer did not
expend or cause to be expended at least $50 million in Construction Costs
Page 26
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
for the Phase I of the Development, the Phase I Completion Date shall be
deemed to not have occurred by the Phase I Completion Deadline and the
City shall have the right to terminate this Agreement immediately by
providing written notice to Developer.
6.1.3. Failure to Complete Phase II.
After receipt of a timely submitted Notice of Completion for Phase
II, if the City determines that (i) all Phase II Improvements are not
Substantially Complete or (ii) Developer has not expended or caused to be
expended at least $90 million in aggregate Construction Costs for Phase I
and Phase II of the Development, the City shall notify Developer in
writing and Developer shall have the greater of: (i) such time as necessary
(but in no event beyond the Phase II Completion Deadline), or (ii) thirty
(30) calendar days following receipt of such notice, to supplement the
Notice of Completion in order to demonstrate to the satisfaction of the
City that as of the Phase II Completion Date (i) all Phase II Improvements
have been Substantially Completed and (ii) Developer has expended or
caused to be expended at least $90 million in aggregate Construction
Costs for Phase I and Phase II of the Development. If the City still
determines that as of the Phase II Completion Deadline (i) all Phase II
Improvements were not Substantially Complete or (ii) Developer did not
expend or cause to be expended at least $90 million in aggregate
Construction Costs for Phase I and Phase II of the Development, the Phase
II Completion Date shall be deemed to not have occurred by the Phase II
Completion Deadline, in which case the Program Grants payable tinder
this Agreement shall be reduced in accordance with Section 5.2.2.1.
6.1.4. Failure to Complete Phase III.
After receipt of a timely submitted Notice of Completion for Phase
III, if the City determines that (i) all Phase III Improvements are not
Substantially Complete or (ii) Developer has not expended or caused to be
expended at least $125 million in aggregate Construction Costs for Phase
I, Phase II, and Phase III of the Development, the City shall notify
Developer in writing and Developer shall have the greater of: (i) such time
as necessary (but in no event beyond the Phase III Completion Deadline),
or (ii) thirty (30) calendar days following receipt of such notice, to
supplement the Notice of Completion in order to demonstrate to the
satisfaction of the City that as of the Phase III Completion Date (i) all
Phase III Improvements have been Substantially Completed and (ii)
Developer has expended or caused to be expended at least $125 million in
aggregate Construction Costs for Phase I, Phase II, and Phase III of the
Development. If the City still determines that as of the Phase III
Completion Deadline (i) all Phase III Improvements were not
Substantially Complete or (ii) Developer did not expend or cause to be
Page 27
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
expended at least $125 million in aggregate Construction Costs for Phase
I, Phase II, and Phase III of the Development, the Phase III Completion
Date shall be deemed to not have occurred by the Phase III Completion
Deadline, in which case the Program Grants payable under this Agreement
shall be reduced in accordance with Section 5.2.2.2.
6.1.5. Failure to Complete Phase IV.
After receipt of a timely submitted Notice of Completion for Phase
IV, if the City determines that (i) all Phase IV Improvements are not
Substantially Complete or (ii) Developer has not expended or caused to be
expended at least $170 million in aggregate Construction Costs for all
Phases of the Development, the City shall notify Developer in writing and
Developer shall have the greater of. (i) such time as necessary (but in no
event beyond the Phase IV Completion Deadline), or (ii) thirty (30)
calendar days following receipt of such notice, to supplement the Notice
of Completion in order to demonstrate to the satisfaction of the City that
as of the Phase IV Completion Date (i) all Phase IV Improvements have
been Substantially Completed and (ii) Developer has expended or caused
to be expended at least $170 million in aggregate Construction Costs for
the Development. If the City still determines that as of the Phase IV
Completion Deadline (i) all Phase IV Improvements were not
Substantially Complete or (ii) Developer did not expend or cause to be
expended at least $170 million in aggregate Construction Costs for all
Phases of the Development, the Phase IV Completion Date shall be
deemed to not have occurred by the Phase IV Completion Deadline, in
which case Developer shall not be entitled to receive any Program Grants
for Phase IV.
6.2. Failure to Pay City'faxes.
An event of default shall occur under this Agreement if any City taxes
owed on the Development Property by Developer or an Affiliate or arising on
account of Developer's or an Affiliate's operations on the Development Property
become delinquent and Developer or the Affiliate does not either pay such taxes
or properly follow the legal procedures for protest and/or contest of any such
taxes. In this event, the City shall notify Developer in writing and Developer
shall have thirty (30) calendar days to cure such default. If the default has not
been fully cured by such time, the City shall have the right to terminate this
Agreement immediately by providing written notice to Developer and shall have
all other rights and remedies that may be available to it under the law or in equity.
6.3. Violations of City Code, State or Federal Law.
An event of default shall occur under this Agreement if any written
citation is issued to Developer or an Affiliate due to the occurrence of a violation
Page 28
Economic Development Program Agreement
between City of Port Worth and Museum Place Holdings,LLC
of a material provision of the City Code on the Development Property or on or
within any improvements thereon (including, without limitation, any violation of
the City's Building or Fire Codes and any other City Code violations related to
the environmental condition of the Development Property; the environmental
condition other land or waters which is attributable to operations on the
Development Property; or to matters concerning the public health, safety or
welfare) and such citation is not paid or the recipient of such citation does not
properly follow the legal procedures for protest and/or contest of any such
citation. An event of default shall occur under this Agreement if the City is
notified by a governmental agency or unit with appropriate jurisdiction that
Developer or an Affiliate, or any successor in interest thereto; any third party with
access to the Development Property pursuant to the express or implied permission
of Developer or an Affiliate, or any a successor in interest thereto; or the City (on
account of the Required Improvements or the act or omission of any party other
than the City on or after the effective date of this Agreement) is in violation of
any material state or federal law, rule or regulation on account of the
Development Property, improvements on the Development Property or any
operations thereon (including, without limitation, any violations related to the
environmental condition. of the Development Property; the environmental
condition other land or waters which is attributable to operations on the
Development Property; or to matters concerning the public health, safety or
welfare). Upon the occurrence of any such default described in this Section 6.3,
the City shall notify Developer in writing and Developer shall have (i) thirty (30)
calendar days to cure such default or (ii) if Developer has diligently pursued cure
of the default but such default is not reasonably curable within thirty (30) calendar
days, then such amount of time that the City reasonably agrees is necessary to
cure such default. If the default has not been fully cured by such time, the City
shall have the right to terminate this Agreement immediately by providing written
notice to Developer and shall have all other rights and remedies that may be
available to under the law or in equity.
6.4. Failure to Meet Construction Cost Spending, Supply and Service
Spending and/or Affordable Housing Commitments; Failure to Meet
Employment Goal.
If Developer fails to meet the Fort Worth Construction Commitment or the
M/WBE Construction Commitment for any Phase, or if Developer fails to meet
the Fort Worth Supply and Service Spending Commitment or the M/WBE Supply
and Service Spending Commitment in any given year, such event shall not
constitute a default hereunder or provide the City with the right to terminate this
Agreement, but, rather, shall only cause the amount of the Program Grants that
the City is required to pay pursuant to this Agreement to be reduced in accordance
with this Agreement. If Developer fails to meet the Affordable Housing
Commitment in any given year, such event shall not constitute a default hereunder
or provide the City with the right to terminate this Agreement, but, rather, .shall
only cause the Prograrn Grant payment that would otherwise have been payable in
Page 29
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings.LLC
the following Program Year to be forfeited or reduced in accordance with this
Agreement. If Developer fails to meet the Employment Goal in any given year,
such event shall not constitute a default hereunder and shall not cause the amount
of the Program Grant that the City is required to pay in the following Program
Year to be reduced.
6.5. Failure to Submit Reports.
Without limiting the application of Section 6.6, if Developer fails to
submit any report required by and in accordance with Section 4.8, the City's
obligation to pay any Program Grants at the time, if any, shall be suspended until
Developer has provided all required reports.
6.6. General Breach.
Unless stated elsewhere in this Agreement, Developer shall be in default
under this Agreement if Developer 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 Developer 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 shall have the right to terminate this Agreement immediately by
providing written notice to Developer.
7. INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Developer shall operate as an
independent contractor in each and every respect hereunder and not as an agent,
representative or employee of the City. Developer shall have the exclusive right to
control all details and day-to-day operations relative to the Development Property and
any improvements thereon and shall be solely responsible for the acts and omissions of
its officers, agents, servants, employees, contractors, subcontractors, licensees and
uzvitees. Developer aclalowledges that the doctrine of respondeat superior will not apply
as between the City and Developer, its officers, agents, servants, employees, contractors,
subcontractors, licensees, and invitees. Developer further agrees that nothing in this
Agreement will be construed as the creation of a partnership or joint enterprise between
the City and Developer.
8. INDEMNIFICATION.
DEVELOPER, AT NO COST TO THE CITY, AGREES TO DEFEND,
INDEMNIFY AND HOLD THE CITY, ITS OFFICERS, AGENTS SERVANTS AND
Page 30
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings.LLC
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 DEVELOPER'S BUSINESS AND ANY
RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING
DEATH, THAT MAY RELATE TO, ARISE OUT OF OR BE OCCASIONED BY (i)
DEVELOPER'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS
AGREEMENT OR (ii)ANY NEGLIGENT ACT OR OMISSION OR INTENTIONAL
MISCONDUCT OF DEVELOPER, ITS OFFICERS, AGENTS, ASSOCIATES,
EMPLOYEES, CONTRACTORS (OTHER THAN THE CITI) OR
SUBCONTRACTORS, RELATED TO THE DEVELOPMENT AND THE
REQUIRED IMPROVEMENTS AND ANY OPERATIONS AND ACTIVITIES
THEREON OR OTHERWISE TO THE PERFORMANCE OF THIS AGREEMENT.
9. NOTICES.
All written notices called for or required by this Agreement shall be addressed to
the following, or such other party or address as either party designates in writing, by
certified mail, postage prepaid, or by hand delivery:
City: Developer:
City of Fort Worth Museum Place Holdings, LLC
Attn: City Manager Attn: Richard Garvey
1000 Throcicmorton 2918 Wingate St.
Fort Worth, TX 76102 Fort Worth, TX 76107
with copies to: with a copy to:
the City Attorney and Russell Norment
Economic/Community Development Brackett& Ellis,P.C.
Director at the same address 100 Main St.
Fort Worth, TX 76102-3090
10. ASSIGNMENT AND SUCCESSORS.
Developer 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 Developer, 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 Developer
under this Agreement. Otherwise, Developer 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 shall not be unreasonably withheld,
conditioned on (i) the prior approval of the assignee or successor and a finding by the City
Page 31
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
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 Developer
under this Agreement. Any attempted assignment (other than to an,Affiliate in accordance
with this Section 10) without the City Council's prior consent shall constitute grounds for
termination of this Agreement following ten (10) calendar days.of receipt of written notice
from the City to Developer. Any lawful assignee or successor in interest of Developer of
all rights under this Agreement shall be deemed "Developer" for all purposes under this
Agreement.
11. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND
REGULATIONS.
This Agreement will.be subject to all applicable federal, state and local laws,
ordinances, rules and regulations, including, but not limited to, all provisions of the
City's Charter and ordinances, as amended.
12. GOVERNMENTAL POWERS.
It is understood that by execution of this Agreement, the City does not waive or
surrender any of it 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 shall not constitute a waiver
of that party's right to insist upon appropriate performance or to assert any such right on
any future occasion.
14. VENUE AND JURISDICTION.
If any action, whether real or asserted, at law or in equity, arises on the basis of
any provision of this Agreement, venue for such action shall lie in state courts located in
Tarrant County, Texas or the United States District Court for the Northern District of
Texas—Fort Worth Division. This Agreement shall be construed in accordance with the
laws of the State of Texas.
Page 32
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
15. NO THIRD PARTY RIGHTS.
The provisions and conditions of this Agreement are solely for the benefit of the
City and Developer, and any lawful assign or successor of Developer, and are not
intended to create any rights, contractual or otherwise, to any other person or entity.
16. FORCE MAJEURE.
It is expressly understood and agreed by the parties to this Agreement that if the
performance of any obligations hereunder is delayed by reason of war, civil commotion,
acts of God, inclement weather, or other circumstances which are reasonably beyond the
control of the party obligated or permitted under the terms of this Agreement to do or
perform the same, regardless of whether any such circumstance is similar to any of those
enumerated or not, the party so obligated or permitted shall be excused from doing or
performing the same during such period of delay, so that the time period applicable to
such design or construction requirement shall be extended for a period of time equal to
the period such party was delayed. Notwithstanding anything to the contrary herein, it is
specifically understood and agreed that Developer's failure to obtah-i adequate financing
to complete the Required Improvements by the Completion Deadlines specified for those
Required Improvements by this Agreement shall not be deemed to be an event of force
majeure and that this Section 16 shall not operate to extend the Completion Deadline-in
such an event.
17. INTERPRETATION.
In the event of any dispute over the meaning or application of any provision of
this Agreement, this Agreement shall be interpreted fairly and reasonably, and neither
more strongly for or against any party,regardless of the actual drafter of this Agreement.
18. CAPTIONS.
Captions and headings used in this Agreement are for reference purposes only and
shall not be deemed a part of this Agreement.
19. 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 Developer, and any lawful assign and successor of Developer, 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
Page 33
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
Agreement. Notwithstanding anything to the contrary herein, this Agreement shall not be
amended unless executed in writing by both parties and approved by the City Council of
the City in an open meeting held in accordance with Chapter 551 of the Texas
Government Code.
20. COUNTERPARTS.
This Agreement may be executed in multiple counterparts, each of which shall be
considered an original, but all of which shall constitute one instrument.
EXECUTED as of the last date indicated below:
CITY OF FORT WORTH: MUSEUM PLACE FIOLDINGS,
LLC:
B By:
Y
Dale Fisseler Name:�(cF� e
Assistant City Manager Manager
Date: 1 - I 0 s Date:
APPROVED AS TO FORM AND LEGALITY:
Peter Valcy
Assistant City Attorney
M&C: C-22120 5-15-07
Attested By:
aj 0611A k�-A
14arty Hendrix 0 W
City ecretary
Page 34 � npq
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Economic Development Program Agreement iv��h ( PE js R U
between City of Fort Worth and Museum Place Holdings,LLC .,.�
EXHIBITS
"A" —Description and Map Depicting the Development Property
"A-1"—Phase I Parcel
"A-2"—Phase H Parcel
"A-3"—Phase III Parcel
"A-4" —Phase IV Parcel
"B" —Depiction and Description of Required Improvements
"C"—Inspection Conditions and Criteria for HUD Units
"D"— 2007 HOME Program Rent Limits and 2007 Income Limits for the Fort
Worth-Arlington, TX HUD Metro FMR Area
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
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Exhibit "C"
INSPECTION CONDITIONS AND CRITERIA FOR HUD UNITS
Developer shall comply with any HUD rules and regulations regarding the condition,
repair, or maintenance of the HUD Units, including, but not limited to, compliance with
the City's Building Code, including the International Building Code and any locally
adopted amendments thereto, as set forth in Chapter 7 of the City Code and City
Ordinance Nos. 15948 and 16162. Developer shall allow the City to inspect or cause
inspection of the HUD Units to ensure compliance with such Code.
Without limiting application of any HUD rules and regulations to the HUD Units,
Developer agrees that the HUD Units be made available to qualifying tenants for
terms of at least one (1) year, unless a shorter term is specifically requested by the
tenant and mutually agreed to by and between Developer and the tenant, and that
none of the lease documents for the HUD Units will contain any of the prohibited
lease provisions set forth in Title 24, Section 92.253(b) of the Code of Federal
Regulations.
Economic Development Program Agreement
between City of Fort Worth and Museum Place Holdings,LLC
Exhibit"D"
2007 HOME PROGRAM RENT LIMITS AND
2007 INCOME LIMITS FOR THE
FORT WORTH-ARLINGTON,TX HUD METRO FMR AREA
FY 2007 Income Limits Documentation System-- Summary for Port Worth-Arlington, T... Page 1 of 2
FY 2.007 Income i Its Documentation
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FY 2007 Income Limits Summary
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FY 2007 FY 2007
Income Median Income 1 2 3 4 5 6
Limit Income Limit Person Person Person Person Person Person
Area Category
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80°/-'. $35,500 $40,550 $45,650 $50,700 $54,750 $58,800
Income
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The Fort Worth-Arlington,TX HUD Metro FMR.Area contains the following areas: Johnson County,TX; Parker
County,TX; and Tarrant County,TX.
Income Limit areas are based on FY 2007 Fair Market Rent (FMR) areas. For a detailed
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Dallas,TX HUD Metro FMR Area
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HUD Metro FMR Area
This system provides complete documentation of the development of the Final FY 2007 Fair
Market Rents (FMRs) for Fort Worth-Arlington, TX HUD Metro FMR Area. This page
provides a summary of how the Final FY 2007 FMRs were developed and updated starting
with the formation of the Final FY 2007 FMR Areas from the metropolitan Core-Based
Statistical Areas (CBSAs) as established by the Office of Management and Budget, the 2000
Census benchmark, incorporating information from Revised Final FY 2005 FMRs, and
updating to FY 2007 including information from local Random Digit Dialing (RDD) survey data.
Click on links in the tables below to see more detail on how the data were developed.
Final FY 2007 FMR Area Geography and 2000 Census
Base Rent
Final FY 2007 FMR Areas Follow FY 2006 Area Definitions with Modifications
In establishing Final FY 2007 FMR areas, HUD continues to use the revised Office of
Management and Budget (OMB) area definitions that were first issued in 2003 and updated in
2005, but differ from the final FY 2006 FMR areas in that additional modifications to the
county-based statistical areas as defined by OMB have been made.
The FY 2006 FMR area definitions were derived by examining the 2003 OMB metropolitan
areas to see if and how they differed from FY 2005 FMR areas. If a new metropolitan area
differed from the old FMR area(s) covering the same geography, HUD checked the 2000
Census 40th Percentile Base Rents for each part of the new metropolitan area that was
previously in a different old FMR area against the 2000 Census 40th Percentile Base Rent for
the entire new area. On these pages, the parts of the new metropolitan areas that were
previously in different old FMR areas are referred to as "Evaluated Metro FMR Areas."
If any of the Evaluated Metro FMR Areas in a new metropolitan area had 2000 Census 40th
Percentile Base Rents that differed from the 2000 Census 40th Percentile Base Rent of the
entire area by at least 5 percent, HUD established them as separate "HUD Metro FMR
Areas" (HMFA)within the new metropolitan area and assigned them their own 2000 Census
Base Rent.
Any Evaluated Metro FMR Area with a 2000 Census 40th Percentile Base Rent that did not
differ from the entire metropolitan area 2000 Census 40th Percentile Base Rent by at least 5
percent received the 2000 Census Base Rent for the entire metropolitan area. If there was
more than one such Evaluated Metro FMR Area in a metropolitan area, all Evaluated Metro
FMR Areas assigned the metropolitan area 2000 Census Base Rent are treated as a single
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FMR area. Unless such "recombined" areas constitute the entire new metropolitan area
however, they are also renamed as "HUD Metro FMR Areas" (HMFA) because such FMR
areas are not the same geography as the official OMB metropolitan area definitions.
For example, suppose a new metropolitan area consists of an old FMR area, half of another
old FMR area, and a formerly nonmetropolitan county. HUD would evaluate the 2000 Census
40th Percentile Base Rents for each of the three parts (Evaluated Metro FMR Areas) that
comprise the new area against the 2000 Census Base 40th Percentile Rent for the entire new
area.
If none of the three evaluated areas has a 2000 Census 40th Percentile Base Rent that differs
from the entire new metropolitan area 2000 Census 40th Percentile Base Rent by at least 5
percent, then the new metropolitan area was undivided and served as a FY 2006 FMR area in
its entirety.
Suppose the Evaluated Metro FMR Area consisting of half of an old FMR area has a 2000
Census 40th Percentile Base Rent that differed from the entire metropolitan area's 2000
Census 40th Percentile Base Rent by more than 5 percent. Then HUD established two "HUD
Metro FMR Areas": one consisting of the half of the old FMR area and assigned its own 2000
Census Base Rent, and the other consisting of the combination of the other old FMR area and
the formerly nonmetropolitan county.
Final FY 2007 Area Modifications
Most of the FY 2006 merged FMR areas remaining after the 5 percent rent test was applied
had similar income limits. For the FY 2007 FMRs, separate FMR areas are created for any
parts of old metropolitan areas, or formerly nonmetropolitan counties, that would have more
than a 5 percent increase or decrease in their 2000 Census base area median family income
as a result of implementing the 2003 OMB definitions.
Consider the example from above where a new metropolitan area consists of an old FMR
area, half of another old FMR area, and a formerly nonmetropolitant county. HUD proposes to
evaluate the 2000 Census base median family income for each of the three parts (Evaluated
Metro FMR Areas)that comprise the new area against the 2000 Census Median Family
Income for the entire new area.
Similarly to the 40th Percentile rent comparison, if none of the three evaluated areas has a
2000 Census Base median family income that differs from the entire new metropolitan area
2000 Census Base median family income by at least 5 percent, then the new metropolitan
area was undivided and served as a FY 2007 FMR area in its entirety.
Suppose the Evaluated Metro FMR Area consisting of half of an old FMR area has a 2000
Census Base median family income that differed from the entire metropolitan area's 2000
Census Base median family income by more than 5 percent. Then HUD establishes two "HUD
Metro FMR Areas": one consisting of the half of the old FMR area and assigned its own 2000
Census Base Rent, and the other consisting of the combination of the other old FMR area and
the formerly nonmetropolitan county.
Fort Worth-Arlington, TX HUD Metro FMR Area is made up of the following:
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Johnson County, TX ; Parker County, TX ; and Tarrant County, TX .
FY 2007 FMR Area Derivation
The Fort Worth-Arlington, TX HUD Metro FMR Area is a HUD-defined metropolitan FMR
area that is part of the Dallas-Fort Worth-Arlington, TX MSA. Fort Worth-Arlington, TX
HUD Metro FMR Area is considered a separate HUD-defined metropolitan FMR area because
Fort Worth-Arlington, TX HUD Metro FMR Area has a 2000 Census 40th Percentile Base
Rent ($632) that differs from the 2000 Census 40th Percentile Base Rent for Dallas-Fort
Worth-Arlington, TX MSA ($681) by at least 5.0 percent.
1 - ($632/$681) = 1 - 0.928 = 7.2 percent >= 5.0 percent.
Additionally, HUD compared the 2000 Census Median Family Income for Fort Worth-
Arlington, TX HUD Metro FMR Area ($53,350) to the 2000 Census Median Family Income for
Dallas-Fort Worth-Arlington, TX MSA ($55,263) to see if the difference is more than
5.0 percent. As can be seen from the calculation below,
1 - ($53,3501$55,263) = 1 - 0.965 = 3.5 percent < 5.0 percent
the difference is less than 5.0 percent. Fort Worth-Arlington, TX HUD Metro FMR Area does
not qualify for separate area status on the basis of the Median Family Income comparison, but
does qualify using the Census base rent comparison.
Fort Worth-Arlington, TX HUD Metro FMR Area has a 2000 Census Base Rent of 679.
This is a 50th Percentile 2000 Census Base Rent as established by HUD regulations. To see
the FY 2007 40th Percentile Rents for Fort Worth-Arlington, TX HUD Metro FMR Area, click
here.
Computing the 2000-t0-2005 Update Factor and 2005
Intermediate Rent
Fort Worth-Arlington, TX HUD Metro FMR Area is entirely within the old Fort Worth--
Arlington, TX PMSA, so the 2000-to-2005 Update Factor is simply the Revised Final FY 2005
FMR for Fort Worth--Arlington, TX PMSA ($732) divided by the 2000 Census Base Rent for
Fort Worth--Arlington, TX PMSA ($676), or$732 / $676 = 1.0828.
The 2005 Intermediate Rent for 2-Bedroom units is used in the computation of the bedroom
ratios that are applied to the Final FY 2007 2-Bedroom FMR to yield the other bedroom-unit
FMRs. The 2005 2-Bedroom Intermediate Rent is simply the 2000 Census 2-Bedroom Base
Rent times the 2000-to-2005 update factor:
2005 2-Bedroom Intermediate Rent for Fort Worth-Arlington, TX HUD Metro FMR Area
_ $679 x 1.0828 = $735
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The 2005-to-2007 Update Factors
The Fort Worth-Arlington, TX HUD Metro FIVIR Area has the following 2005-to-2007 Update
Factors:
Update Factors used between FY2005 and FY2007
Update Local RDD Local RDD
Year Factor Type Completed? Used?
2005 to 0.9860 Local CPI No No
2006 Factor
2006 to 1.0270 Local CPI No No
2007 Factor
Final FY 2007 2-Bedroom FIVIR
The Final FY 2007 2-Bedroom FMR is simply the product of the 2000 Census Base Rent, the
2000-to-2005 Update Factor and the 2005-to-2007 Update Factor for Fort Worth-Arlington,
TX HUD Metro FMR Area as determined above:
Fort Worth-Arlington, TX HUD Metro FMR Area Final FY 2007 FMR
_ $679 x 1.0828 x 0.9860 x 1.0270 = $735 x 0.9860 x 1.0270 = $725 x 1.0270 = $745
The Final FY 2007 FMRs for All Bedroom Sizes
The following table shows the Final FY 2007 FMRs by unit bedrooms. The FMRs for units with
different numbers of bedrooms are computed from the ratio of the 2005 Intermediate Rents for
the different unit sizes to the 2005 2-Bedroom Intermediate Rent. These Rent Ratios are
applied to the Final FY 2007 2-Bedroom FMR to determine the Final FY 2007 FMRs for the
different size units.
The 2005 Intermediate Rents for different size units are computed from 2000 Census Base
Rents that are updated to 2005 using the 2000-to-2005 update factors for each unit size
derived from the Revised Final FY 2005 FMR.for the old FMR area that contained Fort Worth-
Arlington, TX HUD Metro FMR Area.
Click on the links in the table to see how the bedroom rents were derived.
Final FY 2007 FMRs By Unit Bedrooms
Efficiency One- Two- Three- Four-
Bedroom Bedroom Bedroom Bedroom
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Final FY 2007 Fair Market Rent Documentation System-- Summary for Fort Worth-Arli... Page 5 of 6
Final FY 2007 $565 $605 $745 $1,010 L $1,135
FMR
Other HUD Metro FIVIR Areas in the Same MSA
Select another Final FY 2007 HUD Metro FMR Area that is a part of the Dallas-Fort Worth-
Arlington, TX MSA
Dallas,TX HUD Metro FMR Area
Related Final FY 2007 FIVIR Areas
Select another Final FY 2007 FMR Area that includes parts of the old FMR area that contains
Fort Worth-Arlington, TX HUD Metro FMR Area
Hood county,TX;j
•5.eteet��FMR�Areac
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Page 1 of 2
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 5115/2007
DATE: Tuesday, May 15, 2007
LOG NAME: 17MUSPLACEX REFERENCE NO.: C-22120
SUBJECT:
Authorize Execution of Economic Development Program Agreement with Museum Place
Development Group, LTD, Related to a Mixed-Use Project to be Constructed at the Intersection of
University Drive, Camp Bowie Boulevard, West 7th Street and Bailey Street
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to execute the attached Economic Development Program Agreement with
Museum Place Development Group, LTD (subject to subsequent, non-material changes agreed to by the
parties) related to a mixed-use project to be constructed at the intersection of University Drive, Camp Bowie
Boulevard, West 7th Street and Bailey Street; and
2. Find that the terms and conditions of the Agreement, as outlined below and in the Agreement, constitute
a custom-designed economic development program, as recommended by the 2007 Comprehensive Plan
and authorized by Chapter 380 of the Texas Local Government Code.
DISCUSSION:
Under the proposed Economic Development Program Agreement, Museum Place Development Group,
LTD (Developer), has committed to construct a mixed-use development consisting of residential units, office
space, retail space, and a hotel on property near the intersection of University Drive, Camp Bowie
Boulevard, West 7th Street and Bailey Street. Fifteen percent of rental residential units constructed in
Phases II and III will be set aside for lease at affordable rates, with two-thirds of those reserved being
leased to qualifying households earning no more than 80 percent of the area median income, per HUD
standards; and one-third of those set aside for qualifying households earning no more than 60 percent of
the area median income.
The project will be constructed in phases, with the incentives tied to the completion of phases. The
minimum investment and maximum incentive schedule are summarized as follows:
Phase I will consist of 24,000 square feet (SF) of retail space, 108,000 SF of office space, and 75,000 SF of
residential space to open by June 30, 2008. The investment is expected to exceed $50 million with a
maximum gross incentive of$7.2 million (estimated $4.1 mil. Net Present Value).
Phase II will consist of 79,600 SF of retail space, 24,600 SF of office space, and 225 for rent. Residential
units are expected open by December 31, 2009. The total investment in Phase I and Phase II is expected
to exceed $90 million with a maximum gross incentive of $12.9 million (estimated $7.4 mil. Net Present
Value).
Phase III will consist of 84,900 SF of retail space and 225 rental residential units and is expected to open by
December 31, 2010. The total investment in Phase I, Phase 11 and Phase III is expected to exceed $125
million with a maximum gross incentive of$18 million (estimated $10.3 mil. Net Present Value).
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Page 2of%
Phase IV will consist of a hotel with at least 140 rooms and will be completed by December 31, 2010. If not
completed by this data' the hotel will not be subject bothe incentive ognaernont, and there will be no impact
on the incentives for other phases. The total investment in Phase |. Phase ||. Phase ||| and Phase |\/ io
expected to exceed $170 million with o maximum gross incentive of $24.4 million (estimated $13.8 mil. Net
Present Value).
In exchange for completion for each phase completed, the Developer will be eligible to receive up to 15
annual economic development grants, equal to 55 percent of incremental nao| and business personal
property taxes paid to the City; and 55 percent of the City's one percent incremental sales tax paid to the
Qtx, and for the last five years, 60 percent of such tax revenues. Failure to meet the deadlines for each
Phase (except Phase IV) will result in the grants being reduced to3O percent of the above-referenced tax
nsVenuaa for previous phases and no incentive for the then current phase. Failure to meet the completion
deadline for Phase | iso condition of default for the overall agreement.
To receive the maximum incentives, the Developer must spend 30 percent ofhard construction costs in
each phase with Fort Worth contractors, and 25 percent of the hard construction costs in each phase with
certified Fort Worth K8/VVBE contractors. In addition, the Developer must spend at least $30,000 on annual
discretionary service and supply contracts with Fort Worth contractors once Phase | is complete with an
additional $15'OOO for Phase |, and Phases || and ||| respectively, and at least $20,000 with certified Fort
Worth K8/VVBE contractors with on additional $10.000 for Phase || and ||| respectively. Phase IV will not be
subject to these provisions.
The Museum Place Development io located in COUNCIL DISTRICT 7.
FISCAL '
The Finance Director certifies that compliance with the terms of this agreement should noou|t in increased
revenue to the City. The amount of the increase ia not quantifiable ot this time.
TO Fund/Account/Centers FROM Fund/Account/Centers
Submifted for City Manager's Office Dale Fiooe|er0514CA
Originating Department Head: Tom Higgins (O1S2)
Additional Information Contact: Jay Chopm (50O4)
Mark Fo|den (0034)
`
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http://www.cfwnet.org/council_packet/Reports/mc_print.asp 1/15/2008