HomeMy WebLinkAboutContract 46133 CUY SECRETAW
CONTRACT NO.
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 municipality organized under the laws of the State of Texas, and
AMERICAN AIRLINES,INC.("Company"),a Delaware corporation.
RECITALS
A. Company is a major commercial airline engaged in the carrying of
passengers and cargo domestically and internationally. Company's corporate headquarters
are located in the City. Company also owns approximately 47 acres of property in the
City that is adjacent to its current Southern Reservations Office at 4700 American
Boulevard and is more specifically described in Exhibit"A", attached hereto and hereby
made a part of this Agreement for all purposes (the "Land"). Company wishes to
expand its operations by constructing and operated a new Integrated Operations Center
(the"Project")and is interested in locating this Project on the Land.
B. At a minimum, the Project is anticipated to involve the expenditure of at
least $55 million in real property improvements to the Land and to result in the
installation of at least $33 million in taxable business personal property on the Land. In
addition, once the Project is completed, Company is expected to provide at least 1,300
jobs on the Land, with a certain number of those jobs held by Fort Worth and Central
City residents. In order to encourage Company to undertake the Project on the Land, the
City has offered Company a twenty(20)year economic development incentive consisting
of(i) a one (1)-year real and personal property tax abatement, which will be governed by
that certain Tax Abatement Agreement between the City and Company dated on or about
the Effective Date of this Agreement, as authorized by the City Council's approval during
its regular meeting on June 10, 2014 of agenda item M&C C-26830 (the "Tax
Abatement Agreement"), and (ii) an economic development program that provides for
the City to pay fourteen (14) annual economic development grants to Company, as
authorized by Chapter 380 of the Texas Local Government Code and as governed by this
Agreement.
C. Under the Tax Abatement Agreement, Company is entitled to receive a tax
abatement in the 2016 tax year of up to eighty-five percent (85%) of the City's ad
M CM-,) valorem taxes on the value of any improvements on the Land(and not on the Land itself)
C--) rn and on the value of any New Taxable Tangible Personal Property located on the Land
M over their values for the 2014 tax year if (i) Company causes to be expended at least
M ® Fifty-five Million Dollars ($55,000,000.00) in Construction Costs for the Project by the
CZ) Completion Date (as defined in the Tax Abatement Agreement); (ii)the Completion Date
® a occurred on or before December 31, 2015; and (iii) New Taxable Tangible Personal
Property having a cost of at least Thirty-three Million Dollars ($33,000,000.00) was in
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Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc. OFFMAL RECORD
CFV SECRETARY
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place on the Land by January 1, 2016, as more specifically outlined in the Tax Abatement
Agreement.
D. The Tax Abatement Agreement serves as the first component of the City's
economic development incentive to Company. Under Section 312.206 of the Code,
execution of the Tax Abatement Agreement between the City and Company will also
make Company eligible to receive a tax abatement for real and personal property in the
Zone from certain taxing jurisdictions other than the City, although Company
understands and agrees that the City cannot and does not guarantee that any of those
other taxing jurisdictions will actually grant Company such a tax abatement. This
Agreement is the second component of the City's economic development incentive to
Company. Under this Agreement, if Company completes the Project in accordance with
the Tax Abatement Agreement, Company will be eligible to receive certain economic
development grants from the City for a period of fourteen (14) years after expiration of
the Tax Abatement Agreement, as more specifically set forth in this Agreement.
E. As recommended by the 2014 Comprehensive Plan, adopted by the City
Council pursuant to Ordinance No. 21164-03-2014, and in accordance with Resolution
No. 3716-03-2009, the City has established an economic development program pursuant
to which the City will, on a case-by-case basis, offer economic incentives authorized by
Chapter 380 of the Texas Local Government Code that include monetary loans and grants
of public money, as well as the provision of personnel and services of the City, to
businesses and entities that the City Council determines will promote state or local
economic development and stimulate business and commercial activity in the City in
return for verifiable commitments from such businesses or entities to cause specific
employment and other public benefits to be made or invested in the City (the "380
Program").
F. 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. In
addition, the City Council has determined that the 380 Program is an appropriate means
to achieve 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 to
the terms and conditions of this Agreement are consistent with the City's economic
development objectives as outlined in the 2014 Comprehensive Plan. This Agreement is
authorized by Chapter 380 of the Texas Local Government Code.
G. The City has determined that the feasibility of the Project is contingent
upon Company's receipt of both the tax abatement under the Tax Abatement Agreement
and the Program Grants, as provided in this Agreement. The City's analysis is
specifically based on financial information provided by Company.
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:
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Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
AGREEMENT
1. INCORPORATION OF RECITALS.
The City Council has found, and the City and Company hereby agree, that the
recitals set forth above are true and correct and form the basis upon which the parties
have entered into this Agreement.
2. DEFINITIONS.
In addition to 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 E.
Affiliate means all entities, incorporated or otherwise, under common control
with, controlled by or controlling Company. For purposes of this definition, "control"
means fifty percent(50%) or more of the ownership determined by either value or vote.
Central City means that area in the corporate limits of the City within Loop 820
(i) consisting of all Community Development Block Grant ("CDBG") eligible census
block groups; (ii) all state-designated enterprise zones; and (iii) all census block groups
that are contiguous by seventy-five percent (75%) or more of their perimeter to CDBG-
eligible block groups or enterprise zones, as well as any CDBG-eligible block in the
corporate limits of the City outside Loop 820, as more specifically depicted in the map of
Exhibit "B", attached hereto and hereby made a part of this Agreement for all purposes.
Central City Employment Commitment has the meaning ascribed to it in
Section 4.1.3.
Central City Employment Percentage has the meaning ascribed to it in Section
5.1.6.
Central City Resident means an individual whose primary residence is at a
location within the Central City.
Completion Date has the meaning ascribed to it in the Tax Abatement
Agreement.
Completion Deadline has the meaning ascribed to it in the Tax Abatement
Agreement.
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Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
Construction Costs has the meaning ascribed to it in the Tax Abatement
Agreement.
Director means the director of the City's Housing and Economic Development
Department.
Effective Date has the meaning ascribed to it in Section 3.
Fort Worth Certified NMBE 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 Central Texas Regional Certification Agency (NCTRCA) 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 Company 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 Company is seeking credit under this Agreement.
Fort Worth Construction Commitment has the meaning ascribed to it in the
Tax Abatement Agreement.
Fort Worth Construction Percentage has the meaning ascribed to it in Section
5.1.2.
Fort Worth Employment Commitment has the meaning ascribed to it in
Section 4.1.2.
Fort Worth Employment Percentage has the meaning ascribed to it in Section
5.1.5.
Fort Worth Resident means an individual whose primary residence is at a
location within the corporate limits of the City.
Fort Worth Supply and Service Percentage has the meaning ascribed to it in
Section 5.1.7.
Fort Worth Supply and Service Spending Commitment has the meaning
ascribed to it in Section 4.2.1.
Full-time Job means a job provided on the Land by Company or an Affiliate to
one (1) individual, whether new or retained, for at least forty (40) hours per week or such
other measurement used to define full-time employment by Company in accordance with
its then-current personnel policies and regulations.
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Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
Land has the meaning ascribed to it in Recital A.
M/WBE Construction Commitment has the meaning ascribed to it in the Tax
Abatement Agreement.
M/WBE Construction Percentage has the meaning ascribed to it in Section
5.1.3.
M/WBE Supply and Service Percentage has the meaning ascribed to it in
Section 5.1.8.
M/WBE Supply and Service Spending Commitment has the meaning ascribed
to it in Section 4.2.2.
New Taxable Tangible Personal Property has the meaning ascribed to it in the
Tax Abatement Agreement.
Overall Employment Commitment has the meaning ascribed to it in Section
4.1.1.
Overall Employment Percentage has the meaning ascribed to it in Section 5.1.4.
Overall Proiect Percentage has the meaning ascribed to it in Section 5.1.1.
Program Grants means the annual economic development grants paid by the
City to Company in accordance with this Agreement and as part of the 380 Program.
Program Source Funds means an amount equal to the City's ad valorem taxes
received by the City during the Twelve-Month Period ending in each Program Year on
the value of any improvements on the Land (but not on the Land itself) and on the value
of New Taxable Tangible Personal Property located on the Land, less Three Thousand
Fifty-Nine and 73/100 ($3,059.73), which is the collective amount of such ad valorem
taxes due to be received by the City from Company for the 2014 tax year on the basis of
the value of any improvements on the Land and on the value of New Taxable Tangible
Personal Property located on the Land.
Program Year means a calendar year in which the City is obligated pursuant to
this Agreement to pay Company a Program Grant, beginning with the 2018 calendar year
(Program Year 1).
Proiect has the meaning ascribed to it in Recital A.
Records has the meaning ascribed to it in Section 4.5.
Supply and Service Expenditures means those local discretionary expenditures
made by Company directly for the operation and maintenance of the Land and any
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Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
improvements thereon, excluding any electricity, gas, water and other utility service
costs.
Tax Abatement Agreement has the meaning ascribed to it in Recital B.
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.
This Agreement shall take effect on the date as of which both the City and
Company have executed this Agreement (the "Effective Date") and, unless terminated
earlier in accordance with its terms and conditions, shall expire on the date as of which
the City has paid the fourteenth (14th) annual Program Grant pursuant to and in
accordance with this Agreement(the "Term").
4. COMPANY'S OBLIGATIONS AND COMMITMENTS.
In accordance with the terms and conditions of the Tax Abatement Agreement,
Company has agreed (i) to expend at least Fifty-five Million Dollars ($55,000,000.00) in
Construction Costs for the Project by the Completion Date; (ii) that the Completion Date
must occur on or before the Completion Deadline; and (iii) that New Taxable Tangible
Personal Property having a value of at least Thirty-three Million Dollars
($33,000,000.00) must be in place on the Land by January 1, 2016, as determined solely
by the appraisal district having jurisdiction of the Land at that time and reflected in the
certified appraisal roll received by the City from that appraisal district for the 2016 tax
year. Company has also committed to expend a certain amount or percentage of
Construction Costs with Fort Worth Companies and Fort Worth Certified M/WBE
Companies, as set forth in the Tax Abatement Agreement. In addition to the requirements
of the Tax Abatement Agreement, Company hereby agrees to the following annual
commitments for purposes of this Agreement:
4.1. Employment Commitments.
4.1.1. Overall Employment.
On or before the Completion Deadline, and continuing throughout
the Term of this Agreement, Company must provide and fill at least 1,300
Full-time Jobs on the Land (the "Overall Employment Commitment").
Determination of compliance with the Overall Employment Commitment
will be based on Company's employment data as of December 1 (or such
other date that is mutually acceptable to both the City and Company) of
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Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
each year, which will be verified on the basis of the employment report
submitted by Company to the City in accordance with Section 4.3.1.
4.1.2. Employment Commitment for Fort Worth Residents.
On or before the Completion Deadline, and continuing throughout
the Term of this Agreement, Company must provide and fill at least the
greater of(i) 195 Full-time Jobs on the Land or (ii) fifteen percent (15%)
of all Full-time Jobs provided on the Land, regardless of the total number
of such Full-time Jobs, with Fort Worth Residents (the "Fort Worth
Employment Commitment"). Determination of compliance with the
Fort Worth Employment Commitment will be based on Company's
employment data as of December 1 (or such other date that is mutually
acceptable to both the City and Company) of each year, which will be
verified on the basis of the employment report submitted by Company to
the City in accordance with Section 4.3.1. Full-time Jobs held by Fort
Worth Residents will also count as Full-time Jobs for purposes of
measuring the Overall Employment Commitment outlined in Section
4.1.1.
4.1.3. Employment Commitment for Central City Residents.
On or before the Completion Deadline, and continuing throughout
the Term of this Agreement, Company must provide and fill at least the
greater of(i) 65 Full-time Jobs on the Land or (ii) five percent(5%) of all
Full-time Jobs provided on the Land, regardless of the total number of
such Full-time Jobs, with Central City Residents (the "Central City
Employment Commitment"). Determination of compliance with the
Central City Employment Commitment will be based on Company's
employment data as of December 1 (or such other date that is mutually
acceptable to both the City and Company), which will be verified on the
basis of the employment report submitted by Company to the City in
accordance with Section 4.3.1. Full-time Jobs held by Central City
Residents will also count as Full-time Jobs for purposes of measuring the
Fort Worth Employment Commitment outlined in Section 4.1.2 and the
Overall Employment Commitment outlined in Section 4.1.1.
4.2. Supply and Service Spending Commitments.
4.2.1. For Fort Worth Companies.
On or before the Completion Deadline, and continuing throughout
the Term of this Agreement, Company annually must make at least the
greater of (i) One Hundred Fifty Thousand Dollars ($150,000.00) in
Supply and Service Expenditures or (ii) thirty percent (30%) of all Supply
and Service Expenditures made in the calendar year in question, regardless
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between City of Fort Worth and American Airlines,Inc.
of the total amount of such Supply and Service Expenditures, with Fort
Worth Companies (the "Fort Worth Supply and Service Spending
Commitment").
4.2.2. For Fort Worth Certified M/WBE Companies.
On or before the Completion Deadline, and continuing throughout
the Term of this Agreement Company annually must make at least the
greater of (i) One Hundred Twenty-five Thousand Dollars ($125,000.00)
in Supply and Service Expenditures or (ii) twenty-five percent (25%) of
all Supply and Service Expenditures made in the calendar year in question,
regardless of the total amount of such Supply and Service Expenditures,
with Fort Worth Certified M/WBE Companies (the "M/WBE Supply and
Service Spending Commitment"). Dollars spent with Fort Worth
Certified M/WBE Companies will also count as dollars spent with Fort
Worth Companies for purposes of measuring the Fort Worth Supply and
Service Spending Commitment outlined in Section 4.2.1.
4.3. Reports and Filings.
4.3.1. Employment Report.
On or before February 1, 2018 and February 1 of each year
thereafter, in order for the City to assess the degree to which the Overall
Employment Commitment, the Fort Worth Employment Commitment and
the Central City Employment Commitment were met in the previous
calendar year, Company must provide the Director with a report in a form
reasonably acceptable to the Director that sets forth the total number of
individuals, the total number of Fort Worth Residents, and the total
number of Central City Residents who held Full-time Jobs provided by
Company on the Land as of December 1 (or such other date that is
mutually acceptable to both the City and Company) of the previous
calendar year,together with reasonable supporting documentation.
4.3.2. Supply and Service Spending Report.
On or before February 1, 2018 and February 1 of each year
thereafter, in order for the City to assess the degree to which Company
met the Fort Worth Supply and Service Spending Commitment and the
M/WBE Supply and Service Spending Commitment for the previous
calendar year, Company must provide the Director with a report in a form
reasonably acceptable to the Director that sets forth the aggregate Supply
and Service Expenditures made during the previous calendar year with
Fort Worth Companies and with Fort Worth Certified M/WBE
Companies,together with reasonable supporting documentation.
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Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
4.3.3. General.
Company must supply any additional information reasonably
requested by the City that is pertinent to the City's evaluation of
compliance with each of the terms and conditions of this Agreement.
4.4. Inspections.
At any time during Company's normal business hours throughout the
Term and following reasonable notice to Company, the City will have the right to
inspect and evaluate the Land, and any improvements thereon, and Company will
provide full access to the same, in order for the City to monitor compliance with
the terms and conditions of this Agreement. Company will cooperate fully with
the City during any such inspection and evaluation. Notwithstanding the
foregoing, Company shall have the right to require that any representative of the
City be escorted by a Company representative or security personnel during any
such inspection and evaluation.
4.5. Audits.
The City will have the right throughout the Term to audit the financial and
business records and any other documents of Company that relate to the Project or
that are otherwise necessary to evaluate Company's compliance with this
Agreement or with the commitments set forth in this Agreement, including, but
not limited to construction documents and invoices (collectively "Records").
Company must make all Records available to the City on the Land 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.
4.6. Use of Land.
Throughout the Term of this Agreement, the Land must be used as an
Integrated Operations Center for Company and otherwise in a manner that is
consistent with the general purposes of encouraging development or
redevelopment of the Zone.
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Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
5. CITY OBLIGATIONS.
5.1. Program Grants.
Subject to the terms and conditions of this Agreement, Company will be
entitled to receive from the City fourteen (14) annual Program Grants. The
amount of each Program Grant will equal a percentage of the Program Source
Funds, which percentage will equal the sum of the Overall Project Percentage,
Fort Worth Construction Percentage, the M/WBE Construction Percentage, the
Overall Employment Percentage, the Fort Worth Employment Percentage, the
Central City Employment Percentage, the Fort Worth Supply and Service
Percentage, and the M/WBE Supply and Service Percentage, as defined in
Sections 5.1.1, 5.1.2, 5.1.3, 5.1.4, 5.1.5, 5.1.6, 5.1.7, and 5.1.8, respectively, as
follows:
5.1.1. Completion of Proiect(30%).
If the City determined under the Tax Abatement Agreement that(i)
Company expended at least Fifty-five Million Dollars ($55,000,000.00) in
Construction Costs for the Project by the Completion Date, and the
Completion Date occurred on or before the Completion Deadline, as
confirmed by the City in the Certificate of Completion issued by the
Director in accordance with Section 5.1 of the Tax Abatement Agreement,
and (ii)New Taxable Tangible Personal Property having a value of at least
Thirty-three Million Dollars ($33,000,000.00)was in place on the Land by
January 1, 2016, as determined solely by the appraisal district having
jurisdiction over the Land at that time and reflected in the certified
appraisal roll received by the City from that appraisal district for the 2016
tax year, each annual Program Grant will include thirty percent (30%) of
the Program Source Funds (the "Overall Project Percentage").
5.1.2. Fort Worth Construction Cost Spending (Up to 10%).
Each annual Program Grant will include a percentage of the
Program Source Funds that are calculated on the basis of the extent to
which Company met the Fort Worth Construction Commitment under the
Tax Abatement Agreement (the "Fort Worth Construction
Percentage"). The Fort Worth Construction Percentage under this
Agreement will be equal to the Fort Worth Construction Percentage
established under the Tax Abatement Agreement.
5.1.3. Fort Worth M/WBE Construction Cost Spending(Up to 10%).
Each annual Program Grant will include a percentage of the
Program Source Funds that are calculated on the basis of the extent to
which Company met the M/WBE Construction Commitment under the
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Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
Tax Abatement Agreement (the "M/WBE Construction Percentage").
The M/WBE Construction Percentage under this Agreement will be equal
to the M/WBE Construction Percentage established under the Tax
Abatement Agreement.
5.1.4. Overall Employment(Up to 15%).
A percentage of each annual Program Grant will be based on the
extent to which the Overall Employment Commitment, as outlined in
Section 4.1.1, was met in the previous calendar year (the "Overall
Employment Percentage"). The Overall Employment Percentage will
equal the product of fifteen percent(15%) multiplied by the percentage by
which the Overall Employment Commitment was met in the previous
calendar year, which will be calculated by dividing the actual number of
Full-time Jobs provided and filled on the Land as of December 1 (or such
other date that is mutually acceptable to both the City and Company) in
the previous calendar year by 1,300,which is the number of Full-time Jobs
constituting the Overall Employment Commitment. For example, if only
1,040 Full-time Jobs were provided on the Land in a given year, the
Overall Employment Percentage for the Program Grant payable in the
following Program Year would be 12% instead of 15% (or .15 x
[1,040/1,300]), or .15 x .80, or .12. If the Overall Employment
Commitment is met or exceeded in a given calendar year, the Overall
Employment Percentage for the Program Grant payable in the following
Program Year will be fifteen percent(15%).
5.1.5. Fort Worth Employment(Up to 10%).
A percentage of each annual Program Grant will be based on the
extent to which the Fort Worth Employment Commitment, as outlined in
Section 4.1.2, was met in the previous calendar year (the "Fort Worth
Employment Percentage"). The Fort Worth Employment Percentage
will equal the product of ten percent (10%) multiplied by the percentage
by which the Fort Worth Employment Commitment was met, which will
be calculated by dividing the actual number of Full-time Jobs provided on
the Land as of December 1 (or such other date that is mutually acceptable
to both the City and Company) of the previous calendar year that were
filled with Fort Worth Residents by the number of Full-time Jobs
comprising the Fort Worth Employment Commitment for that year, as
determined in accordance with Section 4.1.2. For example, if Company
provided 1,500 Full-time Jobs on the Land in the previous calendar year,
the Fort Worth Employment Commitment for that year would be 225 Full-
time Jobs (15% of 1,500). In this scenario, if only 195 Full-time Jobs
provided on the Land in the previous calendar year were filled with Fort
Worth Residents, the Fort Worth Employment Percentage for the Program
Grant payable in the following Program Year would be 8.67% instead of
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between City of Fort Worth and American Airlines,Inc.
10% (or .10 x [195/225], or .10 x .866, or .086). If the Fort Worth
Employment Commitment is met or exceeded in a given calendar year,the
Fort Worth Employment Percentage for the Program Grant payable in the
following Program Year will be ten percent(10%).
5.1.6. Central City Employment(Up to 5%).
A percentage of each annual Program Grant will be based on the
extent to which the Central City Employment Commitment, as outlined in
Section 4.1.3, was met in the previous calendar year (the "Central City
Employment Percentage"). The Central City Employment Percentage
will equal the product of five percent(5%)multiplied by the percentage by
which the Central City Employment Commitment was met in the previous
calendar year, which will be calculated by dividing the actual number of
Full-time Jobs provided on the Land as of December 1 (or such other date
that is mutually acceptable to both the City and Company) of previous
calendar year that were filled with Central City Residents by the number
of Full-time Jobs comprising the Central City Employment Commitment
for that year, as determined in accordance with Section 4.1.3. If the
Central City Employment Commitment is met or exceeded in a given
calendar year, the Central City Employment Percentage for the Program
Grant payable in the following Program Year will be five percent(5%).
5.1.7. Fort Worth Supply and Service Spending(Up to 2.5%).
A percentage of each annual Program Grant will be based on the
extent to which the Fort Worth Supply and Service Spending
Commitment, as outlined in Section 4.2.1, was met in the previous
calendar year (the "Fort Worth Supply and Service Percentage"). The
Fort Worth Supply and Service Percentage will equal the product of two
and one-half percent (2.5%) multiplied by the percentage by which the
Fort Worth Supply and Service Spending Commitment was met in the
previous calendar year,which will be calculated by dividing the amount of
Supply and Service Expenditures made with Fort Worth Companies in that
year by One Hundred Fifty Thousand Dollars ($150,000.00), which is the
number of dollars comprising the Fort Worth Supply and Service
Spending Commitment. For example, if Company made only
$120,000.00 in Supply and Service Expenditures in a given calendar year,
the Fort Worth Supply and Service Percentage for the Program Grant
payable in the following calendar year would be 2% instead of 2.5% (or
.25 x [$120,000/$150,000], or .025 x .80, or .02). If the Fort Worth
Supply and Service Spending Commitment is met or exceeded in a given
calendar year, the Fort Worth Supply and Service Percentage for the
Program Grant payable in the following Program Year will be two and
one-half percent(2.5%).
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Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc,
5.1.8. M/WBE Supply and Service Spending (Up to 2.5%).
A percentage of each annual Program Grant will be based on the
extent to which the M/WBE Supply and Service Spending Commitment,
as outlined in Section 4.6.2, was met in the previous calendar year (the
"M/WBE Supply and Service Percentage"). The M/WBE Supply and
Service Percentage will equal the product of two and one-half percent
(2.5%) 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 amount of Supply and Service
Expenditures made with Fort Worth Certified M/WBE Companies in that
year by One Hundred Twenty-five Thousand Dollars ($125,000.00),
which is the number of dollars comprising the M/WBE Supply and
Service Spending Commitment. If the M/WBE Supply and Service
Spending Commitment is met or exceeded in a given calendar year, the
M/WBE Supply and Service Percentage for the Program Grant payable in
the following Program Year will be two and one-half percent(2.5%).
5.1.9. 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 Company failed to meet the Central City Employment
Commitment by 10 Full-time Jobs, but exceeded the Fort Worth
Employment Commitment by 10 Full-time Jobs, the Central City
Employment Percentage for the Program Grant payable in the following
Program Year would still be reduced in accordance with Section 5.1.6 on
account of Company's failure to meet the Central City Employment
Commitment.
5.2. Deadline for Payments and Source of Funds.
The first Program Grant payable hereunder (in other words, the Program
Grant payable for Program Year 1) will be paid by the City on or before June 1,
2018, and each subsequent Program Grant payment will be paid on or before June
1 of the Program Year in which such payment is due. A Program Grant will not
be paid in 2017 because the Program Source Funds that would serve as the basis
for a Program Grant in that year will be affected by the tax abatement provided to
Company under the Tax Abatement Agreement for the 2016 tax year. It is
understood and agreed that all Program Grants paid pursuant to this Agreement
will come from currently available general revenues of the City and not directly
from the Program Source Funds themselves. Company 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
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between City of Fort Worth and American Airlines,Inc.
business as a home rule municipality and will not serve as the basis for calculating
any future Program Grant payment or other obligation to Company.
6. DEFAULT, TERMINATION AND FAILURE BY COMPANY TO MEET
VARIOUS DEADLINES AND COMMITMENTS.
6.1. Termination of Tax Abatement Agreement.
If the Tax Abatement Agreement is lawfully terminated, this Agreement
will automatically terminate contemporaneously upon the effectiveness of
termination of the Tax Abatement Agreement.
6.2. Failure to Submit Reports.
If Company fails to submit any report or information to the City pursuant
to and in accordance with the provisions of Section 4.3, the City shall notify
Company in writing. Company shall have thirty (30) calendar days from the date
of such notice to provide the City with any such report or information in full. If
the City has not received the report or information in full within such thirty (30)
calendar days, the City will have the right to terminate this Agreement by
providing written notice to Company without further obligation to Company
hereunder.
6.3. Failure to Pay City Taxes.
An event of default shall occur under this Agreement if any City taxes
owed by Company or an Affiliate or arising on account of Company's or an
Affiliate's operations on the Land become delinquent and Company 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
Company in writing and Company 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 Company and shall have all other rights and remedies that may be
available to it under the law or in equity.
6.4. Violations of City Code, State or Federal Law.
An event of default shall occur under this Agreement if any written
citation is issued to Company or an Affiliate due to the occurrence of a violation
of a material provision of the City Code on the Land 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 Land; the environmental condition of other land or
waters which is attributable to operations on the Land; or to matters concerning
Page 14
Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
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 Company or an Affiliate, or any successor in interest thereto; any
third party with access to the Land pursuant to the express or implied permission
of Company or an Affiliate, or any successor in interest thereto; or the City (on
account of the Project or the act or omission of any party other than the City on or
after the effective date of this Agreement) is declared to be in violation of any
material state or federal law, rule or regulation on account of the Land,
improvements on the Land or any operations thereon (including, without
limitation, any violations related to the environmental condition of the Land; the
environmental condition of other land or waters which is attributable to operations
on the Land; or to matters concerning the public health, safety or welfare). Upon
the occurrence of such default, the City shall notify Company in writing, and
Company shall have (i) thirty (30) calendar days to cure such default or (ii) if
Company 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 Company and shall have
all other rights and remedies that may be available it to under the law or in equity.
6.5. Knowing Employment of Undocumented Workers.
Company acknowledges that the City is required to comply with Chapter
2264 of the Texas Government Code, enacted by House Bill 1196 (80th Texas
Legislature), which relates to restrictions on the use of certain public subsidies.
Company hereby certifies that Company, and any branches, divisions, or
departments of Company, does not and will not knowingly employ an
undocumented worker, as that term is defined by Section 2264.001(4) of the
Texas Government Code. In the event that Company, or any branch, division, or
department of Company, is convicted of a violation under 8 U.S.C. Section
1324a(l) (relating to federal criminal penalties and injunctions for a pattern or
practice of employing unauthorized aliens), subject to any appellate rights that
may lawfully be available to and exercised by Company, Company shall repay,
within one hundred twenty (120) calendar days following receipt of written
demand from the City, the aggregate amount of Program Grants received by
Company hereunder, if any,plus Simple Interest at a rate of four percent (4%)
per annum.
For the purposes of this Section 6.5, "Simple Interest" is defined as a rate
of interest applied only to an original value, in this case the aggregate amount of
Program Grants paid pursuant to this Agreement. This rate of interest can be
applied each year, but will only apply to the amount of Program Grants received
hereunder and is not applied to interest calculated. For example, if the aggregate
Page 15
Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
amount of Program Grants received by Company hereunder is $10,000 and it is
required to be paid back with four percent (4%) interest five years later, the total
amount would be $10,000+ [5 x($10,000 x 0.04)],which is $12,000. This Section
6.5 does not apply to convictions of any Affiliate of Company, any franchisees of
Company, or any person or entity with whom Company contracts. Notwithstanding
anything to the contrary herein, this Section 6.5 shall survive the expiration or
termination of this Agreement.
6.6. Sale or Conveyance of Land to a Third Party.
If Company sells or otherwise conveys record ownership of the Land to
any other person or entity other than an Affiliate, and this Agreement has not been
assigned to that person or entity in accordance with Section 10 of this Agreement,
this Agreement will terminate on the effective date of the sale or conveyance.
6.7. General Breach.
Unless stated elsewhere in this Agreement, Company shall be in default
under this Agreement if Company breaches any term or condition of this
Agreement. In the event that such breach remains uncured after thirty (30)
calendar days following receipt of written notice from the City referencing this
Agreement (or, if Company has diligently and continuously attempted to cure
following receipt of such written notice but reasonably requires more than thirty
(30) calendar days to cure, then such additional amount of time as is reasonably
necessary to effect cure, as determined by both parties mutually and in good
faith), the City shall have the right to terminate this Agreement immediately by
providing written notice to Company.
6.8. Failure to Meet Employment or Supply and Service Spending
Commitments.
A failure in any given calendar year to meet the Overall Employment
Commitment, the Fort Worth Employment Commitment, the Central City
Employment Commitment, the Fort Worth Supply and Service Spending
Commitment, or the M/WBE Supply and Service Spending Commitment shall not
constitute a default hereunder or provide the City with the right to terminate this
Agreement, but, rather, will only cause the percentage of Program Source Funds
applicable to the Program Grant payable in the following Program Year to be
reduced in accordance with this Agreement.
7. INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Company will operate as an
independent contractor in each and every respect hereunder and not as an agent,
representative or employee of the City. Company shall have the exclusive right to
Page 16
Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
control all details and day-to-day operations relative to the Land and any improvements
thereon and shall be solely responsible for the acts and omissions of its officers, agents,
servants, employees, contractors, subcontractors, licensees and invitees. Company
acknowledges that the doctrine of respondeat superior will not apply as between the City
and Company, its officers, agents, servants, employees, contractors, subcontractors,
licensees, and invitees. Company further agrees that nothing in this Agreement will be
construed as the creation of a partnership or joint enterprise between the City and
Company.
8. INDEMNIFICATION.
COMPANY, AT NO COST TO THE CITY, AGREES TO DEFEND,
INDEMNIFY AND HOLD THE CITY, ITS OFFICERS,AGENTS SERVANTS AND
EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS,
ACTIONS, COSTS AND EXPENSES OF ANY KIND, INCLUDING, BUT NOT
LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING
ALLEGED DAMAGE OR LOSS TO COMPANY'S BUSINESS AND ANY
RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING
DEATH, THAT MAY RELATE TO, ARISE OUT OF OR BE OCCASIONED BY(i)
COMPANY'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS
AGREEMENT OR (ii)ANY NEGLIGENT ACT OR OMISSION OR INTENTIONAL
MISCONDUCT OF COMPANY, ITS OFFICERS, AGENTS, ASSOCIATES,
EMPLOYEES, CONTRACTORS (OTHER THAN THE CIT19 OR
SUBCONTRACTORS, RELATED TO THE PROJECT, THE LAND AND ANY
OPERATIONS AND ACTIVITIES THEREON, OR THE PERFORMANCE OF
THIS AGREEMENT OTHERWISE.
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: Company:
City of Fort Worth American Airlines,Inc.
Attn: City Manager Attn: Suzanne Turner
1000 Throckmorton 4333 Amon Carter Blvd
Fort Worth, TX 76102 Fort Worth, TX 76155
Page 17
Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
with copies to: American Airlines,Inc.
Attn:Dave Lewis
the City Attorney and 4333 Amon Carter Blvd
Housing/Economic Development Dept. Fort Worth, TX 76155
Director at the same address
10. ASSIGNMENT AND SUCCESSORS.
Company may not assign, transfer or otherwise convey any of its rights or
obligations under this Agreement to any other person or entity without the prior consent of
the City Council, which consent shall not be unreasonably withheld, conditioned on (i)the
assignee or successor will own the Land, all improvements located on the Land and all
New Taxable Tangible Personal Property; (ii) the prior approval of the assignee or
successor and a finding by the City Council that the proposed assignee or successor is
financially capable of meeting the terms and conditions of this Agreement; and (iii) prior
execution by the proposed assignee or successor of a written agreement with the City under
which the proposed assignee or successor agrees to assume and be bound by all covenants
and obligations of Company under this Agreement. Any lawful assignee or successor in
interest of Company of all rights under this Agreement shall be deemed"Company" for all
purposes under this Agreement. Notwithstanding the above, the City hereby agrees and
consents to any merger, stock transfer, asset transfer, or other internal corporate
restructuring of Company (including, without limitation, that involving American Airlines,
Inc. and American Airlines Group, Inc. ("AAL") and/or any other wholly-owned
subsidiary or subsidiaries of AAL or similar internal restructuring within Company's
organization) (an "Internal Restructuring") and any related assignment or transfer of this
Agreement that may occur or may be deemed to occur as a result of any such Internal
Restructuring, and the City waives any right it may have to terminate, amend or modify this
Agreement and any claim of breach or default hereunder in each case arising directly in
connection with or as a result of any such Internal Restructurings.
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 its governmental powers or immunities.
Page 18
Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
13. SEVERABILITY.
If any provision of this Agreement is held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not in any way
be affected or impaired.
14. 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 parry's right to insist upon appropriate performance or to assert any such right on
any future occasion.
15. 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.
16. NO THIRD PARTY RIGHTS.
The provisions and conditions of this Agreement are solely for the benefit of the
City and Company, and any lawful assign or successor of Company, and are not intended
to create any rights, contractual or otherwise, to any other person or entity.
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.
In the event of any conflict between the body of this Agreement and the Application, the
body of this Agreement shall control.
18. CAPTIONS.
Captions and headings used in this Agreement are for reference purposes only and
shall not be deemed a part of this Agreement.
Page 19
Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
i
19. ENTIRETY OF AGREEMENT.
This Agreement, including any exhibits attached hereto and any documents
incorporated herein by reference, contains the entire understanding and agreement
between the City and Company, and any lawful assign and successor of Company, as to
the matters contained herein. Any prior or contemporaneous oral or written agreement is
hereby declared null and void to the extent in conflict with any provision of this
Agreement. Notwithstanding anything to the contrary herein, this Agreement 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.
CP
EXECUTED as of the last date indicated below: i.-g 00 °o° t7
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CITY OF FORT WORTH: ATTEST: `b°°o°°°o°�°°�° .
S�
By:
Fernando Costa Name: o 5 Cty�C�j
Assistant City Manager Title: G s-C Cwt 11
Date: z4z!tz j` Date:
APPROVED AS TO FORM AND LEGALITY:
By:
Peter Vaky
Deputy City Attorney
M&C: C-26830 06-10-14
Page 20 0'Farr C L Wr-, 0 R D
Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc. r RN
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AMERICAN INES,INC.,
a Delaware rpo ation:
Name: p i chael KA iAexva�
Title:�/p, l OVerrin cry+ + tAvpoY+ A-Kalirs
Date: d
Page 21
Economic Development Program Agreement
between City of Fort Worth and American Airlines,Inc.
I
EXHIBITS
"A"—Description and Map Depicting the Land
"B"—Map of Central City
Economic Development Program Agreement between
City of Fort Worth and American Airlines,Inc.
EXHIBIT "A"
PROPERTY DESCRIPTION
DESCRIPTION, of a 6.086 acre tract of land described in situated in the A. J. Huitt Survey, Abstract No. 709,
Tarrant County, Texas and being a part of Lot 1, Block 1, American Airlines Addition, an addition to the City of
Fort Worth, Texas according to the plat recorded in Volume 388-45, Page 97 of the Plat Records of Tarrant
County, Texas; said tract being part of that tract of land described in Warranty Deed to American Airlines, Inc.
recorded in Volume 4440, Page 599 of the Deed Records of Tarrant County, Texas; said 6.086 acre tract
being more particularly described as follows (bearing system based on a bearing of South 89 degrees, 57
minutes East for the south right-of-way line of State Highway No. 183 per deed recorded in Volume 5474,
Page 96 of said Deed Records):
COMMENCING, at a TXDOT monument found in the south right-of-way line of State Highway No. 183 (a
variable width right-of-way); said point being South 89 degrees, 57 minutes, 00 seconds East, a distance of
219.10 feet from the north end of a right-of-way corner clip at the intersection of the said south line of State
Highway No. 183 and the east right-of-way line of American Boulevard (a variable width right-of-way); said
point also being the beginning of a curve to the right;
THENCE, in a southeasterly direction, along the said south line of State Highway No. 183 and along
said curve to the right, having a central angle of 06 degrees, 30 minutes, 12 seconds, a radius of
2,844.79 feet, a chord bearing and distance of South 86 degrees, 41 minutes, 54 seconds East,
322.73 feet, an arc distance of 322.90 feet to a point;
THENCE, South 06 degrees, 33 minutes, 12 seconds West, departing the said south line of State
Highway No. 183, a distance of 225.99 feet to the POINT OF BEGINNING;
THENCE, South 87 degrees, 59 minutes, 54 seconds East, a distance of 253.48 feet to a point for corner;
THENCE, South 33 degrees, 55 minutes, 34 seconds East, a distance of 128.23 feet to a point for corner;
THENCE, South 12 degrees, 06 minutes, 05 seconds East, a distance of 192.79 feet to a point for corner;
THENCE, South 01 degrees, 27 minutes, 33 seconds West, a distance of 133.92 feet to a point for corner;
THENCE, South 88 degrees, 35 minutes, 35 seconds East, a distance of 50.17 feet to a point for corner;
THENCE, South 00 degrees, 22 minutes, 01 seconds West, a distance of 19.62 feet to a point for corner;
THENCE, North 88 degrees, 35 minutes, 51 seconds West, a distance of 48.81 feet to a point for corner;
THENCE, South 10 degrees, 29 minutes, 00 seconds West, a distance of 122.91 feet to a point for corner;
THENCE, South 20 degrees, 03 minutes, 49 seconds West, a distance of 109.50 feet to a point for corner;
THENCE, North 87 degrees, 59 minutes, 54 seconds West, a distance of 404.23 feet to a point for corner;
THENCE, North 01 degrees, 07 minutes, 30 seconds East, a distance of 200.63 feet to a point for corner;
THENCE, North 33 degrees, 30 minutes, 39 seconds East, a distance of 54.53 feet to a point for corner;
THENCE, North 00 degrees, 56 minutes, 44 seconds East, a distance of 103.75 feet to a point for corner;
THENCE, North 33 degrees, 04 minutes, 21 seconds East, a distance of 60.72 feet to a point for corner;
THENCE, North 00 degrees, 57 minutes, 56 seconds East, a distance of 114.49 feet to a point for corner;
Page 1 of 2
THENCE, North 33 degrees, 33 minutes, 15 seconds East, a distance of 50.92 feet to a point for corner;
THENCE, North 00 degrees, 56 minutes, 44 seconds East, a distance of 109.32 feet to the POINT OF
BEGINNING;
CONTAINING, 265,084 square feet or 6.086 acres of land, more or less.
At the public hearing, interested persons will be entitled to speak about or present evidence for or against
designation of such property as a tax abatement reinvestment zone. Following closure of the public hearing,
the City Council will consider the adoption of an ordinance that designates the above-described property as
Tax Abatement Reinvestment Zone Number Eighty-Nine, City of Fort Worth, Texas.
For additional information, contact the City's Housing & Economic Development Department by telephone at
817-212-2663 or in writing at 1000 Throckmorton Street, Fort Worth, Texas 76102.
Page 2 of 2
FORT WORTH American Airlines
Adjacent to 4700 American Blvd
Fort Worth, Texas 76155
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Copyright 2014 City of Fort Worth.Unauthorized reproduction is a violation of applicable laws.This product is for informational purposes and may not have been prepared
for or be suitable for legal,engineering,or surveying purposes.It does not represent an on-the-ground survey and represents only the approximate relative location of
property boundaries.The City of Fort Worth assumes no responsibility for the accuracy of said data. n
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M&C Review Page 1 of 3
Official site of the City of Fork Worth,Texas
I I FORT���ORTIi
COUNCIL ACTION: Approved on 6110/2014
DATE: 6/10/2014 REFERENCE NO.: C-26830 LOG NAME: 17TAEDPAAA
CODE: C TYPE: NON-CONSENT PUBLIC NO
HEARING:
SUBJECT: Authorize Execution of Tax Abatement Agreement and Economic Development Program
Agreement with American Airlines for the Construction of an Integrated Operations Center
Adjacent to its Southern Reservations Office at 4700 American Boulevard (COUNCIL
DISTRICT 5)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the execution of a one year Tax Abatement Agreement and a fourteen year Economic
Development Program Agreement with American Airlines in return for the investment amount of
$88,000,000.00 in real and business personal property in connection with the construction of an
Integrated Operations Center adjacent to its Southern Reservations Office at 4700 American
Boulevard; and
2. Authorize the waiver of certain related development fees.
DISCUSSION:
The Housing and Economic Development Department is proposing a 15-year economic development
program with American Airlines (Company) for the construction of an Integrated Operations Center
adjacent to its Southern Reservations Office at 4700 American Boulevard.
Project:
The Company is a commercial airline engaged in carrying passengers and cargo domestically and
internationally. The Company owns or is under contract to purchase property located adjacent to the
Southern Reservations Office at 4700 American Boulevard. The Company will redevelop and use the
property for the location of its Integrated Operations Center in return for the economic development
incentives offered by the City. The proposed project is estimated to have a construction cost of
$55,000,000.00 and the Company will invest a minimum of $33,000,000.00 in non-inventory, non-
supply personal property improvements by December 31, 2015. Personal property value will be
determined solely by the appraisal district having jurisdiction over the property. Failure to meet the
real property investment is a condition of default and will result in immediate termination of the
Agreement.
Tax Abatement Agreement and Economic Development Program Agreement:
The Housing and Economic Development Department is proposing a one year Tax Abatement
Agreement with the Company that could potentially abate up to 85 percent of the City's taxes on the
incremental value of real and personal property at the site. This abatement will be for one year
only. Execution of the Tax Abatement Agreement by the City will allow other eligible taxing -
jurisdictions also to grant abatements of real and personal property taxes assessed by those
jurisdictions. Under state law, an eligible taxing jurisdiction other than a municipality may not grant tax
abatement on property within a municipality unless the municipality has also granted tax abatement
for the same property.
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=19889&councildate=6/10/2014 06/11/2014
M&C Review Page 2 of 3
The Tax Abatement Agreement will compliment a 14 year Economic Development Program
Agreement, as authorized by Chapter 380 of the Texas Local Government Code, pursuant to which
the City will make annual economic development grants in amounts not to exceed 85 percent of the
City's tax receipts on the incremental value of real and personal property at the site.
The Tax Abatement Agreement and the Economic Development Program Agreement will be
structured as follows:
Utilization of Fort Worth Companies and Fort Worth Certified M/WBE Businesses (Real
Property Improvements):
The Company is required to spend the greater of$13,750,000.00 or 25 percent of construction costs
with contractors that are Fort Worth companies. The Company is also required to spend the greater
of $13,750,000.00 or 25 percent of construction costs with contractors that are Fort Worth Certified
Minority/Women-Owned Business Enterprise (M/WBE) companies (with the understanding that dollars
spent with Fort Worth Certified M/WBE companies will also count as dollars spent with Fort Worth
companies).
Employment Commitments:
The Company will employ a minimum of 1,300 Full-Time Employees (FTEs) on the property by
December 31, 2015. The Company will fill the greater of 15 percent of all jobs or 195 with Fort Worth
residents and the greater of 5 percent of all jobs or 65 with Fort Worth Central City residents.
Utilization of Fort Worth Companies and Fort Worth Certified M/WBE Businesses (Supply &
Services):
The Company will spend the greater of 30 percent or $150,000.00 of annual discretionary supply and
service expenditures with contractors that are Fort Worth contractors. This amount applies to all years
in which the City participates in the project. The Company will spend the greater of 25 percent or
$125,000.00 of annual discretionary service and supply expenditures with contractors that are Fort
Worth Certified M/WBE contractors (with the understanding that dollars spent with Fort Worth Certified
M/WBE companies will also count as dollars spent with Fort Worth companies). This amount applies
to all years in which the City participates in the project.
Supply and Service Expenditures means all expenditures by the Company expended directly for the
operation and maintenance of the development excluding amounts paid for electric, gas, water and
any other utility services.
City Commitments:
The tax abatement and all grant payments are based on and shall not exceed 85 percent of the
incremental increase in value of real property improvements (above a base year value) and business
personal property at the new facility calculated in accordance with achievement of the commitments
and goals set forth in the following chart:
Company Commitment Potential
Abatement
Real and Personal Property Investment 30 Percent
Real Property Improvements with Fort Worth Contractors 10 Percent
Real Property Improvements with Fort Worth M/WBE Contractors 10 Percent
Overall Employment 15 Percent
Employment of Fort Worth Residents 10 Percent
Employment of Fort Worth Central City Residents 5 Percent
Utilization of Fort Worth Companies for Supplies and Services 2.5 Percent
Utilization of Fort Worth M/WBE Companies for Supplies and 2.5 Percent
Services
TOTAL 85 Percent
Except for cases of default, failure to meet a commitment will result in a reduction of the corresponding
component of the abatement and grants for that year proportional to the amount the commitment was
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M&C Review Page 3 of 3
not met or for the duration of the Agreement term in the case of construction commitments.
Fee Waivers:
As part of this Economic Development Program and consistent with the public purposes of assisting in
the development and diversification of the economy and the elimination of unemployment consistent
with Article 3, Section 52-a of the Texas Constitution, the City will waive the following fees related to the
Required Improvements that would otherwise be charged by the City at any time prior to the Completion
Deadline: (i) all building permit, plan review, inspection and re-inspection fees; (ii) all zoning fees; (iii) all
temporary encroachment fees; (iv) all platting fees; and (v) all fire, sprinkler and alarm permit fees. All
other fees charged or assessed by the City, in accordance with applicable federal, state and local laws,
ordinances, rules and regulations, including, but not limited to transportation impact fees and water and
sewer impact fees are not waived and shall be fully payable.
The project is located in COUNCIL DISTRICT 5, Mapsco 56J.
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that this action will not increase the total
appropriations on City funds.
TO Fund/Account/Centers FROM Fund/Account/Centers
Submitted for City Manager's Office by: Fernando Costa (6122)
Originating Department Head: Jesus Chapa (5804)
Robert Sturns (212-2663)
Additional Information Contact: Ana Alvarado (212-2680)
ATTACHMENTS
AA Reference Map.pdf
http://apps.cfwnet.org/council_packet/mc_review,asp?ID=19889&councildate=6/10/2014 06/11/2014