HomeMy WebLinkAboutContract 34053 b RETARY
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ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
("Agreement") is made and entered into by and between the CITY OF FORT
WORTH ("City"), a home rule municipal corporation organized under the laws of the
State of Texas, and PNL FORT WORTH, L.P. ("PNL"), a Delaware limited
partnership.
RECITALS
A. The City has created an Economic and Community Development
Department in order to, among other things, oversee economic development programs
authorized by Texas law and approved by the City Council, including those authorized by
Chapter 380 of the Texas Local Government Code, to promote state and local economic
development and to stimulate business and commercial activity in the City.
B. In accordance with the 2005 Comprehensive Plan adopted by the City
Council pursuant to M&C G-14691 on February 22, 2005, the City's economic
development programs are based on a model of custom-designed incentives and
partnership programs with private businesses on a case-by-case analysis of individual
projects to help ensure the growth and diversification of the local economy.
C. As part of the economic development programs recommended by the 2005
Comprehensive Plan and in accordance with Resolution No. 2704, adopted by the City
Council on January 30, 2001, the City has established a 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 business or entities to cause specific
infrastructure, employment and other public benefits to be made or invested in the City.
D. PNL is the owner of the real property known as the Tandy Center. The
Tandy Center consists of two high-rise buildings (referred to herein as the "South
Tower" and the "North Tower") as well as extensions to both the South Tower and
North Tower and a retail mall area. PNL intends to redevelop the Tandy Center in two
phases. The first phase, which is the subject of this Agreement, consists of the
redevelopment of the South Tower into residential condominiums (and not apartments)
and of an extension of the South Tower and portions of the mall area into ground level
retail and commercial space ("Phase I"). The property on which Phase I will occur is
described and depicted in Exhibit "A" (the "Source Property"), attached hereto and
hereby made a part of this Agreement for all purposes. Improvements on
KC-i f,
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Economic Development Program Agreement ' 1�
between City of Fort Worth and PNL Fort Worth,L.P. ' `'
Property are largely vacant due, in large part, to the relocation of RadioShack
Corporation from the Tandy Center to a new corporate campus; retail businesses have
largely vacated the mall area.
E. As part of Phase I of the Tandy Center redevelopment, both PNL and the
City believe that they will mutually benefit from (i) the demolition of that portion of the
mall area necessary to extend W. Second Street from Throckmorton Street to Taylor
Street; (ii) the removal of the office and parking structure that spans over 250 feet of
Throckmorton Street (the "Throckmorton Overhang") and the (iii) creation of new
street level commercial and retail space. PNL is willing to undertake this additional work
in return for financial incentives provided by the City, as more specifically outlined in
this Agreement.
F. The 2005 Comprehensive Plan advocates the provision of public
incentives to encourage downtown housing development. In addition, studies undertaken
to analyze the downtown housing market in the City indicate that approximately fifty
percent (50%) of all persons who lease multi-family residential units in the City's
downtown will move from locations outside of the City, which, according to a study by
Grotta Marketing Research, will benefit and stimulate business and commercial activity
in the City.
G. The City Council has found and 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.
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 are hereby acknowledged, the parties agree as follows:
AGREEMENT
1. INCORPORATION OF RECITALS.
The City Council hereby finds that the recitals set forth above are true and correct
and form the basis upon which the City has entered into this Agreement.
2. DEFINITIONS.
The following terms shall have the definitions ascribed to them as follows:
Pae 2
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P. i111CA
Affiliate means all entities, incorporated or otherwise, under common control
with, controlled by or controlling PNL. For purposes of this definition, "control" means
fifty percent (50%) or more of the ownership determined by either value or vote.
Available Sales Tax means up to a one percent (1%) municipal sales tax, such as
that presently in effect pursuant to Texas Tax Code §§ 321.101(a) and 321.103, and that
is deposited into the City's general fund without legal or regulatory restrictions on its use.
The following sales taxes are specifically excluded from the definition of Available Sales
Tax: (i) the Crime Control District Sales Tax imposed by the City pursuant to Texas Tax
Code § 323.105 and Texas Local Government Code § 363.005; (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
sales tax imposed by the Fort Worth Transportation Authority pursuant to Texas Tax
Code Chapter 322; and (iii) any future sales taxes that, on account of their designation or
commission to a specific purpose or entity pursuant to state or local law, are not retained
by the City for general use. If the City ever charges less than a one percent (1%)
Available Sales Tax, then the Available Sales Tax hereunder shall be computed to reflect
that lower percentage. If the City ever charges less than a one percent (1%) Available
Sales Tax and then subsequently adds a sales tax that increases such lower percentage
and whose use is not otherwise controlled or regulated, in whole or in part, then
Available Sales Tax shall be computed to reflect that increased percentage up to a
maximum aggregate of one percent (M).
Benefit Percentage means the sum of the Source Property Investment
Percentage, the Fort Worth Construction Percentage and the M/WBE Construction
Percentage.
Certificate of Expenditure means a certificate issued by the Director verifying
the amount of Construction Costs and Source Property Project Costs, as the case may be,
expended for Phase I of the redevelopment of the Source Property and any other
Required Improvements, including Construction Costs expended therefor with Fort
Worth Companies and Fort Worth Certified M/WBE Companies, as more specifically
outlined in Section 5.3.4.
Comptroller means the Texas Comptroller of Public Accounts.
Comptroller Reports has the meaning assigned in Section 5.5.1 hereof.
Construction Costs means the costs of all hard construction, construction
equipment charges, the costs of construction materials, building systems installation and
repairs, contractor fees, architectural and engineering costs and fees attributable to Phase
I of the redevelopment of the Source Property and any other Required Improvements plus
tenant finish-outs of the improvements located on the Source Property and marketing
costs and real estate brokerage fees related to the sale of the residential condominiums
located on the Source Property and the sale or lease of non-residential space located on
the Source Property. Construction Costs does not include any acquisition costs of the
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Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
Source Property or improvements thereon or any insurance, bonding or building permit
and encroachment fees related to the redevelopment of the Source Property.
Director means the director of the City's Economic and Community
Development Department or his or her authorized designee.
Effective Date has the meaning assigned to it in Section 4 hereof.
Excess Source Property Tax Revenues means the positive difference between
the Source Property Tax Increment Revenues received by the City in a given Program
Year and the amount of the Program Grant that the City is obligated to pay PNL in the
same Program Year.
Final Certificate of Completion means a certificate issued by the Director
verifying that the Required Improvements have been completed in accordance with and
pursuant to the terms and conditions of this Agreement, as more specifically outlined in
Section 5.3.3.
Fort Worth Certified M/WBE Company means a minority or woman-owned
business that has received certification as either a minority business enterprise (MBE) or
a woman business enterprise (WBE) by either the North Texas Regional Certification
Agency (NTRCA) or the Texas Department of Transportation (TxDOT), Highway
Division, and that has a principal business office located within the corporate limits of the
City from which the service claimed is provided.
Fort Worth Company means a business that has a principal office located within
the corporate limits of the City from which the service claimed is provided.
Fort Worth Construction Percentage has the meaning assigned to it in Section
6.2.
Full-time Equivalent Job means a job held by one (1) or more individuals for an
aggregate period of not less than forty (40) hours per week or another measurement used
to define full-time employment by the respective business or businesses located and
operating on the Source Property in accordance with their then-current corporate-wide
personnel policies and regulations.
Legal Requirements means 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.
Maximum Annual Program Grant Amount means the maximum Program
Grant that the City will pay PNL for a given Program Year, as set forth in Exhibit "B",
attached hereto and hereby made a part of this Agreement for all purposes, as may be
increased pursuant to and in accordance with Section 6.5.1 of this Agreement, but subject
to the Program Cap.
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Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
Minimum Fort Worth Construction Commitment has the meaning assigned to
it in Section 5.1.2.
Minimum M/WBE Construction Commitment has the meaning assigned to it
in Section 5.1.3.
M/WBE Construction Percentage has the meaning assigned to it in Section 6.3
hereof.
North Tower has the meaning assigned to it in Recital D hereof.
Phase I has the meaning assigned to it in Recital D hereof.
Program means the economic development program authorized by Chapter 380
of the Texas Local Government Code and established and outlined in this Agreement.
Program Cap means$11,345,596.00 in gross dollars.
Program Grant Shortfall has the meaning assigned in Section 6.5.1 hereof.
Program Grants means the annual economic development grants paid by the
City to PNL in accordance with this Agreement and as part of the Program until PNL has
received the Maximum Program Grant Amount or this Agreement expires or is
terminated.
Program Year means a calendar year in which the City is obligated to pay PNL a
Program Grant, beginning with the first full calendar year following the Project
Completion Date("Program Year 111).
Proiect Completion Date means the date as of which the City has issued all of
the following: (i) a Final Certificate of Completion for all Required Improvements; (ii) a
Certificate of Expenditure verifying all Construction Costs and Source Property Project
Costs, as the case may be, expended or caused to be expended by PNL for Phase I of the
redevelopment of the Source Property and any other Required Improvements; (iii) a
temporary certificate of occupancy for at least one hundred fifty (150) residential
condominiums located on the Source Property; (iv) a written statement signed by the
Director of the City's Development Department or his authorized designee that at least
seventy-five (75) residential condominiums located on the Source Property have been
finished-out in accordance with the punch list attached hereto as Exhibit "C", which is
hereby made a part of this Agreement for all purposes; and (v) a temporary certificate of
occupancy for at least 30,000 square feet of shell non-residential space located on the
Source Property.
Proiect Completion Deadline means June 30, 2009.
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PS�I�JV'��
between City of Fort Worth and PNL Fort Worth,L.P. 1 ;I �Jj ,' ��� �. �
p �GL
Public Property means any public rights-of-way, easements or other property
owned by the City or another governmental agency.
Records has the meaning assigned in Section 5.6 hereof.
Required Improvement. means (i) the redevelopment of at least 300,000 square
feet of space in the South Tower into at least one hundred fifty (150) residential
condominium units with associated common space, of which at least seventy-five (75)
must be fully finished-out in accordance with the punch list attached hereto as Exhibit
"C"; (ii) abatement of substantially all asbestos from existing Source Property
improvements, as evidenced by an abatement closeout report from a certified
environmental consultant; (iii) the provision of at least 30,000 square feet of leasable
commercial space in Phase I for office, retail, restaurant and other non-residential uses;
(iv) the construction of a vehicular parking garage, either below- or above-grade, and
provision of at least four hundred (400) new parking spaces; (v) demolition of the
Throckmorton Street Overhang in accordance with a Community Facilities Agreement or
other written agreement between the City and PNL; (vi) completion of the Second Street
Extension in accordance with a Community Facilities Agreement or other written
agreement between the City and PNL, all as more specifically depicted in Exhibit "D"
(attached hereto and hereby made a part of this Agreement for all purposes); and (vii) the
grant by PNL to the City, at no cost to the City, of an easement or easements (similar in
scope to those street easements granted to the City for the use, operation, maintenance,
repair and reconstruction of public streets over Weatherford Street, Taylor Street,
Throckmorton Street and Third Street pursuant to a replat of Lots 1, 2 and 3, Block 18R,
City Place, Lots 3 and 4, Block 17, Fort Worth Original Town Addition and Block 18R,
Fort Worth Original Town Addition) and that certain agreement between the City, PNL
and Tandy Garage, L.P. executed on or about the Effective Date of this Agreement) for
all of the Second Street Extension to be used a public right-of-way, with reservations as
reasonably necessary to permit a single-floor sky bridge to encroach within such right-of-
way at the second floor level of the South Tower, which easement or easements (i) shall
be temporary (but after the Project Completion Date, revocable only in the event that the
City fails to pay all Program Grants pursuant to and in accordance with this Agreement)
and shall become permanent upon payment of all Program Grants pursuant to and in
accordance with this Agreement; upon any termination by PNL after the Project
Completion Date, as more specifically set forth in Section 8.1; or upon any lawful
termination of this Agreement by the City in accordance with Section 8.2, and (ii) must
be in a form reasonably acceptable to the City and accepted by the City Council.
Second Street Extension means the extension of W. Second Street between
Throckmorton Street and Taylor Street, as more specifically depicted in Exhibit "D", and
the demolition of those Existing Improvements necessary to construct the Second Street
Extension.
Source Property has the meaning assigned to it in Recital D.
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Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
Source Property Investment Commitment has the meaning assigned to it in
Section 5.1.1.
Source Property Investment Percentage has the meaning assigned to it in
Section 6.1
Source Property Proiect Costs means all Construction Costs plus environmental
abatement costs, costs of any demolition work, sales and renovation taxes, building
permit and encroachment fees, costs of insurance and performance bonds, financing
costs, reasonable consulting fees (excluding architectural and engineering consulting),
legal fees, development fees, title survey fees and closing costs attributable to Phase I of
the redevelopment of the Source Property and any other Required Improvements.
Source Property Tax Increment Revenues means (i) the amount of real
property taxes paid in a given tax year by any entity or entities to the City based on the
entire taxable appraised value of the Source Property (land and improvements) minus
$62,939.00 (which is the full amount of the real property taxes attributable to the Source
Property and received by the City for the 2005 tax year) and (ii) all Available Sales Tax
resulting from sales tax received by the City and collected by any entity on sales
consummated in the City and transacted from the Source Property, the amount of which
will be determined from Verified Source Property Tax Payments confirmed by the City
pursuant to and in accordance with Section 5.5.1. With respect to real property taxes, the
taxable appraised value of the Source Property will be established solely by the appraisal
district that has jurisdiction over the Source Property at the time. With respect to sales
taxes, notwithstanding anything to the contrary, in no event shall the sales tax component
of Source Property Tax Increment Revenues exceed the Available Sales Tax portion of
the Verified Source Property Sales Tax Payments, as reported by PNL to the City
pursuant to Section 5.5.1, subject to verification by the City.
South Tower has the meaning assigned to it in Recital D hereof.
Term has the meaning assigned to it in Section 4 hereof.
Throckmorton Street Overhang has the meaning assigned to it in Recital E
hereof.
Verified Source Property Sales Tax Payments has the meaning assigned to it in
Section 5.5.1 hereof.
4. TERM.
This 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 upon the earlier of(i) the date as of which PNL has received aggregate Program
Grants equal to the Program Cap or (ii) payment by the City of the fourteenth (14th)
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Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
annual Program Grant pursuant to and in accordance with this Agreement or, if Section
6.5.3 applies, payment by the City of the fifteenth (15th) annual Program Grant pursuant
to and in accordance with this Agreement(the"Term").
5. P11:L OBLIGATIONS.
5.1. Phase I and Required Improvements.
5.1.1. Source Property Investment Commitment and Construction of
Required Improvements by Proiect Completion Deadline.
In order for PNL to be eligible for payment of any Program Grants
by the City pursuant to this Agreement, (i) PNL shall expend or cause to
be expended at least $40 million in Source Property Project Costs and (ii)
the Project Completion Date must occur prior to the Project Completion
Deadline. As more specifically set forth in Section 6.1 of this Agreement,
in order to receive the maximum amount of Program Grants available for
payment under this Agreement, PNL must expend or cause to be expended
at least $62.5 million in Source Property Project Costs ("Source Property
Investment Commitment"). If PNL expends or causes to be expended
between $40 million and $62.5 million in Source Property Project Costs,
PNL will be eligible to receive a reduced amount of Program Grants
available for payment under this Agreement. Notwithstanding anything to
the contrary herein, if(i) PNL expends or causes to be expended less than
$40 million in Source Property Project Costs or (ii) the Project
Completion Date does not occur on or before the Project Completion
Deadline, regardless of the Source Property Project Costs expended, an
event of default shall occur, as more specifically outlined in Section 8.
5.1.2. Use of Fort Worth Companies.
PNL will expend or cause to be expended with Fort Worth
Companies at least the greater of(i) $10,000,000 in Construction Costs or
(ii) twenty-five percent (25%) of all Construction Costs, without regard to
the total Construction Costs expended (the "Minimum Fort Worth
Construction Commitment").
5.1.3. Use of Fort Worth Certified M/WBE Companies.
PNL will expend or cause to be expended with Fort Worth
Certified M/WBE Companies at least the greater of (i) $10,000,000 in
Construction Costs or (ii) twenty-five percent (25%) of all Construction
Costs, without regard to the total Construction Costs expended (the
"Minimum M/WBE Construction Commitment"). Dollars spent with
Fort Worth Certified M/WBE Companies shall also count as dollars spent
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Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
with Fort Worth Companies for purposes of the Minimum Fort Worth
Construction Commitment set forth in Section 5.1.2.
5.1.4. Good Faith Effort to Exceed Commitments.
PNL hereby agrees to undertake a good faith effort to spend or
cause to be spent at least thirty percent (30%) of total Construction Costs
with Fort Worth Companies and at least thirty percent (30%) of total
Construction Costs with Fort Worth Certified M/WBE Companies, which
goal shall include, and not be in addition to, the Minimum Fort Worth
Construction Commitment and the Minimum M/WBE Construction
Commitment. PNL shall consult with the City's Minority and Women
Business Enterprise Advisory Committee for assistance in achieving this
goal.
5.2. Community Facilities Agreements; Permits.
As part of the Required Improvements, PNL shall construct the Second
Street Extension and demolish the Throckmorton Street Overhang pursuant to a
Community Facilities Agreement or other written agreement between the City and
Developer for such work. PNL hereby agrees that PNL shall not initiate any work
on the Second Street Extension or Throckmorton Street Overhang demolition
until a Community Facilities Agreement or other written agreement has been
executed by and between the City and PNL for such work. From the Effective
Date until the Completion Date, for work on Phase I that requires a City-issued
building permit and that is anticipated to occur on or in improvements owned by
PNL or an Affiliate and located on, over or under Public Property and for any
other work on Phase I that is anticipated to occur on, over or under Public
Property, PNL will not undertake or cause to be undertaken any work thereon
until PNL has received written approval by the property owner. In the case of
work on the Required Improvements that is anticipated to occur in the City's
public rights-of-way, easements or other City-owned property, PNL will notify
the City in writing and request a written opinion as to whether PNL must first
enter into a Community Facilities Agreement or other written document with the
City. If any such document is required, PNL will not undertake or cause to be
undertaken any affected work on Phase I until the Community Facilities
Agreement or other required written document has been executed by all parties
and is in full force and effect. PNL hereby agrees to comply with all terms and
conditions of any Community Facilities Agreement or other required written
document with the City covering the affected work on Phase 1.
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Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
5.3. Inspections,Monthly Reports, and City Certificates.
5.3.1. Inspections.
At any time prior to the Completion Date, during normal business
hours and following reasonable notice to PNL, the City and any authorized
designee shall have, and PNL shall provide, access to the Required
Improvements and the Source Property (including any portions of the
Source Property owned by third parties) so that the City and any
authorized designee can inspect all work undertaken on Phase I of the
redevelopment of the Source Property and any other Required
Improvements in order to ascertain PNL's compliance with this
Agreement and to evaluate such work for compliance with any permit,
code or other requirements. PNL shall cooperate fully with the City and
any authorized designee during any such inspection. The City shall not be
required to issue any written certificates or statements as provided in
Sections 5.3.3, 5.3.4 and 5.3.5 if the City is denied reasonable access to
inspect the Required Improvements and any portion of the Source
Property by any party for the purposes stated in those respective
provisions.
5.3.2. Monthly Certificates Related to Required Improvements and
Source Property Project Costs.
PNL shall submit monthly certificates, signed by an officer of PNL
and any applicable third party contractor, to the Director that state, as of a
date certain, (i) the specific work on Phase I and any other Required
Improvements that has been completed since the last monthly report; (ii)
the amount of money that PNL has paid or caused to be paid for
completion of such work and that PNL intends to claim as a Construction
Cost or as a Source Property Project Cost, organized by line item showing
Construction Costs expended with Fort Worth Companies and with Fort
Worth Certified M/WBE Companies; and (iii) PNL's calculation of the
estimated cost to complete Phase I and any other Required Improvements.
Upon receipt of any such certificate, the Director shall have ten (10)
calendar days to notify PNL in writing of any objection that he or she may
have as to the amount of money expended in Construction Costs or Source
Property Project Costs or PNL's calculation of the estimated cost to
complete Phase I and any other Required Improvements. The grounds for
any such objection shall be limited, respectively, to a good faith
determination by the Director that the amount of money paid by or on
behalf of PNL does not qualify under this Agreement as a Construction
Cost or as a Source Property Project Cost, as the case may be. If PNL
disagrees with such objection, the City and PNL shall diligently work in
good faith to resolve the dispute. If resolution is not achieved, PNL may
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Economic Development Program Agreement ('�?,�� 1 � �^��
between Ci of Fort Worth and PNL Fort Worth,L.P. u �! CJ
/1
petition the City Council to make a determination, which determination
shall be final.
5.3.3. Final Certificate of Completion for the Required
Improvements.
Once the Required Improvements have been completed, PNL shall
submit an application for a Final Certificate of Completion, signed by an
officer of PNL and the general contractor(s), to the Director that states the
specific work on the Required Improvements that was completed. Within
thirty (30) calendar days following receipt of such application, the City
will conduct an inspection of the Required Improvements in accordance
with Section 5.3.1 in order to ascertain whether the Required
Improvements have, in fact, been completed. If the City determines that
additional work on any of the Required Improvements is required in order
to be in compliance with this Agreement or applicable law, ordinance, rule
or regulation, the City will promptly notify PNL in writing, which written
notice shall specify the deficiencies identified by the City. If the City
determines that the Required Improvements have been successfully
completed, the Director will promptly issue PNL a Final Certificate of
Completion.
5.3.4. Certificate of Expenditure for Phase I (Including Required
Improvements).
Once the Required Improvements have been completed, PNL shall
submit an application for the Certificate of Expenditure, which application
shall contain a report, signed by an officer of PNL and the general
contractor(s), that sets forth (i) the specific work on Phase I and any other
Required Improvements that was completed; (ii) a detailed breakdown of
the total amount of money that PNL paid or caused to be paid for
completion of such work and that PNL claims as a Construction Cost
(including those Construction Costs expended with Fort Worth Companies
and Fort Worth Certified M/WBE Companies) or as a Source Property
Project Cost, as the case may be, together with all supporting invoices and
other documents reasonably requested by the Director that demonstrate
that such amounts were actually paid by PNL, including final lien waivers
signed by the general contractor or satisfactory evidence of appropriate
bonding of any disputed lien claims. Subject to the provisions of this
Section 5.3.4, the City will issue a Certificate of Expenditure to PNL
within sixty (60) calendar days following receipt of the report required
herein and reasonable satisfaction by the Director that all invoices,
documentation and information required herein have been provided. The
Certificate of Expenditure shall, among other things, state the Benefit
Percentage that will be used to calculate Program Grants payable to PNL
hereunder.
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Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
5.3.5. Inspection of Completed Residential Condominiums.
Once the finish-out of at least seventy-five (75) residential
condominiums on the Source Property in accordance with the finish-out
punch list attached hereto as Exhibit "C" has been completed, PNL will
notify the City in writing. Within thirty (30) calendar days following
receipt of such written notice, the City will conduct an inspection of the
Source Property in accordance with Section 5.3.1 in order to ascertain
whether those residential condominiums have, in fact, been completed in
accordance with such finish-out punch list. If the City determines that
additional work on any residential condominium is required in order to be
complete in accordance with the finish-out punch list, the City will
promptly notify PNL in writing, which written notice shall specify the
deficiencies identified by the City. If the City determines that the finish-
out of at least seventy-five (75) residential condominiums on the Source
Property in accordance with the finish-out punch list has successfully been
completed, the City will issue PNL a written statement to that effect
signed by the Director of the City's Development Department or his
authorized designee.
5.4. Employment Goal.
PNL shall use commercially reasonable efforts to ensure that sixty (60)
Full-time Equivalent Jobs are provided on the Source Property (including
employees of the residential condominium homeowners' association) within one
hundred eighty (180) calendar days following the Completion Date. The City
recognizes that the number of Full-time Equivalent Jobs provided on the Source
Property may not be in PNL's control and will be subject to the date as of which
non-residential portions of the Source Property are full operational. PNL shall
make a good faith effort to obtain from the residential condominium
homeowners' association and any third party that purchases or leases any portion
of non-residential space on the Source Property to provide PNL with annual
employment data sufficient for PNL to complete the annual report to the City, as
required by and in accordance with Section 5.5.3 of this Agreement.
5.5. Annual Reports.
On or before March 1 of the calendar year following the Completion Date
and on or before March 1 of each Program Year thereafter, PNL will provide the
City with the following reports in a form reasonably acceptable to the City:
5.5.1. Sales Tax Certificates.
To the extent reasonably possible, PNL will require any third party
that purchases or leases all or any non-residential portion of the Source q j�
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Economic Development Program Agreement � '�' pk ul�
between City of Fort Worth and PNL Fort Worth,L.P.
Property to provide PNL with annual sales data sufficient for PNL to
complete the annual report to the City required by this Section 5.5.1. PNL
shall provide the City with access to all sales tax reports filed with the
Comptroller by PNL and, to the extent received by PNL in accordance
with the sentence above, any third party that purchases or leases all or any
non-residential portion of the Source Property (collectively, the
"Comptroller Reports"). In addition, PNL shall provide the City with a
report that summarizes the data set forth in the Comptroller Reports by
stating (i) the total amount of sales generated from the Source Property
during the previous calendar year; (ii) the aggregate amount of sales tax
paid to the Comptroller during the previous calendar year from sales on
the Source Property (the "Verified Source Property Tax Payments");
(iii) a list of the separate amounts of sales tax shown on each respective
Comptroller Report to have been paid by PNL and each individual entity
located on the Source Property; (iv) a list of those tenants or other entities
located on the Source Property for which PNL did not obtain a
Comptroller Report relating to such year. PNL shall keep and maintain
copies of all Comptroller Reports for at least seven (7) years following the
end of the year to which such Comptroller Reports related, and shall make
such Comptroller Reports available to the City pursuant to Section 5.6 for
purposes of verification by the City. Notwithstanding anything to the
contrary herein, any sales taxes received by the City from sales
consummated on the Source Property but that are not Verified Source
Property Tax Payments will not be considered in calculating the sales tax
portion of Source Property Tax Increment Revenues.
5.5.2. Property Tax Reports.
PNL will provide the City with a report of the real property taxes
levied by the City on all the tax parcels within the Source Property (land
and improvements) in the period between February 1 of the preceding
calendar year and January 31 of the year in which the report is due PNL
shall prepare this report from data available on the Tarrant Appraisal
District website and other public records.
5.5.3. Employment Reports.
PNL will provide the City with a report in a form reasonably
acceptable to the City that sets forth the total number of Full-time
Equivalent Jobs held on the Source Property in the previous calendar year,
measured as of December 31 or another date in that year requested by
PNL and reasonably acceptable to the City.
Page 13
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
5.6. Audits.
PNL agrees that at any time during the Term of this Agreement the City
will have the right, at the City's expense, to audit the financial and business
records in the possession of PNL or any Affiliate, successor in interest or assignee
of PNL that are in the possession of PNL and that relate to (i) expenditures for
Phase I of the redevelopment of the Source Property and any other Required
Improvements; (ii) total expenditures with Fort Worth Companies and Fort Worth
Certified M/WBE Companies for Phase I of the redevelopment of the Source
Property and any other Required Improvements; and (iii) sales on the Source
Property (collectively, the "Records"). All Records, including any Comptroller
Reports, shall be made available to the City on the Source Property or at another
location in the City that is acceptable to the City following reasonable advance
notice by the City. PNL and such other third parties shall otherwise cooperate
fully with the City during any audit performed hereunder.
6. PROGRAM GRANTS ANL FEE WAIVERS.
Subject to the Program Cap and all terms and conditions of this Agreement, the
City will pay PNL a Program Grant each year during the Term of this Agreement. The
first Program Grant shall be paid in the first full calendar year following the Completion
Date. The Program Grant payable in a given Program Year other than Program Year 15
shall equal the Benefit Percentage multiplied by the Source Property Tax Increment
Revenues received by the City between February 1 of the previous calendar year and
January 31 of the given Program Year, subject to the Maximum Annual Program Grant
Amount established for that Program Year (as may be increased pursuant to Section
6.5.1) and the operation of the Program Cap. The Benefit Percentage will be determined
at the time that the Certificate of Expenditure is issued in accordance with Section 5.3.4
of this Agreement, and will remain constant throughout the Program. The Program Grant
payable for Program Year 15, if any, will equal the lesser of(i) the aggregate amount of
any Program Grant Shortfalls remaining after payment of the Program Grant for Program
Year 14 or (ii) the amount of Source Property Tax Increment Revenues received by the
City between February 1 of the previous calendar year and January 31 of Program Year
15, as more specifically set forth in Section 6.5.3.
6.1. Overall Construction Cost Spending (Maximum 60% Component).
Each annual Program Grant payable hereunder shall include an amount
that is based on the percentage by which the Source Property Investment
Commitment, as outlined in Section 5.1.1, was met (the "Source Property
Investment Percentage"). The Source Property Investment Percentage will
equal the product of sixty percent (60%) multiplied by the percentage by which
the Source Property Investment Commitment, as outlined in Section 5.1.1, was
met, which will be calculated by dividing the actual Source Property Project Costs
Page 14 � i""v�ln! { �ilN
Economic Development Program Agreement '{'� 'lt
between City of Fort Worth and PNL Fort Worth,L.P. 5 L
i
expended by $62.5 million. For example, if $50 million in Source Property
Project Costs were expended, the Source Property Investment Percentage would
be 48%, which is .60 x [$50million/$62.5 million], or .60 x .80, or .48. If Source
Property Project Costs are $62.5 million or more, the Source Property Investment
Percentage shall equal 60%. In no event shall the Source Property Investment
Percentage exceed 60%. Notwithstanding anything to the contrary herein, if PNL
expends or causes to be expended less than $40 million in Source Property Project
Costs, an event of default shall occur, as more specifically outlined in Section
8.2.2.
6.2. Fort Worth Construction Cost wending (Maximum 20%
Component).
Each annual Program Grant payable hereunder shall include an amount
that is based on the percentage by which the Minimum Fort Worth Construction
Commitment, as outlined in Section 5.1.2, was met (the "Fort Worth
Construction Percentage"). The Fort Worth Construction Percentage will equal
the product of twenty percent (20%) multiplied by the percentage by which the
Minimum Fort Worth Construction Commitment was met, which will be
calculated by dividing the actual Construction Costs expended with Fort Worth
Companies by the number of dollars comprising the Minimum Fort Worth
Construction Commitment, as determined in accordance with Section 5.1.2. For
example, if, pursuant to Section 5.1.2, the Minimum Fort Worth Construction
Commitment is $10 million and only $9 million in Construction Costs were
expended with Fort Worth Companies, the Fort Worth Construction Percentage
would be 18%, which is .20 x [$9 million/$10 million], or .20 x .90, or .18. If the
Minimum Fort Worth Construction Commitment was fully met, the Fort Worth
Construction Percentage shall equal 20%. In no event shall the Fort Worth
Construction Percentage exceed 20%.
6.3. M/WBE Construction Cost Spending(Maximum 20% Component).
Each annual Program Grant payable hereunder shall include an amount
that is based on the percentage by which the Minimum M/WBE Construction
Commitment, as outlined in Section 5.1.2, was met (the "M/WBE Construction
Percentage"). The M/WBE Construction Percentage will equal the product of
twenty percent (20%) multiplied by the percentage by which the Minimum
M/WBE Construction Commitment was met, which will be calculated by dividing
the actual Construction Costs expended with Fort Worth Certified M/WBE
Companies by the number of dollars comprising the Minimum M/WBE
Construction Commitment, as determined in accordance with Section 5.1.3. For
example, if, pursuant to Section 5.1.3, the Minimum M/WBE Construction
Commitment is $10 million and only $8 million in Construction Costs were
expended with Fort Worth Certified M/WBE Companies, the M/WBE
Construction Percentage would be 16%, which is .20 x [$8 million/$10 million],
or .20 x .80, or .16. If the Minimum M/WBE Construction Commitment was
Page 15
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
fully met, the M/WBE Construction Percentage shall equal 20%. In no event
shall the M/WBE Construction Percentage exceed 20%.
6.4. Calculation of Program Grant.
As stated in the introductory paragraph of this Section 6, each annual
Program Grant other than that payable for Program Year 15, if any, shall equal the
product of the Benefit Percentage multiplied by the Source Property Tax
Increment Revenues received by the City between February 1 of the previous
calendar year and January 31 of the given Program Year, subject to the Maximum
Annual Program Grant Amount established for that Program Year and the
operation of the Program Cap. For instance, taking the examples previously set
forth in Section 6.1, 6.2 and 6.3, the Benefit Percentage would be 82% (a Source
Property Investment Percentage of 48% + a Fort Worth Construction Percentage
of 18% + an M/WBE Construction Percentage of 16%). Now, suppose that by
January 31 of Program Year 5 the City had received $850,000 in Source Property
Tax Increment Revenues since the preceding February 1. Because the Maximum
Annual Program Grant Amount for Program Year 5, as set forth in Exhibit`B", is
$759,837, that amount, and not the $850,000 figure, would be used to calculate
the Program Grant, and the difference ($90,163) would be retained by the City as
Excess Source Property Tax Revenues. In that case, the Program Grant payable
by the City to PNL for Program Year 5 would equal $623,066.34 (the 82%
Benefit Percentage x $759,837 in Source Property Tax Increment Revenues
available for the Program), and the difference between that Program Grant and the
maximum Program Grant payable if the Benefit Percentage had been 100%
($136,770.66) would also be retained by the City as Excess Source Property Tax
Revenues.
6.5. Program Grant Shortfalls.
6.5.1. Defined.
In the event that the amount of any Program Grant paid in a given
Program Year is less than the Maximum Annual Program Grant Amount
authorized for payment in the same Program Year, as set forth on Exhibit
"B" hereto (excluding any reductions under this Agreement due to a
Benefit Percentage that is less than 100%, calculated in accordance with
Section 6.4), then, subject to Section 6.5.2, the difference between the
amount of the Program Grant paid for that Program Year and the
Maximum Annual Program Grant Amount authorized for payment in that
same Program Year (a"Program Grant Shortfall") shall be added to the
Maximum Annual Program Grant Amount applicable for the following
Program Year. For example, the Maximum Annual Program Grant
Amount for Program Year 1 is $689,432 and for Program Year 2 is
$706,467. If the Program Grant paid by the City for Program 1 were
$650,000, then, subject to Section 6.5.2, the Maximum Annual Program
Page 16
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
Grant for Program Year 2 would be increased by the Program Grant
Shortfall of $39,432 (the $689,432 Maximum Annual Program Grant
Amount established for Program Year 1 — the $650,000 Program Grant
actually paid for Program Year 1), so that the Maximum Annual Program
Grant Amount for Program Year 2 would be $745,899 (the $706,467
Maximum Program Grant Amount established for Program Year 2 + the
$39,432 Program Grant Shortfall arising in Program Year 1.
6.5.2. Benefit Percentage Factored In.
The calculation of any Program Grant Shortfall must take into
account any reduction in the Benefit Percentage by operation of the
calculation set forth in Section 6.4. For instance, the example in Section
6.5.1, where the Program Grant Shortfall is $39,432, assumes a Benefit
Percentage of 100%. If, however, the Benefit Percentage were 82%, as
calculated in the example in Section 6.4, then the determination of
whether there was a Program Grant Shortfall and, if so, how much, would
depend on whether and the extent to which the Program Grant paid in that
year failed to equal the Maximum Annual Program Grant Amount for that
Program Year due to the Benefit Percentage's being less than 100%. For
example, if Source Property Tax Increment Revenues received by the City
in the twelve-month period ending January 31 of Program Year 1 were
$750,000 and the Benefit Percentage is 82%, then the Program Grant
payable in Program Year 1 would be $615,000, and there would be no
Program Grant Shortfall even though the Program Grant was less than the
Maximum Annual Program Grant Amount of $689,432 because the
difference ($74,432) was entirely attributable to the fact that the Benefit
Percentage was less than 100%. In this case, the $74,432 difference
would be retained by the City as Excess Source Property Tax Revenues.
6.5.3. Program Grant Payable in Program Year 15 Only if Program
Grant Shortfall Remains.
As stated in the introductory paragraph of this Section 6, the
Program Grant payable for Program Year 15, if any, will equal the lesser
of (i) the aggregate amount of any Program Grant Shortfalls remaining
after payment of the Program Grant for Program Year 14 or (ii) the
amount of Source Property Tax Increment Revenues received by the City
between February 1 of the previous calendar year and January 31 of
Program Year 15. If there are not any Program Grant Shortfalls remaining
after payment of the Program Grant for Program Year 14, then the Term
of this Agreement shall expire upon payment of the Program Grant for
Program Year 14 and the City shall have no further obligation to PNL
hereunder.
Page 17
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P. ? �,
AS
6.6. No Offsets.
For purposes of determining the Benefit Percentage, a reduction to the
maximum available Source Property Investment Percentage, Fort Worth
Construction Percentage or M/WBE Construction Percentage on account of a
failure fully to meet the Source Property Investment Commitment, the Minimum
Fort Worth Construction Commitment or Minimum M/WBE Construction
Commitment, respectively, may not be offset by exceeding of another of those
Commitments. In other words, if the Minimum M/WBE Construction
Commitment was missed by $2 million but the Minimum Fort Worth
Construction Commitment was exceeded by $2 million and the Source Property
Investment Percentage were fully met, the Benefit Percentage would still be
subject to reduction pursuant to Section 6.3 on account of the failure to meet the
Minimum M/WBE Construction Commitment in full.
6.7. Retention by City, of Excess Source Property Tax Revenues.
PNL understands and agrees that any Excess Source Property Tax
Revenues received and retained by the City may be used by the City for any
lawful purpose and will not be available for the Program or used to calculate the
payment of any future Program Grants to PNL.
6.8. Deadline for Payments and Source of Funds.
Each annual Program Grant payment will be made by the City to PNL on
or before June 1 of the Program Year in which such Program Grant is due. It is
understood and agreed that all Program Grants paid pursuant to this Agreement
shall come from lawfully available funds that have been appropriated by the City
Council from the general fund or from such other funds as may be set aside for
that purpose consistent with Article 111, Section 52(a) of the Texas Constitution,
as amended, and not directly from Source Property Tax Increment Revenues
received by the City.
6.9. Certain Fee Waivers.
As part of the Program, the City hereby agrees to waive all building permit
fees associated with Phase I of the redevelopment of the Source Property and any
other Required Improvements and no more than $503,000 in encroachment fees
for the temporary closure of sidewalks and streets from Weatherford to Third
Streets between Throckmorton and Taylor Streets due to construction work on
Phase I of the redevelopment of the Source Property and any other Required
Improvements from the Effective Date until the Project Completion Date and that
would ordinarily be charged by the City in accordance with applicable laws,
ordinances, rules, regulations or policies. PNL hereby understands and agrees
that all other City-assessed fees related to Phase I of the redevelopment of the
Page 18
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
Source Property and any other Required Improvements, including, but not limited
to, water and sewer impact fees, will not be waived. Notwithstanding anything to
the contrary herein, in no event will the City waive or reimburse PNL for (i) any
water or sewer impact fees or(ii) fees of any nature assessed by third parties, such
as third party inspection fees.
7. LIABILIT AND INDEMNIFICATION.
PNL SHALL BE LIABLE FOR AND HEREBY AGREES TO DEFEND,
INDEMNIFY AND HOLD THE CITY, ITS OFFICERS, AGENTS AND
EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS,
COSTS AND EXPENSES FOR PERSONAL INJURY (INCLUDING DEATH,
PROPERTY DAMAGE OR OTHER HARM FOR WHICH RECOVERY OF
DAMAGES IS SOUGHT THAT MAY ARISE OUT OF OR BE OCCASIONED BY
PNL'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS
AGREEMENT, OR BY ANY NEGLIGENT OR GROSSLY NEGLIGENT ACT OR
OMISSION, MALFEASANCE OR MISCONDUCT OF PNL, ITS OFFICERS,
AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE
CITY) OR SUBCONTRACTORS, IN THE PERFORMANCE OF THIS
AGREEMENT, INCLUDING, BUT NOT LIMITED TO, THE UNDERTAKING OF
THE REDEVELOPMENT OF THE SOURCE PROPERTY AND ANY OTHER
REQUIRED IMPROVEMENTS, EXCEPT THAT THE INDEMNITY PROVIDED
FOR IN THIS PARAGRAPH SHALL NOT APPLY TO ANY LIABILITY
RESULTING FROM THE SOLE NEGLIGENCE OF CITY, ITS OFFICERS,
AGENTS, EMPLOYEES OR SEPARATE CONTRACTORS, AND IN THE EVENT
OF JOINT AND CONCURRENT NEGLIGENCE OF BOTH PNL AND THE CITY,
RESPONSIBILITY, IF ANY, SHALL BE APPORTIONED COMPARATIVELY IN
A CCORDANCE WITH THE LA WS OF THE STA TE OF TEXAS.
8. DEFAULT, TERMINATION AND FAILURE TO MEET VARIOUS
OBLIGATIONS.
8.1. T.-r.minatio_ 'by PNL.
PNL may terminate this Agreement at any time by providing written
notice to the City; provided, however, that nothing herein shall relieve PNL of the
obligation to restore any Public Property affected by work undertaken on the
Source Property to substantially the same condition as it existed before such work
was undertaken, subject to reasonable wear and tear within ninety (90) calendar
days following the effective date of termination, and that all provisions and
conditions of this Agreement related to such obligation, including, but not limited
to, Section 7, shall survive the termination of this Agreement pursuant to this
Section 8.1. If PNL terminates this Agreement after the Project Completion Date,
and the Project Completion Date occurred on or before the Project Completion
Page 19 �;�f �L�lr14 l�C 1a
Economic Development Program Agreement r 77 ' 1'r'� ' lay
between City of Fort Worth and PNL Fort Worth,L.P. i c � d��1n'���:y
t
Deadline, then the easement granted to the City for use of the Second Street
Extension as public right-of-way shall become permanent.
8.2. Termination by the City.
8.2.1. Failure to Complete Required Improvements.
An event of default shall occur if the Project Completion Date has
not occurred by the Project Completion Deadline, in which case the City
shall have the right to terminate this Agreement immediately by providing
written notice of such intent to PNL.
8.2.2. Failure to Expend Minimum Source Property Project Costs.
An event of default shall occur if less than $40 million in Source
Property Project Costs were expended by the Completion Date for Phase I
of the redevelopment of the Source Property and any other Required
Improvements, as determined by the content of the Certificate of
Expenditure on its face, in which case the City shall have the right to
terminate this Agreement immediately by providing written notice of such
intent to PNL.
8.2.3. Failure to Sub,:.it Construction Certificates.
If PNL fails to submit any monthly certificate relating to the work
on Phase I and any other Required Improvements in accordance with
Section 5.3.2, the City shall notify PNL in writing and PNL shall submit
such certificate within ten (10) calendar days following receipt of the
City's notice. If PNL is delinquent in the provision of three (3) or more
such certificates, the City shall notify PNL in writing and PNL shall have
thirty(30) calendar days to submit all delinquent reports to the City. If the
City has not received all such delinquent reports following that thirty (30)
day cure period, an event of default shall occur and the City shall have the
right to terminate this Agreement immediately by providing written notice
of such intent to PNL. Notwithstanding anything to the contrary herein,
the City shall have no obligation to provide PNL with any written notice
or any opportunity to cure for a failure to submit applications for the Final
Certificate of Completion or Certificate of Expenditure in accordance with
Sections 5.3.3 and 5.3.4,respectively. If the City is unable to issue a Final
Certificate of Completion or Certificate of Expenditure by the Project
Completion Deadline due to PNL's failure to submit the appropriate
applications, then the Project Completion Date shall be deemed to not
have occurred by the Project Completion Deadline, and Section 8.2.1 shall
apply.
Page 20
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
8.2.4. Failure to Pay City Taxes.
An event of default shall occur if any ad valorem taxes on any
portion of the Source Property that is owned by PNL or any Affiliate and
owed to the City become delinquent and PNL or the Affiliate, as the case
may be, does not either pay such taxes in full or properly follow the legal
procedures for protest and/or contest of any such taxes within thirty (30)
calendar days following receipt by PNL of written notice from the City. If
the event of default remains uncured after such time, the City shall issue a
second notice of default to PNL, in which case PNL shall have an
additional sixty (60) calendar days (or if PNL or the Affiliate, as the case
may be, has diligently pursued cure of the default but such default is not
reasonably curable within sixty (60) calendar days, then such amount of
time that the City reasonably agrees is necessary to cure such default). If
the event of default remains uncured by such time, the City shall have the
right to terminate this Agreement immediately by providing written notice
to PNL and shall have all other rights and remedies that may be available
to it under the law or in equity.
8.2.5. Violation of Applicable Law.
8.2.5.1. City Code Violations.
An event of default shall occur if any written
citation is issued to PNL or an Affiliate due to the occurrence of a
material violation of a provision of the City Code on any portion of
the Source Property then owned by PNL or an Affiliate or on or
within any improvements thereon (including, without limitation,
any material violation of the City's Building or Fire Codes and any
other City Code violations related to the environmental condition
of the Source Property; the environmental condition of other land
or waters which is attributable to operations on such portion of the
Source Property then owned by PNL or an Affiliate or to matters
concerning the public health, safety or welfare) and such citation is
not paid in full or the recipient of such citation does not properly
follow the legal procedures for protest and/or diligent contest of
any such citation within thirty (30) calendar days following receipt
by PNL of written notice from the City. If the event of default
remains uncured after such time, the City shall issue a second
notice of default to PNL, in which case PNL shall have an
additional sixty (60) calendar days (or if PNL or the Affiliate, as
the case may be, has diligently pursued cure of the default but such
default is not reasonably curable within sixty (60) calendar days,
then such amount of time that the City reasonably agrees is
necessary to cure such default). An event of default shall occur if
Page 21
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
PNL or an Affiliate is convicted of the charges set forth in any
such citation (whether by payment of the citation or a guilty or no
contest plea to the charges set forth in the citation) and does not
fully cure the offense thereunder within sixty (60) calendar days
following the date of conviction (or if PNL or the Affiliate, as the
case may be, has diligently pursued cure of the default but such
default is not reasonably curable within sixty (60) calendar days,
then such amount of time that the City reasonably agrees is
necessary to cure such default), in which case the City, as its sole
and exclusive remedy under this Agreement, shall have the right to
terminate this Agreement immediately by providing written notice
to PNL and shall have all other rights and remedies that may be
available to the City under the law with respect to such violation of
the City Code.
8.2.5.2. Violations of State or Federal Law.
An event of default shall occur under this
Agreement if the City is notified by a governmental agency or unit
with appropriate jurisdiction that the City, PNL or an Affiliate is in
violation of any material state or federal law, rule or regulation on
account of the Source Property, improvements on the Source
Property or any operations thereon (including, without limitation,
any material violations related to the environmental condition of
the Source Property; the environmental condition of other land or
waters which is attributable to operations on the Source Property;
or to matters concerning the public health, safety or welfare) and
such violation is not fully cured within thirty (30) calendar days
following receipt by PNL of written notice from the City. If the
event of default remains uncured after such time, the City shall
issue a second notice of default to PNL, in which case PNL shall
have an additional sixty (60) calendar days (or if PNL or the
Affiliate, as the case may be, has diligently pursued cure of the
default but such default is not reasonably curable within sixty (60)
calendar days, then such amount of time that the City reasonably
agrees is necessary to cure such default), in which case the City, as
its sole and exclusive remedy under this Agreement, shall have the
right to terminate this Agreement immediately by providing
written notice to PNL and shall have all other rights and remedies
that may be available to the City under the law with respect to such
violation of state or federal law.
Page 22 OXICJA'6 'ROD
Economic Development Program Agreementujgr � +,�°`��
between City of Fort Worth and PNL Fort Worth, L.P.
8.3. Failure to Meet Construction Spending Commitments and Goals or
Employment Goal.
Subject to Section 8.2.1 and 8.2.2, the failure to meet the Minimum Fort
Worth Construction Commitment or the Minimum M/WBE Construction
Commitment shall not constitute an event of default or provide the City with the
right to terminate this Agreement, but, rather, shall only be weighed against the
amount of the Program Grants that the City is required to pay PNL under this
Agreement. PNL's failure to meet its good faith goal to exceed the Minimum
Fort Worth Construction Commitment and the Minimum M/WBE Construction
Commitment, as set forth in Section 5.1.4, and PNL's failure to meet in any given
year the employment goal, as set forth in Section 5.4, shall not constitute events
of default or provide the City with the right to terminate this Agreement, and also
shall not impact the amount of the Program Grants that the City is required to pay
PNL under this Agreement.
8.4. Estoppel Certificates.
Upon written request by PNL to the City, no more frequently than once
per year, the City shall provide PNL with a certificate stating, as of the date of the
certificate, (i) whether this Agreement is in full force and effect and, if PNL is in
breach of this Agreement, the nature of that breach; (ii) the aggregate amount of
Program Grants that the City has previously paid to PNL; and (iii) the remaining
balance of Program Grants anticipated to be paid to PNL.
9. INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that PNL shall operate as an independent
contractor as to all rights and privileges granted herein, and not as an agent,
representative or employee of the City. PNL shall have the exclusive right to control the
details of all work on Phase I and any other Required Improvements and of all operations
and activities on the Source Property and shall be solely responsible for the acts and
omissions of its officers, agents, servants, employees, contractors, subcontractors,
patrons, licensees and invitees. PNL acknowledges that the doctrine of respondeat
superior shall not apply as between the City and PNL or any Affiliate, their officers,
agents, employees, contractors and subcontractors. PNL further agrees that nothing
herein shall be construed as the creation of a partnership or joint enterprise between the
City and PNL or an Affiliate.
Page 23
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
10. MUTUAL ASSISTANCE.
The City and PNL will do all things reasonably necessary or appropriate to carry
out the objectives, terms and provisions of this Agreement and to aid and assist each
other in carrying out such objectives, terms and provisions.
11. SUCCESSORS AND ASSIGNS.
Prior to issuance of the Final Certificate of Completion, PNL may not assign,
transfer or otherwise convey any of its rights or obligations under this Agreement to any
party other than an Affiliate of PNL without the prior written consent of the City, which
consent shall not unreasonably be withheld or delayed, conditioned on (i) the prior
approval of the assignee or successor and a finding by the City Council that the proposed
assignee or successor is financially capable of completing Phase I of the redevelopment
of the Source Property and any other Required Improvements and (ii) if all rights and
obligations under this Agreement are to be assigned,transferred or otherwise conveyed to
a non-Affiliate third party, prior execution by the proposed assignee or successor of a
written agreement with the City under which the proposed assignee or successor agrees to
assume all covenants and obligations of PNL under this Agreement; provided, however,
that PNL may assign this Agreement to an Affiliate without the City's consent so long as
PNL and the Affiliate comply with subsection (ii) above. After issuance of the Final
Certificate of Completion and provided that PNL is not in default at the time, PNL may
assign all or part of its rights and obligations hereunder without the approval or consent
of the City. In any such event, PNL shall promptly provide the City with written notice
of the name of and a local contact for any successor or assign. This Agreement shall be
binding on and inure to the benefit of the parties, their respective successors and assigns.
12. 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: PNL:
City of Fort Worth PNL Fort Worth, L.P.
Attn: Director Attn: David M. Porter
Economic & Community Dev. Dept. 2100 Ross Avenue, Suite 2900
1000 Throckmorton Dallas,TX 75201
Fort Worth, TX 76102
Page 24
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
with copies to: with a copy to:
the City Manager and the City Attorney Allan Katz
at: Winstead, Sechrest &Minick
5400 Renaissance Tower
1000 Throckmorton Dallas, TX 75270
Fort Worth,TX 76102
13. INTERPRETATION.
Regardless of the actual drafter of this Agreement, this Agreement shall, in the
event of any dispute over its meaning or application, be interpreted fairly and reasonably,
and neither more strongly for or against any party.
14. VENUE AND JURISDICTION.
This Agreement shall be construed in accordance with the laws of the State of
Texas and applicable ordinances, rules, regulations or policies of the City. Venue for any
action under this Agreement shall lie in the State District Court of Tarrant County, Texas.
This Agreement is performable in Tarrant County, Texas.
15. GOVERNMENTAL POWERS.
It is understood that by execution of this Agreement, the City does not waive or
surrender any of it governmental powers.
16. NO THIRD PARTY RIGHTS.
The provisions and conditions of this Agreement are solely for the benefit of the
City and PNL, and any lawful assign or successor of PNL, and are not intended to create
any rights, contractual or otherwise, to any other person or entity.
17. 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, governmental restrictions, regulations, or interferences,
unreasonable delays by the City in issuing any permits or certificates of occupancy or
conducting any inspections of or with respect to Phase I of the redevelopment of the
Source Property and any other Required Improvements (based on the amount of time that
Page 25
Economic Development Program Agreement \ r
between City of Fort Worth and PNL Fort Worth,L.P.
..•;.�c�I IU ni
the City customarily requires in undertaking such activities and based on the then-current
workload of the City department(s) responsible for undertaking such activities), or delays
caused by unforeseen construction or site issues, fire or other casualty, court injunction,
necessary condemnation proceedings, acts of the other party, its affiliates/related entities
and/or their contractors, or any actions or inactions of third parties 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.
18. LEGAL REQUIREMENTS.
This Agreement is subject to all Legal Requirements.
19. 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.
20. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and constitute one and the same instrument.
21. CAPTIONS.
The captions to the various clauses of this Agreement are for informational
purposes only and shall not alter the substance of the terms and conditions of this
Agreement.
22. 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 PNL, their assigns and successors in interest, 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.
This Agreement shall not be amended unless executed in writing by both parties and
Page 26
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
approved by the City in an open meeting held in accordance with Chapter 551 of the
Texas Government Code.
EXECUTED as of the last date indicated below:
CITY OF FORT WORTH: PNL FORT WORTH,L.P., a
Delaware limited partnership:
By: PNL FW GP,LLC,
a Delaware limited liability
company and its sole
general partner:
By: By: & Y6A2�j
Dale Fisseler VDavid M. Porter
Assistant City Manager Manager
Date: oZ / Date:
APPROVED AS TO FORM AND LEGALITY:
By: __zw—z—'�
Peter Vaky
Assistant City Attorney
M&C: C--21133
Attested By:
V�4Z7V
Nlaity Hendrix
City 7ecretary
Page 27
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
EXHIBITS
"A"—Map and Description of the Source Property
"B"—Chart of Maximum Annual Program Amounts
"C"—Punch List for Completed Residential Condominiums
"D" —Elevation and Site Plans Depicting Phase I and Other Required
Improvements
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
Exhibit"A"
MAP AND DESCRIPTION OF SOURCE PROPERTY
The Source Property consists of Lots 1 and 2, Block 18 R, Fort Worth Original
Town Addition, as depicted in the final plat dated September 2006 and attached hereto.
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
Exhibit"B"
CHART OF MAXIMUM ANNUAL PROGRAM GRANT AMOUNTS
Maximum Annual
Program Year Program Grant Amount
Payable in that Program
Year
1 $689,432
2 $706,467
3 $723,875
4 $741,662
5 $759,837
6 $778,410
7 $797,388
8 $816,782
9 $836,601
10 $856,854
11 $877,550
12 $898,701
13 $920,317
14 $941,720
Economic Development Program Agreement
between City of Fort Worth and PNL Fort Worth,L.P.
Exhibit"C"
PUNCH LIST FOR COMPLETED RESIDENTIAL CONDOMINIUMS
A residential condominium shall be counted as completed for purposes of
determining the Project Completion Date if the condominium:
❑ Is located on a floor of the building that has received a temporary certificate of
occupancy;
❑ Contains an operational heating/ventilation/air conditioning system;
❑ Contains functional plumbing fixtures throughout;
❑ Contains functional electrical wiring;
❑ Has functional major appliances (other than a refrigerator) installed;
❑ Has all cabinets and countertops installed and finished in kitchen and all bathrooms;
❑ Has all lighting fixtures installed and operational; and
❑ Contains finished paint, trim and flooring.
Economic Development Program Agreement ��tj � �
between City of Fort Worth and PNL Fort Worth,L.P.
Exhibit"D"
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City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 11/1/2005
DATE: Tuesday, November 01, 2005
LOG NAME: 171 CITYPLACEEDA REFERENCE NO.: C-21133
SUBJECT:
Authorize the Execution of an Economic Development Program Agreement with PNL Fort Worth,
L.P., for the Redevelopment of the South Tower and Outlet Mall of the Former Tandy Center
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to execute the attached Economic Development Program Agreement
(subject to non-material final changes agreed to by the parties) with PNL Fort Worth, L.P., related to the
redevelopment of the South Tower and Outlet Mall of the former Tandy Center; and
2. Find that the terms and conditions of the Agreement, as outlined below, constitute a custom-designed
economic development program that will promote local economic development and stimulate commercial
activity in the City, as recommended by the 2005 Comprehensive Plan and authorized by Chapter 380 of
the Texas Local Government Code.
DISCUSSION:
Under the proposed Economic Development Program Agreement (Agreement), PNL Fort Worth, L.P.,
(Developer) has committed to expend up to $62,500,000 by June 30, 2009 to:
1) Redevelop the South Tower and retail mall of the former Tandy Center (the Property) through:
a) the construction of a minimum of 300,000 square feet of residential and air-conditioned common
area that results in a minimum of 150 condominium units and
b) the construction of a minimum of 30,000 square feet of leaseable commercial/retail space;
2) Provide at least 400 parking spaces in a below-grade or structured parking garage constructed as
part of the project; and
3) Construct public improvements consisting of:
a) the re-opening and dedication by public access easement of Second Street for pedestrian and
vehicular traffic between Throckmorton Street and Taylor Street;
b) the demolition of 270 feet of commercial and parking space above Throckmorton Street; and
c) construction of an elevator to provide access to the County public park located at the northwest
corner of Taylor Street and Second Street.
The Developer will also use best efforts to create 60 new jobs on the Property.
In return for the redevelopment of the Property, PNL Fort Worth, L.P., will be eligible to receive up to 15
annual economic development program grants as authorized by Chapter 380 of the Texas Local
Government Code. The amount of the program grants will equal up to 100% of the City's real property
incremental tax revenue and up to 100% of the City's 1% sales tax incremental revenue attributable to the
Property (collectively, the Property's Incremental Taxes).
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Page 2 of 3
In order to obtain the maximum benefit under the Agreement, the Developer will be required to spend at
least $62.5 million on Project improvements including:
1) A minimum of$40 million in construction costs;
2) The greater of 25% or $10,000,000 of its construction costs with Fort Worth companies; and
3) The greater of 25% or $10,000,000 of its construction costs with Fort Worth certified M/WBE
companies. Additionally, the Developer will make a good faith effort to expend 30% of its construction
costs with Fort Worth certifies M/WBE companies. Expenditures with Fort Worth certified M/WBE
companies will also count as expenditures with Fort Worth companies.
The total amount of the program grants shall not exceed $11,345,596.00 in gross dollars over the term of
the Agreement. Each annual program grant will be capped in accordance with the table attached to the
Agreement as Exhibit B (Maximum Annual Program Grants). If any annual program grant is less than the
Maximum Annual Program Grant for that year (excluding reductions caused by Developer's failure to meet
one or more of its commitments, as explained below), the difference shall be added, with no interest, to the
next year's Maximum Annual Program Grant amount. The term of the agreement shall be up to 15 years,
or the payment of no more than $11,345,596.00, whichever comes first. If Developer fails to expend at
least $40 million in construction costs on the project by June 30, 2009, the City will have the right to
terminate the Agreement.
The actual amount of each annual program grant will depend upon the extent to which Developer has met
its construction, project improvement and construction spending commitments, as outlined above and
allocated as follows:
• An amount equal to 60% of the Property's Incremental Taxes, if Developer expends at least $62,500,000
on project improvements by June 30,2009, which percentage will be reduced by the degree to which
Developer fails to attain that commitment and with the understanding that if Developer fails to expend at
least $40 million in construction costs on the project, the City may terminate the Agreement;
• An amount equal to 20% of the Property's Incremental Taxes, if Developer spends the greater of 25% or
$10,000,000 of its construction costs with Fort Worth companies which percentage will be reduced by the
degree to which Developer fails to attain that commitment; and
• An amount equal to 20% of the Property's Incremental Taxes, if Developer spends the greater of 25% or
$10,000,000 of its construction costs with Fort Worth certified M/WBE companies, which percentage will be
reduced by the degree to which Developer fails to attain that commitment.
In addition to the program grants, the City will waive:
1) building permit fees (estimated at $169,000); and
2) up to $503,000 in temporary encroachment fees. As per City ordinance, the City collects fees for use of
public property for the exclusive use by another party. During the time of construction, the project will
require the use of sidewalk and public right-of-way for the area bounded by Weatherford Street,
Throckmorton Street, Third Street and Taylor Street. At the conclusion of construction, the sidewalk and
public right-of-way area will be restored to pre-construction or better condition.
This Agreement is authorized by Chapter 380 of the Texas Local Government Code and is consistent with
the City's commitment to use custom-designed incentives on a case-by-case basis to help ensure the
growth and diversification of the local economy, as recommended in the 2005 Comprehensive Plan adopted
by City Council on February 22, 2005, (M&C G-14691).
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Page 3 of 3
The proposed Project is located in the Downtown Central Business District, COUNCIL DISTRICT 9.
FISCAL iNFORMATION/CERTIFICATION:
The Finance Director certifies that this action will require no direct expenditure from the City funds in the
current fiscal year.
TO Fund/Account/Centers FROM Fund/AccounVCenters
Submitted for City Manager's Office by: Dale Fisseler (6140)
Originating Department Head: Tom Higgins (6192)
Additional Information Contact: Christine Maguire (8187)
http://www.cfwnet.org/council_packet/Reports/mc_print.asp 12/4/2006