HomeMy WebLinkAboutContract 40520 CITY SECRETARY
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;
RADIOSHACK CORPORATION ("RadioShack"), a Delaware corporation; and TE
ELECTRONICS LP ("TE"), a Delaware limited partnership whose general partner is
RadioShack.
RECITALS
The City, RadioShack and TE hereby agree that the following statements are true
and correct and constitute the basis upon which the parties have entered into this
Agreement:
A. RadioShack currently leases a portion of property owned by Tarrant
County College District in downtown Fort Worth (the "Downtown Site") for use as the
RadioShack Corporate Headquarters (as defined herein). The City and RadioShack have
entered into a separate Economic Development Program Agreement, as amended,
pursuant to which the City will pay RadioShack certain annual economic development
program grants in return for RadioShack's maintaining its corporate headquarters at the
Downtown Site and certain annual employment and supply and service spending
commitments connected therewith. Such Economic Development Program Agreement is
a public document on file in the City Secretary's Office as City Secretary Contract No.
27982, as amended by City Secretary Contract No. 27982-A1 (the "Original EDPA").
B. The Original EDPA and other RadioShack Incentive Agreements (as
defined in Section 2 hereof), other than this Agreement, have been structured so that
payments received by RadioShack thereunder do not exceed amounts owed to
RadioShack for infrastructure funded and constructed by RadioShack pursuant to that
certain Development Agreement between RadioShack and the Board of Directors of Tax
Increment Reinvestment Zone Number Six, City of Fort Worth, Texas, dated on or about
September 13, 2004, as amended, and that certain Development Agreement between
RadioShack and the Board of Directors of Tax Increment Reinvestment Zone Number
Six, City of Fort Worth, Texas, dated on or about July 15, 2005, as amended
(collectively, the "TIF Agreements"). Once RadioShack has been paid such amounts,
this Agreement will be the only RadioShack Incentive Agreement to remain in effect.
C. As recommended by the 2010 Comprehensive Plan, adopted by the City
Council pursuant to Ordinance No. 19044-02-2010, and in accordance with Resolution
No. 3716-03-2009, the City has established an economic development program pursuant
Eis the ity will, on a case-by-case basis, offer economic development incentive
RECORD
1mic Development Program Agreement
vn City- Fort Worth,TE Electronics LP,and RadioShack Corporation 0 6-30-10 P03:07 IN
E
packages authorized by Chapter 380 of the Texas Local Government Code that include
monetary loans and grants of public money, as well as the provision of personnel and
services of the City, to businesses and entities that the City Council determines will
promote state or local economic development and stimulate business and commercial
activity in the City in return for verifiable commitments from such businesses or entities
to cause specific employment and other public benefits to be made or invested in the City
(the "380 Program").
D. As part of the 380 Program, the City wishes to provide certain economic
development incentives to TE, a Delaware limited partnership whose general partner is
RadioShack, in return for RadioShack's and TE's commitment to cause additional City
sales taxes to be generated and for RadioShack's commitment to maintain its corporate
headquarters in the City, as more specifically set forth in this Agreement. The City
Council recognizes the economic importance to the City of RadioShack's current
corporate headquarters operations in the City and wishes to retain that presence in the
City. In addition, the additional City sales taxes that will be generated as a result of the
commitments made by TE and RadioShack pursuant to this Agreement will immediately
benefit the City's Crime Control and Prevention District and, after the Infrastructure Pay-
back Date (as defined in Section 2 hereof), the City's general fund.
E. This Agreement is authorized by Chapter 380 of the Texas Local
Government Code.
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
AGREEMENT
1. INCORPORATION OF RECITALS.
The City Council hereby finds, and the City, RadioShack and TE 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 C hereof.
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Economic Development Program Agreement
between City of Fort Worth,TE Electronics LP,and RadioShack Corporation
Affiliate means all entities, incorporated or otherwise, under common control
with, controlled by or controlling an entity. For purposes of this definition, "control"
means fifty percent (50%) or more of the ownership determined by either value or vote.
Casualty Event means the complete or partial destruction of RadioShack's
Corporate Headquarters at a location or locations in the City resulting from an
identifiable event of a sudden, unexpected, or unusual nature, such as flood, windstorm,
or fire, that prevents RadioShack from using such location or locations as its Corporate
Headquarters in its ordinary and customary manner, following which (i) if the Corporate
Headquarters is located at the Downtown Site, substantial completion of the restoration
of the Downtown Site shall be undertaken in accordance with the applicable lease
agreement between RadioShack and Tarrant County College District, and RadioShack
shall recommence use of the Downtown Site as its Corporate Headquarters within such
time as is reasonably practical or (ii) otherwise, RadioShack shall, within ninety (90)
calendar days of such Casualty Event, initiate or cause to be initiated continuous repairs,
construction, or reconstruction at a location or locations in the corporate limits of the City
necessary to restore, build or rebuild its Corporate Headquarters.
Comptroller Approval means a private letter ruling from the Texas Comptroller
of Public Accounts indicating that, under a factual scenario substantially similar to
RadioShack's and TE's plans to consummate TE-RadioShack Taxable Sales in the City
in accordance with this Agreement, that the City would be a "place of business of the
retailer" (with TE being the "retailer"), as that definition is used in Section 321.002(a)(3)
of the Texas Tax Code, or that such sales would be consummated in the City, as that term
is used in Section 321.203 of the Texas Tax Code; provided that such private letter ruling
will not specifically identify TE, RadioShack or the City by name.
Effective Date has the meaning ascribed to it in Section 3 hereof.
Excluded TE Sales Tax Revenues means (i) TE Sales Tax Revenues whose use
is restricted by any state law adopted after the Effective Date of this Agreement and that
would otherwise be available for the Program under the state laws in effect on the
Effective Date of this Agreement and (ii) the amount of TE Sales Tax Revenues received
by the City attributable to TE-RadioShack Taxable Sales in calendar year 2009, if any.
Infrastructure Pay-back Date means the earlier of December 31, 2016 or the
date as of which RadioShack has received the gross sum of Ten Million Seven Hundred
Sixty-six Thousand Five Hundred Fourteen and No/100 Dollars ($10,766,514.00)
pursuant to the RadioShack Incentive Agreements, beginning with any payments made
during calendar year 2010. The Original EDPA and the TIF Agreements will expire on
the Infrastructure Pay-back Date.
Original EDPA has the meaning ascribed to it in Recital A hereof.
Program means the economic development program established and outlined in
this Agreement as part of the City's 380 Program.
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Economic Development Program Agreement
between City of Fort Worth,TE Electronics LP,and RadioShack Corporation
Program Grants means the economic development grants paid by the City to TE
in accordance with this Agreement and as part of the Program.
RadioShack Business Partner means a business with which RadioShack or an
Affiliate of RadioShack regularly conducts business, including, but not limited to,
telephone carriers, other vendors, franchisees, and landlords/lessors, but excluding retail
store customers of RadioShack or any Affiliate of RadioShack.
RadioShack Corporate Headquarters means RadioShack's primary
administrative office at which the Chief Executive Officer, Chief Financial Officer, and
other senior staff overseeing RadioShack's strategic planning, corporate communications,
tax and legal, marketing, finance, human resources, and information technology matters
are located.
RadioShack Incentive Agreements means, collectively, this Agreement, the
Original EDPA, and the TIF Agreements.
Records has the meaning ascribed to it in Section 4.3 hereof.
Renewal Term has the meaning ascribed to it in Section 3 hereof.
Sales Tax Certificate means a certificate or other statement in a form reasonably
acceptable to the City setting forth TE's collection of sales and use tax imposed by the
City and remitted to the State of Texas for TE-RadioShack Taxable Sales consummated
in the City in any given month during the Term or any Renewal Term, as more
specifically outlined in Section 4.2.
Taxable Items shall have the same meaning assigned by Chapter 151 of the
Texas Tax Code, as amended.
TE-RadioShack Taxable Sales means sales consummated in the City in
accordance with Section 321.203 of the Texas Tax Code by TE to RadioShack or a
RadioShack Business Partner of Taxable Items associated with the general business
operations of RadioShack and any Affiliate thereof, including, without limitation,
supplies, software, equipment, fixtures, signage, and other items used or for which the
benefit is derived at the RadioShack Corporate Headquarters, RadioShack's distribution
centers, or RadioShack's retail stores.
TE Sales Tax Revenues means a one percent (1%) available municipal sales tax,
such as the one percent (1%) tax presently in effect pursuant to Texas Tax Code §§
321.101(a) and 321.103, resulting from sales tax received by the City and collected by
TE on TE-RadioShack Taxable Sales. TE Sales Tax Revenues specifically exclude (i)
the Crime Control District Sales Tax imposed by the City pursuant to Texas Tax Code §
323.105 and Local Government Code § 363.005, and (ii) the Transit Authority Sales Tax
paid to the City by the Fort Worth Transportation Authority pursuant to City Secretary
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Economic Development Program Agreement
between City of Fort Worth,TE Electronics LP,and RadioShack Corporation
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) Excluded TE Sales Tax Revenues, if any. If the City ever charges
less than a one percent (1%) available sales tax, then TE Sales Tax Revenues shall be
computed to reflect that lesser 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, by another governmental entity, authority or applicable law, ordinance, rule or
regulation, then TE Sales Tax Revenues shall be computed to reflect that increased
percentage up to a maximum aggregate of one percent (1%). Notwithstanding anything
to the contrary herein, in no event does TE Sales Tax Revenues include any sales taxes
received on account of sales consummated at RadioShack's or an Affiliate's retail stores
in the City.
Term has the meaning ascribed to it in Section 3 hereof.
TIF Agreements has the meaning ascribed to it in Recital B hereof.
True-up Amount has the meaning ascribed to it in Section 5.4 hereof.
3. TERM
This Agreement shall be effective on the later date as of which (i) the City,
RadioShack and TE have all executed this Agreement and (ii) RadioShack has delivered
a fully executed copy of a lease between RadioShack and Tarrant County College District
for certain property in downtown Fort Worth identified in that certain Economic
Development Program Agreement between the City and Radio Shack on file in the City
Secretary's Office as City Secretary Contract No. 27982, as amended, that contains all
terms and conditions set forth in Exhibit "A", attached hereto and hereby made a part of
this Agreement for all purposes (the "Effective Date") and shall expire on the fifteenth
(15th) anniversary thereof, unless terminated earlier as provided by and in accordance
with this Agreement (the "Term"); provided, however, that all parties hereto may
collectively and in writing renew this Agreement for two (2) successive terms of five (5)
years each (each a "Renewal Term"). Any obligation of a party arising prior to
expiration or termination of this Agreement, either during the Term or a Renewal Term,
shall survive the expiration or termination.
4. OBLIGATIONS AND COMMITMENTS OF RADIOSHACK AND TE.
4.1. Maintenance of RadioShack Corporate Headquarters in the City.
Throughout the Term and any Renewal Term of this Agreement,
RadioShack shall continually use a location or locations within the corporate
limits of the City as the RadioShack Corporate Headquarters. TE and
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Economic Development Program Agreement
between City of Fort Worth,TE Electronics LP,and RadioShack Corporation
RadioShack understand and agree that Section 10 of this Agreement prohibits an
assignment of the rights or obligations under this Agreement by either TE or
RadioShack without the advance written consent of the City.
4.2. Sales Tax Certificates.
TE shall provide the City with a Sales Tax Certificate for each month
during the Term and any Renewal Term within sixty (60) calendar days following
the last day of the month covered by the Sales Tax Certificate. TE shall also
provide the City with any additional supporting documentation reasonably
required by the City to verify TE Sales Tax Revenues for purposes of calculating
the amount of Program Grants payable pursuant to this Agreement. The Sales
Tax Certificate shall at a minimum contain, include or be accompanied by the
following:
4.2.1. A copy of all sales and use tax returns and reports, sales and use
tax prepayment returns, direct payment tax returns and reports, if any,
sales and use tax audit assessments, including amended sales and use tax
returns or reports, filed by TE for the applicable month showing sales and
use tax collected (including sales and use tax imposed by the City and paid
directly to the State of Texas pursuant to a direct payment certificate) by
TE for TE-RadioShack Taxable Sales consolidated in the City during that
month; and
4.2.2. Information concerning any refund or credit received by TE of
sales or use tax paid or collected by TE (including any sales and use tax
paid directly to the State of Texas pursuant to a direct payment permit)
which has previously been reported by TE as sales and use tax paid or
collected for TE-RadioShack Taxable Sales consummated in the City
during a previous month.
4.3. Audits.
The City, at its own cost and expense, will have the right throughout the
Term and any Renewal Term to audit the financial and business records of TE or
RadioShack that relate to the terms and conditions of this Agreement or that
contain information necessary for the City to calculate or verify any Program
Grant payable hereunder (collectively, the "Records"). TE and RadioShack shall
make all Records available to the City at the RadioShack Corporate Headquarters
in the City or at another location in the City acceptable to the parties following at
least seven (7) calendar days' advance notice by the City and shall otherwise
cooperate fully with the City during any audit.
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Economic Development Program Agreement
between City of Fort Worth,TE Electronics LP,and RadioShack Corporation
4.4. Comptroller Approval.
At the City's request, TE, at no cost to the City, shall obtain Comptroller
Approval of this Agreement.
5. PROGRAM GRANT PAYMENTS.
Subject to Section 6 and all other terms and conditions of this Agreement, TE will
be entitled to receive from the City a monthly Program Grant in an amount equal to a
percentage of TE Sales Tax Revenues for that month, as verified from the Sales Tax
Certificate covering that month that is filed by TE in accordance with Section 4.2 and as
calculated in accordance with this Section 5.
5.1. From Effective Date Until Infrastructure Pay-back Date.
The City will pay TE monthly Program Grants equal to one hundred
percent (100%) of the TE Sales Tax Revenues beginning with the first full month
following the Effective Date and ending with the month in which the
Infrastructure Pay-back Date occurs; provided, however, that if payment of a
Program Grant pursuant to and in accordance this Agreement in any given month
would cause RadioShack to receive an amount in excess of the gross sum of Ten
Million Seven Hundred Sixty-six Thousand Five Hundred Fourteen and No/100
Dollars ($10,766,514.00) pursuant to the RadioShack Incentive Agreements,
beginning with any payments made during calendar year 2010, then the amount of
such Program Grant shall be reduced to equal such amount as is necessary for
RadioShack to receive no more than the gross sum of Ten Million Seven Hundred
Sixty-six Thousand Five Hundred Fourteen and No/100 Dollars ($10,766,514.00)
pursuant to the RadioShack Incentive Agreements, beginning with any payments
made during calendar year 2010. In such an event, any remaining TE Sales Tax
Revenues attributable to that month shall be included in the calculation of the next
month's Program Grant in accordance with Section 5.2 hereof.
5.2. After Infrastructure Pay-back Date .
Subject to Section 5.1, the City will pay TE monthly Program Grants
equal to fifty percent (50%) of the TE Sales Tax Revenues beginning with the
first full month following the month in which the Infrastructure Pay-back Date
occurs and each month thereafter for the remainder of the Term and any Renewal
Term. The City will retain the remaining fifty percent (50%) of TE Sales Tax
Revenues, which may be used by the City for any purpose.
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Economic Development Program Agreement
between City of Fort Worth,TE Electronics LP,and RadioShack Corporation
5.3. Deadline for Payments.
Program Grants payable for each month pursuant to and in accordance
with this Agreement shall be paid to TE within sixty (60) calendar days following
receipt by the City of the Sales Tax Certificate covering such month.
5.4. True-ups on Basis of Amended Returns; Refunds.
In the event that TE files an amended sales and use tax return or report for
TE-RadioShack Taxable Sales or the State of Texas determines that (i) additional
sales and use tax is due and owing from TE-RadioShack Taxable Sales
consummated in the City or (ii) the amount of TE Sales Tax Revenues received
by the City in a given month exceeds the amount of TE Sales Tax Revenues that
the City should have received in that month, then the following Program Grant
payable by the City shall be increased or decreased, as the case may be, by the
collective difference between the amount of TE Sales Tax Revenues used to
calculate the affected Program Grant or Grants and the amount of TE Sales Tax
Revenues that the City actually received in the affected month or months (a
"True-up Amount"). In the event that either TE or the City is unable to recover
the True-up Amount due to the termination, expiration or impending expiration of
this Agreement, then (i) the City shall be obligated to continue making Program
Grants, calculated in accordance with this Agreement until TE has received all
True-up Amounts owed and (ii) TE shall be obligated to reimburse the City the
full True-up Amount within thirty (30) calendar days' advance written notice
from the City.
5.5. Retention by City of Excluded TE Sales Tax Revenues.
TE understands and agrees that any Excluded TE Sales Tax Revenues
shall be retained and 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 TE.
5.6. Source of Prozram Grant Funds.
Notwithstanding anything to the contrary herein, it is understood and
agreed that all Program Grants paid pursuant to this Agreement shall come from
currently available general revenues of the City and other legally available
sources, and not directly from TE Sales Tax Revenues received by the City.
5.7. Chanize in Law.
If during the term of this Agreement state law applicable to municipal
taxation changes and, as a result, the amounts of the Program Grants payable
hereunder differ materially from the amounts which would have been calculated if
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Economic Development Program Agreement
between City of Fort Worth,TE Electronics LP,and RadioShack Corporation
state law had remained the same as in effect on the Effective Date, then the parties
shall endeavor to adjust the Program Grant computation so as to achieve the same
proportionate economic benefits to TE and the City as would have resulted if the
law had not changed. Notwithstanding anything to the contrary herein, any
adjustment negotiated pursuant to this Section 5.7 is subject to the approval of the
City's City Council in an open meeting conducted in accordance with Chapter
551 of the Texas Government Code and is not binding on either party unless an
amendment to this Agreement is executed by all parties.
6. DEFAULT; TERMINATION.
6.1. Failure to Maintain RadioShack Corporate Headquarters in the City;
Liquidated Damages.
TE and RadioShack understand and agree that if RadioShack fails to use a
location or locations in the City's corporate limits for the RadioShack Corporate
Headquarters, as specified in Section 4.1 of this Agreement, for seven (7)
calendar days or more in any calendar year during the Term or any Renewal Term
of this Agreement (other than a temporary cessation of use due to a Casualty
Event), the City will have the right to terminate this Agreement immediately by
providing written notice to TE and RadioShack. RadioShack's failure to use the
Downtown Site for the RadioShack Corporate Headquarters constitutes an event
of default under the Original EDPA, but shall not constitute a default under this
Agreement so long as RadioShack uses another location or locations in the City
for the RadioShack Corporate Headquarters.
In addition, RadioShack recognizes that a portion of the consideration
under this Agreement is the economic benefit brought to the City by virtue of
RadioShack's operation of its Corporate Headquarters in the City, especially in
the first five (5) years of the Term of this Agreement. Accordingly, RadioShack
understands and agrees that the failure of RadioShack to use a location or
locations within the corporate limits of the City as the RadioShack Corporate
Headquarters during those first five (5) years, and the resulting loss of jobs in the
current economic climate, will harm and have a negative economic impact on the
City, and RadioShack agrees that the amount of actual damages resulting
therefrom are speculative in nature and will be difficult or impossible to ascertain.
Therefore, upon termination of this Agreement for failure by RadioShack to use a
location or locations in the City as its Corporate Headquarters at any time on or
before June 30, 2015, RadioShack agrees to reimburse the City, as liquidated
damages and not as a penalty, the following amounts:
(a) If RadioShack fails to use a location or locations in the City as the
RadioShack Corporate Headquarters for seven (7) calendar days at any time
between and including June 9, 2010 and June 30, 2012, RadioShack shall
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Economic Development Program Agreement
between City of Fort Worth,TE Electronics LP,and RadioShack Corporation
reimburse the City one hundred percent (100%) of all Program Grants paid
pursuant to this Agreement after January 1, 2010.
(b) If RadioShack fails to use a location or locations in the City as the
RadioShack Corporate Headquarters for seven (7) calendar days at any time
between and including July 1, 2012 and June 30, 2013, RadioShack shall
reimburse the City seventy-five percent (75%) of all Program Grants paid
pursuant to this Agreement after January 1, 2010.
(c) If RadioShack fails to use a location or locations in the City as the
RadioShack Corporate Headquarters for seven (7) calendar days at any time
between and including July 1, 2013 and June 30, 2014, RadioShack shall
reimburse the City fifty percent (50%) of all Program Grants paid pursuant to this
Agreement after January 1, 2010.
(c) If RadioShack fails to use a location or locations in the City as the
RadioShack Corporate Headquarters for seven (7) calendar days at any time
between and including July 1, 2014 and June 30, 2015, RadioShack shall
reimburse the City twenty-five percent(25%) of all Program Grants paid pursuant
to this Agreement after January 1, 2010.
The City and RadioShack agree that such amounts are a reasonable
approximation of actual damages that the City will incur as a result of
RadioShack's failure to use a location or locations in the City as the RadioShack
Corporate Headquarters throughout the Term of this Agreement and that this
provision is intended to provide compensation for actual damages and is not a
penalty. The provisions of this Section 6.1 shall survive any termination of this
Agreement.
6.2. Failure to Submit Sales Tax Certificates.
For any month in which TE fails to submit a Sales Tax Certificate, as
required by and in accordance with Section 4.2, the City's obligation to pay TE a
Program Grant for that month pursuant to this Agreement shall be suspended until
the City has received such Sales Tax Certificate. If TE fails to submit a Sales Tax
Certificate for three (3) consecutive months, Section 6.3 shall apply.
6.3. In General.
Unless stated elsewhere in this Agreement, TE shall be in default under
this Agreement if TE or RadioShack 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 by the City referencing this
Agreement (or, if TE or RadioShack has diligently and continuously attempted
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
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Economic Development Program Agreement
between City of Fort Worth,TE Electronics LP,and RadioShack Corporation
reasonably necessary to effect cure, as determined collectively by all parties in
good faith), the City shall have the right to terminate this Agreement immediately
by providing written notice to TE and RadioShack.
6.4. By Mutual Agreement.
The parties may terminate this Agreement by mutual written agreement.
7. INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that TE and RadioShack shall operate as
independent contractors in each and every respect hereunder and not as agents,
representatives or employees of the City. TE and RadioShack shall have the exclusive
right to control all details and day-to-day operations relative to their respective functions
and duties, and shall be solely responsible for the acts and omissions of their officers,
agents, servants, employees, contractors, subcontractors, licensees and invitees. TE and
RadioShack acknowledge that the doctrine of respondeat superior will not apply as
between the City and TE or RadioShack, their officers, agents, servants, employees,
contractors, subcontractors, licensees, and invitees. TE and RadioShack further agree
that nothing in this Agreement will be construed as the creation of a partnership or joint
enterprise between the City and TE or RadioShack.
8. INDEMNIFICATION.
RADIOSHACK AND TE SHALL BE LIABLE FOR AND HEREBY AGREE
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
TE'S OR RADIOSHACK'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 RADIOSHACK OR
TE OR ANY AFFILIATE, THEIR OFFICERS, AGENTS, ASSOCIATES,
EMPLOYEES, CONTRACTORS (OTHER THAN THE CITY) OR
SUBCONTRACTORS, IN THE PERFORMANCE OF THIS AGREEMENT,
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 SOME OR ALL OF THE PARTIES, RESPONSIBILITY, IF
ANY, SHALL BE APPORTIONED COMPARATIVELY IN ACCORDANCE WITH
THE LA WS OF THE STA TE OF TEXAS.
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Economic Development Program Agreement
between City of Fort Worth,TE Electronics LP,and RadioShack Corporation
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:
City of Fort Worth
Attn: City Manager
1000 Throckmorton
Fort Worth, TX 76102
with copies to:
the City Attorney and
Housing and Economic Development
Director at the same address
TE: RadioShack:
TE Electronics LP RadioShack Corporation
c/o RadioShack Corporation Attn: VP, General Counsel &
Attn: VP, General Counsel & Corporate Secretary
Corporate Secretary 300 RadioShack Circle, MS CF4-101
300 RadioShack Circle, MS CF4-101 Fort Worth, TX 76102
Fort Worth, TX 76102
with a copy to: with a copy to:
E. Brad Mahon E. Brad Mahon
Murphy Mahon Keffler Farrier, LLP Murphy Mahon Keffler Farrier, LLP
Tindall Square Building No. 2 Tindall Square Building No. 2
505 Pecan St., Suite 101 505 Pecan St., Suite 101
Fort Worth, TX 76102 Fort Worth, TX 76102
The City, TE and RadioShack may change their addresses for notice specified above by
providing the other parties with thirty (30) days' advance written notice of such change of
address.
10. ASSIGNMENT AND SUCCESSORS.
This Agreement shall be binding on and inure to the benefit of the parties, their
respective successors and assigns; provided, however, that neither RadioShack nor TE
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may convey, transfer or otherwise assign all or any part of their rights and obligations
hereunder without the advance written consent of the City.
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.
13. NO WAIVER.
The failure of a party to insist upon the performance of any term or provision of
this Agreement or to exercise any right granted hereunder shall not constitute a waiver of
that party's right to insist upon appropriate performance or to assert any such right on any
future occasion.
14. VENUE AND JURISDICTION.
If any action, whether real or asserted, at law or in equity, arises on the basis of
any provision of this Agreement, venue for such action shall lie in state courts located in
Tarrant County, Texas or the United States District Court for the Northern District of
Texas — Fort Worth Division. This Agreement shall be construed in accordance with the
laws of the State of Texas.
15. NO THIRD PARTY RIGHTS.
The provisions and conditions of this Agreement are solely for the benefit of the
City, TE and RadioShack, and any assign or successor thereof to which the City has
consented in accordance with Section 10 of this Agreement, and are not intended to
create any rights, contractual or otherwise, to any other person or entity.
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between City of Fort Worth,TE Electronics LP,and RadioShack Corporation
16. 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.
17. CAPTIONS.
Captions and headings used in this Agreement are for reference purposes only and
shall not be deemed a part of this Agreement.
18. 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, RadioShack, and TE 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.
19. COUNTERPARTS.
This Agreement may be executed in multiple counterparts, each of which shall be
considered an original, but all of which shall constitute one instrument.
EXECUTED to take effect on the Effective Date:
CITY OF FORT WORTH:
By. Attes by:
lc Tom Higgins
oonu���a
Assistant City Manager v �p
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d�3c� iv y Hendrix, City etary '01 °°°°°°p°N,I
Date: ��o0 0���
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OFFICIAL RECORD contract Authorization �9, �°o 00- �
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Economic Development Program Agreement I I 1 b a44 ��0
between City of Fort Worth,TE Electronics LP,and RadioShack Coj�$r pn
APPROVED AS TO FORM AND LEGALITY:
By:
Peter Vaky
Assistant City Attorney
M&C: C-2g27� L-/5=/D
TE ELECTRONICS LP, RADIOSHACK CORPORATION,
a Delaware limited partnership: a Delaware corporation:
By:RADIOSHACK CORPORATION, a
Delaware corporation and its sole
general partner:
By: By:/G��.!C/��
ame: Robert C. Donohoo Name: Robert C. Donohoo
Title: VP, General Counsel & Title: VP, General Counsel &
Corporate Secretary Corporate Secretary
Date: Date:
Page 15
Economic Development Program Agreement
between City of Fort Worth,TE Electronics LP,and RadioShack Corporation
EXHIBIT "A"
Lease Terms and Conditions
That certain Amended and Restated Lease between Tarrant County College
District and RadioShack, dated as of June 25, 2008, as previously amended by that
certain First Amendment to Lease, dated as of March 11, 2010, shall be further amended
(the "Second Amendment") as necessary to reflect the following terms and conditions:
1. RadioShack shall lease the Clear Fork Building and the West Fork Building (as
those terms are defined in the Amended and Restated Lease) for an extended term
expiring on June 30, 2016.
2. RadioShack may not terminate the Lease as of a date prior to June 30, 2015. If
the Lease is terminated prior to June 30, 2015, RadioShack will be liable for payment of
all Basic Rent, Additional Rent, and any other sums owed to Tarrant County College
District under the Lease through June 30, 2015.
3. Annual Basic Rent for both the Clear Fork Building and the West Fork Building
shall be $5,200,000.00.
4. Within thirty (30) days following the effective date of the Second Amendment,
Tarrant County College District shall cause that certain lawsuit brought by Tarrant
County College District in Cause No. 096-242929-10, styled Tarrant County College
District, Plaintiff v. Tarrant Appraisal District, Defendant, whereby Tarrant County
College District is seeking a judicial determination that all or part of the Premises (as that
term is defined in the Amended and Restated Lease) is exempt from ad valorem taxes, to
be dismissed with prejudice.
Page 16
Economic Development Program Agreement
between City of Fort Worth,TE Electronics LP,and RadioShack Corporation
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 6/15/2010
DATE: Tuesday,June 15, 2010 REFERENCE NO.: C-24274
LOG NAME: 17RADIOSHACKPOS380
SUB.IECT:
Authorize Execution of Economic Development Program Agreement with RadioShack Corporation and TE
Electronics LP
RECOMMENDATION:
It is recommended that the City Council authorize the City
Monger to execute an Economic Development Program
Agreement with RadioShack Corporation and TE Electronics LP in
substantially the same form as that attached hereto.
DISCUSSION:
Under a separate Mayor and Council Communication item being
considered separately by the City Council,City staff is
recommending that the City Council authorize an amendment to
that certain Economic Development Program Agreement between
the City and RadioShack Corporation(City Secretary Contract No.
27982) (the Original EDPA).Under the proposed amendment to
the Original EDPA, RadioShack will maintain its corporate
headquarters,along with 400 full—time jobs with Fort Worth
residents and 150 full—time jobs with Central City residents, at its
downtown campus, which has been purchased by Tarrant County
College District. RadioShack has also committed to expend at least
$1.2 million each year with Fort Worth companies and
$100,000.00 per year with minority—and women—owned
businesses for supplies and services associated with the operation
of its corporate headquarters. In return,the City will pay
RadioShack annual economic development grants authorized by
Chapter 380 of the Texas Local Government Code equal to 100
percent of real and personal property taxes received by the City
that are attributable to RadioShack's corporate headquarters at the
site until the earlier of(i)June 30,2016 or(ii)the date as of which
$10,766,514.00 has been paid pursuant to the Original EDPA,as
amended;the two amended Development Agreements between
RadioShack and the Riverfront TIF's board of directors(the TIF
Agreements);and this proposed Economic Development Program
Agreement between TE Electronics LP,RadioShack and the City.
TE Electronics LP(TE)is a Delaware limited partnership based in
Fort Worth that is controlled by RadioShack. Under the Economic
Development Program Agreement that is proposed,RadioShack
will cause TE to serve as the retail provider for all taxable items
associated with the general business operations of RadioShack and
its affiliates, including supplies, software,fixtures and signage,that
are used at RadioShack's corporate headquarters and in the retail
stores of RadioShack,its franchisees and affiliates.The sale of
such items will result in the collection of sales taxes in Fort Worth
that do not currently exist.As an incentive for RadioShack to
maintain its corporate headquarters in the City,the City will pay
TE economic development program grants equal to 100% of TE's
sales tax revenues(excluding any amounts collected for the City's
Crime Control and Prevention District or for the Fort Worth
Transportation Authority)until the sum of$10,766,514.00 has
been paid pursuant the Original EDPA, as amended;the TIF
Agreements,as amended; and this Agreement. After that,the City
will pay TE an amount equal to only 50%of those sales tax
revenues,and the City will retain the other 50%.The term of this
proposed Agreement is 15 years, which the parties can collectively
agree to extend for two additional terms of 5 years each.
If RadioShack ceases to use a location in the City as its corporate
headquarters at any time during the term of the Agreement,the
City will have the right to terminate the Agreement immediately.
In addition,if RadioShack ceases to use a location in the City at its
corporate headquarters on or before June 30,2015,TE will be
required to reimburse the City the following percentages of all
Program Grants paid under this Agreement:
• 100% if RadioShack ceases to use a location in the City as
its corporate headquarters at any time between June 9,
2010 and June 30, 2012;
•75%if RadioShack ceases to use a location in the City as
its corporate headquarters at any time between July 1,2012
and June 30,2013;
• 50%if RadioShack ceases to use a location in the City as
its corporate headquarters at any time between July 1,2013
and June 30,2014; and
•25%if RadioShack ceases to use a location in the City as
its corporate headquarters at any time between July 1,2014
and June 30,2015.
City staff anticipates that the operation of RadioShack's corporate
headquarters,as that term is defined in the Agreement,will require
a significant level of employment and local investment. However,
unlike the Original EDPA,this Agreement does not require
RadioShack to maintain a specific number of jobs at the site or to
make minimum amounts of supply and service expenditures.
RadioShack and TE may not convey,transfer or otherwise assign
their rights under this Agreement without the advance written
consent of the City.
The RadioShack facility is located in COUNCIL DISTRICT 9.
FISCAL INFORMATION:
The Financial Management Services Director certifies that this
action will have no material effect on City funds.
FUND CENTERS:
TO Fund/Account/Centers FROM Fund/Account/Centers
CERTIFICATIONS:
Submitted for City Manager's Office by: Thomas Higgins (6192)
Originating Department Head: Jay Chapa (5804)
Additional Information Contact: Guy Brown (7313)
ATTACHMENTS
1. 17RadioShack Point of Sale 380 6-10-10 Clean 121.DOC