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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 PIER—FTW, INC. ("Pier 1"), a Delaware corporation.
RECITALS
WHEREAS, 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; and
WHEREAS, in accordance with the 2002 Comprehensive Plan adopted by the
City Council pursuant to M&C G-13541 on February 26, 2002, 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; and
WHEREAS, 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;
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Economic Development Program Agreement R.C ,J 19 TEX.
between City of Fort Worth and Pier—FTW,Inc. -
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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
SECTION 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.
SECTION 2.
PURPOSE
2.1. Objectives.
Pier 1's current corporate headquarters are located in leased office space
within a high-rise building in downtown Fort Worth. Pier 1 has outgrown its
current facilities and intends to build a new corporate headquarters at another
location. Pier 1 is exploring a number of locations for construction of its new
corporate headquarters, including locations outside of the City. One of the
locations that Pier 1 is considering for this purpose is property in the northwest
part downtown Fort Worth in the vicinity of Forest Park Boulevard, West Fifth
Street and Summit Avenue (the "Pier 1 Site"), which is more specifically
depicted in the map attached hereto as Exhibit "A". Exhibit "A" is hereby made
a part of this Agreement for all purposes.
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Economic Development Program Agreement ��Util�1J C= L;I ^l��ry
between City of Fort Worth and Pier—FTW, Inc.
The City Council believes that the northwest portion of downtown is
underdeveloped and that quality development in that sector will help draw
together the central business district, the cultural district and the green spaces
along Trinity Park as a more cohesive and lively urban area. Pier 1's proposed
development of the Pier 1 Site, as set forth in this Agreement, will contribute
significantly to the momentum needed to achieve that goal. Consequently, the
City strongly favors Pier 1's relocation of its corporate headquarters to the Pier 1
Site. The parties acknowledge that the present infrastructure in the vicinity of the
Pier 1 Site is insufficient to support anticipated development by Pier 1 and that the
costs of development on the Pier 1 Site will greatly exceed the costs of
comparable development on raw land at another site. Pier 1 wishes to continue its
historical presence in the City's downtown area and to play a significant role in its
future revitalization. However, in order to justify a relocation to the Pier 1 Site,
Pier 1 has requested an economic assistance package from the City so that its
costs for development, improvement and expansion of the Pier 1 Site will be more
comparable with, rather than greatly exceeding, those associated with raw land.
2.2. Concent and Structure.
The parties have jointly developed the concept behind the Program
outlined in this Agreement. The Program is designed to make up for the
increased costs that Pier 1 will incur as a result of its relocation to the Pier 1 Site
rather than to a suburban site in the City or a location in another municipality.
Under the Program, the City will provide Pier 1 with economic development
grants based on the amount of revenue received by the City from Pier 1's property
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Economic Development Program Agreement
between City of Fort Worth and Pier—FTW, Inc.
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taxes on the Pier 1 Site and on compliance by Pier 1 with various commitments
that will benefit the City, as further provided in this Agreement. The City will
fund these economic development grants from available moneys in the City's
general fund.
SECTION 3.
DEFINITIONS
Capped Taxable Appraised Value means the maximum taxable appraised value of
Pier 1 Property for a given tax year, as set forth in Exhibit "B", attached hereto and
hereby made a part of this Agreement for all purposes, on which the City will calculate
its Program Grant to Pier 1 for that tax year.
Central City means the area of the corporate limits of the City within Loop 820 (i)
consisting of all Community Development Block Grant ("CDBG") eligible census block
groups; (ii) all state-designated enterprise zones; and (iii) all census block groups that are
contiguous by seventy-five percent (75%) or more of their perimeter to CDBG eligible
block groups or enterprise zones, as well as any CDBG-eligible block in the corporate
limits of the City outside Loop 820, as more specifically depicted in the map of Exhibit
"C", attached hereto and hereby made a part of this Agreement for all purposes.
Central City Resident means an individual whose principal place of residence is at
a location within the Central City.
Certified M/WBE means a minority or woman-owned business that has received
certification as either a minority business enterprise (MBE) or a woman business
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Economic Development Program Agreement
between City of Fort Worth and Pier—FTW, Inc. 9
enterprise (WBE) by either the City, the North Texas Regional Certification Agency
(NTRCA) or the Texas Department of Transportation (TxDOT), Highway Division.
Corporate Offices means a major operation and/or administrative facilities for
Pier 1 and its successors and assigns.
Excess Pier 1 Property Taxes means the positive difference, if any, between
property tax revenue received by the City in a given tax year which is based on the entire
taxable appraised value of Pier 1 Property and that which is based on the Capped Taxable
Appraised Value for the same tax year in accordance with Exhibit `B". For example, and
as an example only, if the Capped Taxable Appraised Value in a given tax year is
$500,000 and the entire taxable appraised value of Pier 1 Property for that tax year is
actually $750,000, Excess Pier 1 Property Taxes would be the tax revenue received by
the City for that tax year based on the $250,000 difference between $750,000 and
$500,000.
Fort Worth Company means a business that has a principal office located within
the corporate limits of the City.
Fort Worth Resident means an individual whose principal place of residence is
located within the corporate limits of the City.
Full-time Job means a job filled by one (1) individual for a period of not less than
thirty-seven and one-half(37 %) hours per week or another measurement used to define
full-time employment by Pier 1 in accordance with its then-current personnel policies and
regulations.
Pier 1 means Pier—FTW, Inc., and all companies, incorporated or otherwise under
common control with, controlled by, or controlling Pier 1 Imports, Inc. For purposes of
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this definition, "control" means fifty percent (50%) or more of the ownership determined
by either value or vote.
Pier 1 Property means real and personal property owned or leased by Pier 1 (i) on
which Pier 1 is required to pay real and/or personal property taxes to the City and (ii) that
is located on the Pier 1 Site.
Pier 1 Property means the amount of real and personal property tax paid in
a given tax year by Pier 1 to the City based on the lesser of(i) the entire taxable appraised
value of Pier 1 Property or (ii) the Capped Taxable Appraised Value. The entire taxable
appraised value of Pier 1 Property will be established solely by the appraisal district that
has jurisdiction over the Pier 1 Site at the time, with the understanding that Pier 1 shall
retain all rights to protest and contest any such appraisals. With respect to property
leased by Pier 1, Pier 1 Property Taxes include that portion of annual property tax,
prorated on a daily basis, which is attributable to the period during which Pier 1 was the
lessee of such property.
Program means the economic development program authorized by Chapter 380 of
the Texas Local Government Code and established and outlined in this Agreement.
Program Grants means the annual economic development grants paid by the City
to Pier 1 in accordance with this Agreement and as part of the Program.
SECTION 4.
TERM
This Agreement shall be effective as of the date of execution by both parties and,
subject to Section 8.4.1 of this Agreement, shall expire upon payment by the City to Pier
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Economic Development Program Agreement -
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between City of Fort Worth and Pier—FTW,Inc. i(` `1'�r• �i�C�i•{!e
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I of the twentieth (20th) annual Program Grant, as provided by Section 6 hereof (the
"Term"), unless terminated earlier as provided by and in accordance with this
Agreement.
SECTION 5.
PIER 1 OBLIGATIONS
5.1. Required Improvements.
The commitments set forth in Sections 5.1.1, 5.1.2 and 5.1.3 may hereafter
be referred to, either in an individual or a collective sense, as the "Base
Commitments".
5.1.1. Construction of Corporate Offices.
Pier 1 will make or cause to be made real and personal property
investments on the Pier 1 Site of at least $80 million, including site
development costs and as further depicted in Exhibit "D", attached hereto
and hereby made a part of this Agreement for all purposes (the "Required
Improvements"), by December 31, 2005 in order for the Pier 1 Site to be
used for Corporate Offices at all times during the Term of this Agreement.
5.1.2. Use of Fort Worth Companies.
Without regard to the actual amount of dollars spent on the
Required Improvements, Pier 1 will spend at least twenty-five percent
(25%) of its construction costs for the Required Improvements with
contractors that are Fort Worth Companies.
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Economic Development Program Agreement
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5.1.3. Use of Certified M/WBEs.
Without regard to the actual amount of dollars spent on the
Required Improvements, Pier 1 will spend at least twenty percent (20%) of
its construction costs for the Required Improvements with contractors that
are Certified M/WBEs. Dollars spent with a Certified M/WBE that is also
a Fort Worth Company will be calculated at 1.5 times their face value (so
that if, for example, Pier 1 spends $1,000 with a Certified M/WBE that is
also a Fort Worth Company, Pier 1 will be deemed to have spent $1,500
with such Certified M/WBE for purposes of determining whether Pier 1
has met its twenty percent (20%) Certified M/WBE spending requirement
under this Section 5.1.3.
5.2. Employment Commitments.
As of the date of execution of this Agreement, Pier 1 employs
approximately 730 employees in its headquarters location in downtown Fort
Worth. Determination of compliance with this Section 5.2 shall be based on Pier
1's employment data as of August 1 of each year for which the requirements
under this Section 5.2 are in effect.
5.2.1. Fort Worth Residents.
At all times during the term of this Agreement, Pier 1 will provide
at least (i) 350 Full-time Jobs on the Pier 1 Site to Fort Worth Residents or
(ii) forty percent (40%) of the total number of Full-time Jobs on the Pier 1
Site to Fort Worth Residents, whichever is greater.
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5.2.2. Central City Residents.
At all times during the term of this Agreement, Pier 1 will provide
at least (i) 100 Full-time Jobs on the Pier 1 Site to Central City Residents
or (ii) ten percent (10%) of the total number of Full-time Jobs on the Pier
1 Site to Central City Residents, whichever is greater.
5.3. Supply and Service Expenditure Commitments.
5.3.1. Fort Worth Companies.
Beginning with calendar year 2005, and in each subsequent year of
the term of this Agreement, Pier 1 will spend at least $1 million in local
discretionary funds for supplies and services directly provided in
connection with the operation of the Required Improvements with Fort
Worth Companies.
5.3.2. Certified M/WBEs.
Beginning with calendar year 2005, and in each subsequent year of
the term of this Agreement, Pier 1 will spend at least $200,000 in local
discretionary funds for supplies and services directly provided in
connection with the operation of the Required Improvements with
Certified M/WBEs. Dollars spent with a Certified M/WBE that is also a
Fort Worth Company will be calculated at 1.5 times their face value (so
that if, for example, Pier 1 spends $1,000 with a Certified M/WBE that is
also a Fort Worth Company, Pier 1 will be deemed to have spent $1,500
with such M/WBE for purposes of determining whether Pier 1 has met its
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Economic Development Program Agreement
between Cit of Fort Worth and Pier—FTW,Inc.
City
$200,000 Certified M/WBE spending requirement under this Section
5.3.2.
5.4. Use of Pier 1 Site as Corporate Offices.
Pier 1 shall use the Pier 1 Site or cause the Pier 1 Site to be used for
Corporate Offices at all times during the Term of this Agreement.
5.5. Audits.
Pier 1 agrees that the City will have the right to audit the financial and
business records of Pier 1 that relate to the Pier 1 Site and the Required
Improvements (collectively "Records") at any time during the Term of this
Agreement in order to determine compliance with this Agreement. Pier 1 shall
make all Records available to the City on the Pier 1 Site or at another location in
the City acceptable to both parties following reasonable advance notice by the
City and shall otherwise cooperate fully with the City during any audit.
SECTION 6.
PROGRAM GRANTS
Beginning in calendar year 2006, the City will pay to Pier 1 twenty (20) annual
Program Grants calculated in accordance with this Section 6.
6.1. Base Benefit.
The amount of each annual Program Grant paid during the Term of this
Agreement shall be based on the Base Benefit. The "Base Benefit" shall equal
the Pier 1 Property Taxes for the previous tax year, multiplied by a percentage
equal to ninety percent (90%) minus the Aggregate Commitment Ratio
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Economic Development Program Agreementr�
between City of Fort Worth and Pier—FTW,Inc. ,�?,?���
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Percentage, as defined in and calculated in accordance with Section 6.2. The
Aggregate Commitment Ratio Percentage shall be determined on the earlier of(i)
January 31, 2006 (but only taking into account the extent to which Pier 1 met its
Base Commitments, as specifically set forth in Sections 5.1.1, 5.1.2 and 5.1.3, as
of December 31, 2005, and disregarding any construction undertaken or payments
made after such date) or (ii) the date of issuance of a final certificate of occupancy
for all of the Required Improvements.
6.2. Commitment Ratio Percentages.
The "Aggregate Commitment Ratio Percentage" shall equal the
aggregate percentage, if any, by which Pier 1 failed to meet its Base
Commitments, as specifically set forth in Sections 5.1.1, 5.1.2 and 5.1.3 (each an
"Individual Commitment Ratio Percentage") and as follows:
6.2.1. Commitment With Rep-ard to Construction (Section 5.1.1).
If Pier 1 fails to spend at least $80 million on the Required
Improvements by December 31, 2005, the Individual Commitment Ratio
Percentage related to Section 5.1.1 shall equal the difference between (i)
one hundred percent (100%) and (ii) a fraction, to be expressed as a
percentage, where (a) the numerator is the actual amount of dollars spent
by Pier 1 on the Required Improvements as of December 31, 2005 and
where (b) the denominator is $80 million. In other words, by way of
example only, if as of December 31, 2005 Pier 1 had spent only $76
million on the Required Improvements, the Individual Commitment Ratio
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between City of Fort Worth and Pier—FTW, Inc. ^ e O
Percentage under this Section 6.2.1 would be five percent (5%), which is
100% minus [$76 million/$80 million, or 95%].
6.2.2. Commitment with Regard to Use of Fort Worth Companies
(Section 5.1.2).
If Pier 1 fails to spend at least at least twenty-five percent (25%) of
its construction costs for the Required Improvements with contractors that
are Fort Worth Companies, the Individual Commitment Ratio Percentage
related to Section 5.1.2 shall equal the difference between (i) one hundred
percent (100%) and (ii) a fraction, to be expressed as a percentage, where
(a) the numerator is the number of dollars actually spent with contractors
that are Fort Worth Companies in the construction of the Required
Improvements and where (b) the denominator is the product of the total
number of dollars actually spent in the construction of the Required
Improvements multiplied by .25 (25%). In other words, by way of
example only, if as of December 31, 2005 Pier 1 had spent $80 million on
the Required Improvements, $18 million of which was with Fort Worth
Companies, the Individual Commitment Ratio Percentage under this
Section 6.2.2 would be ten percent (10%), which is 100% minus [$18
million divided by {$80 million x .251, or $18 million/$20 million, or
90%].
6.2.3. Commitment with Regard to Use of Certified M/WBEs
(Section 5.1.3).
If Pier 1 fails to spend at least at least twenty percent (20%) of its
construction costs for the Required Improvements with contractors that are
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Economic Development Program Agreement � � =: �' � J
between City of Fort Worth and Pier—FTW,Inc.
Certified M/WBEs, the Individual Commitment Ratio Percentage related
to Section 5.1.3 shall equal the difference between (i) one hundred percent
(100%) and (ii) a fraction, to be expressed as a percentage, where (a) the
numerator is the number of dollars actually spent with contractors that are
Certified M/WBEs in the construction of the Required Improvements and
(b) the denominator is the product of the total number of dollars actually
spent in the construction of the Required Improvements multiplied by .20
(20%). In other words, by way of example only, if as of December 31,
2005 Pier 1 had spent $80 million on the Required Improvements, $12.8
million of which was with Certified M/WBEs, the Individual Commitment
Ratio Percentage under this Section 6.2.3 would be twenty percent (20%),
which is 100% minus [$12.8 million divided by {$80 million x .201, or
$12.8 million/$16 million, or 80%].
6.2.4. Calculation of Aggregate Commitment Ratio Percentage and
Impact on Base Benefit.
As stated above, the Aggregate Commitment Ratio Percentage
equals the sum of each Individual Commitment Ratio Percentage.
Therefore, taking the examples used in Sections 6.2.2 and 6.2.3, if Pier 1
spent $80 million on the Required Improvements, $18 million of which
was with Fort Worth Companies and $12.8 million of which was with
Certified M/WBEs, the Aggregate Commitment Ratio Percentage would
equal thirty percent (30%), which is the sum of the 10% Individual
Commitment Ratio Percentage under Section 6.2.2 and the 20% Individual
Commitment Ratio Percentage under Section 6.2.3. In this instance, then,
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the Base Benefit would be sixty percent (60%) of the Pier 1 Property
Taxes for the previous tax year (90%, which is the maximum potential
Base Benefit available under this Agreement, minus the 30% Aggregate
Commitment Ratio Percentage).
6.2.5. No Offsets.
A deficiency in attainment of one Base Commitment may not be
offset by exceeding another Base Commitment. In other words, if Pier 1
exceeded its Base Commitment to spend at least twenty-five percent
(25%) of its construction costs on the Required Improvements with Fort
Worth Companies by five percent (5%) but failed to attain its Base
Commitment to spend at least twenty percent (20%) of its construction
costs on the Required Improvements with Certified M/WBEs by five
percent (5%), the Aggregate Commitment Ratio Percentage would still be
five percent (5%) on account of Pier I's failure to meet the latter Base
Commitment.
6.3. Program Grants During Term of Agreement.
Each annual Program Grant paid by the City to Pier 1 in calendar year
2006 and in each subsequent year during the term of this Agreement shall be
based on a combination of the Base Benefit and Pier 1's compliance with its
commitments under Sections 5.2.1, 5.2.2, 5.3.1 and 5.3.2, as follows:
r � 1
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Economic Development Program Agreement
between City of Fort Worth and Pier—FTW,Inc.
6.3.1. Base Benefit Component (60%).
Pier 1 shall automatically receive sixty percent (60%) of the
applicable Base Benefit as part of each annual Program Grant paid during
the term of this Agreement.
6.3.2. Fort Worth Resident Employment (10%).
If during the previous tax year Pier 1 has complied with its
commitment to provide at least the number of Full-time Jobs on the Pier 1
Site to Fort Worth Residents required for that year, as set forth in Section
5.2.1 of this Agreement, Pier 1's Program Grant for the next calendar year
shall be increased by an amount equal to ten percent (10%) of the
applicable Base Benefit.
6.3.3. Central City Resident Employment (10%).
If during the previous tax year Pier 1 has complied with its
commitment to provide at least the number of Full-time Jobs on the Pier 1
Site to Central City Residents required for that year, as set forth in Section
5.2.2 of this Agreement, Pier 1's Program Grant for the next calendar year
shall be increased by an amount equal to ten percent (10%) of the
applicable Base Benefit.
6.3.4. Discretionary Spending with Fort Worth Companies (10%).
If during the previous calendar year Pier I has complied with its
commitment to spend at least $1 million in local discretionary funds for
supplies and services directly provided in connection with the operation of
the Required Improvements with Fort Worth Companies, as set forth in
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Section 5.3.1 of this Agreement, Pier 1's Program Grant for the next
calendar year shall be increased by an amount equal to ten percent (10%)
of the applicable Base Benefit.
6.3.5. Discretionary Spending with Certified M/WBEs (10%).
If during the previous calendar year Pier 1 has complied with its
commitment to spend at least $200,000 in local discretionary funds for
supplies and services directly provided in connection with the operation of
the Required Improvements with Certified M/WBEs, as set forth in
Section 5.3.2 of this Agreement (and as adjusted as provided in Section
5.3.2 for any Certified MWBE that is also a Fort Worth Company), Pier
1's Program Grant for the next calendar year shall be increased by an
amount equal to ten percent (10%) of the applicable Base Benefit.
6.3.6. No Offsets.
A deficiency in attainment of any of the commitments set forth in
Sections 5.2.1, 5.2.2, 5.3.1 and/or 5.3.2 may not be offset by exceeding
another of such commitments. In other words, if in a given year Pier 1
exceeded its commitment, as set forth in Section 5.3.1, to spend at least $1
million in discretionary funds for supplies and services with Fort Worth
Companies by $100,000 but spent only $100,000 in discretionary funds
for supplies and services with Certified M/WBEs instead of$200,000, as
required by Section 5.3.2, Pier 1's Program Grant would still be reduced
in the next calendar year by ten percent (10%) for its failure to meet its
commitment under Section 5.3.2. --
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6.4. Excess Pier 1 Property Taxes Excluded for Program Grants.
Pier 1 understands and agrees that any Excess Pier 1 Property Taxes
received by the City shall remain the property of the City; that the City will not at
any time be required to pay Pier 1 any Excess Pier 1 Property Taxes as part of the
Program; and that Excess Pier 1 Property Taxes received in one year will not in
any manner be applied to or carried over to any Program Grant to Pier 1 in a
subsequent year.
6.5. Deadline for Payment.
Annual Program Grants will be paid to Pier 1 no sooner than May 1 and
no later than June 1 of 2006 and of each subsequent calendar year during the
Term of this Agreement.
SECTION 7.
OTHER CITY OBLIGATIONS
7.1. Penn Street Ri!ht-of-Way Vacation.
At Pier 1's request, the City adopted Ordinance No. 15192 on August 13,
2002 under which the City vacated approximately 2.13 acres of public right-of-
way (that portion of Penn Street adjacent to the southwest corner of Lot 16,
Carlock's Addition, City of Fort Worth, as recorded in the Plat Records of Tarrant
County, Texas and as further depicted in Ordinance No. 15192) (the "Penn Street
Right-of-Way". The value established for the Penn Street Right-of-Way is
$463,452.45. The parties agree that the vacation of the Penn Street Right-of-Way
is necessary in order for Pier 1 to complete the Required Improvements.
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Therefore, as part of the consideration under this Agreement, the City agrees to
forgo payment by Pier 1 of the $463,452.45 value of the Penn Street Right-of-
Way to which the City would otherwise be entitled in return for the vacation
thereof.
7.2. Waiver of Development Fees.
The City will waive all development, building, permit, inspection and
similar fees related to the construction of Pier 1's headquarters (excluding any
fees payable to the Department of Engineering related to formal and/or informal
community facilities agreements) on the Pier 1 Site. However, the City will not
reimburse Pier 1 for any such fees assessed by third parties, such as third party
inspection fees.
7.3. Fast-Track Development Approvals.
The City will provide a procedure to expedite all City development
approvals, including permits and inspections, for the Pier 1 Site.
7.4. Enterprise Zone.
If requested by Pier 1, the City will use reasonable efforts to obtain
Enterprise Zone designation for the Pier 1 Site.
7.5. Infrastructure Improvements.
The City and Pier 1 anticipate that the City will undertake certain public
infrastructure improvements in and around the Pier 1 Site. The nature of these
public infrastructure improvements; the cost and the manner in which the City
will share in such cost, if at all; and the time frame in which these public
infrastructure improvements will be undertaken and completed will, along with
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other pertinent matters, be determined solely in accordance with one or more
Community Facilities Agreements that are negotiated in good faith and entered
into by and between the City and Pier 1.
7.6. Additional Right-of-Way Vacations.
In addition to the Penn Street Right-of-Way, if requested by Pier 1, the
City Council may subsequently adopt an ordinance or ordinances that provide for
the vacation of additional public rights-of-way on or adjacent to the Pier 1 Site.
As part of the consideration under this Agreement, the City may forgo payment
by Pier 1 of the value of such public rights-of-way to which the City would
otherwise be entitled in return for the vacation thereof.
SECTION 8.
DEFAULT, TERMINATION AND
FAILURE TO MEET VARIOUS OBLIGATIONS.
8.1. Termination by Pier 1.
Pier 1 may terminate this Agreement by providing written notice to the
City on or before completion of the Required Improvements (as evidenced by
issuance of any required certificate of occupancy) should Pier 1 fail to obtain a
commitment satisfactory to it for the reimbursement of any or all of the costs of
constructing the Required Improvements pursuant to a development contract,
lease financing agreement or other arrangement between Pier 1 and a bank or
group of banks, developer, leasing company or other third party with resources
sufficient to fund such costs.
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8.2. Termination by the City.
The City may terminate this Agreement at any time after December 31,
2005 or the date on which a final certificate of occupancy is issued for all of the
Required Improvements, whichever is earlier, in the event that the Base Benefit,
as calculated in accordance with Section 6.1, is zero (0) or less.
8.3. Failure by Pier 1 to Meet Base Commitments, Employment
Commitments and/or Supply and Service Expenditure Commitments.
Subject to Section 8.2, Pier 1's failure in any given year to comply with all
or any of the Base Commitments or the commitments set forth in Section 5.2.1,
5.2.2, 5.3.1 and 5.3.2 shall not place Pier 1 in default hereunder or provide the
City with the right to terminate this Agreement, but, rather, shall only be weighed
against the amount of the Program Grant that the City is required to pay Pier 1 in
accordance with this Agreement and as specifically provided in Sections 6.3 and
6.4.
8.4. Failure to Use Pier 1 Site for Corporate Offices.
After December 31, 2005 or the date on which a final certificate of
occupancy is issued for all of the Required Improvements, whichever is earlier, if
the Pier 1 Site is at any time not used for Corporate Offices, as required by
Section 5.4, Pier 1 shall not be deemed to be in default hereunder and the City
will not have the right to terminate this Agreement, but, rather, the following
provisions shall apply:
8.4.1. For an Entire Year.
If the Pier 1 Site is not used for Corporate Offices for an entire
year, the City will have no obligation to make any Program Grant payment
Pae 20
Economic Development Program Agreement
between City of Fort Worth and Pier—FTW,Inc. -YIU. %-g
M.n
P
to Pier 1 or any successor in interest for the following year, with the
understanding that the Term of this Agreement shall not be extended and
that any such waiver shall be counted as a Program Grant payment for
purposes of calculating the Term of this Agreement. In such an event, the
revenue comprising the Program Grant that the City would otherwise have
been obligated to make for such following year shall instead be treated as
Excess Pier 1 Property Taxes, as provided in Section 6.4, and will be
retained by the City and shall not be carried over to any Program Grant in
any subsequent year.
8.4.2. For a Portion of a Year.
If the Pier 1 Site is used for Corporate Offices for only a portion of
a year, the City's Program Grant payment to Pier 1 or a successor in
interest for the following year shall be prorated in accordance with the
number of days during the previous year that the Pier 1 Site was used for
Corporate Offices. In such an event, the revenue comprising difference
between the Program Grant actually made in such following year and the
Program Grant that the City would otherwise have been obligated to make
for such following year shall be treated as Excess Pier 1 Property Taxes,
as provided in Section 6.4, and will be retained by the City and shall not
be carried over to any Program Grant in any subsequent year.
r
Pae 21
Economic Development Program Agreementu �!I�
between City of Fort Worth and Pier—FTW,Inc.
SECTION 9.
MUTUAL ASSISTANCE.
The City and Pier 1 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.
SECTION 10.
REPRESENTATIONS AND WARRANTIES.
The City represents and warrants to Pier 1 that the Program and this Agreement
are within the scope of its authority and the provisions of the charter and code of the City
and that it is duly authorized and empowered to establish the Program and enter into this
Agreement. Pier 1 represents and warrants to the City that it has the requisite authority to
enter into this Agreement.
SECTION 11.
SECTION OR OTHER HEADINGS.
Section or other headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement.
SECTION 12.
ENTIRE AGREEMENT.
This Agreement contains the entire agreement between the parties with respect to
the transaction contemplated herein.
Page 22 CC:i U C�E `��;fi�t��l'�
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Economic Development Program Agreement ( � l!rc"�M Sr z�
between City of Fort Worth and Pier—FTW,Inc. o G UIJp �J � a
SECTION 13.
AMENDMENT.
This Agreement may only be amended, altered, or revoked by written instrument
signed by the City and Pier 1.
SECTION 14.
SUCCESSORS AND ASSIGNS.
This Agreement shall be binding on and inure to the benefit of the parties,
their respective successors and assigns. Provided that Pier 1 is not in default at the time,
Pier 1 may assign all or part of its rights and obligations hereunder without the approval
or consent of the City.
SECTION 15.
NOTICE.
Any notice and/or statement required and permitted to be delivered shall be
deemed delivered by depositing same in the United States mail, certified with return
receipt requested, postage prepaid, addressed to the appropriate party at the following
addresses, or at such other addresses provided by the parties in writing:
PIER 1: Attn: Chairman
Pier 1 Imports
301 Commerce St., Suite 600
Fort Worth, Texas 76102
With a copy to: Attn: General Counsel
Pier 1 Imports
301 Commerce St., Suite 600 _
Fort Worth, Texas 76102 pp
(-?l(elL
Pae 23 iii .'
Economic Development Program Agreement o MIl_�I10� LIRS``
between City of Fort Worth and Pier—FTW,Inc.
CITY: Attn: Director
Economic & Community Development Department
City of Fort Worth
1000 Throckmorton
Fort Worth, Texas 76102
With a copy to: Attn: City Attorney
City Attorney's Office
1000 Throckmorton Street
Fort Worth, Texas 76102
SECTION 16.
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.
SECTION 17.
APPLICABLE LAW.
This Agreement is made, and shall be construed and interpreted under the laws of the
State of Texas, and venue shall lie in state courts located in Tarrant County, Texas or in the
United States District Court for the Northern District of Texas,Fort Worth Division.
SECTION 18.
SEVERABILI T i'.
In the event any provision of this Agreement is illegal, invalid, or unenforceable under
present or future laws, then, and in that event, it is the intention of the parties hereto that the
remainder of this Agreement shall not be affected thereby, and it is also the intention of the
Page 24
Economic Development Program Agreement
between City of Fort Worth and Pier—FTW,Inc. G�o` 7`;' �` EX8
parties to this Agreement that in lieu of each clause or provision that is found to be illegal,
invalid, or unenforceable a provision be added to this Agreement which is legal, valid and
enforceable and is as similar in terms as possible to the provision found to be illegal, invalid or
unenforceable.
SECTION 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 as of the last date indicated below:
CITY OF FORT WORTH: PIER—FTW, INC.:
By: Rz"L-- '/nrM ►-r' By:
Reid Rector Marvin J. Girouar
Assistant City Manager Chairman
Date: l Date: ���/ 402,
APPROVED AS TO FORM AND LEGALITY:
ATTESTED BY
By: s
Peter Vaky
Assistant City Attorney
MC:_ C—I ?m /0 -9-02
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Page 25 � } !'UrQGII�
Economic Development Program Agree ent 't�(' j(U.U.�f4l.r.�/
between City of Fort Worth and Pier-- W, Inc. �I�I 1'i1�tS�
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EXHIBITS
"A"—Map Depicting the Pier 1 Site
"B"—Capped Taxable Appraised Values for Each Year
"C"—Map of the Central City
"D"—Required Pier 1 Improvements
Economic Development Program Agreement
between City of Fort Worth and Pier—FTW, Inc.
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Exhibit "B"
Maximum Taxable Appriased Value of Pier 1 Property
City's Fiscal Maximum
Year in Taxable
which Taxes Assessed
Are Received Value
2006 80,000,000
2007 102,500,000
2008 105,0621500
2009 107,689,063
2010 110,381,289
2011 113,140,821
2012 115,969,342
2013 118,868,575
2014 121,840,290
2015 124,886,297
2016 128,008,454
2017 131,208,666
2018 134,488,882
2019 137,851,104
2020 141,297,382
2021 144,829,817
2022 148,450,562
2023 152,161,826
2024 155,965,872
2025 159,865,019
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City of Fort Worth, Texas
Mayor and Council Communication
DATE REFERENCE NUMBER LOG NAME PAGE
10/8/02 C-19283 17PIER 1 of 2
SUBJECT ECONOMIC DEVELOPMENT PROGRAM AGREEMENT WITH PIER - FTW, INC.
RECOMMENDATION:
It is recommended that the City Council:
1. Find that the terms and conditions of the attached Economic Development Program Agreement with
Pier - FTW, Inc. (Pier 1) constitute a custom-designed economic development program as outlined
in the 2002 Comprehensive Plan; and
2. Authorize the City Manager to execute the attached Economic Development Program Agreement
with Pier 1 (the Agreement).
DISCUSSION:
Under the attached Agreement, Pier 1 has committed to (i) make at least $80 million in real and
personal property investments on property owned by Pier 1 in the vicinity of Forest Park Boulevard,
West Fifth Street and Summit Avenue (the Property) by December 31, 2005; (ii) spend at least 25% of
its construction costs in making those improvements with Fort Worth contractors; and (iii) spend at least
20% of its construction costs in making those improvements with contractors that are certified as
M/WBE companies. These collectively will be referred to as the Construction Commitments.
In addition, for the full 20-year term of the Agreement, Pier 1 has committed (i) to employ Fort Worth
residents in at least 350 full-time positions or at least 40% of all full-time positions offered on the
Property, whichever number is greater, and (ii) to employ Central City residents in at least 100 full-time
positions or at least 10% of all full-time positions offered on the Property, whichever number is greater.
Moreover, for the full 20-year term of the Agreement, Pier 1 has committed to spend at least $1 million
per year with Fort Worth companies and $200,000 per year with certified M/WBE companies for various
supplies and services used in connection with its business operations on the Property. These
collectively will be referred to as the Employment and Spending Commitments.
In return for the economic benefits that will accrue as a result of Pier 1's redevelopment of the Property
and its operation of corporate offices on the Property, beginning in 2006 the City will make twenty
annual economic development program grants to Pier 1, as authorized by Section 380 of the Texas
Local Government Code. The maximum annual grant that Pier 1 will be eligible to receive under the
Agreement is 90% of the taxes it pays to the City on the Property and any taxable personal property
located on the Property, subject to an annual cap based on the taxable appraised value of the Property
as outlined in Exhibit "B" of the Agreement (the Maximum Available Benefit). However, the actual
amount of each annual grant will depend upon a combination of the tax revenue that the City has
received from the Property in the previous tax year and the extent to which Pier 1 has met the
commitments outlined above.
City of Fort Worth, Texas
Mayor and Council Communication
DATE REFERENCE NUMBER LOG NAME PAGE
10/8/02 C-19283 17PIER 2 of 2
SUBJECT ECONOMIC DEVELOPMENT PROGRAM AGREEMENT WITH PIER - FTW, INC.
Pier 1 will receive a base benefit that is determined by the degree to which Pier 1 meets its
Construction Commitments. If Pier 1 meets all of its Construction Commitments, it will receive 60% of
the Maximum Available Benefit. If Pier 1 fails to meet its Construction Commitments, this base benefit
will be reduced by the cumulative percentage that Pier 1 failed to meet the Construction Commitments.
This component of the grants will be referred to as the Base Benefit. The Base Benefit will never
exceed 60% of the Maximum Available Benefit.
In addition to the Base Benefit, Pier 1 will be able to earn additional sums based on whether Pier 1
meets the four Employment and Spending Commitments required for a specific year. Each of the four
Employment and Spending Commitments will be worth 10% of the Maximum Available Benefit, for a
total of 40% of the Maximum Available Benefit. Overall, the City will never make a grant to Pier 1 that is
in excess of the Maximum Available Benefit, meaning that the City will at all times be entitled to retain
at least 10% of the taxes generated by the Pier 1 Property.
The 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 and partnership programs with private
businesses on a case-by-case basis to help ensure the growth and diversification of the local economy,
as stated in the 2002 Comprehensive Plan adopted by the City Council on February 26, 2002 (M&C G-
13541).
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that this action will have no material effect on City funds.
RR:n
Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY
Office by: (to)
Reid Rector 6140
Originating Department Head:
Tom Higgins 6192 (from) APPROVED 10/08/02
Additional Information Contact:
Peter Vaky 7601