Item 4K
City of Southlake Values:
Integrity ♦ Innovation ♦ Accountability ♦ Commitment to Excellence ♦ Teamwork
M E M O R A N D U M
February 28, 2017
To: Shana Yelverton, City Manager
From: Alison Ortowski, Assistant City Manager
Subject: Item 4K: Approve Resolution No. 17-010, adopting a 380
and tax abatement agreement between the City of Southlake
and TD Ameritrade Holding Corporation
Action
Requested: Approval of Resolution No. 17-010 as presented.
Background
Information: On September 1, 2015, the City Council directed City
Manager Shana Yelverton to enter into a Memorandum of
Understanding (MOU) with TD Ameritrade whose purpose
was to establish the mutually-agreed upon terms of a future
incentive agreement between the two entities.
The MOU established infrastructure cost participation on
roadway, water, sewer line and duct bank construction, and
also identified that:
“The parties desire to enter into an ad valorem tax
abatement agreement pursuant to Chapter 312 of the Texas
Tax Code to exempt from taxation: (i) up to 90% of the
increase in the value of the Property for a period not to
exceed 10 years; and (ii) up to 90% of the value of tangible
personal property that is brought onto the Property after the
execution of the tax abatement agreement, fo r a period not
to exceed 10 years.”
The proposed agreement includes provisions that are in
alignment with the MOU. It also includes a number of
performance requirements related to minimum capital
investment, taxable value and employment targets.
Strategic Link: C4 Attract & keep top-tier businesses to drive a dynamic &
sustainable economic environment
Item 4K: Resolution No. 17-010; City Council Meeting Date – March 7, 2017
Page 2 of 36
City of Southlake Values:
Integrity ♦ Innovation ♦ Accountability ♦ Commitment to Excellence ♦ Teamwork
There are also a number of elements of the City’s
Comprehensive Plans that support approval of this
agreement.
Citizen Input/
Board Review: N/A
Financial
Considerations: Following are financial aspects of the development and
associated agreement:
Infrastructure Program Grant Payments
Per the agreement, TD Ameritrade has agreed to construct
infrastructure improvements as follows:
Water Line, Sewer Upgrades, Duct Bank Work:
o The City will pay TD Ameritrade in an amount equal
to 50% of actual construction costs. Total payment
will not exceed $663,750.
Kirkwood Improvements:
o The City will pay TD Ameritrade in an amount equal
to 50% of actual construction costs attributable to
deceleration/acceleration lanes and median cuts.
Total payment will be capped at $254,980.
The agreement also specifies that TD Ameritrade will
reimburse the City in an amount equal to 50% of actual
construction costs related to the installation of a signal at TW
King and Kirkwood Boulevard. This amount is capped at
$152,500.
General Fund Sales Tax Program Grant Payments
The agreement also provides for the following payments to
TD Ameritrade from sales taxes generated by the project:
Construction Materials:
o The City will pay TD Ameritrade 100% of the general
fund sales and use taxes received by the City that
are attributable to the purchase of construction
materials used on the project. Payments will not
exceed $775,000.
Item 4K: Resolution No. 17-010; City Council Meeting Date – March 7, 2017
Page 3 of 36
City of Southlake Values:
Integrity ♦ Innovation ♦ Accountability ♦ Commitment to Excellence ♦ Teamwork
FF&E; Machinery & Equipment; Utilities; Operating
Costs:
o The City will pay TD Ameritrade 50% of the general
fund sales and use taxes received by the City that
are attributable to purchase of FF&E and Machinery
& Equipment necessary to equip the project prior to
occupancy. Payment will not exceed $190,000.
o During the first 5 years of operation, the City will pay
TD Ameritrade 50% of the general fund sales and
use taxes received by the City that are attributable to
purchase of Machinery & Equipment, Utilities and
Taxable Operating Costs. Payments under this term
will not exceed $50,000 in total.
Tax Abatement
The agreement includes provisions to provide an abatement
of real and business personal property taxes for a term of 10
year. The agreement stipulates the amount to be abated
based on the taxable value as follows:
Taxable Value Abatement Amount
$139,500,000+ 90%
$139,499,999-124,000,000 80%
$123,999,999-108,500,000 70%
$108,499,999-93,000,000 60%
$92,999,999-77,500,000 50%
$77,499,000 and below 0%
The agreement states that if value s fall below $77,500,000,
TD Ameritrade shall forfeit the tax abatement for that
corresponding tax year.
The agreement also states that if TD Ameritrade fails to
make the minimum capital investment of $145,000,000, they
will not be entitled to any tax abatement.
Other Provisions and Performance Requirements
The agreement includes a provision requiring that TD
Ameritrade meet certain employment goals as follows:
No later than Number of Total FTEs
12-31-2018 1400
Item 4K: Resolution No. 17-010; City Council Meeting Date – March 7, 2017
Page 4 of 36
City of Southlake Values:
Integrity ♦ Innovation ♦ Accountability ♦ Commitment to Excellence ♦ Teamwork
03-31-2019 1500
03-31-2020 1550
03-31-2021 1600
03-31-2022 1650
03-31-2023 1700
03-31-2024 1750
If employment targets are not met, TD Ameritrade must pay
the City $500 for each FTE not created or maintained.
That agreement also states that the average salary for all
FTEs may not be less than $70,000 throughout the term of
the agreement.
And finally, as stated previously, the agreement requires a
minimum capital investment of $145,000,000 with a
corresponding taxable value minimum of $139,500,000 in
order to qualify for the maximum incentive. The minimum
capital investment is required in order for TD Ameritrade to
receive the program grant payments and tax abatement.
The minimum taxable value is required to receive the full
90% abatement allowed.
Chief Financial Officer Sharen Jackson has reviewed all
terms, including the capital investment and taxable value
provisions and has concluded that these amounts should
generate a return sufficient to warrant public investment.
The current annual benefit from the site is appr oximately
$20,000. CFO Jackson estimates that the annual benefit
during the abatement will average just under $300,000 with
the annual benefit after the abatement averaging about $1.2
million.
Legal Review: The proposed agreement was reviewed and approved by the
City Attorney.
Alternatives: Approve Resolution No. 17-010 with amendments or direct
staff to revise the agreement and return for City Council
consideration at a future meeting
Supporting
Documents: Resolution No. 17-010
Exhibit A : 380 and Tax Abatement Agreement
Item 4K: Resolution No. 17-010; City Council Meeting Date – March 7, 2017
Page 5 of 36
RESOLUTION NO. 17-010
A RESOLUTION OF THE CITY OF SOUTHLAKE, TEXAS, APPROVING
THE TERMS AND CONDITIONS OF A PROGRAM TO PROMOTE
ECONOMIC DEVELOPMENT AND STIMULATE BUSINESS AND
COMMERCIAL ACTIVITY IN THE CITY; AUTHORIZING THE MAYOR
TO EXECUTE AN AGREEMENT WITH TD AMERITRADE HOLDING
CORPORATION, FOR SUCH PURPOSES; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, Chapter 380 of the Texas Local Government Code authorizes
municipalities to establish and provide for the administration of programs that promote
economic development and stimulate business and commercial activity in the City; and
WHEREAS, the City Council has been presented with a proposed agreement by
and between the City of Southlake and TD Ameritrade Holding Corporation (“TD
Ameritrade”), a copy of which is attached hereto as Exhibit “A” and incorporated herein
by reference (hereinafter called the “Agreement”); and
WHEREAS, upon full review and consideration of the Agreement and all matters
attendant and related thereto, the City Council is of the opinion that the Agreement will
assist in implementing a program whereby economic development will be promoted and
business and commercial activity will be stimulated in the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SOUTHLAKE, TEXAS, THAT:
SECTION 1.
The City Council finds that the terms of the Agreement will promote economic
development and stimulate business and commercial activity in the City and otherwise
meet the criteria of Section 380.001 of the Texas Local Government Code as well as
Chapter 312 of the Texas Tax Code.
SECTION 2.
The City Council hereby adopts an economic development program whereby the
City of Southlake will make economic development program payments to TD
Ameritrade, and take other specified actions, in accordance with the terms outlined in
the Agreement.
SECTION 3.
The terms and conditions of the Agreement, having been reviewed by the City
Council of the City of Southlake and found to be acceptabl e and in the best interest of
Item 4K: Resolution No. 17-010; City Council Meeting Date – March 7, 2017
Page 6 of 36
the City and its citizens are hereby approved.
SECTION 4.
The Mayor is hereby authorized to execute the Agreement and all other
documents in connection therewith on behalf of the City subst antially according to the
terms and conditions set forth in the Agreement.
SECTION 5.
This Resolution shall become effective from and after its passage.
PASSED AND APPROVED this the 7th day of March, 2017.
________________________
Laura Hill, Mayor
ATTEST:
____________________________
Lori Payne, TRMC
City Secretary
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 7
THE STATE OF TEXAS )
)
COUNTY OF TARRANT )
380 AND TAX ABATEMENT AGREEMENT
BETWEEN THE CITY OF SOUTHLAKE, TEXAS, AND
TD AMERITRADE HOLDING CORPORATION
This 380 and Tax Abatement Agreement (“Agreement”) is entered into by and
between the City of Southlake, Texas, a Texas home rule municipality (“City”), and TD
Ameritrade Holding Corporation (“the “Company” and together with its Affiliates, “Owner”).
City and the Company are sometimes hereafter referred to individually as a “party” and
collectively as the “parties.”
W I T N E S S E T H:
WHEREAS, Section 312.002(a) of the Texas Tax Code requires the City to pass a
resolution indicating the City’s desire to become eligible to participate in tax abatement
agreements; and
WHEREAS, on or about May 4, 1999, the City adopted Resolution No. 99-26
electing to become eligible to participate in tax abatement agreements, in accordance with
Section 312.002(a) of the Texas Tax Code, and subsequently has timely reaffirmed its tax
abatement agreement policies; and
WHEREAS, at such times the City also adopted and/or reaffirmed tax abatement
guidelines and criteria, in accordance with Section 312.002 of the Texas Tax Code
(hereinafter referred to as the “City’s Tax Abatement Guidelines and Criteria”); and
WHEREAS, the City’s Tax Abatement Guidelines and Criteria constitute
appropriate guidelines and criteria governing tax abatement agreements to be entered into
by the City, as contemplated by Chapter 312 of the Texas Tax Code, as amended; and
WHEREAS, on or about May 3, 2016, the City Council of the City of Southlake,
Texas, adopted Ordinance No. 1151 establishing a Tax Abatement Reinvestment Zone in
the City of Southlake, Texas, as authorized by the Property Redevelopment and Tax
Abatement Act, Chapter 312 of the Texas Tax Code; and
WHEREAS, the Owner owns approximately 78 acres of real property located in the
Reinvestment Zone and City and more particularly described on Exhibit A attached hereto
(“Real Property”); and
WHEREAS, this abatement of taxes will maintain and enhance the economic and
employment base of the City, thereby benefiting the City, in accordance with the Tax
Abatement Guidelines and Criteria and the Property Redevelopment and Tax Abatement
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 8
Act; and
WHEREAS, the City Council of the City of Southlake, Texas, finds that the
contemplated use of the Real Property, and the improvements to the Real Property as set
forth in this Agreement, and the other terms hereof are consistent with encouraging
development of said Reinvestment Zone in the City of Southlake, Texas, in accordance
with the purposes for its creation, and are in compliance with the City’s Tax Abatement
Guidelines and Criteria, and Chapter 312 of the Texas Tax Code; and
WHEREAS, the Owner acknowledges and agrees that the tax abatements granted
by this Agreement are contingent upon its compliance with this Agreement in accordance
with the terms and conditions set forth herein; and
WHEREAS, the City desires to provide incentives to the Owner pursuant to
Chapter 380 of the Texas Local Government Code (“Chapter 380”) to locate Owner’s
regional corporate campus in the City; and
WHEREAS, the City has the authority under Chapter 380 to make grants of public
funds for the purpose of promoting local economic development and stimulating business
and commercial activity in the City; and
WHEREAS, the City has determined that a grant of funds to the Owner will serve
the purpose of promoting local economic development and enhancing business and
commercial activity in the City; and
WHEREAS, the City finds that a grant of funds would satisfy a fundamental
objective of the City’s strategy, which is to attract and keep top businesses to drive a
dynamic and sustainable economic environment; and
WHEREAS, The City finds that a grant of funds will further the objectives of the
City’s adopted Comprehensive Plan, including: (a) actively recruiting corporate
headquarters and regional offices, with an emphasis on the financial industry; (b)
encouraging development in desired zones such as State Highway 114 West; (c)
supporting appropriate public-private partnerships that will help retain and enhance the
City’s economic base; and (d) attracting desired business to ensure economic growth as
well as continued employment and services for residents of the City; and
WHEREAS, this Agreement was approved by the City Council of the City of
Southlake, Texas, at a regularly scheduled meeting, consistent with Section 312.207(a) of
the Texas Tax Code, as amended.
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:
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 9
SECTION 1. FINDINGS INCORPORATED
All the above premises are hereby found to be true and correct and are hereby
approved and incorporated into the body of this Agreement as if copied in their entirety.
SECTION 2. PROGRAM APPROVED
The City Council hereby establishes a 380 economic development program (the
“Program”) to locate a regional corporate campus in the City and finds and determines that
this Agreement will effectuate the purpose of the Program.
SECTION 3. TERM
This Agreement shall be effective as of the Effective Date and end on the last day
of the Tax Abatement Period, unless terminated earlier by the parties as provided below.
SECTION 4. DEFINITIONS
The following words shall have the following meanings when used in this
Agreement:
Affiliate. “Affiliate” means any Person directly controlling or controlled by the Company, or
any Person controlling or controlled by the same Person who is controlling or is controlled
by the Company. As used in this definition, the term “control” means the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract, or otherwise.
Agreement. “Agreement” means this 380 and Tax Abatement Agreement, together with
all exhibits and schedules attached to this Agreement.
Area Report. “Area Report” means reports as provided in Section 321.3022 of the Texas
Tax Code with respect to City Sales and Use Tax allocations to the City attributable to
Owner’s sales and purchases of Taxable Items (as this term is defined in the Texas Tax
Code) at the Project.
Base Year Value. “Base Year Value” means the value of the Real Property as of January
1, 2016 as appraised by the Tarrant Appraisal District.
Business Personal Property. “Business Personal Property” means tangible personal
property of Owner including but not limited to furniture, fixtures, vehicles and equipment
located at the Real Property (or within the Project) which, at the time of execution of this
Agreement, is not on the tax rolls of the City.
Capital Investment. “Capital Investment” means the actual cost incurred related to the
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 10
construction of the Project, including labor and materials, engineering costs, surveying
costs, fees of consultants, permit and inspection fees, and Business Personal Property
located on the Real Property after the date of this Agreement that are subject to ad
valorem taxes.
Certificate of Occupancy. “Certificate of Occupancy” means a certificate issued by the
City building official reflecting that construction of the Project has been completed in
conformance with appropriate City codes such that the Owner is authorized to secure full
utility service and is permitted to occupy the structures for commercial occupancy.
Comptroller. “Comptroller” means the Comptroller of Public Accounts for the State of
Texas, or such other agency responsible for collecting sales and use taxes within the State
of Texas and remitting them to the City.
Construction Costs. “Construction Costs” means the cost of design, construction
document preparation, bidding, permits, fees, surveying, and construction of the
Infrastructure Improvements. Construction Costs do not include the cost of land, interest
on construction financing, or marketing costs.
Duct Bank Work. “Duct Bank Work” means the electrical duct bank improvements to be
constructed by Owner as shown on the attached Exhibit C.
Effective Date. “Effective Date” means the date of the later to execute this Agreement
by and between the City and Owner.
FTE. “FTE” means any employee working at the Project on a thirty (30) hour or more
per week schedule, or a combination of two (2) or more employees on part time
schedules that equal forty (40) hours. For the avoidance of doubt, “FTE” includes all
contract labor.
FF&E. “FF&E” means movable furniture, fixtures, or other equipment that have no
permanent connection to the structure of a building or Utilities, and which are purchased
after the Effective Date and prior to Owner’s occupancy of the Project.
Infrastructure Improvements. “Infrastructure Improvements” means the Water Line,
Sewer Upgrades, Duct Bank Work, and Kirkwood Improvements.
Inspection and Acceptance. “Inspection and Acceptance” means the process by which
the City reviews the completed construction of the Infrastructure Improvements to
determine the validity and quality of the work performed, to be subsequently owned,
operated and maintained by the City, and acknowledged by the City through an issuance
of a final acceptance letter to Owner stating the Infrastructure Improvements have been
completed according to City standards.
Kirkwood Improvements. “Kirkwood Improvements” means the
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 11
deceleration/acceleration lanes and median cuts at Kirkwood/TW King to be constructed
by Owner, on or along Kirkwood Boulevard, as shown on the attached Exhibit D.
Machinery and Equipment. “Machinery and Equipment” means machinery and
equipment, purchased after the Effective Date, and installed and used at the Project for
the purpose of supporting the business operations of Owner.
Owner. “Owner” means TD Ameritrade Holding Corporation together with its Affiliates.
Person. "Person" means an individual or a corporation, partnership, trust, estate,
unincorporated organization, association, or other legal entity.
Program. “Program” has the meaning set forth in Section 2 of this Agreement.
Program Grant Payments. “Program Grant Payments” have the meaning set forth in
Section 6 of this Agreement.
Project. “Project” means the buildings and structures as identified and depicted on the
approved site plan as attached hereto as Exhibit B.
Real Property. “Real Property” means the approximately 78 acre tract of land within the
City as more particularly described in Exhibit A to this Agreement, which is attached hereto
and incorporated herein for all purposes.
Sales and Use Tax. “Sales and Use Tax” means the City’s municipal sales and use tax,
currently at the rate of one percent (1.0%) attributable to the general fund, pursuant to
Chapter 321 of the Texas Tax Code, as amended; provided, however, should the electors
of the City reallocate the Sales and use Tax or should the Texas Legislature amend the
applicable tax code provision to increase or decrease the amount of allowed municipal
sales and use tax, then in the event of a decrease, Sales and Use Tax shall mean the
actual amount of sales and use tax received by the City, and in the event of an increase,
the Sales and Use Tax shall mean one percent (1.0%). “Sales and Use Tax” specifically
excludes sales taxes collected for the Southlake Park Development Corporation, the
Crime Control and Prevention District, the Community Enhancement and Development
Corporation, or any other economic development tax collected now or in the future.
Sewer Upgrades. “Sewer Upgrades” means the sewer system upgrades to be
constructed by Owner as shown on the attached Exhibit E.
Substantial Completion Deadline. “Substantial Completion Deadline” means
December 31, 2017.
Tax Abatement Period. “Tax Abatement Period” means the period, in years, during
which the Real Property and Business Personal Property added to the Real Property are
entitled to tax abatement pursuant to this Agreement. The Tax Abatement Period shall
commence on January 1 of the year following the issuance of a Certificate of Occupancy
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 12
for the Project and said period shall expire on the last day of the tenth (10th) calendar year
thereafter.
Taxable Operating Costs. “Taxable Operating Costs” mean costs incurred by Owner
after Project is completed to maintain Machinery and Equipment and FF&E and for
services and property to maintain the Project, including, but not limited to, security,
supplies, materials, fuel and software.
Taxable Value. “Taxable Value” means the appraised value as certified by the Tarrant
Appraisal District as of January 1 of a given year.
Tax Year. “Tax Year” means the term in Section 1.04 of the Texas Tax Code (i.e., the
calendar year).
Term. “Term” means the term of this Agreement as specified in Section 3 of this
Agreement.
Utilities. “Utilities” mean any service that is provided to the Project, including, but not
limited to, electricity, water, gas or pipelines.
Water Line. “Water Line” means the 12 inch water line to be constructed by Owner as
shown on the attached Exhibit F.
SECTION 5. OWNER OBLIGATIONS AND USE OF PROPERTY
(a) Improvements to Real Property. This Agreement is conditioned upon the Owner
receiving a Certificate of Occupancy for the Project and making the Capital
Investment no later than the Substantial Completion Deadline. As consideration for
the agreements of City contained herein, Owner agrees that, subject to Force
Majeure, it will diligently and faithfully in a good and workmanlike manner pursue
the commencement of construction and completion of the Project on the Real
Property consistent with the requirements set forth herein. Owner agrees that
construction of the Project shall be in accordance with all applicable federal, state,
and local laws and regulations. The Real Property shall be used only in compliance
with the City’s Comprehensive Zoning Ordinance.
(b) Capital Investment. On or before the Substantial Completion Deadline, Owner
must make a Capital Investment in the Project in an amount of no less than $145,000,000.
Within 60 days of Substantial Completion Deadline, Owner must provide sufficient
evidence to the City for the Capital Investment in a manner acceptable to the City.
(c) Taxable Value. Owner agrees that beginning on the commencement of the Tax
Abatement Period and continuing thereafter throughout the Term, the total Taxable Value
of the Business Personal Property and Real Property (as improved by the Project, but
excluding land value) will be at least $139,500,000.
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 13
(d) Occupancy. Owner agrees to perform all obligations and fulfill all conditions
required under City ordinances (including payment of application fees) in order to
receive a Certificate of Occupancy for all buildings and structures within the
Project on or before the Substantial Completion Deadline. Beginning on the
Substantial Completion Deadline and continuing thereafter throughout the Term,
Owner shall continuously occupy and conduct its business operations at the
Project.
(e) FTEs.
(i) Required FTEs. Owner agrees to create a minimum of 1,750 FTEs by
March 31, 2024 and retain them for the Term of this Agreement according to the
following schedule:
No later than Number of Total FTEs
12-31-2018 1400
03-31-2019 1500
03-31-2020 1550
03-31-2021 1600
03-31-2022 1650
03-31-2023 1700
03-31-2024 1750
(ii) Average Salary. The average salary for all FTEs working at the Project
may not be less than $70,000 throughout the Term of this Agreement.
(iii) Payment in lieu of FTEs. The parties acknowledge that the City’s adopted
Comprehensive Plan anticipates that City’s public-private partnerships will help
retain and enhance the City’s economic base, and that Owner’s obligation to
create and maintain the FTE levels in Section 5(e)(i) are necessary in achieving
such goals. Owner will annually certify (by providing exact total FTE numbers)
that FTE levels have been met in the certification described in Section 10 of this
Agreement. If the FTE levels are not m et in any given year, Owner will pay City
an amount of $500 for each FTE not created or maintained in accordance with
Section 5(e)(i), with payment due no later than 30 days after City’s receipt of the
certification; provided, however, that in no event sha ll the sum of all payments
made under this Section be greater than the amount of the Program Grant
Payments and amount of property taxes abated under this Agreement . Provided
Owner makes the payment in this Section when applicable, Owner’s failure to
comply with 5(e)(i) shall not be an event of default subject to termination and
repayment pursuant to Section 8 of this Agreement.
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 14
(f) Infrastructure Improvements.
(i) At its sole cost, Owner must construct the Infrastructure Improvements on
the Real Property in compliance with the attached Exhibit(s) C, D, E and F, and
any City-approved plans, specifications and permits.
(ii) Owner shall cause all necessary permits and approvals required by the
City and any applicable governmental authorities to be issued for the
construction of the Infrastructure Improvements. Owner shall be responsible for
the design, inspection and supervision of the construction of the Infrastruc ture
Improvements.
(iii) Prior to the commencement of construction of the Infrastructure
Improvements, Owner shall submit plans and specifications for the Infrastructure
Improvements, for approval by the City, which approval shall follow regular City
processes for approval of such plans and specifications, including the execution
of the City’s commercial developer agreement.
(iv) Owner shall comply with all local, state, and federal laws and regulations
regarding the design and construction of the Infrastructure Improvements.
(v) Construction of the Infrastructure Improvements shall be subject to
periodic inspections by the City to confirm compliance with the City -approved
plans and specifications. Owner shall be responsible for completing and/or
correcting any work not constructed in accordance with the City-approved plans
and specifications. Any material change in the design of the Infrastructure
Improvements during the construction stage shall be approved by the City.
(vi) Owner shall dedicate or convey the Infrastructure Improvements to the
City as required by the City’s subdivision regulations and Code of Ordinances,
including, where so required, by Special Warranty Deed conveying good and
indefeasible title in fee simple to the Infrastructure Improvements, free and clear
of any and all liens, encumbrances, conditions, assessments, and restrictions
other than as provided in this Agreement. At the time of such dedications or
conveyances, Owner shall deliver to the City: (i) releases from the contractors,
subcontractors and suppliers of materials who have provided labor and materials
for the Infrastructure Improvements showing that they have been paid for such
labor and materials; and (ii) an assignment of all warranties and payment and
performance bonds applicable to the Infrastructure Improvements.
(g) Reporting of Sales and Use Taxes. Owner will provide to the City, on a quarterly
basis, a copy of Texas sales and use tax returns submitted to the Compt roller
establishing the remittance of the Sales and Use Tax collected or paid as a result of the
operation of the Project (“Sales Tax Reports”). Owner may redact the Sales Tax
Reports to remove information not relevant to the determination of the Program Grant
Payment. Owner will provide any release or releases to the City necessary to allow the
State of Texas to provide Area Reports. Owner will provide to the City copies of any
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 15
final Comptroller audit adjustments or amended returns that affect the Sales and Use
Tax received or the Program Grant Payments. Owner must provide other
documentation in a form acceptable to City that establishes and proves amounts of
Sales and Use Tax City has received attributable to Owner’s purchases in Sections 6(a)
and 6(b) of this Agreement.
(h) Signal Reimbursement. TD Ameritrade Services Company, Inc., a wholly owned
subsidiary of Company (“TD Ameritrade Services Company”) will reimburse City an
amount equal to 50% of the actual construction costs attributable to the City’s
installation of the signal located at the main north entrance of the Real Property, as
shown on the attached Exhibit D, but such reimbursement shall not to exceed $152,500.
Reimbursement to City will be due within thirty (30) days after TD Ameritrade Services
Company’s receipt of City’s written request for payment, which shall include evidence of
City’s construction costs.
SECTION 6. 380 PROGRAM GRANT
The following grant payments related to the Program (the "Program Grant
Payments") and waivers shall be granted, paid, and provided according to the following
terms, provided the Company is in full compliance with the terms of this Agreement:
(a) Sales Tax Rebates
(i) Construction Materials. The City agrees that it shall pay to Owner an
amount equal to one hundred percent (100%) of the Sales and Use Tax received
by the City attributable to the purchase of construction materials by Owner or
contractors retained by Owner in connection with the construction of the Project
prior to the Substantial Completion Deadline; provided, however, that under no
circumstances will the aggregate grant payments under this subsection exceed
Seven Hundred Seventy-Five Thousand Dollars ($775,000).
(ii) FF&E; Machinery & Equipment; Utilities; Operating Costs.
(a) The City agrees to pay Owner an amount equal to fifty percent (50%)
of the Sales and Use Tax received by the City attributable to Owner’s
purchase of FF&E and Machinery & Equipment to equip the Project prior to
Owner’s occupancy of the Project; provided, however, that under no
circumstances will the aggregate grant payments under this subsection
exceed One Hundred Ninety Thousand Dollars ($190,000).
(b) During the first five (5) years of the Project’s operation, the City
further agrees to pay Owner an amount equal to fifty percent (50%) of the
Sales and Use Tax received by the City attributable to (1) Owner’s purchase
of Machinery & Equipment; (2) the Utilities; and (3) the Taxable Operating
Costs. Said five-year period will commence on the date the Certificate of
Occupancy for the Project is issued. Under no circumstances will the
aggregate grant payments under this subsection exceed Fifty Thousand
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 16
Dollars ($50,000).
(iii) Timing of Payments. The City shall make Program Grant Payments in this
Section 6(a) quarterly after receipt and review of the Sales Tax Reports and Area
Reports for each month of the applicable calendar year. The City covenants and
agrees to make a Program Grant Payment to Owner within forty-five (45) days
following the receipt of all of the following: (1) the Sales Tax Reports specified in
Section 5(f) of this Agreement for each month of the applicable calendar
quarter; (2) the Area Reports or other information establishing the amounts of
received Sales and Use Tax from the Comptroller’s office for each month in the
applicable calendar quarter; and (3) the City’s receipt of the Sales and Use Tax
from the Comptroller’s office for each month of the applicable calendar quarter.
The City will request the State Comptroller to provide Area Reports.
(b) Infrastructure Program Grant Payments. Owner will be entitled to payment for the
completed Infrastructure Improvements provided the following requirements have been
met: (1) Inspection and Acceptance of all of the Infrastructure Improvements has been
completed; (2) the Project has received a Certificate of Occupancy; (3) Owner has
provided sufficient evidence to the City for the Capital Investment in a manner reasonably
acceptable to the City; (4) Owner has paid City for the installation of the signal in
accordance with Section 5(h); and (5) Owner has submitted a written request for
payment, including documentation acceptable to City which sufficiently documents
Owner’s Construction Costs. No later than ninety (90) days after all three of the
foregoing requirements have been met, City will pay Owner in the amounts as stated
below:
(i) Water Line; Sewer Upgrades; Duct Bank Work. City will pay Owner in an
amount equal to 50% of actual Construction Costs of the Water Line. Sewer
Upgrades, and Duct Bank Work; provided, however, total payments under this
Section 6(b)(i) shall not exceed $663,750.
(ii) Kirkwood Improvements. City will pay Owner in an amount equal to the
lesser of: 50% of actual Construction Costs attributable to the
deceleration/acceleration lanes and median cuts; or (2) $254,980.
(d) SH 114 Improvements. City agrees to support and use all reasonable efforts to: (1)
erect a signal at SH 114 and Kirkwood Boulevard as depicted on Exhibit G; and (2) cause
the extension of the SH 114 frontage road along the south end of the Real Property, as
depicted on Exhibit G, including a request to the Texas Department of Transportation
(“TxDOT”) for such modification and requests to potential partners such as TxDOT, other
adjacent property owners, and regional partners for financial assistance. TD Ameritrade
Services Company agrees to dedicate a portion of the Real Property for the purpose of
the frontage road extension, and the parties acknowledge that they are working towards
creating a final legal description for the dedication, which will be made by separate
agreement subsequent to the Effective Date of this Agreement. The parties further
acknowledge and agree that City’s efforts towards the foregoing improvements are
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 17
contingent upon the City obtaining sufficient funding, all necessary TxDOT and
governmental approvals, and TD Ameritrade Services Company’s future dedication of a
portion of the Real Property sufficient for the purpose of frontage road extension, which will
be contingent on City agreeing to provide TD Ameritrade Services Company with the right
to review and comment on the design of the SH 114 improvements.
(e) Kirkwood/Dove Rd. Traffic Control. City agrees to conduct a study of the
intersection of Kirkwood Blvd. and Dove Road to determine what traffic control devices are
necessary, if any. If a traffic control device is necessary, the City will be responsible for
designing and constructing said device.
(f) Plan Review. City agrees that the construction plans submitted by Owner
regarding construction of the Project and Infrastructure Improvements will be afforded
expedited plan review by City staff and City’s third party consultants.
SECTION 7. TAX ABATEMENT
(a) The real property subject to this Agreement shall be the Real Property. The
improvements to the Real Property shall consist of the Project, as depicted on Exhibit B to
this Agreement.
(b) Subject to the terms and conditions of this Agreement, ad valorem real and
business personal property taxes otherwise owed to the City for the Real Property and the
Business Personal Property shall be abated. Said abatement of the taxes on the Real
Property shall be based upon the increased Taxable Value of the Real Property, as
improved by the Project, over the Base Year Value, and in accordance with the terms of
this Agreement and all applicable federal, state, and local laws and regulations.
Abatement of the ad valorem business personal property taxes on the Business Personal
Property shall be based on the Taxable Value of the Business Personal Property, and in
accordance with the terms of this Agreement and all applicable federal, state, and local
laws and regulations.
(1) Term. The Tax Abatement Period shall be ten (10) years (with the first year
of tax abatement being the first tax year following the date on which the City issues a
Certificate of Occupancy for the Project (i.e., the Tax Abatement Period starts on January
1 of such following year).
(2) Abatement Amount. The tax abatement rate for each such year during the
Tax Abatement Period shall be 90% of the portion of the Taxable Value of Real Property
that is subject to abatement, and 90% of the ad valorem taxes assessed on the Business
Personal Property located on the Real Property, and such qualifications as are noted
elsewhere in this Agreement.
(c) Notwithstanding the foregoing, if as of January 1 of any given Tax Year, the
Taxable Value of the Business Personal Property and Real Property is below
$139,500,000 as required by Section 5(c), the City will grant an abatement of the Taxable
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 18
Value of the Business Personal Property and Real Property subject to abatement
according to the following schedule:
Taxable Value Abatement Amount
$139,499,999-124,000,000 80%
$123,999,999-108,500,000 70%
$108,499,999-93,000,000 60%
$92,999,999-77,500,000 50%
The failure of the value of the Business Personal Property and Real Property to have a
Taxable Value of at least $77,500,000 as of January 1 of any given Tax Year shall not be
an event of default subject to termination and repayment of the abated taxes pursuant to
Section 8 of this Agreement, but shall result in the forfeiture of the tax abatement for such
Tax Year.
(d) Notwithstanding the foregoing, Owner will not be entitled to any tax abatement
under this Agreement until it has provided City with evidence that it has made the Capital
Investment in accordance with this Agreement.
(e) Notwithstanding any provision in this Agreement to the contrary, the Real Property
and Business Personal Property shall not be entitled to tax abatement for more than ten
consecutive (10) years.
(f) Pursuant to section 312.204 of the Texas Tax Code, this Agreement is subject to
the rights of holders of outstanding bonds of the City.
SECTION 8. TERMINATION AND RECAPTURE PROVISION
(a) Termination. This Agreement may be terminated upon any one or more of the
following:
(i) by mutual written agreement of the parties;
(ii) upon written notice by either party, if the other party defaults or breaches
any of the terms or conditions of this Agreement and such default or breach is
not cured within thirty (30) days after written notice thereof;
(iii) upon written notice by City, if any taxes owed to City by Owner shall have
become delinquent; or
(iv) upon written notice by City, if Owner suffers an event of bankruptcy or
insolvency.
(b) Repayment. In the event the Agreement is terminated by City pursuant to
Section 8(a)(ii)-(iv), Company shall be liable for and will pay to the City within sixty (60)
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 19
days following the termination of this Agreement: (1) All Program Grant Payments
previously paid to Company (not including the infrastructure payments made to Company
as described in Section 6(b)); (2) the amount of all property taxes abated under this
Agreement; and (3) interest on the abated amount at the rate provided for in the Texas
Tax Code for delinquent taxes.
SECTION 9. RIGHT OF ACCESS FOR INSPECTION
The Company further agrees that the City, its agents and employees, shall have
reasonable right to access the Real Property during normal business hours and upon not
less than two (2) business days written notice to the Company to inspect the Project and
other items subject to this Agreement in order to ensure that the construction of the Project
is in accordance with this Agreement and all applicable federal, state, and local laws and
regulations. After completion of the Project, the City shall have the continuing right of
reasonable access to the Real Property during normal business hours and upon not less
than five (5) business days written notice to the Company to inspect the Real Property to
ensure that such are thereafter maintained and operated in accordance with this
Agreement.
SECTION 10. ANNUAL CERTIFICATION
On or before May 1 of each year, the Owner shall each provide to City written
certification that Owner is in compliance with each applicable term of this Agreement.
Such certification shall be in a form reasonably satisfactory to the City, and shall include, at
a minimum, information supporting the Owner’s conclusions that it met (or expects to
meet) each condition and requirement to abatement set forth in this Agreement. Any
failure of the City to request or demand such certification shall not constitute a waiver of
such certification or any future certification; provided, however, that if the City fails to
request or demand such certification and Owner fails to provide such certification, the City
shall give such party written notice of such failure and such party shall provide such
certification within thirty (30) days of such party's receipt of such notice.
SECTION 11. MISCELLANEOUS PROVISIONS
(a) Amendments. This Agreement constitutes the entire understanding and
agreement of the parties as to the matters set forth in this Agreement. No alteration of
or amendment to this Agreement shall be effective unless given in writing and signed by
the party or parties sought to be charged or bound by the alteration or amendment.
(b) Applicable Law and Venue. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, and all obligations of the parties
created hereunder are performable in Tarrant County, Texas. Exclusive venue for any
action arising under this Agreement shall lie in the state district courts of Tarrant
County, Texas.
(c) Assignment. This Agreement shall be binding on and inure to the benefit of the
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 20
parties, their respective successors and assigns. The Company may assign all or part
of its rights and obligations hereunder: (1) to any Affiliate effective upon written notice to
the City, provided the Affiliate agrees in writing to comply with each and every obligation
of the Company in this Agreement; or (2) to any Person other than an Affiliate with the
prior written approval of the City, which approval shall be in City’s sole discretion, and
provided the assignee agrees in writing to comply with each and every obligation of the
Company in this Agreement.
(d) Binding Obligation. This Agreement shall become a binding obligation on the
signatories upon execution by all signatories hereto. City warrants and represents that
the individual executing this Agreement on behalf of City has full authority to execute
this Agreement and bind City to the same. The Company warrants and represents that
the individual executing this Agreement on its behalf has full authority to exec ute this
Agreement and bind it to the same.
(e) Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which shall constitute one and the
same document.
(f) Filing. In order to receive the tax abatement pursuant to this Agreement, Owner
understands it must file with the appraisal district an application for property tax abatement
exemption between January 1 and April 30 of each year during the term of this
Agreement.
(g) Notices. Any notice or other communication required or permitted by this
Agreement (hereinafter referred to as the “Notice”) is effective when in writing and (i)
personally delivered either by facsimile (with electronic information and a mailed copy
to follow) or by hand, or (ii) three (3) days after notice is deposited with the U.S. Postal
Service, postage prepaid, certified with return receipt requested, and addressed as
follows:
if to Owner: TD Ameritrade Holding Corporation
200 South 108th Avenue
Omaha, NE 68154
Attention: Finance-Tax
if to City: City of Southlake
1400 Main Street, Ste. 460
Southlake, Texas 76092
Attention: City Manager
(h) Severability. In the event any provision of this Agreement shall be determined by
any court of competent jurisdiction to be invalid or unenforceable, the Agreement shall,
to the extent reasonably possible, remain in force as to the balance of its provisions as if
such invalid provision were not a part hereof.
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 21
(i) Sovereign Immunity. No party hereto waives any statutory or common law right
to sovereign immunity by virtue of its execution hereof.
(j) Undocumented Workers. Owner certifies that Owner does not and will not
knowingly employ an undocumented worker in accordance with Chapter 2264 of the
Texas Government Code, as amended. If during the Term of this Agreement, Owner is
convicted of a violation under 8 U.S.C. § 1324a(f), Owner shall repay the amount of the
public subsidy provided under this Agreement plus interest, at the rate of six percen t
(6%), not later than the 120th day after the date the City notifies Owner of the violation.
(k) Prevailing Party Attorney’s Fees. In the event any person initiates or defends
any legal action or proceeding to enforce or interpret any of the terms of t his
Agreement, the prevailing party in any such action or proceeding shall be entitled to
recover its reasonable costs and attorney’s fees (including its reasonable costs and
attorney’s fees on any appeal).
(l) Rough Proportionality. As additional consideration for the payments received by
Owner under this Agreement, Owner agrees that all dedications, construction costs and
other payments made by Owner related to the Infrastructure Improvements are roughly
proportional to the need for such Infrastructure Improvements created by the
development of the Real Property and Owner hereby waives any claim therefore that it
may have. Owner further acknowledges and agrees that all prerequisites to such a
determination of rough proportionality have been met, and that any costs incurred
relative to the dedication, construction costs and other payments for the Infrastructure
Improvements are related both in nature and extent to the impact of the Project. Owner
waives and releases all claims against the City related to any and all rough
proportionality and individual determination requirements mandated by Section 212.904,
Texas Local Government Code, or the Texas or U.S. constitutions, as well as other
requirements of a nexus between development conditions and the projected impact of
the Project.
(m) City Ordinances Applicable. The signatories hereto shall be subject to all
applicable ordinances of the City, whether now existing or in the future arising.
(n) 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, fire or other casualty, 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 obligation or requirement shall
be extended for a period of time equal to the period such party was delayed.
(o) Runs with the Land. The provisions of this Agreement shall run with the land and
be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns and successors in title.
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 22
(p) Erroneously Paid Sales Tax. In the event the Comptroller determines, for any
reason, that any Sales and Use Taxes were erroneously paid to City from the sales
provided for herein and City is required to rebate or repay any portion of such taxes, the
amount of such rebate or repayment shall be deducted from the calculation of the Sales
and Use Taxes received by City under this Agreement, and in the event the calculation
of Sales and Use Taxes paid for a Program Grant Payment shall reflect an overpayment
by City to Owner, Owner agrees to reimburse City th e amount of such overpayment.
Notification of any such required adjustment will be provided to Owner at the earliest
practical date. This section will survive termination of this Agreement.
(q) Sales Tax Disclosure. The City hereby designates this Agreement as a revenue
sharing agreement, thereby entitling the City to request sales tax information from the
Comptroller, pursuant to section 321.3022, Texas Tax Code, as amended. The City
shall notify Owner after receiving any Public Information Act request that seeks
disclosure of information provided by or concerning Owner, including any information
relating to Owner’s operations or receipts or payments of Sales and Use Tax, and the
parties will reasonably cooperate to determine whether or to what extent t he requested
information may be released without objection and without seeking a written opinion of
the Texas Attorney General. The City shall take the position that any information
responsive to a Public Information Act request relating to Owner that the parties do not
mutually agree to release without objection is information not subject to release to the
public pursuant to Section 321.3022(f) of the Texas Tax Code, section 552.110 of the
Texas Government Code, or other applicable law. The City shall seek a written opinion
from the Texas Attorney General raising any applicable exception to release of such
information prior to any release to a third -party under the Texas Public Information
Act. If the City seeks a written opinion from the Texas Attorney G eneral pursuant to
Section 552.305 of the Texas Government Code, the City may require Owner to draft
and submit to the Texas Attorney General the substantive comments or arguments in
support of such opinion request. The City shall provide Owner timely noti ce and an
opportunity to review and comment on any opinion request submitted by the City.
(r) Offset. Owner agrees that, subject to the provision of notice by City and 60 -day
period following receipt of notice in which Owner may respond or act, City may o ffset
the amount of tax abatement installment or Program Grant Payments due to Owner for
any calendar year under this Agreement against any amount which is: (i) lawfully due to
City from Owner pursuant to this Agreement, and (ii) subject to challenge by Owner in a
court of competent jurisdiction.
(s) Limitation of Liability. The parties agree that neither party will be liable to the
other under this Agreement for consequential damages (including lost profits) or
exemplary damages.
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 23
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
SOUTHLAKE, TEXAS, on this _____ day of _____________, 2017.
CITY:
CITY OF SOUTHLAKE, TEXAS
Laura Hill, Mayor
Date:
ATTEST:
Lori Payne, City Secretary
COMPANY:
TD AMERITRADE HOLDING CORPORATION
By:
Name:
Title:
Date:
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 24
For purposes of Section 5(h) and 6(d) of this
Agreement:
TD AMERITRADE SERVICES COMPANY,
INC.
By:
Name:
Title:
Date:
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 25
STATE OF TEXAS )
)
COUNTY OF TARRANT )
This instrument was acknowledged before me on the ____ day of
_____________, 2017, by Laura Hill, Mayor of the City of Southlake, Texas, a Texas
home rule municipality, on behalf of said City.
__________________________________
Notary Public, State of Texas
STATE OF ___________ )
)
COUNTY OF __________ )
This instrument was acknowledged before me on the ____ day of
_____________, 2017, by , the of TD Ameritrade Holding
Corporation.
______
Notary Public, State of Texas
STATE OF ___________ )
)
COUNTY OF __________ )
This instrument was acknowledged before me on the ____ day of
_____________, 2017, by , the of TD Ameritrade
Services Company, Inc .
______
Notary Public, State of Texas
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 26
Exhibit A
The Real Property
Legal Description: Lot 1R1R1, Block 1, Sabre Group Campus Addition, an addition to
the City of Southlake, Tarrant County, Texas according to the plat recorded as
Instrument No. D215221562, Plat Records, Tarrant County, Texas.
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 27
Exhibit B
The Project – Site Plan
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 28
Exhibit C-1
Duct Bank
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 29
Exhibit C-2
Duct Bank
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 30
Exhibit C-3
Duct Bank
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 31
Exhibit D
Kirkwood Improvements
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 32
Exhibit D
Kirkwood Improvements
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 33
Exhibit E
Sewer Upgrades
TD Ameritrade and City of Southlake 380 and Tax Abatement Agreement 34
Exhibit F
Water Line
Exhibit G
SH 114 Improvements
Exhibit G
SH 114 Improvements