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Item 4GCITY OF SOUTH LAKE ITEM 4G MEMORANDUM (January 20, 2013) To: Shana Yelverton, City Manager From: Shannon Hamons, CEcD, Director of Economic Development and Tourism Subject: Item 4.G: Resolution 15-006, a resolution of the City of Southlake, Texas, approving the terms and conditions of a 380 agreement program to promote economic development and stimulate commercial activity in the city — Kimball Oaks Action Requested: Approve a Resolution 15-006 as noted above Background Information: The Strode Company is in the process of completing the development of multiple commercial buildings within a shopping area identified as Kimball Oaks at the intersection of Southlake Boulevard and South Kimball Avenue. This location is the site of the recently opened PGA Tour Superstore and where the BJ's Brew House restaurant will be located. When complete later in 2015, the commercial development is expected to have approximately 102,000 square feet of retail space and approximately 21,000 square feet of restaurant space for a total of 123,000 square feet. The project is expected to generate a minimum of $127,000 a year in ad valorem taxes and approximately $323,000 a year in sales taxes for a total of about $440,000 net new revenue (existing ad valorem deducted). As part of this development, the company has completed improvements to the adjacent infrastructure as recommended by the Department of Public Works. Those improvements totaled $338,848 and they have been inspected and accepted by the City staff. The improvements include: • Village Center South (access to school to the south) • Southbound deceleration lane • Kimball median reconstruction • Removal of CISD drive • Install cu rb/sidewal k/g utter • 8-inch waterline installation • Actuated crosswalk installation In accordance with City Council's directive, the 380 agreement will reimburse Strode Property Company a total of $197,092 for the public asset work. The funds will be distributed from monies already collected from: • Roadway Impact Fee $124,675 • Water Impact Fee $ 38,250 • Park Dedication Fee $ 34,167 $197,092 Financial Considerations: Reimbursement of $197,092 from monies already collected from the project in fees as listed above. New net revenue to the City from the project will total about $440,000. Strategic Link: The item supports the City's strategy through C2 - Provide travel convenience within City and region and F2 - Invest to provide & maintain high quality public assets. This agreement is also in accordance with recommendations in the City's Southlake 2030 Master Thoroughfare Plan for this area which included construction of a deceleration lane, removal of an existing CISD driveway and installation of crosswalks and sidewalks. The item also links to the City's economic development strategy ED132 to manage incentive programs to attract and retain high quality businesses as a means of growing Southlake's economy. Citizen Input/ Board Review: None Legal Review: Agreement and resolution review completed by TOASE Alternatives: 1. Approve the Resolution as submitted 2. Approve the Resolution with amendments 3. Take no action on the Resolution. Supporting Documents: Resolution 15-006 Corresponding 380 Agreement with Strode Property Company Staff Recommendation: Approve Resolution 15-006 as submitted. Staff Contact: Shannon Hamons, Director of Economic Development & Tourism RESOLUTION NO. No. 15-006 Item 4.G 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 SPC KIMBALL OAKS, LTD., A TEXAS 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, On January 20, 2015 the City Council approved a Chapter 380 Agreement (the "Agreement") by and between the City and SPC Kimball Oaks, Ltd., a Texas Corporation, to 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 SPC Kimball Oaks, Ltd., 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. SECTION 2. The City Council hereby adopts amendments to the economic development program whereby the City of Southlake will make economic development program payments to SPC Kimball Oaks, Ltd., 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 acceptable and in the best interest of 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 substantially according to the terms and conditions set forth in the Agreement. SECTION S. This Resolution shall become effective from and after its passage. PASSED AND APPROVED this the 6th day of January, 2015 John Terrell, Mayor ATTEST: Lorie Payne, TRMC CITY OF SOUTHLAKE, TEXAS AND SPC KIMBALL OAKS, LTD CHAPTER 380 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This CHAPTER 380 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Agreement") is made and entered into by and between the City of Southlake, Texas, a Texas home rule municipality ("City"), and SPC Kimball Oaks, Ltd. ("Company"). City and Company may sometimes hereafter be referred to individually as a "Party" and collectively as the "Parties." WHEREAS, Company desires to build a 13.86 acre commercial retail development known as Kimball Oaks comprised of multiple commercial buildings with no less than a total of 123,000 square feet located at the intersection of Southlake Boulevard and South Kimball Avenue, and as depicted on the attached Exhibit A ("Development"); WHEREAS, the City desires to provide, pursuant to Chapter 380 of the Texas Local Government Code ("Chapter 380"), an incentive to Company for the construction of the Development and certain improvements; and WHEREAS, the City has the authority under Article 52-a of the Texas Constitution and Chapter 380 to make loans or grants of public funds for the purposes of promoting local economic development and stimulating business and commercial activity within the City; and WHEREAS, the City has determined that a grant of funds to the Company will serve the public purpose of promoting local economic development, and stimulating business and commercial activity within the City. NOW THEREFORE, for and in consideration of the agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: SECTION 1. FINDINGS INCORPORATED The foregoing recitals are hereby incorporated into the body of this Agreement and shall be considered part of the mutual covenants, consideration and promises that bind the Parties. SECTION 2. PROGRAM APPROVED A program authorized under Chapter 380 is hereby established to bring the Development and Improvements to the City. The terms of this Agreement shall implement the program. SECTION 3. TERM This Agreement shall be effective as of the Effective Date and shall terminate when the Parties have fulfilled all of their obligations pursuant to the terms of this Agreement, unless terminated earlier pursuant to the terms of this Agreement. SECTION 4. DEFINITIONS The following words shall have the following meanings when used in this Agreement: The terms "Agreement," "City," "Company," and "Development," shall have the meanings provided above. "Certificate of Occupancy" means a certificate issued by the City building official reflecting that construction has been completed in conformance with appropriate City codes and Company is authorized to secure full utility service and to permit commercial occupancy of the building or structure. "Commencement of Construction" means that: (i) the plans have been prepared and all approvals thereof and permits with respect thereto required by applicable governmental authorities have been obtained for construction of the Development and Improvements; and (ii) grading of the land on which the Development and Improvements are to be located has commenced. "Construction Costs" means the cost of design and construction document preparation, and construction and installation of the Improvements, site grading and such other reasonable industry -standard costs. "Effective Date" means the date this Agreement is signed by both Parties. "Event of Default" means and includes any of the Events of Default set forth below in the section entitled "Events of Default." "Inspection and Final Acceptance" means the process by which the City reviews the completed construction of the Improvements to determine the validity and quality of the work performed is acknowledged by the City through an issuance of a final acceptance letter to the Company stating the Improvements have been completed according to City standards. "Program Grant" or "Program Grant Payment" means the economic development grants paid by the City to Company in accordance with this Agreement. "Term" means the term of this Agreement as specified in Section 3 of this Agreement. "Improvements" means the work completed on the Development, adjacent property and public right-of-way that includes a drive lane, median, crosswalks, pavers, and all other appurtenances related to the improvements at the Development, that Company will install, as shown on the attached Exhibit B. SECTION 5. OBLIGATIONS OF COMPANY Company covenants and agrees with the City that, while this Agreement is in effect, it shall comply with the following terms and conditions: (a) Construction Standards. Company agrees to construct the Development in compliance with Exhibit A. and install the Improvements in compliance with the attached Exhibit B. Further, the Development and Improvements will be constructed in compliance with all applicable local, state, and federal regulations, and Company will acquire all necessary permits and obtain all required approvals. (b) Commencement of Construction. Company agrees that all construction will be complete by March 1, 2015. (c) Time of Completion. All of the buildings and structures within the Development must receive a Certificate of Occupancy no later than December 31, 2015. The Improvements must be constructed and installed prior to or concurrently with the construction of the Development. Inspection and Final Acceptance of the Improvements must occur prior to issuance of any Certificate of Occupancy for any portion of the Development. (d) Construction Costs. Company agrees that it will be solely responsible for paying all Construction Costs prior to receiving the Program Grant Payment. (e) Performance. Company agrees to perform and comply with all terms, conditions, and provisions set forth in this Agreement and in all other instruments and agreements between Company and City, and any related agreements between Company and City. (f) Access to Information. Company agrees to provide the City, upon reasonable notice, access to information related to the construction, and access to information necessary to fulfill this Agreement, throughout the term of this Agreement. (g) Undocumented Workers. Company certifies that Company 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, Company is convicted of a violation under 8 U.S.C. § 1324a(f), Company shall repay the amount of the public subsidy provided under this Agreement plus interest, at the rate of the prime rate plus two percent (6%) per annum, not later than the 120th day after the date the City notifies Company of the violation. SECTION 6. OBLIGATIONS OF CITY City covenants and agrees that, while this Agreement is in effect, it shall comply with the following terms and conditions and make the following Program Grants, provided Company is in full compliance with the terms and conditions of this Agreement: (a) Program Grant Payment. No later than 90 days after a Certificate of Occupancy has been issued for the last remaining building on the Development, and provided Company has first submitted a written request for payment, including sufficient documentation of Construction Costs, City will pay Company a Program Grant Payment in an amount not to exceed $197,092 for the work and items listed and depicted on Exhibit B. SECTION 7. EVENTS OF DEFAULT Each of the following shall constitute an Event of Default under this Agreement: (a) Default. Failure of Company or City to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any related documents, or failure of Company or City to comply with or to perform any other term, obligation, covenant or condition contained in any other agreement between the City and Company. (b) False Statements. Any written warranty, representation or statement made or furnished to the receiving Party under this Agreement or any document(s) related hereto furnished to the receiving Party is/are false or misleading in any material respect, either now or at the time made or furnished, or if the furnishing Party obtains actual knowledge that any such warranty, representation or statement has become false or misleading after the time that it was made, and the furnishing Party fails to provide written notice to the receiving Party of the false or misleading nature of such warranty, representation or statement within ten (10) days after the furnishing Party learns of its false or misleading nature. (c) Insolvency. The dissolution or termination of Company's existence as a going business or concern, Company's insolvency, appointment of receiver for any part of Company's property, any assignment of all or substantially all of the assets of Company for the benefit of creditors of Company, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Company unless, in the case of involuntary proceedings, such proceedings are discharged within sixty (60) days after filing. SECTION 8. EFFECT OF AN EVENT OF DEFAULT (a) General Defaults. In the event of default under this Agreement, including without limitation, Section 7 above, the non -defaulting Party shall give written notice to the defaulting Party of any default, and the defaulting Party shall have thirty (30) days to cure said default. Should said default remain uncured as of the last day of the applicable cure period and the non -defaulting Party is not otherwise in default, the non -defaulting Party shall have the right to immediately terminate this Agreement. In the event the City terminates this Agreement as a result of the foregoing, it will have no further obligation to make any remaining Program Grant Payments. Additionally, Company will owe City repayment of the previous Program Grant Payments made to Company, plus interest at the rate of the prime rate per annum. Company shall pay such funds to City within sixty (60) days of termination. SECTION 9. MISCELLANEOUS PROVISIONS The following miscellaneous provisions are a part of this Agreement: (a) Amendments. At any time, City and Company may determine that this Agreement should be amended for the mutual benefit of the Parties, or for any other reason, including an amendment to induce Company to maintain its operations in the City when this Agreement could otherwise be terminated. City and Company agree to consider reasonable requests for amendments to this Agreement which may be made by any of the Parties hereto, lending institutions, bond counsel or financial consultants. Any amendments to this Agreement must be in writing and signed by the appropriate authorities of both City and Company. (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. Venue for any action arising under this Agreement shall lie in the state district courts of Tarrant County, Texas. (c) Assignment. This Agreement may not be assigned without the express written consent of the other Party. (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. Company warrants and represents that the individual executing this Agreement on Company's behalf has full authority to execute this Agreement and bind it to the same. (e) Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of the Agreement. (f) 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. (g) Entire Agreement. This Agreement constitutes the entire understanding and agreement of the Parties as to the matters set forth in this Agreement. No other understanding, oral or otherwise, in direct conflict with this Agreement shall be deemed to exist or to bind any of the Parties hereto. All prior written or oral offers, counteroffers, memoranda of understanding, proposals and the like are superseded by 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. Neither Party is relying on any statement, representation, nor warranty of the other Party not expressly set out in this Agreement. Each of the undersigned authorized representatives of the Parties warrants and represents and does hereby state and represent that no promise or agreement which is not herein expressed has been made to him or her in executing this Agreement, and that none of them are relying upon any statement or representation of any agent of the Parties. Each Party is relying on its own judgment and each Party has been represented by independent counsel its choosing. This Agreement shall not be construed against the drafter hereof, but shall be construed as if all Parties drafted the same. (h) 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, or court injunction, 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. (i) Further Acts and Releases. City and Company each agrees to take such additional acts and execute such other documents as may be reasonable and necessary in the performance of their obligations hereunder. (j) Governmental Powers, Waiver of Immunity. By execution of this Agreement, the City does not waive or surrender any of its governmental powers, immunities or rights. (k) No Third Party Beneficiaries. The performance of the respective obligations of City and Company under this Agreement are not intended to benefit any party other than City or Company, except as expressly provided otherwise herein. No person or entity not a signatory to this Agreement shall have any rights or causes of action against any Party to this Agreement as a result of that Party's performance or non-performance under this Agreement, except as expressly provided otherwise herein. (1) 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 Company: Charles A. Keller SPC KIMBALL OAKS, LTD 5950 Berkshire Lane 9875 Dallas, Texas 75225 Attention: Chuck Keller if to City: City of Southlake, Texas 1400 Main Street, Suite 460 Southlake, Texas 76092 Attention: Mayor With a copy to: Taylor, Olson, Adkins, Sralla & Elam, LLP 6000 Western Place, Suite 200 I-30 at Bryant -Irvin Road Fort Worth, Texas 76107 Attention: Drew Larkin (m) Right of Offset. The City may at its option, offset any amounts due and payable under this Agreement against any debt (including taxes) lawfully due and owing to the City from the Company, regardless of whether the amount due arises pursuant to the terms of this Agreement or otherwise, and regardless of whether or not the debt has been reduced to judgment by a court. (n) Relationship of Parties. The Parties shall not be deemed in a relationship of partners or joint ventures by virtue of this Agreement, nor shall either Party be an agent, representative, trustee or fiduciary of the other. Neither Party shall have any authority to bind the other to any agreement. (o) Severability. City and Company declare that the provisions of this Agreement are severable. If it is determined by a court of competent jurisdiction that any term, condition or provision hereof is void, voidable, or unenforceable for any reason whatsoever, then such term, condition or provision shall be severed from this Agreement and the remainder of the Agreement enforced in accordance with its terms. (p) COMPANY EXPRESSLY AGREES TO FULLY AND COMPLETELY DEFEND, INDEMNIFY, AND HOLD HARMLESS THE CITY, AND ITS OFFICERS, AND EMPLOYEES, AGAINST ANY AND ALL CLAIMS, LAWSUITS, LIABILITIES, JUDGMENTS, COSTS, AND EXPENSES FOR PERSONAL INJURY (INCLUDING DEATH), PROPERTY DAMAGE OR OTHER HARM, DAMAGES OR LIABILITY FOR WHICH RECOVERY OF DAMAGES IS SOUGHT, SUFFERED BY ANY PERSON OR PERSONS, THAT MAY ARISE OUT OF OR BE OCCASIONED BY ANY NEGLIGENT, GROSSLY NEGLIGENT, WRONGFUL, OR STRICTLY LIABLE ACT OR OMISSION OF COMPANY OR ITS AGENTS, EMPLOYEES, OR CONTRACTORS, ARISING OUT OF THE PERFORMANCE OF THIS AGREEMENT. COMPANY'S OBLIGATIONS UNDER THIS SECTION WILL SURVIVE THE TERM OF THIS AGREEMENT. IN WITNESS WHEREOF, the City and Strode Property Company have executed this Agreement as of the day of , 2015. ATTEST Lori Payne, TRMC CITY SECRETARY APPROVED AS TO FORM: CITY ATTORNEY THE CITY OF SOUTHLAKE John Terrell, Mayor SPC KIMBALL OAKS, LTD Name: Its: EXHIBIT A Southlake Boulevard • '� Kimball Oaks 1 BLDG E • �•• o Project Overview BWGF • • 13.86 acres * • u ;a;; •G • 123,100 sf retail o' ✓ 21,000 restaurant Af �l two • South • • • • • �` Kimball e. •��a•••••eSO b ' 1 , 1 1 1 1 �1 I •� I' 1 �I C EXHIBIT B List of Improvements - Village Center South 1 $166,480 Southbound VCS Deceleration $35,533 Kimball Median Reconstruction ir CISD Existing Drive demo $7,600 CISD New Drive 8-inch Water Line $38,250 Actuated Crosswalk Ad Nor North 8' sidewalk $22,750 South 5' sidewalk $9,835 TOTAL 333,848 Depiction of Improvements: Village Center South Public Assets Public Assets Public Assets Public Assets Public Assets Public Assets Public Assets Public Assets Public aD Q �a E Y Sources of City incentive program participation: Road Impact Fe Water Impact Fee $38,250 Park Dedication Fee $34,167 TOTAL 197,092