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Item 4GCITY OF SOUTHLAKE MEMORANDUM (Feb. 3, 2015) 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 Property Company has initiated the construction of approximately 123,000 square feet of retail and commercial development at the corner of Southlake Boulevard and South Kimball Avenue. The PGA Tour Superstore has already opened at this location. The company is seeking reimbursement for installation of public assets at this location, which include a deceleration lane on Southlake Boulevard, changes to the median on Kimball Avenue, closure of an entry drive to the CISD school building, construction of Village Center South (between the center and CISD property), actuated signals, new crosswalks, and a water line. These improvements have been completed to Public Works' satisfaction. The proposed 380 incentive agreement of $197,092 reflects Council's feedback provided to staff on its level of support as discussed in executive sessions over the last year, including the most recent presentation in November of 2014. Although the company had requested a much higher incentive amount, Council stated its willingness to reimburse only for a portion of the public improvements (total cost of $333,848). The complete site work costs for this project were in excess of $1.8 million, in which Council chose to not participate. As you recall, when last presented the details of this potential incentive agreement in November, 2014, Council instructed staff to pursue the burial of the utilities along Southlake Boulevard frontage of the project. Although this item is not included in the incentive agreement outlined here, Public Works is researching the cost of burying the utility lines at this location as directed. They have received a cost estimate for burying the electric lines from Encore at $450,000. The department is still awaiting cost estimates from Charter Communications and TW Telecom for burying their lines. Although their costs are not yet know, Public Works estimates that burying all utilities at the location could exceed $600,000. Financial Considerations: Reimbursement of $197,092 from monies already collected from the project in Roadway Impact Fees, Water Impact Fees and Park Dedication Fees. It is estimated that the revenue from the project when complete will be approximately $127,000 a year in ad valorem taxes and $323,000 in sales taxes. With a deduction of the existing ad valorem taxes of about $10,000, the new net revenue to the City would be about $440,000. Strategic Link: The item supports the implementation of the City's strategy through C2: Provide travel convenience with the City and region; F2: Invest to provide high quality public assets; and EDB2: manage incentive programs to attract and retain high quality businesses as a means of growing Southlake's economy. The item links to the city's strategy map in accordance with Critical Business Outcome 1: Continue to implement Southlake 2030 Plan by focusing on short- term initiateives. 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 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 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 City has made its Program Grant Payments to Company. SECTION 4. DEFINITIONS The following words shall have the following meanings when used in this Agreement: The terms "Agreement " " Cam" "Company," and "Development," shall have the meanings provided above. "Construction Costs" means the cost of design and construction document preparation, and construction and installation of the Improvements. "Effective Date" means the date this Agreement is signed by both Parties. "Program Grant" or "Program Grant Pam" 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 listed under List of Improvements 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 the attached Exhibit A. (b) Proof of Costs. In order to receive the Program Grant Payments, Company agrees to provide the City a written request for payment, including sufficient documentation of all Construction Costs. (c) 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 In consideration of Company having made the Improvements and bringing the Development to the City, City covenants and agrees that it shall make the following Program Grant Payments: (a) Program Grant Pam No later than 60 days after Company has submitted a written request for payment to City, including sufficient documentation of Construction Costs, City will pay Company a Program Grant Payment in an amount of $197,092 for the work and items listed and depicted on the attached Exhibit B. SECTION 7. NHSCELLANEOUS 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) 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. (n) 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. IN WITNESS WHEREOF, the City and Strode Property Company have executed this Agreement as of the day of , 2015. THE CITY OF SOUTHLAKE John Terrell, Mayor ATTEST Lori Payne, TRMC CITY SECRETARY APPROVED AS TO FORM: CITY ATTORNEY SPC KIMBALL OAKS, LTD Name: Its: EXHIBIT A Southlake Boulevard rBIncc h ' �� � •1i� �i tf/. r . w ba l Ave. n 0 --- BI.pCH fl ®• N // // /■ as / / ; �� i Mvwl: iu:x.n 8LI7CB BI.pGC - j4i I� 7� ■ Village Center South I' Depiction of Imprc r vements: Kimball Oaks Proiect Overview • 13.86 acres • 126,100 sf ✓ 102,100 retai I ✓ 24,000 restaurant Q Q E Y 0 t List of Improvements: Village Center South L SAuthbound VCS Deoeleration I:ttii RM11►AIMP IE1 0 • M al. n •, *AV 011=31111111=3 $166,480 ��Ublic Asse $35,533 Publ is Assets 017IR_X-FM CISD Existing Drive demo $7,600 RiblicAssets C18D New Drive 8-inch Water Line $38,250 RiblicAssets Actuated Crosswalk $20,000 RablicAssets North 8' sidewalk $22,750 South 5' sidewali ■ $9,835 TOTAL 333,848 Sources of City incentive program participation: Fbad Impact Fee Water Impact Fee $38,250 Park Dedication Fee $34,167 TOTAL 197,092 Public Asset s Ra bl is Assets 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 February 3, 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 5. This Resolution shall become effective from and after its passage. PASSED AND APPROVED this the 3th day of February, 2015 John Terrell, Mayor ATTEST: Lorie Payne, TRMC