Ordinance No. 12,891ORDINANCE NO. 12,891
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS,
AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE AND
THE CITY CLERK TO ATTEST TO A CHAPTER 380 ECONOMIC DEVELOPMENT
AGREEMENT WITH SAN JACINTO RETAIL ASSOCIATES, LLC;
AUTHORIZING PAYMENT BY THE CITY OF BAYTOWN AS AUTHORIZED IN
SAID AGREEMENT; MAKING OTHER PROVISIONS RELATED THERETO; AND
PROVIDING FOR THE EFFECTIVE DATE THEREOF.
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BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:
Section 1: That the City Council of the City of Baytown hereby authorizes and directs the
City Manager to execute and the City Clerk to attest to a Chapter 380 Economic Development Agreement
with San Jacinto Retail Associates, LLC. A copy of the agreement is attached hereto, marked Exhibit
"A," and made a part hereof for all intents and purposes.
Section 2: That the City Council of the City of Baytown authorizes payment in accordance
with the agreement authorized in Section 1 hereinabove.
Section 3: That the City Manager is hereby granted general authority to approve a decrease
or an increase in costs by FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00) or less, provided
that the amount authorized in Section 2 hereof may not be increased by more than twenty -five percent
(25 %).
Section 4: This ordinance shall take effect immediately fr opnd after its passage by the
City Council of the City of Baytown. �i
INTRODUCED, READ and PASSED by the affirmative to f the City Council of the City of
Baytown this the 30`h day of June, 2015.
EPHEN H. DONCARLOS, Mayor
ATT T:
TICIA BRYSCH, City Clerk-/ O
-n• oo,
APPROVED AS TO FORM: +qS• ~• Sd'��'y
ACIO RAMIREZ, SR., City omey
%%cobilsOVlegal,Karen`Tiles',City Council Ordinances\2015Vune 30\ 380EconomicDevelopmentAgreementOrdinance4Mall .doc
Exhibit "A"
ECONOMIC DEVELOPMENT AGREEMENT
STATE OF TEXAS §
COUNTY OF HARRIS §
THIS AGREEMENT by and between the City of Baytown, a Texas home -rule municipal
corporation ( "City ") and San Jacinto Retail Associates, LLC, a Texas limited liability company
( "Developer "), (collectively referred to as the "Parties" and individually as a "Party") is entered
into on this day of June, 2015 (the "Effective Date ").
WHEREAS, Developer is purchasing a certain tract of land totaling approximately 62.5
acres within the incorporated limits of the City, as depicted on the map marked as Exhibit "A"
attached hereto and incorporated herein for all purposes ( "Property"), for the purposes of
developing a commercial /retail development; and
WHEREAS, in accordance with Article III, Section 52 -a of the Texas Constitution and
Chapter 380 of the Texas Local Gov't Code, the City may establish and provide for the
administration of a program for making loans and grants of public money to promote state or local
economic development and to stimulate business and commercial activity in the City; and
WHEREAS, in accordance with Chapter 380, Texas Local Gov't Code, the City hereby
establishes such a program to provide incentives and financial assistance to Developer to
encourage and promote the development of the Property thereby enhancing and stimulating
business and commercial activity in the City and its extraterritorial jurisdiction; and
WHEREAS, Developer has agreed, in exchange and as consideration for funding by the
City, to satisfy and comply with certain terms and conditions, including the construction of the
Project as defined herein; and
WHEREAS, the City and Developer agree that the provisions of this Agreement
substantially advance a legitimate interest of the City by expanding the sales and property tax base
of the City, increasing employment and promoting economic development; and
WHEREAS, the City finds that by its approval and execution of this Agreement it is duly
authorized by the Constitution and laws of the State of Texas to enter into this Agreement, and
Developer represents by its approval and execution of this Agreement that it is duly authorized by
its members or officers to enter into this Agreement, and City and Developer each acknowledge
that the terms, provisions, and conditions hereof are mutually fair and advantageous to each;
NOW, THEREFORE, for and in consideration of the promises and the mutual agreements
set forth herein, the Parties hereby agree as follows:
Economic Development Agreement, Page 1
ARTICLE I
THE PROJECT
1.01 Contingency. The obligations of the City and Developer contained herein are contingent
upon Developer acquiring the Property and notifying the City in writing of such acquisition
on or before December 31, 2015. Should Developer fail to acquire the Property and notify
the City by such date, this Agreement shall automatically terminate and the Parties shall be
released from all obligations contained herein unless otherwise extended in writing by both
Parties.
1.02 The Project.
a. If the necessary approvals are obtained as contemplated in Section 3.Ol.d by
December 31, 2018, Developer shall construct or cause to be constructed a retail
development to be tentatively known as San Jacinto Mall Town Center (the
"Project ") consisting of at least 750,000 square feet of retail space. Developer's
preliminary conceptual site plan for the Project is attached as Exhibit `B -1" (the
"Conceptual Site Plan ").
b. If the necessary approvals for the Project are not secured by December 31, 2018, as
contemplated in Section 3.O1A, the "Project" shall be revised to include only the
redevelopment of the enclosed mall within its current footprint as more particularly
described in the conceptual site plan attached as Exhibit `13-2." Exhibit `B -2" shall
be known as the "Conceptual Site Plan" only if the necessary approvals not be
obtained as contemplated in Section 3.Ol.d.
1.03 Public Purpose. The City finds that the benefits provided by Developer as described in this
Section 1.03 promote economic development in the City and stimulate business and
commercial activity in the municipality. In consideration of the Economic Development
Incentives (as set forth in Article III of this Agreement), Developer agrees to use good -faith
and commercially reasonable efforts to provide the following:
a. if the necessary approvals are obtained as contemplated in Section 3.O1.d:
A major retail development with a minimum of 750,000 square feet, with
construction of same commencing on or about December 31, 2018 and
completed on or before December 31, 2020;
2. Utility infrastructure to serve the Project, including, but not limited to,
water lines, sanitary sewer lines and related infrastructure, construction of
stormwater pump stations and detention pond, channel reinforcement and
related drainage infrastructure to the extent necessary and/or required;
3. Sales tax revenues generated from the Project that are not subject to the
Economic Development Incentives that are collected by the City for street
maintenance, police and fire purposes;
Economic Development Agreement, Page 2
4. All sales tax revenues generated from the Project after payment of the
Economic Development Incentives;
5. Permanent easements at no cost to the City for utilities and fire lanes; and
6. Conveyance of right -of -way at no cost to the City for Independence
Boulevard.
b. if the necessary approvals are not obtained as contemplated in Section 3.0 Ld:
1. The redevelopment of the existing enclosed mall, with construction of same
commencing on or about December 31, 2018, and completed on or before
December 31, 2020;
2. Sales tax revenues generated from the Project that are not subject to the
Economic Development Incentives that are collected by the City for street
maintenance, police and fire purposes; and
3. All sales tax revenues generated from the Project after payment of the
Economic Development Incentives.
ARTICLE II
DEVELOPER OBLIGATIONS
2.01 Creation of Taxable Value.
a. Project. Developer shall use good -faith and commercially reasonable efforts to
complete the Project and have obtained a certificate of occupancy for the same on
or before December 31, 2020. It is understood and agreed that the date for
commencement and/or completion of construction of the Project as established in
this Section and in Section 1.03 may be changed if both parties agree in writing.
b. Minimum Value Created. Upon completion of the construction of the Project as
contemplated by Section 1.02.a above, the taxable value of the Property including
land and all improvements, but excluding business personal property and
inventory, shall be at least FIFTY MILLION AND N01100 DOLLARS
($50,000,000.00). Subject to subsection (c), from and after completion of the
construction of the Project until the expiration of this Agreement, the taxable value
of the Property including land and all improvements, but excluding business
personal property and inventory, shall be at least THIRTY MILLION AND
NO /100 DOLLARS ($30,000,000.00), as assessed by the Harris County Appraisal
District ( "HCAD "). The determination of whether the minimum value established
in this section has been satisfied shall be determined by the taxable value as
assessed by HCAD.
C. Adjusted Minimum Value. If the total appraised value of the Property as certified
by HCAD in any tax year decreases from the previous tax year by 10% or more,
Economic Development Agreement, Page 3
then the THIRTY MILLION AND NO /100 DOLLARS ($30,000,000.00)
minimum value established in subsection b of this section shall be decreased
commensurate with the percentage decrease in the total appraised value of the
property within the City as certified by HCAD for that year or the percentage
decrease in the total appraised value of the Property, whichever is less. If such
minimum value is adjusted downward pursuant to this subsection during the term
of this Agreement and the total appraised value of the Property as certified by
HCAD in any subsequent tax year increases from the previous tax year, such
minimum value will be increased commensurate with the percentage increase in the
total appraised value of property within the City as certified for HCAD for that
year; provided that the required minimum value will never exceed the THIRTY
MILLION AND NO /100 DOLLARS ($30,000,000.00) to which the parties agreed
in subsection b of this section.
2.02 Certificate of Compliance and Inspection. Developer shall annually deliver to the City a
Certificate of Compliance, at the time Developer delivers to the City the annual property
tax notice, utilizing the form attached as Exhibit "D." The form is subject to revision by
the City in its sole discretion.
2.03 Conveyance of Roadway. Within one hundred eighty (180) days after the City obtains the
approvals contemplated in Section 3.01A, Developer shall, at no cost to the City, convey
that portion of the Property depicted in Exhibit "C ", which is attached hereto and
incorporated herein for all intents and purposes for the construction of Independence
Boulevard. The right -of -way shall be conveyed via a special warranty deed in a form and
content acceptable to Developer and the City and shall either (i) be reflected on a plat filed
of record or (ii) be evidenced by separate instrument from Developer (or other party as the
case may be) to the City. Upon conveyance to the City, this property shall no longer be
included in the definition of "Property."
2.04 Conveyance of Easements for Utilities. In connection with redevelopment of the Property,
Developer shall, at no cost to the City, timely convey to the City (i) such permanent
easements for the provision of water, wastewater, and storm water services to the Project as
shall be required to service the various customers within the Project and (ii) such
permanent easements for fire lanes as shall be required by the City's Fire Marshal. Such
easements and rights -of -way shall be in form and content acceptable to Developer and the
City and shall either (a) be reflected on a plat filed of record or (b) be evidenced by separate
instrument from Developer (or other party as the case may be) to the City.
2.05 Conveyance of Property for Grocery. Developer shall use good -faith and commercially
reasonable efforts to sell that portion of the Property depicted on the Conceptual Site Plan
as "HEB Tract" to HEB Grocery Company, LP ( "HEB ") for the operation of a grocery
store; provided, however, (i) the terms of such sale shall be satisfactory to Developer in its
sole discretion and (ii) the actual size, configuration and location of the HEB Tract may
change based on planning and negotiations between Developer and HEB. Upon
conveyance of the IIEB Tract, the HEB Tract shall no longer be included in the definition
of "Property" for any purpose under this Agreement.
Economic Develooment Agreement, Page 4
ARTICLE III
CITY OBLIGATIONS; ECONOMIC DEVELOPMENT INCENTIVES
3.01 Economic Development Incentive No. 1 ( "Incentive No. 1" ). Once Developer has satisfied
the contingency specified in Section 1.01, the City shall provide Incentive No. 1 to
Developer, which incentive shall consist of the following:
a. Property Purchase. Developer shall use good -faith and commercially reasonable
efforts to purchase the property on which Service Merchandise was located and the
property on which Marshall's is currently located, as more particularly depicted on
Exhibit "A" attached hereto. Subject to Subsection f of this Section,
simultaneously with the closing of each property purchase, the City shall pay to
Developer in readily available funds the purchase price of the property being
purchased plus Developer's reasonable and customary closing costs to acquire such
property as shown on the settlement statement. It is the intent of the Parties that the
City shall bear the cost of the purchase of such properties and Developer shall take
title to such properties. Developer will keep the City informed of Developer's
efforts to purchase the Service Merchandise and Marshall's properties including
timing and terms of purchase. Upon purchase of each property by Developer, such
purchased property shall be considered to be included in the definition of
"Property" for all purposes under this Agreement.
b. Demolition. Subject to Subsection f of this Section, the City shall pay all costs
associated with the demolition of the improvements located on the Property
including, without limitation, all mall structural improvements thereon, unless the
Parties otherwise agree in writing to demolition of less than all of such
improvements. Payment to Developer for the costs of demolition shall be made by
the City in readily available funds within thirty (30) days after the completion of the
demolition and the City's receipt of Developer's written request for payment
accompanied by appropriate documentation evidencing payment of the demolition
costs such as invoices or receipts. The Parties expressly understand that
improvements owned by entities other than Developer, including, but not limited
to, those improvements housing Sears, Macy's and J.C. Penney's, shall not be
demolished as part of this incentive. Demolition consists of the complete removal
of building(s) and structure(s) including all walls, foundations, footings, columns,
floors, piers, partitions, concrete, brick, stone, wood, retaining walls, stoops,
underground and aboveground utility lines, removal of debris, and grading of the
land to a smooth condition. The City shall be obligated to make payment under this
Subsection in connection with Developer's redevelopment of the Property, whether
pursuant to Section 1.02.a or Section 1.02.b.
C. Subsidize Sale of Property. Subject to Subsection f of this Section, the City shall
pay Developer in readily available fiends, within thirty (30) calendar days after the
later of (i) the City's receipt of an invoice from Developer or (ii) the closing of the
sale of the IJEB Tract to HEB, the difference between FIVE MILLION TWO
Economic Development Agreement Page 5
HUNDRED FIFTY THOUSAND AND NO /100 DOLLARS ($5,250,000.00) and
the actual sales price of the HEB Tract specified in the earnest money agreement
between Developer and HEB. For example, if the sales price of the HEB Tract
pursuant to the earnest money agreement between Developer and HEB is THREE
MILLION AND N01100 DOLLARS ($3,000,000.00), then the City shall pay to
Developer the sum of TWO MILLION TWO HUNDRED FIFTY THOUSAND
AND NO /100 DOLLARS ($2,250,000.00). If Developer, after using good -faith
and commercially reasonable efforts, is unable to sell the HEB Tract to HEB, the
City shall not be obligated to make a payment under this Subsection.
d. Incentive Pay for Consents. Subject to Subsection f of this Section, promptly
following the Effective Date, the City shall use good -faith and commercially
reasonable efforts to obtain the written consent of the property owners of the
Macy's, Sears and J.C. Penney's retail stores to the redevelopment of the Project
and the Conceptual Site PIan for the Project and, if necessary, to provide an
economic incentive to such owners in order to secure such consent; provided,
however, the aggregate of all incentives provided to such owners which constitute a
portion of the SEVEN MILLION TWO HUNDRED FIFTY AND NO 1100
DOLLARS ($7,250,000.00) Maximum Payment for Incentive No. 1 as set forth in
Subsection f of this Section shall not exceed the sum of ONE MILLION AND
NO 1100 DOLLARS ($1,000,000.00) without Developer's prior written approval.
Economic incentives subject to the Maximum Payment include cash payments to
the owners but do not include tax reimbursements, rebates or other non -cash
incentives, which may be granted pursuant to a Chapter 380 economic
development agreement with such owners. If the City, after using good -faith and
commercially reasonable efforts is unable to secure the approvals contemplated in
this Subsection, the City shall not be obligated to make any payment under this
Subsection.
e. Deferred Maintenance. Subject to Subsection f of this Section, the City, after
receipt of proper invoices from the Developer, will reimburse Developer up to
ONE MILLION TWO HUNDRED THOUSAND AND NO /100 DOLLARS
($1,200,000.00) for Deferred Maintenance during the period commencing on the
date Developer purchases the Property until the date thirty-six (36) months
thereafter. Such reimbursement payments shall be made to Developer within thirty
(30) days after Developer's written request for payment accompanied by
appropriate documentation evidencing payment of Deferred Maintenance costs
such as invoices and receipts. Developer may request payment in a lump sum at
completion of any Deferred Maintenance or in installments during the course of
Deferred Maintenance, provided requests for payment shall not be made more often
than once per month and the maximum payment during any twelve (12) month
period shall not exceed $600,000.00. "Deferred Maintenance" means repairs,
maintenance and improvements necessary or desirable for continued retail
operations during the period preceding and during redevelopment of the Property
and during the phased demolition of certain structures on the Property.
Economic Development Agreement, Page 6
f. Maximum Payment for Incentive No. 1. It is expressly understood and agreed that
nothing contained herein pertaining to Incentive No. 1 shall require the City to
expend more than SEVEN MILLION TWO HUNDRED FIFTY THOUSAND
AND N01100 DOLLARS ($7,250,000.00) for this incentive. The City will not be
in default of this Agreement if it has expended SEVEN MILLION TWO
HUNDRED FIFTY THOUSAND AND N01100 DOLLARS ($7,250,000.00) for
this incentive but fails to fully perform its obligations specified in this Section 3.01.
If (i) the City is obligated and has paid all components of Incentive No. 1 specified
in Subsections a through e, and (ii) the aggregate amount paid by the City to
provide all components of Incentive No. 1 to Developer is less than $7,250,000.00,
then the City shall pay to Developer the difference between $7,250,000.00 and the
actual amount expended by the City to provide Incentive No. 1 on a reimbursement
basis for beautification features to the Property, which beautification features must
be approved by the City (which approval the City shall not unreasonably withhold,
condition or delay). Reimbursement shall be made within thirty (30) days after
receipt of an invoice therefor along with appropriate documentation evidencing
payment and completion of the beautification features. Notwithstanding the
foregoing in this Section 3.011 to the contrary, if approvals as contemplated in
Section 3.01A are not obtained and Developer redevelops the Property pursuant to
Section 1.02.b above, the amount of FOUR MILLION AND N01100 DOLLARS
($4,000,000.00) shall be substituted for the amount of SEVEN MILLION TWO
HUNDRED FIFTY THOUSAND AND NO 1100 DOLLARS ($7,250,000.00) in
every instance in this Section 3.011
3.02 Economic Development Incentive No. 2 ( "Incentive No 2 "). The City shall provide
Incentive No. 2 to Developer, which incentive shall consist of the following:
a. Transition Fee. During the period commencing upon the date Developer satisfies
the contingency contained in Section 1.01 hereinabove and ending on the last day
of the calendar quarter thirty -six (36) months thereafter (the "Transition Fee
Payment Period "), the City shall pay Developer the amount of ONE MILLION
FIVE HUNDRED THOUSAND AND NO /100 DOLLARS ($1,500,000.00),
which amount shall be paid in quarterly payments of ONE HUNDRED TWENTY
FIVE THOUSAND AND NO /100 DOLLARS ($125,000.00) in readily available
funds. The transition fee quarterly payments shall be paid by the City to Developer
within thirty (30) days after the end of each calendar quarter during the Transition
Fee Payment Period.
b. Ad Valorem Tax Refund. Starting the first tax year following the end of the
Transition Fee Payment Period and ending on the last day of the tax year one
hundred twenty (120) months thereafter (the "Ad Valorem Tax Refund Period "),
the City shall pay to Developer annually an amount equal to all ad valorem taxes
received by the City relating to the Property in each tax year, exclusive of business
personal property and inventory. The ad valorem tax refund, however, shall not
include any penalties, interest, additional penalties, or attorney's fees which
Developer may otherwise be required to pay. Developer understands and agrees
that the City is not certifying or otherwise encumbering any funds for the ad
Economic Development Agreement, Page 7
valorem tax refund other than ad valorem taxes collected by the City relating to the
Property and does not have any monies for the same. Developer agrees not to make
any claims against the City for any monies due pursuant to this Section 3.02.b other
than those from the ad valorem taxes collected by the City relating to the Property.
The City shall pay to Developer annually the ad valorem tax refund within thirty
(30) days after the City's receipt of a proper invoice therefor from Developer,
which must include the tax account numbers and certificates issued by the tax
office of each taxing entity verifying that all property taxes for the Property have
been paid in full for the applicable tax year.
3.03 Economic Development Incentive No 3 ( "Incentive No 3 "). The City shall provide
Incentive No. 3 to Developer, which incentive shall consist of the following:
a. Sales Tax Rebate. The City shall pay to Developer from Sales Taxes Collected at
the Project (as defined below) the aggregate amount of FOURTEEN MILLION
AND NO/ 100 DOLLARS ($14,000,000.00) (the "Sales Tax Rebate ") in quarterly
installments as described below. Developer understands and agrees that the City is
not certifying or otherwise encumbering any funds for the Sales Tax Rebate other
than the Sales Taxes Collected at the Project and does not have any monies for the
same. Developer agrees not to make any claims against the City for any monies
due pursuant to this Section 3.03 other than those from the Sales Taxes Collected at
the Project.
1. City Pa ent. The City shall make quarterly payments to Developer from
Sales Taxes Collected at the Project pursuant to Chapter 380 of the Texas
Local Government Code in the amount of the Sales Taxes Collected at the
Project during the applicable calendar quarter in excess of ONE
HUNDRED THIRTY -ONE THOUSAND TWO HUNDRED FIFTY AND
NO /100 DOLLARS ($131,250.00) per calendar quarter (meaning that, for
each calendar quarter during the Sales Tax Rebate Period, the City shall pay
to Developer the Sales Taxes Collected at the Project over the amount of
ONE HUNDRED THIRTY -ONE THOUSAND TWO HUNDRED FIFTY
AND NO 1100 DOLLARS ($131,250.00)). Quarterly payment of the Sales
Tax Rebate shall commence with the first calendar quarter fourteen (14)
months after the earlier to occur of (a) the date four (4) years after the date
Developer satisfies the contingency expressed in Section 1.01 above or (b)
the date of substantial completion of the redevelopment of the Project, and
end upon payment of the aggregate sum of FOURTEEN MILLION AND
N01100 DOLLARS ($14,000,000.00) to Developer in Sales Tax Rebates
(the "Sales Tax Rebate Period "). "Substantial completion" as used in this
subsection shall mean the date when (i) all mechanical, electrical and
plumbing systems necessary for the Project are operational, (ii) all required
governmental inspections and certifications required for the occupancy of
the Project have been obtained, and (iii) the only remaining work is minor
in nature, which work will not interfere with the occupancy or utilization of
the Project. City shall pay to Developer each quarterly installment of the
Sales Tax Rebate within thirty (30) days following receipt of information
Economic Development Agreement Page 8
necessary to determine the Annual Sales Tax Collected at the Project from
the Texas Comptroller of Public Accounts during the Sales Tax Rebate
Period. City agrees to use good -faith and commercially reasonable efforts
to obtain the necessary information to make such determination within a
reasonable period of time following the end of each calendar quarter.
2. Sales Taxes Collected at the Proiect. The "Sales Taxes Collected at the
Project" is defined as the sum of-
a. the actual amount of the 1 % sales and use taxes authorized by
Section 321.101(a) of the Texas Tax Code and received by the City
for sales at the Property, including those monies received after the
collection period because of delinquency or protest, and
b. the actual amount of the 0.5% sales and use taxes authorized by
Section 377.101, et seq. of the Texas Local Government Code and
received by the Baytown Municipal Development District and paid
to the City for sales at the Property, including those monies received
after the collection period because of delinquency or protest.
3. Determining Sales Taxes Collected. In order to determine the quarterly
Sales Taxes Collected at the Project and the quarterly installments of the
Sales Tax Rebate due to Developer, the City shall declare this Agreement to
be a "Revenue Sharing Agreement" to obtain otherwise confidential tax
information, pursuant to Section 321.3022 of the Texas Tax Code. City
agrees to not disclose any information obtained from the State of Texas
under this section, to the extent permissible under the Texas Tax Code.
Developer shall use commercially reasonable efforts to provide the City
with an updated list of the tenants at the Project in order to calculate the
Sales Taxes Collected at the Project. The tenant list shall be provided to the
City in writing within 15 days of any change in tenancy. Such list shall
contain the full name of the tenant, the term of the lease, the taxpayer
number and outlet number, if known by Developer and if applicable, and
any other information necessary to calculate the Sales Taxes Collected at
the Project to the extent known by Developer. If the City receives a public
information request for the information received by the City from the State
of Texas under this subsection, the City shall timely notify the Developer of
the request and the Developer and/or the applicable tenant shall have the
obligation to make arguments to the Texas Attorney General as to why the
information should not be disclosed. The City will abide by the opinion of
the Texas Attorney General or release the information if no opinion is
timely requested.
3.04 Construction of Independence Boulevard ( "Incentive No 4 "). The City shall use
good -faith and commercially reasonable efforts to acquire certain property from the
owners of Macy's retail store for right -of -way for the expansion of Independence
Economic Development Agreement, Page 9
Boulevard by dedication or by payment of an amount not to exceed the fair market value of
such property but not by a proceeding in eminent domain. After that property has been
obtained from Macy's and Developer has conveyed the necessary right -of -way to the City
pursuant to Section 2.03, the City shall, subject to the limitations contained herein, design
and construct (or cause to be designed and constructed) Independence Boulevard, which
shall be a four -lane boulevard extending from Garth Road to San Jacinto Boulevard as
depicted in Exhibit "C." The City shall commence design within three (3) months of
obtaining the property necessary for the construction of Independence Boulevard and shall
diligently pursue the completion of the design and construction of the boulevard thereafter
and complete construction within eighteen (18) months following commencement.
Additionally, the Parties agree that the City's obligations under this paragraph will at no
time exceed SEVEN MILLION FIVE HUNDRED THOUSAND AND NO /100
DOLLARS ($7,500,000.00) ( "Maximum Costs). If the design and construction of
Independence Boulevard exceed the Maximum Costs, the parties agree that the City may
reconfigure the Independence Boulevard and the related improvements in order for cost of
the design and construction to be equal or less than the Maximum Costs. Nothing shall
preclude the City from seeking shared funding from other governmental entities for such
costs. If the necessary approvals are not obtained as contemplated in Section 3.01A, the
City shall not be obligated to extend Independence Boulevard as contemplated under this
Subsection.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.01 Default, Remedies. A default under this Agreement shall occur upon the failure of a Party
to perform any obligation or act, or keep any covenant, required of such Party by the
provisions of this Agreement, or a violation or breach of any of the terns or provisions of
this Agreement by a Party. Any Party to this Agreement that believes that the other Party
to this Agreement has defaulted in the performance of any condition, term, covenant or
obligation owed to that Party under this Agreement shall within one (1) year after
discovery of said default give written notice of the default to the defaulting Party,
specifying in detail the provision or provisions of this Agreement that have allegedly been
breached and what specific action must be taken to cure or correct the default. Should the
Party receiving the notice fail to cure the default within thirty (30) days or such longer
period as may be allowed by the non - breaching Party, the non - breaching Party shall have
the right to enforce this Agreement by exercise of any and all legal and/or equitable
remedies to which such Party is entitled under this Agreement or under applicable laws
including, without limitation, commencing an action for specific performance, breach of
contract or termination of this Agreement. No waiver of any default shall be construed as a
waiver of any preceding or succeeding default of the same or any other covenant, or
condition of this Agreement.
4.02 Separate Status. None of the terms or provisions of this Agreement shall be deemed to
create a partnership between or among the Parties in their respective businesses or
otherwise, nor shall it cause them to be considered joint ventures or members of any joint
enterprise.
Economic Development Agreement, Page 10
4.03 Construction and Interpretation.
a. Whenever required by the context of this Agreement, (i) the singular shall include
the plural, and vice versa, and the masculine shall include the feminine and neuter
genders, and vice versa, and (ii) use of the words "including," "such as," or words
of similar import, when following any general term, statement or matter, shall not
be construed to limit such statement, term or matter to specific terms, whether or
not language of non - limitation, such as "without limitation," or "but not limited to,"
are used with reference thereto, but rather shall be deemed to refer to all other items
or matters that could reasonably fall within the broadest scope of such statement,
term or matter.
b. The captions preceding the text of each article and section of this Agreement are
included only for convenience of reference. Captions shall be disregarded in the
construction and interpretation of this Agreement. Capitalized terms are also
selected only for convenience of reference and do not necessarily have any
connection to the meaning that might otherwise be attached to such term in a
context outside of this Agreement.
C. This Agreement may be executed in several counterparts, each of which shall be
deemed an original. The signatures to this Agreement may be executed and
notarized on separate pages, and when attached to this Agreement shall constitute
one (1) complete document.
4.04 Assignability. This Agreement shall be binding upon and inure to the benefit of the Parties,
and their respective successors in interest and permitted assigns. Neither Party may assign
this Agreement without the prior written consent of the other Party (which consent shall
not be unreasonably withheld, conditioned or delayed) and any such prohibited assignment
shall be void. Notwithstanding the foregoing, without obtaining the consent of the City,
Developer shall be permitted to assign all or a portion of this Agreement (including the
right to receive payments) to: (i) an affiliate, subsidiary or related party of Developer; (ii) a
lender or mortgagee of Developer in connection with financing relating to the Project; and
(iii) following the earlier of five (5) years after the Effective Date or substantial completion
of redevelopment of the Project, any person or entity succeeding to all or substantially all
of Developer's ownership interest in the Property, subject to such assignee in any of such
events assuming all of Developer's obligations hereunder in writing and notice of such
assignment being provided to the City promptly following the date of such assignment.
4.05 Severability. If any provision hereof shall be finally declared void or illegal by any court
or administrative agency having jurisdiction, the entire Agreement shall not be void; but
The remaining provisions shall continue in effect as nearly as possible in accordance with
the original intent of the Parties. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to
modify this Agreement in a mutually acceptable manner so as to effect the original intent of
the Parties as closely as possible to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
Economic Development Agreement Page I I
4.06 Complete Agreement. This Agreement represents the complete agreement of the Parties
with respect to the subject matter hereof and supersedes all prior written and oral matters
related to this Agreement. Any amendment to this Agreement must be in writing and
signed by all Parties hereto or permitted or approved assignees.
4.07 Exhibits. All exhibits attached to this Agreement are incorporated herein by reference and
expressly made part of this Agreement as if copied verbatim.
4.08 Notice. Any notice or demand, which any Party is required to or may desire to serve upon
the other, must be in writing, and shall be sufficiently served if (i) personally delivered, (ii)
sent by facsimile, (iii) sent by registered or certified mail, postage prepaid, or (iv) sent by
commercial overnight carrier, and addressed to:
If to the City:
City of Baytown
Attn: City Manager
P.O. Box 424
Baytown, TX 77522
If to Developer:
San Jacinto Retail Associates, LLC
c/o Fidelis Realty Partners, Ltd.
Attn: Alan Hassenflu
4500 Bissonnet Street, Suite 300
Bellaire, TX 77401
with a copy to:
Fidelis Realty Partners, Ltd.
Attn: General Counsel
4500 Bissonnet Street, Suite 300
Bellaire, TX 77401
or such other address or addresses which any Party may be notified in writing by any other
Party to this Agreement.
Such notice shall be deemed to have been served (a) two (2) business days after the date
such notice is deposited and stamped by the U.S. Postal Service, except when lost,
destroyed, improperly addressed or delayed by the U.S. Postal Service, or (b) upon receipt
in the event of personal service, or (c) the first business day after the date of deposit with an
overnight courier, except when lost, destroyed or improperly addressed, or (d) the date of
receipt by facsimile (as reflected by electronic confirmation); provided, however, that
should such notice pertain to the change of address to either of the Parties hereto, such
notice shall be deemed to have been served upon receipt thereof by the Party to whom such
notice is given.
Economic Development Agreement, Page 12
4.09 Force Majeure. In the event any Party is rendered unable, wholly or in part, by force
majeure to carry out any of its obligations under this Agreement, it is agreed that on such
Party's giving notice and full particulars of such force majeure in writing to the other Party
as soon as possible after the occurrence of the cause relied upon, then the obligations of the
Party giving such notice, to the extent it is affected by force majeure and to the extent that
due diligence is being used to resume performance at the earliest practicable time, shall be
extended for the following periods:
a. up to a maximum of ten (10) business days for payment obligations under this
Agreement, or
b. for all other obligations, the time period a Party is prevented from performing such
obligations hereunder due to a force majeure.
The term "force majeure" as used herein, shall include, but not be limited to, acts of God,
strikes, lockouts or other industrial disturbances, acts of the public enemy, war, blockades,
insurrections, riots, epidemics, landslides, lightening, earthquakes, fires, storms, floods,
washouts, droughts, tornadoes, hurricanes, attests and restraints of governments and
people, explosions, breakage or damage to machines or pipelines and any other inabilities
of either Party, whether similar to those enumerated or otherwise and not within the control
of the parties claiming such inability, which by the exercise of due diligence and care such
Party could not have avoided; provided, however, financial inability of a Party to make any
payment due under this Agreement as and when due shall not be a force majeure.
4.10 Forum Selection. This Agreement and the relationship between the Parties shall be
governed and interpreted under the laws of Texas without regard to any conflict of laws
provision. Venue for any suit arising out of any relationship between the Parties shall
exclusively be the appropriate court in Harris County, Texas. Developer specifically
consents to and waives any objections to personal jurisdiction in Harris County, Texas.
4.11 Appointment of Representatives. To further the commitment of the Parties to cooperate in
the implementation of this Agreement, the Parties shall designate and appoint a
representative to act as a liaison between the Parties. The initial representative for the City
shall be the City Manager, Acting City Manager or his designee (the "City
Representative "), and the initial representative for Developer shall be Alan Hassenflu or
his designee (the "Developer Representative "). The representatives shall be available at all
reasonable times and places to discuss and review the performance of the Parties to this
Agreement and the development of the Property pursuant to the Conceptual Site Plan.
4.12 Effective Date. This Agreement shall be binding and take effect only upon all Parties
signatures hereto, attachment of all required exhibits, and receipt by the Parties of a fully
executed copy hereof. For the purposes of timetables provided in this Agreement, the
Effective Date shall be the date first above written.
4.13 Preamble. The findings of fact, recitations and provisions set forth in the preamble to this
Agreement are true and are adopted and made a part of the body of this Agreement, binding
the Parties hereto, as if the same were fully set forth herein.
Economic Development Agreement, Page 13
4.14 Representation of Authority. The City represents and warrants to Developer that it is duly
authorized and empowered to enter into this Agreement, subject to the terms and
conditions contained therein, and has the legal authority to make a grant to Developer as
provided in this Agreement. Developer represents and warrants that it is duly authorized
and empowered to enter into this Agreement, subject to the terms and conditions contained
herein, and is a proper party to this Agreement.
4.15 Legal Contest. This Agreement is entered into in accordance with applicable law as
understood by the Parties. In the event any part, provision or paragraph thereof shall
become unenforceable by reason of judicial decree or determination the Parties hereto
mutually agree to the extent possible to ensure that all other provisions of the Agreement
including the intent of the Agreement be honored and performed.
4.16 Economic Development Incentives Constitute a Program. This Agreement constitutes an
economic development program to promote state or local economic development and to
stimulate business and commercial activity in the City pursuant to Article III, Sec. 52 -a,
Texas Constitution and Chapter 380, Texas Local Government Code.
4.17 Estoppel Certificates. At the request of a Party, the other Party shall execute and deliver to
the requesting Party an estoppel certificate stating that this Agreement is in full force and
effect and that to such Party's knowledge and belief there are no defaults by any Party (or
that certain defaults exist), as the case may be, under this Agreement.
4.18 Time of the Essence. Time is of the essence in the performance of each and every duty,
obligation and covenant imposed in this Agreement. The Parties will make every
reasonable effort to expedite the subject matters hereof and acknowledge that the
successful performance of this Agreement requires their continued cooperation.
4.19 Conflicts with Future Ordinances. The City agrees that, in the event of a conflict between
the provisions of this Agreement and any ordinance or regulation of the City hereafter
adopted other than those adopted for conformance with state or federal law, the provisions
of this Agreement shall govern matters addressed by this Agreement.
4.20 Unconditional Obligations. Except as otherwise provided herein, the obligations of the
Parties set forth in this Agreement shall be absolute and unconditional during the term of
this Agreement. Neither the City nor Developer will suspend or discontinue any payments
or services required in this Agreement or will terminate this Agreement for any cause,
including, without limiting the generality of the foregoing, the failure of the City or
Developer to perform and observe any agreement, whether express or implied, or any duty,
liability, or obligation arising out of or connected with this Agreement except as provided
in Section 4.01.
4.21 Term. Unless earlier terminated, this Agreement shall remain in force and effect until (i)
the date Incentive Nos. 1, 2, 3 and 4 are paid or performed or (ii) twenty (20) years fiom the
Effective Date, whichever occurs first.
[Signature Page Follows]
Economic Development Agreement, Page 14
The Parties have executed this Agreement to be effective as of the Effective Date.
ATTEST:
LETICIA BRYSCH, City Clerk
APPROVED AS TO FORM:
CITY:
THE CITY OF BAYTOWN,
a Texas home -rule municipal corporation
RON BOTTOMS, Acting City Manager
IGNACIO RAMIREZ, SR., City Attorney
DEVELOPER:
SAN JACINTO RETAIL ASSOCIATES, LLC,
a Texas limited liability company
By: FRP San Jacinto Retail Associates, LLC,
a Texas limited liability company,
its Manager
By:f
Alan
ATTEST:
By:
Glenn E. Airola
Executive Vice President
Economic Development Agreement Page 15
LIST OF EXHIBITS:
Exhibit "A" - Depiction of Property, Service Merchandise and Marshall's Tracts
Exhibit "B -1" - Conceptual Site Plan
Exhibit `B -2" - Conceptual Site Plan for Enclosed Mall
Exhibit "C" - Depiction of Roadway to be Conveyed to the City by Developer
Exhibit "D" - Certificate of Compliance
Economic Development Agreement Page 16
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Exhibit "D"
Economic Development Agreement
Certificate of Compliance
City of Baytown
REPORTING YEAR 20_
HCAD taxable value of the Property* 1" year after completion of Project: $
( *land and improvements, but excluding business personal property and inventory)
HCAD taxable value of Property* for Reporting Year _: $
( *land and improvements, but excluding business personal property and inventory)
I, the authorized , the of San Jacinto
Retail Associates, LLC, hereby certify that the above information is correct and accurate pursuant to the
terms of the Economic Development Agreement dated the _ day of July, 2015.
Signed this the _ day of 120
SAN JACINTO RETAIL
ASSOCIATES, LLC
(Signature)
(Printed Name)
(Title)
STATE OF TEXAS §
COUNTY OF HARRIS §
Before me on this day personally appeared , in his capacity as
of SAN JACINTO RETAIL ASSOCIATES, LLC, on behalf of such
limited liability company, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he /she executed the same for the purposes and consideration
therein expressed.
SUBSCRIBED AND SWORN before me this day of , 20
Notary Public in and for the State of
Texas