Ordinance No. 14,036ORDINANCE NO. 14,036
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 THE SECOND AMENDMENT TO THE
CHAPTER 380 ECONOMIC DEVELOPMENT AGREEMENT WITH SAN JACINTO
RETAIL ASSOCIATES, LLC; 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 the Second Amendment to the Chapter 380
Economic Development Agreement with San Jacinto Retail Associates, LLC. A copy of the amendment
is attached hereto, marked Exhibit "A," and made a part hereof for all intents and purposes.
Section 2: This ordinance shall take effect immediately from and after its passage by the
City Council of the City of Baytown.
INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City of
Baytown this the 281h day of March, 2019.
BRANDON CAPETILLO, Mayor
A ST:
E ICIA BRYSCH, Ci0jZerk
APPROVED AS TO FORM: pia° J�
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�• / � D O y�i
ACIO RAMIREZ, SR. I City Attorney��°
R,Karen FileslCity CoundWrdinances\2019Warch 28\2NDAmendment2380EconomicDevelopmentAgreementOrdinance4Mall.doc
Exhibit "A"
SECOND AMENDMENT TO ECONOMIC DEVELOPMENT AGREEMENT
This Second Amendment to Economic Development Agreement ("Second Amendment")
is made and entered into to be effective as of March , 2019 (the "Second Amendment Date"),
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").
A. City and Developer entered into that certain Economic Development Agreement
dated July 2, 2015, as amended by that certain First Amendment to Economic Development
Agreement dated effective as of August 13, 2018 (collectively, the "Agreement"), for the
purposes of providing certain incentives and financial assistance from the City to the Developer
in exchange for Developer's acquisition and development of certain real property located within
the City as further detailed in the Agreement.
B. City and Developer desire to amend the Agreement as set forth herein.
Now, therefore, for and in consideration of the mutual covenants contained herein, and
other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged and confessed, Developer and City agree as follows:
1. The Proiect. Section 1.02 "The Project" of the Agreement is hereby amended to
read as follows:
1.02 The Proiect.
a. If the property owners of the Macy's and J.C. Penney's retail
stores give their written consent to the redevelopment of the
Project and to the Conceptual Site Plan for the Project (the
"Consents") by December 31, 2019, Developer shall construct or
cause to be constructed a retail development to be tentatively
known as San Jacinto Marketplace (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 Consents are not secured by December 31, 2019, 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 "B-2."
Exhibit "B-2" shall be known as the "Conceptual Site Plan" only if
the Consents are not obtained
2. Public Purpose. Section 1.03 "Public Purpose" of the Agreement is hereby
amended to read as follows:
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 Consents are obtained by December 31, 2019:
1. A major retail development with a minimum of 750,000
square feet, with construction of same commencing on or
about March 31, 2020, and completed on or before
December 31, 2024;
2. Utility infrastructure to serve the Project, including, but not
limited to, water lines, sanitary sewer lines and related
infrastructure, construction of storrnwater 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;
4. All sales tax revenues generated from the Project after
payment of the Economic Development Incentives; and
5. Permanent easements at no cost to the City for utilities and
fire lanes.
b. if the Consents are not obtained by December 31, 2019:
The redevelopment of the existing enclosed mall, with
construction of same commencing on or about March 31,
2020, and completed on or before December 31, 2024;
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
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3. All sales tax revenues generated from the Project after
payinent of the Economic Development Incentives.
3. Acquisition of Sears Tract. The last sentence of Section 9 of the First
Amendment to Economic Development Agreement is hereby deleted in its entirety and replaced
with the following sentence: "If Developer has not obtained written consent to the Project from
the property owners of the Macy's and J.C, Penney's retail stores on or before December 31,
2019, Developer shall reimburse City a portion of the amount paid to Developer pursuant to this
Section 9 in the amount of THREE MILLION TWO HUNDRED FIFTY THOUSAND AND
NO/100 DOLLARS ($3,250,000.00)."
4. Maximum PaDnent for Incentive No. 1. Section 3.01 (f) "Maximum Payment for
Incentive No. 1" of the Agreement is hereby amended to read as follows:
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 NO/100
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 NOI100
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.Ol.f to the contrary, if the Consents are not obtained by
December 31, 2019, and Developer redevelops the Property
pursuant to Section 1.02.b above, the amount of FOUR MILLION
AND NO/100 DOLLARS ($4,000,000.00) shall be substituted for
the amount of SEVEN MILLION TWO HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($7,250,000.00) in every
instance in this Section 3.01.f.
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5. Ad Valorem Tax Refund Period. The definition of the "Ad Valorem Tax Refund
Period" set forth in Section 3.02(b) of the Agreement is hereby revised to mean that period
starting the tax year 2022, and ending on the last day of the tax year one hundred twenty (120)
months thereafter.
6. City Pa}nnent of the Sales Tax Rebate. Section 3.03(a)(1) of the Agreement is
hereby deleted in its entirety and replaced with the following:
"City Payment. 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/100 DOLLARS
($131,250.00)). Quarterly payment of the Sales Tax Rebate shall commence with
the first calendar quarter in 2023, and end upon payment of the aggregate sum of
FOURTEEN MILLION AND NO/100 DOLLARS ($14,000,000.00) to
Developer in Sales Tax Rebates (the "Sales Tax Rebate Period"). City shall pay
to Developer each quarterly installment of the Sales Tax Rebate within thirty (30)
days following receipt of information 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 snake such
determination within a reasonable period of time following the end of each
calendar quarter."
7. Amendment. This Second Amendment may not be modified, amended or
terminated nor any of its provisions waived except by written agreement signed by Developer
and City. As amended hereby, the Agreement shall remain in full force and effect, enforceable
in accordance with its terms.
8. Construction. In the event of any inconsistency or conflict between this Second
Amendment and the Agreement, the terms of this Second Amendment shall control. All
capitalized terms not otherwise defined herein shall have the same meaning as ascribed to them
in the Agreement.
9. Governing Law. This Second Amendment shall be governed by and construed in
accordance with the laws of the State of Texas.
10. Counterparts; Signatures. This Second Amendment may be executed in
counterparts. All executed counterparts shall constitute one agreement, and each counterpart
shall be deemed an original. Electronic signatures, facsimile signatures or signatures transmitted
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by electronic mail in so-called "pdf' format shall be legal and binding and shall have the same
full force and effect as if an original of this Second Amendment had been delivered. Developer
and City (i) intend to be bound by the signatures (whether original, faxed or electronic) on any
document sent by facsimile or electronic mail, (ii) are aware that the other party will rely on such
signatures, and (iii) hereby waive any defenses to the enforcement of the terms of this Second
Amendment based on the foregoing forms of signature.
The parties have executed this Second Amendment to be effective as of the Second
Amendment Date.
CITY:
THE CITY OF BAYTOWN,
a Texas home -rule municipal corporation
By:
Name:
Title:
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: _
Name:
Title: