Ordinance No. 11,994ORDINANCE NO. 11,994
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 CHAMBERS TOWN CENTER, LTD; AUTHORIZING
PAYMENT BY THE CITY OF BAYTOWN IN AN AMOUNT NOT TO EXCEED
TWO MILLION EIGHT HUNDRED FIFTY THOUSAND AND NO /100 DOLLARS
($2,850,000.00); MAKING OTHER PROVISIONS RELATED THERETO; AND
PROVIDING FOR THE EFFECTIVE DATE THEREOF.
****************************************************** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * **
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 Chambers Town Center, Ltd. 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 an amount
not to exceed TWO MILLION EIGHT HUNDRED FIFTY THOUSAND AND NO /100 DOLLARS
($2,850,000.00) 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 fry and after its passage by the
City Council of the City of Baytown. 1//
INTRODUCED, READ and PASSED by the affirmative vA of thee, City Council of the City of
Baytown this the 9h day of August, 2012.
H. DONCARLOS,
\ \Cabfs0I \1egal\Karen\Fi1es \City Council \Ordinances\2012\August 9U8 OEconomicDevebpmentAgmemennviih Walman.doc
ECONOMIC DEVELOPMENT AGREEMFN'P
STA'I L OF ITXAS §
COUNTY OF HARRIS §
T] I] AGREE,MEN'l' by Bind between the City of Baytown, a Texas home -rule municipal
corporation (City ") and Chambers Town Cutter; Ltd., t Texas limited iership
("Developer'*), (collectively referred to as the "Parties') is enteral into on tltis i!zday of
August, '2012. (the -Effective Date').
WI IEREAS, Developer is the owner of a certain tract of land totaling approximately 68
acres within an area that has been annexed by the City for limited purposes, as depicted an the
aerial map marked as Exhibit "A" attachedf hereto ,'md incorporated herein for all purposes
("Property"), for the purposes of developing a cotnmerciallretail development; and
WHEREAS. in accordance with Article 111. 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 poranote state or
local economic development and to stimulate business and commercial activity in the City,
including areas that have been annexed for limited purposes, and
WI°IERFAS, in accordance with Chapter 380, Texas Local Gov't Code, the City hereby
establishes such a program to provide incentives and financial assistance to the Developer to
encourage and promote the development of the Property thereby enhancing and sthoulatingg
business and commercial activity in the City, including areas that have been annexed for limited
purposes, and its extraterritorial jurisdiction; and
WIIERF.AS, the Developer has agreed, in exchange and as consideration for funding by
the City to satisfy and comply width certain terms and conditions, including the construction of
the Project as defined herein; and
W11FREAS, the City and Developer agree that the provisions of this Agreement
substantially advance legitimate interest of the City by expanding the sales tax Base of the City,
increasing employment and promoting economic development;
NOW, TIIERFFORB,; for and in consideration of the promises and the mutual
agreements set lorth herein, the Parties hereby agree as follows:
ARTICLE
RECITALS
I . Recitals. The recitals set forth above are declared true and correct and are hereby
incorporated as part of this Agreement.
t�cgn�pnic. f7gelcrpinent „lgrcentc!if. Page I
ARTICLE II
THE PROJECT
1. The Project. The Developer intends to construct or cause to be constructed a
retail development to be known as Chambers Town Center (the "Project "). The Project is to be
constructed in substantial accordance with the Conceptual Site Plan attached as Exhibit "A" (the
"Conceptual Site Plan ").
2. Water and Wastewater Service for the Project. The Project is located within
Chambers County Municipal Utility District No. 1 ( "CCMUD #1 "). The Developer will
construct the water, sewer and drainage infrastructure for the Project and convey such
infrastructure to CCMUD #1 pursuant to the terms of a preconstruction agreement with
CCMUD #1. CCMUD #1 shall provide water and wastewater service for the Project in
accordance with the Water Supply and Waste Disposal Agreement entered into between the City
and CCMUD# 1.
3. Conveyance of Easements for Utilities. Developer shall, at no cost to the City or
to CCMUD #1, timely convey to the public (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 reasonably 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 the Developer (or other party as
the case may be) to the public.
4. Public Purpose. The City finds that the benefits provided by the Developer and
described in this Section 4 promote economic development in the City and stimulate business
and commercial activity in the municipality. In consideration of the Economic Development
Grant, the Developer agrees to provide the following:
a. 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;
b. Permanent easements at no cost to the City for utilities and for fire lanes;
c. A major retail store with a minimum of 150,000 square feet to the Project no
later than December 31, 2014;
d. Sales tax revenues generated from the Project that are not subject to the
Economic Development Grant that are collected by the City for street maintenance,
police and fire purposes, estimates of which are shown on the attached Exhibit "B "; and
e. All sales tax revenues generated from the Project after payment of the
Economic Development Grant, estimates of which are shown on the attached Exhibit
"B
Economic Development Agreement, Page 2
ARTICLE III
ECONOMIC INCENTIVES
1. Economic Development Grant. The City shall pay to the Developer an economic
development grant in the form of periodic payments made solely from Annual Sales Taxes
Collected at the Project pursuant to Chapter 380 of the Texas Local Government Code, an
amount not to exceed TWO MILLION FIVE HUNDRED SEVENTY -FIVE THOUSAND AND
NO /100 DOLLARS ($2,575,000.00) (the "Economic Development Grant "). The Economic
Development Grant is comprised exclusively of a City Payment as defined below, which grant
expires within seven (7) years from the earlier of (1) May 1, 2013 or (2) the date a notice to
proceed to begin construction of the Wal -Mart store is issued, unless the Agreement is earlier
terminated. The Developer shall provide the City a copy of the notice to proceed issued for the
construction of the Wal -Mart store within ten (10) calendar days of its issuance. The Developer
understands and agrees that the City is not certifying or otherwise encumbering any funds for the
Economic Development Grant and does not have any monies for the same. The Developer
agrees not to make any claims against the City for any monies other than those from the Annual
Sales Taxes Collected at the Project.
a. City Payment. The City will make payments to the Developer from sales tax
revenues pursuant to Chapter 380 of the Texas Local Government Code to the Developer
in the amount of 100% of the Annual Sales Taxes Collected at the Project as defined
below over $300,000 (the "City Payment "). The City Payment shall be paid in annual
installments beginning fourteen months after the date the Wal -Mart store opens to the
public. The City shall have the right to pay the City Payment more frequently than
annually. If this Agreement is not terminated prior to its expiration, the final City
Payment to the Developer shall be that portion of the Annual Sales Taxes Collected at the
Project as of the date of the expiration of this Agreement.
b. Annual Sales Taxes Collected at the Project. The "Annual Sales Taxes
Collected at the Project" is defined as 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 Project during the previous twelve months, including those monies received
after the collection period because of delinquency or protest.
C. Tenant Lists. The 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
Annual 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 applicable
and any other information deemed necessary or advisable by the City in order to calculate
the Annual Sales Taxes Collected at the Project. If requested by the tenant, the City will
keep such sales tax data of an individual tenant or landowner confidential to the extent
permitted by law.
2. Grant Limitation. The City's obligation to pay the Economic Development Grant
to the Developer shall be restricted to Annual Sales Taxes Collected at the Project. The City
shall not be obligated to pay the Economic Development Grant from ad valorem taxes or any
Economic Development Agreement, Page 3
other source of revenue. Furthermore, the Economic Development Grant shall expire within
seven years of the earlier of (1) May 1, 2013 or (2) the date a notice to proceed to begin
construction of the Wal -Mart with a minimum of 150,000 square feet is issued unless earlier
terminated.
3. Traffic Signal Installation. Subject to the limitations contained herein, the City
shall design and construct (or cause to be designed and constructed) a traffic signal on State
Highway 146 at the entrance to the Project if the installation is approved by the Texas
Department of Transportation ( "TxDOT "). The City shall commence design within three (3)
months of the execution of this Agreement and shall diligently pursue the completion of the
design and construction of the traffic signal thereafter. However, the parties understand and
agree that both the design and construction is subject to TxDOT approval, over which neither
party has any control. As such, the City cannot be held in breach of this agreement should
TxDOT not approve or fail to timely approve the design and /or construction of the traffic signal
herein contemplated. Additionally, the parties agree that the City's obligations under this
paragraph will at no time exceed TWO HUNDRED SEVENTY -FIVE THOUSAND AND
NO /100 DOLLARS ($275,000.00) ( "Maximum Traffic Signal Costs "). Any amount in excess of
the Maximum Traffic Signal Costs shall be borne by the Developer, who shall make payment to
the City within thirty (30) days after receiving a request therefor. Failure of the Developer to
timely pay costs in excess of the Maximum Traffic Signal Costs shall be a material breach of this
agreement for which the City may terminate the agreement and seek all appropriate remedies at
law or in equity. Nothing shall preclude the City from seeking shared funding from other
governmental entities for such Maximum Traffic Signal Costs. In the event that no notice to
proceed has been issued for the construction of a Wal -Mart store with a minimum of 150,000
square feet by May 1, 2013, the Developer shall reimburse the City for all costs expended for the
traffic signal installation described herein.
4. Refund. In the event that the Developer fails to fulfill its obligations under the
Agreement, after receipt of notice and expiration of the cure period described in Article IV
below, the City may, at its option, terminate this Agreement, whereupon the Developer shall be
required to reimburse the City within 30 days for payments made by the City pursuant to Article
III Section 3 "Traffic Signal Installation" in accordance with the following:
Year of Non - Compliance
1
Percentage to be Reimbursed
[fill.
1
:1'
1
1'
Economic Development Agreement, Page 4
ARTICLE IV
MISCELLANEOUS PROVISIONS
1. Default; Remedies. Any party to this Agreement that believes that the other party
to this Agreement has defaulted in the performance of any condition, term, or obligation owed to
that party under this Agreement shall within ten (10) business days 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 may terminate this Agreement.
2. Separate Status. None of the terms o
deemed to create a partnership between or among the
otherwise, nor shall it cause them to be considered
enterprise.
3. Construction and Interpretation.
r provisions of this Agreement shall be
Parties in their respective businesses or
joint ventures or members of any joint
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. Assi ng ability. The Developer may assign or transfer its rights (including the right
to receive payments), duties and obligations under this Agreement to any person or entity only
with prior written approval and consent by the City, which approval shall not be unreasonably
withheld. However, the City hereby consents to an assignment of the Developer of its rights,
(including the right to receive payments), duties and obligations under this Agreement to an
affiliate, subsidiary or related party of the Developer; provided the City is given thirty (30) days'
advance written notice of such assignment.
Economic Development Agreement, Page 5
5. 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.
6. 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.
7. Exhibits. All exhibits attached to this Agreement are incorporated herein by
reference and expressly made part of this Agreement as if copied verbatim.
8. 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 7752
If to the Developer:
Crosswell Greenwood Commercial Development LLC
2121 Sage Road, Suite 290
Houston, TX 77056
Attention: Tod Greenwood
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) four (4) 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.
9. Force Maieure. 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
Economic Development Agreement, Page 6
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 suspended
during the continuance of any inability but for no longer period. Such cause shall as far as
possible be remedied with all reasonable dispatch.
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, arrests 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.
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.
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 or his designee (the "City Representative "), and the initial representative for
Developer shall be Allen Crosswell (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.
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.
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.
14. R Rresentation of Authority. The City represents and warrants to the 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 the Developer as
provided in this Agreement. The Developer represents and warrants that such party 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.
Economic Development Agreement, Page 7
15. Sisnaturc Warranty Clause. The signatories to this Agreement represent and
warrant that they have the authority to execute this Agreement on behalf of the Parties,
respectively.
16. Leeal 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 ofthe agreement including the intent of the
Agreement be honored and performed.
17, Economic Incentives Constitute a. Program. '['Iris Agreement constitutes an
economic development program to promote state or local economic development and to
stimulate business and commercial activity in tile City and the area annexed for limited purposes
pursuant to Article III, Sec. 52 - -a. Texas Constitution and Chapter 380, Texas Local. Government
Code.
18.. Term. Unless cailier terminated, this Agreement will remain in force and effect
for seven (7) years fiom the earlier of (1) May I, 2013, or (2) the date that the Wal -Mart store
issues its notice to proceed to its contractor to begin construction of the store, or (3) until the
Economic Development Grant is paid in full.
CITY
B.
12OBER "p D. LEIPFR, City Me urger
APPROVED AS TO FORM:
13y.
G ACID RAMIRI;L, SR„ it t tlorney
tttuic �eye7_nent A�reea rem PageB
DEVELOPER:
Chambers,rown Center, Ltd., by and through its
General Partner ACTG, LLC
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Exhibit "B"
Chambers Town Center
Street Maint. / Police /
City Benefit from
Fire Benefit from
Total Benefit from
Project Sales Tax
Project Sales Tax
Project Sales Tax
Revenue
Revenue
Revenue
(Years 1 -5 net of Developer's participation)
Benefit Year 1
$
300,000
S
495,000
$
795,000
Benefit Year 2
$
300,000
S
526,125
$
826,125
Benefit Year
$
300,000
$
562,534
S
862,534
Benefit Year 4
$
300,000
S
618,638
$
918,638
Benefit Years
5
300,000
S
694,588
$
994,588
BenefitYear6
S
1,013,092
S
759,819
$
1,772,911
Benefit Year 7
$
1,043,275
S
782,456
S
1,825,731
Benefit Year 8
S
1,074,361
S
805,771
S
1,880,132
Benefit Year 9
S
1,106,377
S
829,783
$
1,936,160
Benefit Year 10
S
1,139,352
S
854,514
S
1,993,866
Benefit Year 11
$
1,173,314
S
879,986
S
2,053,300
Benefit Year 12
$
1,208,293
$
906,220
S
2,114,513
Benefit Year 13
$
1,244,318
$
933,239
$
2,177,557
Benefit Year 14
$
1,281,422
S
961,067
$
2,242,489
Benefit Year 15
S
1,319,638
$
989,729
S
2,309,367
Benefit Year 16
$
1,358,997
S
1,019,248
$
2,378,245
Benefit Year 17
S
1,399,535
$
1,049,651
$
2,449,186
Benefit Year 18
S
1,441,286
S
1,080,965
S
2,522,251
Benefit Year 19
5
1,484,288
S
1,113,216
S
2,597,504
Benefit Year 20
S
1,528,578
S
1,146,434
$
2,675,012
Benefit over 20 years
$
20,316,126
$
17,008,978
S
37,325,104