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RE 2005-1213.2 RESOLUTION NO. 2005-1213.2 A RESOLUTION OF THE CITY OF COPPELL, TEXAS, APPROVING THE TERMS AND CONDITIONS OF A TAX ABATEMENT AGREEMENT BY AND BETWEEN THE CITY OF COPPELL, TEXAS AND MAJESTIC PARK WEST PARTNERS, L.P. AND THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY; AUTHORIZING ITS EXECUTION BY THE MAYOR; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council has been presented a proposed Tax Abatement Agreement by and between the City of Coppell, Texas and Majestic Park West Partners, L.P., a Delaware limited partnership and The Northwestern Mutual Life Insurance Company, a Wisconsin corporation, a copy of which is attached hereto and incorporated herein by reference; and WHEREAS, upon full review and consideration of the Agreement, and all matters related thereto, the City Council is of the opinion and finds that the terms and conditions thereof should be approved, and that the Mayor should be authorized to execute the Agreement on behalf of the City of Coppell, Texas; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS, THAT; SECTION 1. The Agreement attached hereto having been reviewed by the City Council of the City of Coppell, Texas, and found to be acceptable and in the best interest of the City and its citizens, be, and the same is hereby, in all things approved, and the Mayor is hereby authorized to execute the Agreement on behalf of the City of Coppell, Texas. SECTION 2. The City Council finds that the improvements proposed to be built upon the Premises described in the Agreement will enhance the economic vitality of the community through a combination of new capital investment, increased sales tax revenues, and the creation of additional job opportunities. SECTION 3. The tax abatement to be granted by the Agreement will not include inventory, and supplies. SECTION 4. The improvements proposed for the Premises will accomplish the tax abatement guidelines of the City of Coppell, Texas. 74205 SECTION 5. The City Manager delivered to the presiding officer of the governing body of each taxing unit in which the property subject to the Agreement is located, a written notice that the City of Coppell, Texas, intends to enter into the Agreement. The notice given by the City Manager included a copy of the Agreement approved by this Resolution. SECTION 6. This Resolution and the Tax Abatement Agreement are hereby approved by the affirmative vote of the majority of the members of the City Council of the City of Coppell, Texas, at a regularly scheduled meeting of the City Council. SECTION 7. This Resolution shall become effective immediately f~om and after its passage. DULY RESOLVED AND ADOPTED by the City Council of the City of Coppell, Texas, on this the/.~ ~"'day o~~~J, 2005. D6L~I~AS ~rO~'El~, MAYOR ATTEST: LiBtBY B~]CITY SECRETARY CITY ~TORNI~'/~f/ -- (PGS/si 11/28/05) 2 74205 STATE OF TEXAS § COUNTY OF DALLAS § TAX ABATEMENT AGREEMENT This Tax Abatement Agreement (the "Agreement") is entered into by and between the City of Coppell, Texas (the "City"), and Majestic-Park West Partners, L.P., a Delaware limited partnership and Northwestern Mutual Life Insurance Company, a Wisconsin corporation ("Owner"), acting by and through their authorized representatives. WITNESSETH: WHEREAS, the City Council of the City of Coppell, Texas, (the "City"), passed an Ordinance (the "Ordinance") establishing Tax Abatement Reinvestment Zone No. 47 (the "Zone"), for commercial/industrial tax abatement, as authorized by the Property Redevelopment and Tax Abatement Act, Chapter 312 of the Texas Tax Code, as amended (the "Tax Code"); and WHEREAS, the City has adopted guidelines for tax abatement (the "Tax Abatement Guidelines"); and WHEREAS, the Tax Abatement Guidelines contain appropriate guidelines and criteria governing tax abatement agreements to be entered into by the City as contemplated by the Tax Code; and WHEREAS, the City has adopted a resolution stating that it elects to be eligible to participate in tax abatement; and WHEREAS, in order to maintain and enhance the commercial and industrial economic and employment base of the Coppell area, it is in the best interests of the taxpayers for the City to enter into this Agreement in accordance with said Ordinance, the Tax Abatement Guidelines and the Tax Code; and WHEREAS, Owner owns, or is under contract to purchase, the real property described in Exhibit "A" ("Land") and intends to construct certain Improvements (hereinafter defined) thereon; and WHEREAS, Owner's development efforts described herein will create permanent new jobs in the City; and WHEREAS, the City Council finds that the contemplated use of the Premises (hereinafter defined), the contemplated Improvements thereto in the amount set forth in this Agreement, and the other terms hereof are consistent with encouraging development of the Zone in accordance with the purposes for its creation and/or in compliance with the Tax Abatement Guidelines, the Ordinance adopted by the City, the Tax Code and all other applicable laws; and Majestic Realty Co. Tax Abatement Agreement -Page 1 74190 WHEREAS, the City Council finds that the Improvements sought are feasible and practicable and would be of benefit to the Premises to be included in the Zone and to the City after expiration of this Agreement; and WHEREAS, a copy of this Agreement has been furnished, in the manner prescribed by the Tax Code, to the presiding officers of the governing bodies of each of the taxing units in which the Premises is located; and WHEREAS, the City desires to enter into an agreement with the Owner for the abatement of taxes pursuant to Chapter 312 of the Tax Code as amended; NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for good and other valuable consideration, the adequacy and receipt of which is hereby acknowledged, including the expansion of primary employment, the attraction of major investment in the Zone, which contributes to the economic development of Coppell and the enhancement of the tax base in the City, the parties agree as follows: Article I Definitions Wherever used in this Agreement, the following terms shall have the meanings ascribed to them: "Base Year Taxable Value" shall mean the Taxable Value for the Improvements for the year in which the Tax Abatement Agreement is executed (2005). "Effective Date" shall mean the last date of execution of this Agreement. "Commencement of Construction" shall mean shall mean that (i) the construction plans for the Improvements have been prepared and all approvals thereof required by applicable governmental authorities have been obtained; and (ii) all necessary permits for construction of the Improvements pursuant to the respective plans therefore having been issued by all applicable governmental authorities. "Completion of Construction" shall mean: (i) substantial completion of the Improvements; and (ii) a final certificate of occupancy has been issued for the Improvements. "Event of Bankruptcy or Insolvency" shall mean the dissolution or termination of a party's existence as a going business, insolvency, appointment of receiver for any part of a party's property and such appointment is not terminated within ninety (90) days after such appointment is initially made, any general assignment for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against such party, and such proceeding is not dismissed within ninety (90) days after the filing thereof. Majestic Realty Co. Tax Abatement Agreement -Page 2 74190 "First Year of Abatement" shall mean January 1 of the calendar year immediately following the date of issuance of the first certificate of occupancy for the first tenant of the Improvements, unless otherwise agreed by the parties. "Force Majeure" shall mean any contingency or cause beyond the reasonable control of a party including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, adverse weather, government or de facto governmental action (unless caused by acts or omissions of such party), fires, explosions or floods, strikes, slowdowns or work stoppages. "Improvements" shall mean the contemplated improvements to be constructed on the Land and as further described herein, and any additions or expansions constructed on the Land during the term of this Agreement. "Premises" shall collectively mean the Land and Improvements. "Taxable Value" means the appraised value as certified by the Appraisal District as of January 1 of a given year. "Land" means the real property described in Exhibit A. Article II General Provisions 2.1 The Owner owns or is under contract, to purchase the Land, which Land is located within the city limits of the City and intends to construct the Improvements. 2.2 The Premises are not in an improvement project financed by tax increment bonds. 2.3 This Agreement is entered into subject to the rights of the holders of outstanding bonds of the City. 2.4 The Premises are not owned or leased by any member of the Coppell City Council or any member of the Coppell Planning and Zoning Commission. Article III Tax Abatement Authorized 3.1 This Agreement is authorized by the Tax Code and in accordance with the City Tax Abatement Guidelines, and approved by resolution of the City Council. 3.2 Subject to the terms and conditions of this Agreement, and provided the Taxable Value for the Improvements, excluding the Land, is at least Eight Million Five Hundred Thousand Dollars ($8,500,000) as of January 1 of the First Year of Abatement and as of January 1 of each year thereafter that this Agreement is in effect, the City hereby grants Owner an abatement of seventy-five percent (75%) of the Taxable Value of the Improvements for a period of five (5) Majestic Realty Co. Tax Abatement Agreement -Page 3 74190 consecutive years. The actual percentage of Taxable Value of the Improvements subject to abatement for each year this Agreement is in effect will apply only to the portion of the Taxable Value of the Improvements that exceeds the Base Year Taxable Value. 3.3 The period of tax abatement for the Improvements herein authorized shall be for a period of five (5) consecutive years. 3.4 During the period of tax abatement herein authorized, Owner shall be subject to all taxation not abated, including but not limited to, sales tax and ad valorem taxation on land, inventory and supplies. Article IV Improvements Owner agrees to construct two office/warehouse or retail showroom buildings containing in the aggregate at least 290,000 square feet of space to be constructed on the Land (and other ancillary facilities such as reasonably required parking and landscaping more fully described in the submittals filed with the City from time to time in order to obtain a building permit) ("Improvements"). Nothing in this Agreement shall obligate Owner to cause the Improvements to be constructed on the Land but said action is a condition precedent to Owner's tax abatement pursuant to this Agreement. Article V Construction of Improvements 5.1 As a condition precedent to the initiation of Owner's tax abatement pursuant to this Agreement, Owner agrees subject to events of Force Majeure to cause Commencement of Construction of the Improvements to occur within three (3) calendar months after the Effective Date, and to cause Completion of Construction of the Improvements to occur within twelve (12) calendar months thereafter, as good and valuable consideration for this Agreement, and that all construction of the Improvements will be in accordance with all applicable state and local laws, codes, and regulations, (or valid waiver thereof). 5.2 Owner agrees to maintain the Improvements during the term of this Agreement in accordance with all applicable state and local laws, codes, and regulations. Owner agrees that the Improvements shall be used only as office/warehouse or retail showroom buildings for a period of five (5) years commencing on the date the first final certificate of occupancy is issued for the Improvements. 5.3 The City, its agents and employees shall have the fight of access to the Premises during construction to inspect the Improvements at reasonable times and with reasonable notice to Owner, and in accordance with Owner's visitor access and security policies, in order to insure that the construction of the Improvements are in accordance with this Agreement and all applicable state and local laws and regulations (or valid waiver thereof). Majestic Realty Co. Tax Abatement Agreement -Page 4 74190 Article VI General Requirements 6.1 Construction plans for the Improvements constructed on the Land to be filed with the City, shall be deemed to be incorporated by reference herein and made a part hereof for all purposes. 6.2 Owner shall before May 1, of each calendar year that the Agreement is in effect, certify in writing to the City that it is in compliance with each term of the Agreement. 6.3 The Land and the Improvements constructed thereon at all times shall be used in the manner (i) that is consistent with the City's Comprehensive Zoning Ordinance, as amended, and (ii) that, during the period taxes are abated hereunder, is consistent with the general purposes of encouraging development or redevelopment within the Zone. 6.4 Owner agrees to provide to the City and any other tenants of the Improvements, the benefit of the tax abatement of the Improvements granted herein. Owner shall, upon written request, provide the City, with satisfactory evidence that the benefits of this Tax Agreement have been provided to any applicable tenants of the Improvements. Article VII Default: Recapture of Abated Tax 7.1 In the event Owner: (i) fails to cause Commencement of Construction and/or Completion of Construction of the Improvements in accordance with this Agreement or in accordance with applicable State or local laws, codes or regulations; (ii) has delinquent ad valorem or sales taxes owed to the City (provided Owner retains its fight to timely and properly protest such taxes or assessment); (iii) has an "Event of Bankruptcy or Insolvency"; or (iv) breaches any of the terms and conditions of this Agreement, then Owner after the expiration of the notice and cure periods described below, shall be in default of this Agreement. As liquidated damages in the event of such default, the Owner shall, within thirty (30) days after demand, pay to the City all taxes which otherwise would have been paid by the Owner to the City without benefit of a tax abatement for the Owner's property the subject of this Agreement, with interest at the statutory rate for delinquent taxes as determined by Section 33.01 of the Tax Code, as amended, but without penalty. The parties acknowledge that actual damages in the event of default termination would be speculative and difficult to determine. The parties further agree that any abated tax, including interest as a result of this Agreement, shall be recoverable against the Owner, its successors and assigns and shall constitute a tax lien against the Owner's property, the subject of this Agreement, and shall become due, owing and shall be paid to the City within thirty (30) days after termination. 7.2 Upon breach by Owner of any obligations under this Agreement, the City shall notify the Owner in writing, who shall have thirty (30) days from receipt of the notice in which to cure any such default. If the default cannot reasonably be cured within a thirty (30) day period, and the Owner has diligently pursued such remedies as shall be reasonably necessary to cure such default, then the City may extend the period in which the default must be cured. Majestic Realty Co. Tax Abatement Agreement -Page 5 74190 7.3 If the Owner fails to cure the default within the time provided as specified above or, as such time period may be extended, then the City at its sole option shall have the right to terminate this Agreement, by written notice to the Owner. 7.4 Upon termination of this Agreement by City, all tax abated as a result of this Agreement, shall become a debt to the City as liquidated damages, and shall become due and payable not later than thirty (30) days after a notice of termination is made. The City shall have all remedies for the collection of the abated tax provided generally in the Tax Code for the collection of delinquent property tax. The City at its sole discretion has the option to provide a repayment schedule. The computation of the abated tax for the purposes of the Agreement shall be based upon the full Taxable Value of the Improvements, without tax abatement for the years in which tax abatement hereunder was received by the Owner, as determined by the Appraisal District, multiplied by the tax rate of the years in question, as calculated by the City Tax Assessor-Collector. The liquidated damages shall incur penalties as provided for delinquent taxes and shall commence to accrue after expiration of the thirty (30) day payment period. Article VIII Miscellaneous 8.1 Annual Application. It shall be the responsibility of the Owner pursuant to the Tax Code, to file an annual exemption application form with the Chief Appraiser for each Appraisal District in which the eligible taxable property has situs. A copy of the exemption application shall be submitted to the City upon request. 8.2 Notice. All notices required by this Agreement shall be addressed to the following, or other such other party or address as either party designates in writing, by certified mail, postage prepaid, or by hand or overnight delivery: If intended for Owner, to: Maj estic-Park West Partners, L.P., a Delaware limited partnership Attn: A1 Sorrels 5000 Quorum Drive, Suite 100 Dallas, Texas 75254 With copy to: Northwestern Mutual Life Insurance Company, a Wisconsin corporation Attn: Ernie Willmore 5100 Tennyson Parkway, Suite 2200 Plano, Texas 75024 Majestic Realty Co. Tax Abatement Agreement -Page 6 74190 If intended for City, to: Attn: City Manager City of Coppell, Texas P. O. Box 478 Coppell, Texas 75019 With copy to: Peter G. Smith Nichols, Jackson, Dillard, Hager & Smith, L.L.P. 1800 Lincoln Plaza 500 N. Akard Dallas, Texas 75201 8.3 Authorization. This Agreement was authorized by resolution of the City Council approved by its Council meeting authorizing the Mayor to execute this Agreement on behalf of the City. 8.4 Severability. In the event any section, subsection, paragraph, sentence, phrase or word herein is held invalid, illegal or unconstitutional, the balance of this Agreement shall stand, shall be enforceable and shall be read as if the parties intended at all times to delete said invalid section, subsection, paragraph, sentence, phrase or word. 8.5 Applicable Law. This Agreement shall be construed under the laws of the State of Texas. Venue for any action under this Agreement shall be the State District Court of Dallas County, Texas. The parties agree to submit to the jurisdiction of said court. 8.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and constitute one and the same instrument. 8.7 Entire Agreement. This Agreement embodies the complete agreement of the parties hereto, superseding all oral or written previous and contemporary agreements between the parties and relating to the matters in this Agreement, and except as otherwise provided herein cannot be modified without written agreement of the parties to be attached to and made a part of this Agreement. 8.9 Recitals. The determinations recited and declared in the preambles to this Agreement are hereby incorporated herein as part of this Agreement. 8.10 Exhibits. All exhibits to this Agreement are incorporated herein by reference for all purposes wherever reference is made to the same. 8.11 Chamber of Commerce. During the term of this Agreement, Owner agrees to maintain continuous corporate membership in the Coppell Chamber of Commerce. Majestic Realty Co. Tax Abatement Agreement -Page 7 74190 8.12 Assignment. This Agreement shall be binding on and inure to the benefit of the parties to it and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns. This Agreement may be assigned with the written consent of the City Manager. EXECUTED in duplicate originals the ~ay of~, 2005. By: ]\ 7',LJ/~ ~ Do las I~.~tover, Mayor Attest: City Attom EXECI Libby Ball~ Secretary Form: [TED in duplicate originals the 17th day of November, 2005. The Northwestern Mutual Life Insurance Company, a Wisconsin corporation By: Northwestern Investment Management Company, L.L.C., a Delaware limited liability company, its wholly-owned affiliate and ,.. Richard F. Von Haden ~ Its Man~ing(~}}or Attest: ~., {~ Wan:eh L~"~'i~, Jr. Its Assistant Secretary Maiestic Realty Co. Tax Abatement Agreement -Page 8 74190 EXECUTED in duplicate originals the ~ day of November, 2005. Majestic Park West Partners, L.P., a Delaware limited partnership By: Majestic Coppell G.P., LLC, a Delaware limited liability company, its general partner By: Majestic Realty Co., a California corporation, Manager's Agent Its: · s~ x s~osu~w., ~n~m~ u~lvpmt:nt Maiestic Realty Co. Tax Abatement Agreement -Page 9 74190 STATE OF CALIFORNIA ) ) SS. COUNTY OF LOS ANGELES ) On November 22, 2005, before me, Rita Lynn Desiardins, Notary Public, personally appeared David A. Wheeler & Kevin D. McCarthy personally known to me to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument, the persons, or the entity upon behalf of which the persons acted, executed the instrument. WITNESS my hand and official seal. Rita Lyrm Desjardins My Commission Expires: [-~[ [ ~'//b~- City's Acknowledgment State of Texas § County of Dallas § This instrument was acknowledged before me on the ~,~"t~ay of~~M~.~/ 2005, by Douglas N. Stover, Mayor of the City of Coppell, Texas, a Texas municipality, on behalf of said municipality. My Commission Expires: ~tate of Texas Owner's Acknowledgment State of Wisconsin § County of Milwaukee § BEFORE ME, the undersigned authority, on this day personally appeared Richard F. Von Haden and Warren L. Smith, Jr., known to me to be the persons whose names are subscribed to the foregoing instrument, and known to me to be the Managing Director and Assistant Secretary, respectively, of Northwestern Investment Management Company, LLC, a Delaware limited liability company, on behalf of THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY and acknowledged to me that they executed said instrument for the purposes and considerations therein expressed, and as the act of said corporation on behalf of THE NORTHWESTERN MUTUAL LIFE iNSURANCE COMPANY. GIVEN under my hand and official seal, this 17th day of November, 2005. Karcdn Gustafson, 174otary Pufi~ic My commission expires: February 24, 2008 k REN C ST/ SON I NOTARY PUBLIC _STATE OF WI$CO,NSiN Maiestic Realty Co. Tax Abatement Agreement -Page 10 74190 Owner's Acknowledgment State of Texas § County of Dallas § BEFORE ME, the undersigned authority, on this __ day of , 2005, personally appeared., the manager's agent and authorized representative of Majestic Realty Co., a California corporation, on behalf of said corporation upon oath stated that he has read the foregoing document and has executed same in, for and on behalf of said company. My Commission Expires: Notary Public, State of Texas Owner's Acknowledgment State of Texas § County of Dallas § BEFORE ME, the undersigned authority, on this __ day of , 2005, personally appeared_, its general partner and authorized representative of Majestic Coppell G.P., L.L.C., a Delaware limited liability company, on behalf of said company and partnership, upon oath stated that he has read the foregoing document and has executed same in, for and on behalf of said company. My Commission Expires: Notary Public, State of Texas Majestic Realty Co. Tax Abatement Agreement -Page 11 74190 EXHIBIT "A" DESCRIPTION, of a 16.800 acre tract of land situated in the James A. Simmons Survey, Abstract No. 1296, in the City of Coppell, Dallas County, Texas, and being all of Lot 2R-2, Block 2 of Park West Commerce Center as recorded in Volume 2000242, Page 1144 of the Deed Records of Dallas County, Texas; said 16.800 acre tract of land being more particularly described as follows: BEGINNING, at a 1/2-inch iron rod with "HALFF ASSOC" cap found at the most southerly point of a 38.00 foot radial corner clip located on the common line between the north right-of-way of Aidine Drive (a variable width right-of-way, 93 feet wide at this point) and the west right-of-way line of Beltline Road (a 120 foot wide right-of-way at this point); THENCE, along the said north line of Airline Drive the following three courses and distances; North 89 degrees, 06 minutes, 46 seconds West, a distance of 126.02 feet to a 1/2" iron rod with "HALFF ASSOC" cap found for corner; South 75 degrees, 57 minutes, 33 seconds West, a distance of 64.05 feet to a 1/2" iron rod with "HALFF ASSOC" cap found for corner; Airline Drive being a 60 foot wide right-of-way at this point; North 89 degrees, 06 minutes, 46 seconds West, a distance of 504.10 feet to a 1/2" iron rod with "PACHECO KOCH" cap found; said point being the southeast corner of Lot 2R-2, Block 2 Park West Commeme Center, an addition to the City of Coppell, Texas according to the Minor Amending Plat recorded in Volume 2000242, Page 1144 of the Deed Records of Dallas County, Texas; THENCE, North 00 degrees, 53 minutes, 14 seconds East, departing the said north line of Airline Drive and along the east line of said Lot 2R-2, a distance of 1003.40 feet to a 1/2-inch iron rod with "Pacheco Koch" cap found for corner; said point being in the south line of Lot 2, Block 1, Park West Commerce Center, an addition to the City of Coppell, Texas according to the plat recorded in Volume 93226, Page 2864 of the Deed Records of Dallas County, Texas; THENCE, South 89 degrees, 06 minutes, 01 seconds East; along the south line of said Block 1; a distance of 736.15 feet to a to a 1/2" iron rod with "HALFF ASSOC" cap found for corner in the said west line of Belt Line Road; THENCE, South 01 degrees, 15 minutes, 30 seconds West, along the said west line of Belt Line Road, a distance of 949.00 feet to the north end of said curving corner clip whose center of said corner clip bears North 88 degrees, 44 minutes, 30 seconds West, a distance of 35.00 feet from said point; THENCE, along said curving corner clip and north right-of-way line of Airline Drive through a central angle of 89 degrees, 37 minutes, 44 seconds an arc distance of 59.44 feet on a chord bearing and distance of South 46 degrees, 04 minutes, 22 seconds West, 53.57 feet to the POINT OF BEGINNING; CONTAINING, 731,815 feet or 16.800 acres of land, more or less.