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RE 2006-1212.4 , \\ ~l9 111111111111111]11111111111111111111111111111111111111I11111II111 RESOLUTIC20070018863 ..,/ 14 PGS RESOLUTION NO. Zoo h- /Z/ z. .4- A RESOLUTION OF THE CITY OF COPPELL, TEXAS, APPROVING THE TERMS AND CONDffiONS OF A TAX ABATEMENT AGREEMENT BY AND BETWEEN THE CITY OF COPPELL, TEXAS AND DA VITA RX; 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 Da Vita Rx, 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 fmds 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 tangible personal property to be located at 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 tangible personal property to be located at the Premises will accomplish the tax abatement guidelines of the City of Coppell, Texas. 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 1 67070 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 from and after its passage. DULY RESOLVED AND ADOPfED by the City Council of the City of Coppell, Texas, on this the /? ~ay of ATTEST: ~ · /:LLd L 1lB Y ittf:ITY SECRETARY C ATTORNEY (pGS/si 12/06/06) 2 67070 STATE OF TEXAS ~ ~ ~ Tax Abatement Agreement COUNTY OF DALLAS This Tax Abatement Agreement (the "Agreement") is entered into by and between the City of Coppell, Texas (the "City"), and DaVita Rx, Inc. ("Lessee"), acting by and through their authorized representatives. WIT N E SSE T H: WHEREAS, the City Council of the City of Coppell, Texas, (the "City"), passed an Ordinance (the "Ordinance") establishing Tax Abatement Reinvestment Zone No. 54 (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, Lessee has or intends to lease approximately 53,000 square feet of space in the existing building located at 1234 Lakeshore Drive (hereinafter defined as the "Improvements") on the real property described in Exhibit "A" (the "Land") and intends to reconfigure, or cause to be reconfigured, on the Land and intends to locate certain Tangible Personal Property (hereinafter defmed) at the Improvements; and WHEREAS, the City Council fmds that the contemplated use of the Premises (hereinafter defmed), 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 WHEREAS, the City Council fmds 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 Da Vita Rx!fax Abatement Agreement -Page 1 67074 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 Lessee 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 Dermitions 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 Tangible Personal Property for the year in which the Tax Abatement Agreement is executed (2006). "City" shall mean the City of Coppell, Texas. "Commencement of Construction" shall mean that: (i) the plans have been prepared and all approvals thereof required by applicable governmental authorities have been obtained for reconfiguration of the Improvements; (ii) all necessary permits for the reconfiguration of the Improvements pursuant to the respective plans therefore having been issued by all applicable governmental authorities; and (iii) the construction of the vertical elements of the reconfiguration of the Improvements has commenced. "Completion of Construction" shall mean that: (i) the reconfiguration of the Improvements, on the Land has been substantially completed; (ii) the first final, permanent certificate(s) of occupancy for the occupancy of the Improvements following the reconfiguration thereof, has been issued by the City. "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. "First Year of Abatement" shall mean January 1 of the calendar year immediately following the date of issuance of the first fmal certificate of occupancy for the Lessee's occupancy for the Improvements unless otherwise agreed by the parties. Da Vita Rxffax Abatement Agreement -Page 2 67074 "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 existing building located at 1234 Lakeshore Drive, Coppell, Texas on the Land. "Land" means the real property described in Exhibit A. "Lease" shall mean Lessee's lease of approximately 53,000 square feet of space in the Improvements. "Lessee" shall mean Da Vita, Rx, Inc. "Pharmacy" shall mean a pharmacy to be operated by the Lessee at the Improvements. "Premises" shall collectively mean the Land and the Improvements, but excluding Tangible Personal Property. "Tangible Personal Property" shall mean tangible personal property, equipment and fixtures owned by or leased by Lessee, other than inventory or supplies, located at the Improvements, subsequent to the execution of this Agreement. "Taxable Value" means the appraised value as certified by the Appraisal District as of January 1 of a given year. Article II General Provisions 2.1 Lessee has or is under contract to lease the Improvements, which are located within the city limits of the City and within the Zone. Lessee intends to locate Tangible Personal Property at 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, or any member of the governing body of any taxing units joining in or adopting this Agreement. 2.5 Lessee shall before May 1, of each calendar year that the Agreement is in effect, certify in writing to the City that, to its knowledge, it is in compliance with each term of the Agreement. Da Vita Rxtfax Abatement Agreement -Page 3 67074 2.6 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. The City acknowledges that the operation of a pharmacy is consistent with the City's Comprehensive Zoning Ordinance, as amended, and the City's general purposes of encouraging development or redevelopment within the Zone. 2.7 Lessee agrees, subject to events of Force Majeure, to continuously lease and occupy the Improvements for a period of at least five (5) consecutive years beginning with the First Year of Abatement. 2.8 The term of this Agreement shall begin on the Effective Date and continue until the 6th anniversary date of the First Year of Abatement, unless sooner terminated as provided herein. Article ill 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 of the Tangible Personal Property is at least Six Million Dollars ($6,000,000.00) 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 Lessee an abatement of seventy-five percent (75%) of the Taxable Value of the Tangible Personal Property for a period of five (5) consecutive years beginning the First Year of Abatement. The actual percentage of Taxable Value of the Tangible Personal Property subject to abatement will only apply to the Tangible Personal Property located in the Improvements after this Agreement is executed. 3.3 The period of tax abatement herein authorized shall be for a period of five (5) consecutive years beginning with the First Year of Abatement. 3.4 During the period of tax abatement herein authorized, Lessee 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 4.1 Lessee agrees to continuously lease and occupy the Improvements and agrees to locate and maintain Tangible Personal Property at the Improvements with a Taxable Value of at least Six Million Dollars ($6,000,000.00) as of the First Year of Abatement as of January 1 of each year thereafter that this Agreement is in effect. Nothing in this Agreement shall obligate Lessee to Da Vita Rx!fax Abatement Agreement -Page 4 67074 lease the Improvements or to locate Tangible Personal Property at the Improvements but said actions are a condition precedent to Lessee's tax abatement pursuant to this Agreement. 4.2 Subject to the terms of the Lease, Lessee agrees to maintain the portion of the Improvements it has leased under the Lease, as required under the terms of its Lease, during the term of this Agreement in accordance with all applicable state and local laws, codes, and regulations. Lessee agrees that the portion of the Improvements it has leased under the Lease, shall be used only as a pharmacy and related purposes for a period of five (5) years commencing with the First Year of Abatement. 4.3 The City, its agents and employees shall have the right of access to the Premises to inspect the portion of the Improvements Lessee has leased, provided that such inspection and entry shall be in accordance with all applicable state and local laws and regulations (or valid waiver thereof) at reasonable times and with reasonable notice to Lessee, and in accordance with Lessee's visitor access and security policies, in order to insure that the Lessee is in compliance with this Agreement, and the City, its agents and employees shall be subject to and shall comply with all applicable state and federal drug control laws and patient confidentiality laws, as well as Lessee's policies and procedures. Article V Default: Recapture of Tax Revenue 5.1 In the event Lessee: (i) fails to lease 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 Lessee retains its right 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 Lessee 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 Lessee shall, within thirty (30) days after demand, pay to the City all taxes which otherwise would have been paid by the Lessee to the City without benefit of a tax abatement for the 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 Lessee, its successors and assigns and shall constitute a tax lien against the Tangible Personal Property and shall become due, owing and shall be paid to the City within thirty (30) days after termination. 5.2 Upon breach by Lessee of any obligations under this Agreement the City shall notify the Lessee 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 Lessee 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. Da Vita Rxtfax Abatement Agreement -Page 5 67074 5.3 If the Lessee 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 Lessee. 5.4 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 Tangible Personal Property, without tax abatement for the years in which tax abatement hereunder was received by the Lessee, 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 VI Miscellaneous 6.1 Annual Application for Tax Exemption. It shall be the responsibility of the Lessee 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. 6.2 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 Lessee, to: Da Vita Rx, Inc. Attn: Bill Hughson 1350 Old Bayshore, Suite 777 Burlingame, CA 94010 If intended for City, to: Attn: City Manager City of Coppell, Texas P. O. Box 9478 Coppell, Texas 75019 Da Vita Rxtfax Abatement Agreement -Page 6 67074 With copy to: Peter G. Smith Nichols, Jackson, Dillard, Hager & Smith, L.L.P. 1800 Lincoln Plaza 500 N. Akard Dallas, Texas 75201 6.3 City Council 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. 6.4 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. 6.5 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 personal and subject matter jurisdiction of said court. 6.6 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. 6.7 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. 6.8 Recordation of Agreement. A certified copy of this Agreement shall be recorded in the Deed Records of Dallas County, Texas. 6.9 Incorporation of Recitals. The determinations recited and declared in the preambles to this Agreement are hereby incorporated herein as part of this Agreement. 6.10 Exhibits. All exhibits to this Agreement are incorporated herein by reference for all purposes wherever reference is made to the same. 6.11 Chamber of Commerce. During the term of this Agreement, Owner agrees to maintain continuous corporate membership in the Coppell Chamber of Commerce. 6.12 Conditions Precedent. This Agreement and the Tax Abatement provided herein on and subject to: (i) Lessee entering into the Lease on or before . and (ii) Lessee occupy the Improvements on or before Da Vita Rxtfax Abatement Agreement -Page 7 67074 EXECUTED in duplicate originals the I~~y o~D~A-d006. By: Attest: B~l3tUL Libby B , ity Secretary EXECUTED in duplicate originals the 7l:b day of .J).it. e~. LY" ,2006. By: Name: Title: Da Vita Rx/fax Abatement Agreement -Page 8 67074 City's Acknowledgment State of Texas ~ ~ County of Dallas ~ This instrument was acknowledged before me on the /Z.~ay ofN?I'I~ 2006, by Douglas N. Stover, Mayor of the City of Coppell, Texas, a Texas municipality, on behalf of said municipality. ~-I/-{) $ My Commission Expires: Lessee's Acknowledgment State of TeIMfI ~ County of S~ t{~ ~ ~ ~ My Commission Expires: j / -- JLt- ~t?C1P . . t(j :;~,:"-l - . . Notary PublIC - CallfomlO ~ i . -. san Mateo County . Mycomm. ExpIres NoV 14. 2009 Da Vita Rx!fax Abatement Agreement -Page 9 67074 Exhibit "A" Legal Description Lots lR & lRl, Block D Northlake 635 Business Park Addition STATE OF TEXAS COUNTY OF DALLAS WHEREAS, Coppell Commerce Center, Ltd., a Texas Limited Partnership, is the owner of a tract of land situated in the Cordelia Bowen Survey, Abstract No. 56, in the City of Coppell, Dallas County, Texas, said tract being all of that tract of land described in deed to said Coppell Commerce Center, Ltd. as recorded in Volume 99223, Page 631, Deed Records, Dallas County, Texas (D.R.D.C.T.), said tract also being all of Coppell Business Center II, an addition to the City of Coppell as recorded in Volume 99217, Page 1763, D.R.D.C.T., and being more particularly described as follows: BEGINNING at a liz-inch found iron rod for the intersection of the west right-of-way line of Beltline Road (a variable width right-of-way) and the north right-of-way line of Lakeshore Drive (a variable width right-of-way, 90 feet wide at this point), as dedicated by the plat of NortWake 635 Business Park, an addition to the City of Coppell as recorded in Volume 85056, Page 3358, D.R.D.C.T.: THENCE along the north, northeast and east right-of-way lines of said Lakeshore Drive, the following calls: North 89 degrees 30 minutes 00 seconds West, a distance of 185.34 feet to a liz-inch set iron rod with a yellow plastic cap stamped 'HALFF ASSOC. INC.' (hereinafter referred to as 'with cap') for the point of curvature of a circular curve to the left having a central angle of 12 degrees 50 minutes 19 seconds and a radius of 300.00 feet, whose chord bears South 84 degrees 04 minutes 51 seconds West a distance of 67.08 feet; Westerly, along said curve for an arc distance of 67.22 feet to a liz-inch set iron rod with cap for the point of reverse curvature of a circular curve to the right having a central angel of 12 degrees 50 minutes 19 seconds and a radius of 300.00 feet, whose chord bears South 84 degrees 04 minutes 51 seconds West a distance of 67.08 feet; Westerly, along said curve for an arc distance of 67.22 feet to a liz-inch found iron rod with cap stamped 'Powell and Powell' for the point of tangency, said Lakeshore Drive being a 60 foot right-of-way at this point; North 89 degrees 30 minutes 00 seconds West, a distance of 388.27 feet to a liz-inch set iron rod with cap for the point of curvature of a circular curve to the right having a central angle of 52 degrees 53 minutes 07 seconds and a radius of 320.00 feet, whose chord bears South 63 degrees 03 minutes 27 seconds West a distance of 284.99 feet; Da Vita RxtTax Abatement Agreement -Page 10 67074 Northwesterly, along said curve for an arc distance of 295.37 feet to a V2-inch found iron rod for the point of tangency; North 36 degrees 36 minutes 53 seconds West, a distance of 398.49 feet to a V2-inch set iron rod with cap for the point of curvature of a circular curve to the right having a central angle of 37 degrees 06 minutes 53 seconds and a radius of 320.00 feet, whose chord bears North 18 degrees 03 minutes 27 seconds West a distance of 203.68 feet; Northerly, along said curve for an arc distance of 207.29 feet to a V2-inch found iron rod for the point of tangency; North 00 degrees 30 minutes 00 seconds East, a distance of 556.13 feet to a V2-inch found iron rod with cap for the intersection of said east right-of-way line of Lakeshore Drive with a line of 5 feet north of and parallel to the north line of a 50 foot Open Channel Drainage Easement as dedicated by the aforementioned plat of Northlake 635 Business Park; THENCE departing said east line and along said parallel line, the following calls: South 89 degrees 30 minutes 00 seconds East, a distance of 629.41 feet to a V2-inch found iron rod with cap for the point of curvature of circular curve to the left having a central angle of 27 degrees 17 minutes 51 seconds and a radius of 470.00 feet, whose chord bears North 76 degrees 51 minutes 05 seconds East a distance of 221.81 feet; Easterly, along said curve for an arc distance of 223.92 feet to a V2-inch set iron rod with cap for the point of reverse curvature of a circular curve to the right having a central angel of 27 degrees 17 minutes 51 seconds and a radius of 530.00 feet, whose chord bears South 76 degrees 51 minutes 05 seconds East a distance of 250.13 feet; Easterly, along said curve for an arc distance of 252.51 feet to a V2-inch found iron rod for the point of tangency; South 89 degrees 30 minutes 00 seconds East, a distance of 168.37 feet to a point for the intersection of said parallel line and the aforementioned west right-of-way line of Beltline Road, said point bears North 00 degrees 30 minutes 00 seconds East, a distance of 30.00 feet from the intersection of the center line of said 50 foot Easement and said west right-of-way line; THENCE South 00 degrees 30 minutes 00 seconds West, along said west right-of-way line, a distance of 1235.26 feet to a V2-inch set iron rod with cap for comer; THENCE South 10 degrees 48 minutes 36 seconds East, continuing along said west right-of-way line, a distance of 56.09 feet to the POINT OF BEGINNING AND CONTAINING 1,430,216 square feet or 32.83 acres of land, more or less. Da Vita Rx!fax Abatement Agreement -Page 11 67074 R.e~vYl ~" tl~ of Cvpp-e I f po 'Boy 0tf78 C1pF (( I IX 756/ '1 ~.' C~(i &ttct1 FILED AND RECORDED liG~V OFFICIAL PUBLIC RECORDS If! ~ (. 0' fJ'~ - ~J>~~Y "~ John F. Warren, County Clerk Dallas County TEXAS January 12, 2007 04:24:10 PM FEE: $64.00 20070018863 (' -'