RE 2006-1212.5
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AGREE ,/20070133511
15 PGS lI\.;
RESOLUTION NO.~b-/2JZ. ~
A RESOLUTION OF THE CITY OF COPPELL, TEXAS, APPROVING THE
TERMS AND CONDmONS OF A TAX ABATEMENT AGREEMENT BY AND
BETWEEN THE CITY OF COPPELL, TEXAS AND mM SOLUTIONS CENTER;
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 ffiM Solutions Center, 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 fmds 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 Cappell, Texas.
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11891
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 from and after its
passage.
ATTEST:
~ #Ju/ ~
L BY~ CITY SECRETARY
CITY ATIORNEY
(pGS/si 12/04/06)
2
11891
COUNTY OF DALLAS
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Tax Abatement Agreement
mM Solution Center
STATE OF TEXAS
This Tax Abatement Agreement (the "Agreement") is entered into by and between the City
of Coppell, Texas (the "City"), and International Business Machines Corporation ("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. 50 (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 leases the real property described in Exhibit "A" ("Land") and intends
to reconfigure, or cause to be reconfigured, approximately 50,000 square feet of space in the
existing ffiM Call Center building located at 1177 Belt line Road (hereinafter defmed as the
"Improvements") on the Land and intends to locate certain Tangible Personal Property (hereinafter
defined) 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
IBM Solution Centerffax Abatement Agreement -Page 1
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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).
"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 final certificate of occupancy for the Lessee's occupancy
ffiM Solution Centerffax Abatement Agreement -Page 2
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for the reconfigured Improvements for the ffiM Solution Center, 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 reconfiguration of approximately 50,000 square feet of
space in the existing ffiM Call Center building located at 1177 Belt line Road on the Land to house
the ffiM Solution Center and the Tangible Personal Property.
"Land" means the real property described in Exhibit A.
"Premises" shall collectively mean the Land and the Improvements following the
reconfiguration thereof, 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 in the ffiM
Solution Center within the Improvements following the reconfiguration thereof, subsequent to
the execution of this Agreement and which is assigned an account number by the central appraisal
district for ad valorem tax appraisal purposes, separate and apart from any other tangible personal
property located at the Premises prior 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 is the lessee of the Premises, which Premises is located within the city limits
of the City and within the Zone. Lessee intends to reconfigure, or cause to be reconfigured, the
Improvements on the Land and to locate Tangible Personal Property (hereinafter defmed) on the
Premises.
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 it is in compliance with each term of the Agreement.
IBM Solution Centerffax Abatement Agreement -Page 3
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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.
2.7 Lessee agrees, subject to events of Force Majeure or ("Casualty"), to continuously
lease and occupy the Improvements for a period of at least five (5) consecutive years beginning with
the First Year of Abatement.
Article In
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 Five Million Five Hundred Thousand Dollars
($5,500,000.00) 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. 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 ffiM Solution Center within the reconfigured
Improvements after this Agreement is executed and which is assigned an account number by the
central appraisal district for ad valorem tax appraisal purposes, separate and apart from any other
tangible personal property located at the Premises prior to the execution of this Agreement.
3.3 The period of tax abatement herein authorized shall be for a period of five (5) years.
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 reconfigure approximately 50,000 square feet of the existing ffiM
Call Center building located on the Land at 1177 Belt Line Road to house the ffiM Solution Center
(the "ffiM Solution Center"), and agrees to locate Tangible Personal Property within the ffiM
Solution Center with a Taxable Value of at least Five Million Five Hundred Thousand Dollars
($5,500,00.00) as of the First Year of Abatement and to locate and maintain Tangible Personal
Property within the ffiM Solution Center with a Taxable Value of at least Five Million Five
Hundred Thousand Dollars ($5,500,000.00) as of January 1 of each year thereafter that this
Agreement is in effect. Nothing in this Agreement shall obligate Lessee to reconfigure the
IBM Solution Centertrax Abatement Agreement -Page 4
64188
Improvements on the Land or to locate Tangible Personal Property on the Premises but said actions
are a condition precedent to Lessee's tax abatement pursuant to this Agreement.
4.2 As a condition precedent to the initiation of Lessee's tax abatement pursuant to this
Agreement, Lessee will diligently and faithfully, in good and workmanlike manner, subject to
events of Force Majeure to cause Commencement of Construction to occur on or before February 1,
2006 and to cause Completion of Construction to occur on or before June 30, 2006, as good and
valuable consideration for this Agreement, and all construction of the Improvements will be in
accordance with all applicable state and local laws, codes, and regulations, (or valid waiver thereot);
provided, that Lessee shall have such additional time to complete and maintain the Improvements as
may be required in the event of "Force Majeure," if Lessee is diligently and faithfully pursuing
completion of the Improvements.
4.3 Lessee agrees to maintain the Improvements during the term of this Agreement in
accordance with all applicable state and local laws, codes, and regulations. Lessee agrees that the
Improvements shall be used only as an office/warehouse building for a period of five (5) years
commencing with the First Year of Abatement.
4.4 The City, its agents and employees shall have the right of access to the Premises
during construction to inspect the Improvements 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 construction of the Improvements are in accordance with this Agreement and all applicable state
and local laws and regulations (or valid waiver thereot).
4.5 Construction plans for the reconfiguration of the Improvements constructed will be
fIled with the City, which shall be deemed to be incorporated by reference herein and made a part
hereof for all purposes.
Article V
Default: Recapture of Tax Revenue
5.1 In the event Lessee: (i) fails to complete the reconfiguration 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 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.
IBM Solution Centerffax Abatement Agreement -Page 5
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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.
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:
ffiM Corporation
Attn: Wayne Spinei
1133 Westchester Avenue
White Plains, NY 10604
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64188
With a copy to:
ffiM Corporation
Attn: Vincent Palmiotto
150 Kettleton Road
Southbury.Ct.06488
If intended for City, to:
Attn: City Manager
City of Coppell, Texas
P. O. Box 9478
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
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.
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64188
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.
Signature Page to Follow
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EXECUTED in duplicate originals the f 't ~ O~006.
By:
Attest:
By~~A~
Li by B~ - - ty Secretary
By:
City Attorney
(pGS/03 1006)(64188)
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EXECUTED in duplicate originals the ~ day of pc.) Jep? A3E~ , 2006.
Bus~ess Machines Corporation
By:
Name:
Title:
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Charles Ernst .................. ·
Nota~ PlJc'ic " .... ~ -.
State of '"""__C~t; (.. ~ 0
My C~m- ,.,ejinis '.' ( ~,_
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IBM Solution Centertrax Abatement Agreement -Page 9
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64188
City's Acknowledgment
State of Texas ~
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County of Dallas ~
This instrument was acknowledged before me on the /$..~ day Of&&..nr kJL./
2006, by Douglas N. Stover, Mayor of the City of Coppell, Texas, a Texas municipality, on behalf
of said municipality.
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My Commission Expires:
Lessee's Acknowledgment
State of Texas
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County of Dallas
This instrument was acknowledged before me on the day of
2006, by , being the of International Business
Machines Corporation, a New York corporation on behalf of said corporation.
Notary Public, State of Texas
My Commission Expires:
IBM Solution Centerrrax Abatement Agreement -Page 10
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Exhibit "A"
Legal Description of the Land
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64188
LEGAL DESCRIPTION
PARK WEST COMMERCE CENTER
LOTS 1 & 2 OF BLOCK 5
Being a 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 Block 5 Park West Commerce Center as recorded in Volume 97248
Page 31 Dallas County Deed Records (D.C.R.D), and being more particularly described as follows:
BEGINNING at a Yz-inch iron rod found at the northeast comer of Lot 1, Block 6, Park West Commerce
Center, the northwest comer of Lot 1, Block 5, said point being located along the south right-of-way line of
Airline Drive (60 feet wide);
THENCE South 89 degrees 06 minutes 46 seconds East along said south right-of-way line of Airline Drive
a distance of 760.47 feet to a Yz-inch iron rod with cap set for a comer;
THENCE South 74 degrees 11 minutes 05 seconds East continuing along said south right-of-way line a
distance of 64.05 feet to a Yz-inch iron rod with cap set for a comer;
THENCE South 89 degrees 06 minutes 46 seconds East a distance of 124.92 feet to a Y2-inch iron rod with
cap set for a comer at the northwest point of a radial comer clip located along the west right-of-way line of
Beltline Road (120 foot right-of-way);
THENCE along said comer clip, departing said south right-of-way an arc distance of 59.94 feet, through a
central angle of90 degrees 22 minutes and 29 seconds, a radius of38.00 feet to a Yz-inch iron rod with cap
set for a comer on the west right-of-way line ofBeltline Road;
THENCE South 01 degree 15 minutes 30 seconds West along said west right-of-way line a distance of
332.09 feet to a Yz-inch iron rod with cap set for a comer;
THENCE South 08 degrees 06 minutes 14 seconds West a distance of 100.72 feet to a Yz-inch iron rod with
cap set for a comer;
THENCE South 01 degree 15 minutes 30 seconds West a distance of 149.25 feet to a Y2-inch iron rod with
cap set for a comer;
THENCE South 89 degrees 06 minutes 46 seconds East a distance of 12.00 feet to a Yz-inch iron rod with
cap set for a comer;
THENCE South 01 degree 15 minutes 30 seconds West a distance of 452.07 feet to a Yz-inch iron rod with
cap set for a comer;
THENCE South 08 degrees 06 minutes 06 seconds West a distance of 100.71 feet to a Yz-inch iron rod with
cap set for a comer;
THENCE South 01 degree 15 minutes 30 seconds West a distance of 100.00 feet to a Yz-inch iron rod with
cap set for a comer at the northeast point of a comer clip located along the north right-of-way line of
Wrangler Drive;
THENCE South 46 degrees 04 minutes 22 seconds West a distance of28.41 feet to a Yz-inch iron rod with
cap set for a comer on the north right-of-way line of Wrangler Drive (65 foot right-of-way);
THENCE North 89 degrees 06 minutes 46 seconds West continuing along said north right-of-way line a
distance of 945.13 feet to a Y2-inch iron rod set for a comer at the southwest comer of Lot 2, Block 5;
THENCE North 00 degrees 53 minutes 14 seconds East departing said north right-of-way line and along
the east line of said Lot 1, Block 6 a distance of 1307.99 feet to the POINT OF BEGlNNlNG AND
CONTAINING 1,275,502 square feet or 29.2871 acres ofland more or less.
FILED AND RECORDED
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I~~~~\ OFFICIAL PUBLIC RECORDS
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John F. Warren, County Clerk
Dallas County TEXAS
April 13, 2007 03:01:39 PM
FEE: $72.00
20070133571