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HomeMy WebLinkAboutItem 10 - Grapevine Mills Incentive Agreement ITEM l® MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: BRUNO RUMBELOW, CITY MANAGER MEETING DATE: APRIL 6, 2010 SUBJECT: TIF NO 1. INCENTIVE AGREEMENT— GRAPEVINE MILLS RECOMMENDATION: City Council to consider a request by Grapevine Mills to enter into an incentive agreement from the TIF No. 1 Economic Development funds. BACKGROUND: Grapevine Mills has made a request of the City for a $1.0 Million incentive from the TIF No. 1 Economic Development funds to renovate/improve their aging infrastructure (i.e. parking lot improvements, landscaping, lighting, sidewalk, interior demolition and renovation and signage improvements. The Mills is in an aggressive mode of attracting to the Mall new/additional retail, hospitality and entertainment venues to the Mall in the near term. The City Council unanimously approved a motion on March 16, 2010 to authorize an economic development grant to Grapevine Mills in an amount not to exceed $1.0 Million subject to the TIF Board's approval of an incentive agreement. Prior to payment of the grant under this agreement, the Mills must submit a description of the renovation/upgrade to be undertaken with these funds. This agreement is in effect until the funds are spent or ten years, which ever comes first. The agreement was approved unanimously by the TIF No. 1 Board on March 29, 2010. Staff recommends approval. April 1, 2010(11:14AM) i STATE OF TEXAS § § Economic Development Agreement COUNTY OF TARRANT § This Economic Development Agreement(this"Agreement") is made by and between the City of Grapevine, Texas(the"City"),and Grapevine Mills Limited Partnership, a Delaware limited partnership (the"Company"), acting by and through their respective authorized officers. WITNESSETH: WHEREAS, the Company is the owner of a portion of the real property commonly known as the Grapevine Mills located in Grapevine, Texas being more particularly described in Exhibit "A" (the "Property"), and intends to renovate and/or upgrade certain existing improvements therein, including associated demolition; and WHEREAS, the renovations and/or upgrades to the Property arc anticipated to result in an increased value to the Property; and WHEREAS, the renovations and/or upgrades to the Property are anticipated to attract a substantial number of additional shoppers, tourists and visitors annually to a family oriented retail and entertainment facility; and WHEREAS, the Company has advised the City that a contributing factor that would induce the Company to continue to invest in significant upgrades to Grapevine Mills would be an agreement by the City to provide an economic development grant to the Company to defray a portion of the cost of such improvements; and WHEREAS,the City has adopted programs for promoting economic development; and WHEREAS, the City is authorized by TExAs LOCAL GovERNmENr CODE §380.001 to provide economic development grants to promote local economic development and to stimulate business and commercial activity in the City; and WHEREAS, the City has determined that making an economic development grant to the Company in accordance with this Agreement will further the objectives of the City, will benefit the City and the City's inhabitants and will promote local economic development and stimulate business and commercial activity in the City. NOW THEREFORE, in consideration of the foregoing, and on the terms and conditions hereinafter set forth, and other consideration the receipt and sufficiency of which is hereby acknowledged the parties agree as follows: Economic Development Agreement- Page 1 64784 i Article I Definitions Wherever used in this Agreement„ the following terms shall have the meanings ascribed to them: "Effective Date" shall mean the last date of execution hereof. "Event of Bankruptcy or Insolvency" shall mean the dissolution or termination of a parry's existence as a going business, insolvency, appointment of receiver for any part of such 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. "Event of 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, acts of terrorism, civil commotion, insurrection, government or de facto governmental action (unless caused by the intentionally wrongful acts or omissions of the party),fires,explosions or floods, strikes, slowdowns or work stoppages. "Expiration Date" shall mean the later o£ 1) the date of the payment of the Maximum Grant Amount; or 2) ten(10)years after the Effective Date. "Grant" shall mean the economic development grant to be paid to the Company to be paid as set forth herein. "Impositions" shall mean all taxes, assessments, use and occupancy taxes, charges, excises, license and permit fees, and other charges by public or governmental authority, general and special, ordinary and extraordinary, foreseen and unforeseen, which are or may be assessed, charged, levied, or imposed by any public or governmental authority on the Company or any property or any business owned by Company within the City. "Maximum Grant Amount" shall mean the collective payment of Grants totaling $1,000,000.00 Dollars. "Required Use" shall mean the continuous lease and occupancy of(i) any portion of the Property improved through this Agreement for a period of at least ten(10)years. Economic DeveIoment Agreement-Page 2 64784 i Article II Term This Agreement shall begin on the Effective Date and expire on the Expiration Date. Article III Economic Development Grant 3.1 Economic Development Grants. Subject to the Company's satisfaction of all the terms and conditions of this Agreement, the City agrees to provide the Company with certain Economic Development Grants. 3.2 Economic Development Grant Payments. The Grant of $1,000,000 shall be paid to the Company in accordance with Section 4.1 hereinbelow. 3.3 (a) The Grants made hereunder shall be paid solely from lawful available funds, which have been appropriated by the City. Under no circumstances shall City's obligations hereunder be deemed to create any debt within the meaning of any constitutional or statutory provision. Article IV Conditions to Economic Development Grants The City's obligation to pay the Grants shall be conditioned upon the Company's continued compliance with and satisfaction of each of the conditions set forth below: 4.1 Prior to the payment of the Grant by the City,the Company shall provide City with a description of the renovation and upgrade activities to be undertaken with the Grant under this Agreement. Such notice shall include the scope of the work, its anticipated costs, and the overall cost and value of the scheduled improvements. The City shall have the right to review and approve any such expenditure(s) prior to being obligated to make payments therefore. Such approval be made by the City Manager, or his designee, and shall not be unreasonably withheld. Upon receipt of written approval by the City, the Company shall be entitled to reimbursement for such costs, up to the Maximum Grant Amount. Reimbursement shall be paid by the City within thirty (30) days of receipt of written proof of the expenditure(s), consistent with the City's prior written approval. 4.2 All construction contracts comprising or relating to be funded under this Agreement shall require that the respective contractor enter into a separated contract with the State of Texas for the purpose of Sales Tax Collection on eligible project costs in accordance with Texas Tax Code Secs. 151.056, 151.311 and 321.208. 4.3 The Company agrees that as a condition precedent to payment of any of the Grant hereunder that it shall not have an uncured breach or default of this Agreement. Economic Development Agreement-Page 3 64784 I 4.4 The Company shall, subject to Events of Force Majeure, cause Commencement of Construction on or before , and to cause Completion of Construction thereof on or before 4.5 Upon completion, the Company shall provide the City with a report as to the uses of the Economic Development Grant hereunder, along with a summary of its investment related to such uses. Article V Termination 5.1 This Agreement shall terminate upon any one of the following: (a) by written agreement of the parties; (b) by either party in the event the other party breaches any of the terms or conditions of this Agreement and such breach is not cured within thirty (30) days after written notice thereof; (c) by City,if Company suffers an Event of Bankruptcy or Insolvency; (d) by City, if any Impositions owed to the City or the State of Texas by Company shall become delinquent (provided, however the Company retains the right to timely and properly protest and contest any such Impositions); or (f) by City, if any subsequent Federal or State legislation.or any decision. of a court of competent jurisdiction declares or renders this Agreement invalid, illegal or unenforceable. 5.2 In the event that the areas of the Property improved hereunder shall cease occupation and/or operation prior to the end of the term of this Agreement, the Company shall use reasonable commercial efforts to lease the premises to other retailers or a similar operator Article VI Miscellaneous 6.1 Binding Agreement. The terms and conditions of this Agreement are binding upon the successors and permitted assigns of the parties hereto. 6.2 Limitation on Liability. It is understood and agreed between the parties that the Company and the City, in satisfying the conditions of this Agreement, have acted independently, and assume no responsibilities or liabilities to third parties in connection with these actions. Economic Development Agreement Page 4 64784 i 6.3 No Joint Venture. It is acknowledged and agreed by the parties that the terms hereof are not intended to and shall not be deemed to create a partnership or joint venture among the parties. 6.4 Authorization. Each party represents that it has full capacity and authority to grant all rights and assume all obligations that are granted and assumed under this Agreement. 6.5 Notice. Any notice required or permitted to be delivered hereunder shall be deemed received (i) three (3) days after deposit into the United States Mail, postage prepaid, certified mail, return receipt requested, addressed to the party at the address set forth below or(ii) on the day actually received if sent by courier or otherwise hand delivered. If intended for the City,to: Attn: City Manager City of Grapevine,Texas City Hall 200 South Main Street Grapevine,Texas 76051-5311 With a copy to: Attn: Matthew C. G.Boyle Boyle&Lowry L.L.P. 4201 Wingren, Suite 108 Irving, Texas 75062 If intended for the Company: James Barkley, General Counsel TMLP GP,LLC c/o Simon Property Group 225 West Washington Indianapolis,Indiana 46204-3435 With a copy to: Gregg Goodman TMLP GP,LLC c/o Simon Property Group/The Mills 5425 Wisconsin Avenue, Suite 500 Chevy Chase,Maryland 20815 -3523 With a copy to: William Hammer TMLP GP,LLC Economic Development Ageement-Page 5 64784 i c/o Simon Property Group 225 West Washington Indianapolis,Indiana 46204-3435 6.6 _Entire Agreement. This Agreement is the entire agreement between the parties with respect to the subject matter covered in this Agreement. There is no other collateral oral or written Agreement between the parties that in any manner relates to the subject matter of this Agreement, except as provided in any Exhibits attached hereto. 6.7 Governing Law. The Agreement shall be governed by the laws of the State of Texas; and venue for any action concerning this Agreement shall be in the State District Court of Tarrant County, Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. 6.8 Amendment. This Agreement may only be amended by a written agreement executed by both parties. 6.9 Legal Construction. In the event any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect other provisions, and it is the intention of the parties to this Agreement that in lieu of each provision that is found to be illegal, invalid, or unenforceable, a provision shall be added to this Agreement which is legal, valid and enforceable and is as similar in terms as possible to the provision found to be illegal, invalid or unenforceable. 6.10 Recitals. The recitals to this Agreement are incorporated herein. 6.11 Counterparts. This Agreement may be executed in counterparts. Each of the counterparts shall be deemed an original instrument, but all of the counterparts shall constitute one and the same instrument. 6.12 Exhibits. All exhibits to this Agreement are incorporated herein by reference for all purposes wherever reference is made to the same. 6.13 Survival of Covenants. Any of the representations, warranties, covenants, and obligations of the parties, as well as any rights and benefits of the parties, pertaining to a period of time following the termination of this Agreement shall survive termination. 6.14 Successors and Assigns. This Agreement may not be assigned without the City's prior written consent. Neither the Company nor its legal representatives or successors in interest shall, by operation of law or otherwise, assign, mortgage,pledge, encumber or otherwise transfer this Agreement or any part hereof, or the interest of the Company under this Agreement, without obtaining the City's prior written consent, which may be given or withheld in the City's sole Economic Development Agreement-Page 6 64784 i discretion. Any attempted assignment by the Company in violation of the terms and provisions of this Agreement shall be void and shall constitute a material breach of this Agreement. EXECUTED on this day of 2010. CrrY OF GRAPEVINE TEXAS By: Bruno Rumbelow,City Manager ATTEST: By: City Secretary APPROVED As To FORM: By: City Attorney EXECUTED the day of 2010. By: GRAPEVINE MILLS LIMITED PARTNERSHIP, a Delaware limited partnership By: GRAPEVINE MILLS OPERATING COMPANY,L.L.C., a Delaware limited liability company, its Managing General Partner By: THE MILLS LIMITED PARTNERSHIP, a Delaware limited partnership, its Executive Manager By: TMLP GP, LLC, a Delaware limited liability company, its general partner By: Name: Title: Economic Develo went A eement-Page 7 64784 i City's Acknowledgement STATE OF TEXAS § § COUNTY OF TARRANT § This instrument was acknowledged before me on the day of , 2010, by Bruno Rumbelow, being City Manager of the City of Grapevine, Texas, a Texas municipality,on behalf of said municipality. Notary Public, State of Texas My Commission expires: Company's Acknowledgement STATE OF § COUNTY OF § This instrument was acknowledged before me on the day of , 2010, by being the of Notary Public, State of My Commission expires: Economic Development Agreement-Page 8 64784 l Exhibit"A" Description of the Property Grapevine Mills is generally located at the northwest corner of the intersection of State Highways 25, and 121 and FM 2499 in the City of Grapevine,Texas, and is generally shown on the attached site plan attached hereto as Exhibit A-1.