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HomeMy WebLinkAbout026043 RES - 11/16/2004 RESOLUTION AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE TO EXECUTE AN AGREEMENT WITH LOFTY DEVELOPMENTS, LTD. PROVIDING FOR TEMPORARY PROPERTY TAX ABATEMENT WHEREAS, the Texas Property Redevelopment and Tax Abatement Act (the "Act"), Texas Tax Code, Chapter 312, as amended, authorizes the City of Corpus Christi, Texas (the "City") to enter into Tax Abatement Agreements for projects meeting the guidelines and criteria for granting tax abatement, as amended, duly adopted by the City; and WHEREAS, an application for temporary tax abatement has been filed with the City by Lofty Developments, Ltd. for the rehabilitation of a facility in the City; and WHEREAS, the enterprise zone created in the City includes the property to be covered by the proposed tax abatement agreement and is eligible for such treatment in accordance with the provisions of the Act; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. The City finds and determines that the terms of the proposed agreement and the property subject to the proposed agreement meet the applicable guidelines and criteria, as amended, adopted by the City, and the City further determines that the proposed project is feasible and the proposed temporary abatement of taxes will inure to the long term benefit of the City. SECTION 2. The execution of the Tax Abatement Agreement attached in substantial form as Exhibit A is authorized and approved. Duly adopted at a regular meeting of the City Council on the II/t;;~y of November, 2004. ATTEST: ~ Armando Chapa City Secretary Samuel L. Mayor APPROVED AS TO FORM: By: i...J./Yli;ttv0-.. Lisa Aguilar< Assistant City Attorney for City Attorney November 9, 2004. Nov 16 2004 Lofty Developments.doc 02Fl04~ Corpus Christi, Texas / (01)-- Day of =1IAJl-.-i~ , ,204 The above resolution was passed by the following vote: Samuel L. Neal, Jr. Brent Chesney Javier D. Colmenero Melody Cooper Henry Garrett Bill Kelly Rex A. Kinnison Jesse Noyola Mark Scott ~ ~ oJj~ ~ ~ ~L (:u a~ ~~ ~ 1126043 TAX ABATEMENT AGREEMENT THE STATE OF TEXAS COUNTY OF NUECES This Tax Abatement Agreement (hereinafter referred to as the 'Agreement") is made and entered into by and between the CITY OF CORPUS CHRISTI, TEXAS (the "Governmental Unit") and Lofty Developments, Ltd. a Texas Limited Partnership (the "Owner"), the owner of taxable property in the City of Corpus Christi, Texas, identified on the attached Exhibit B, (the "Property') I. AUTHORIZATION This Agreement is authorized by the Texas Property Redevelopment and Tax Abatement Act, Texas Tax Code, Chapter 312, as amended (the "Act") , and is subject to the laws of the State of Texas and the charter, ordinances, and orders of the Governmental Unit. II. DEFINITIONS As used in this Agreement, the following terms shall have the meanings set forth below: A. "Abatement means the temporary, full or partial exemption from ad valorem taxes of certain Added Value to real and personal property in a zone designated for economic development purposes pursuant to the Act. B. "Added Value" means the increase in the assessed value of an eligible property as a result of "expansion" or "modernization" of an existing facility or construction of a facility." It does not mean or include "deferred maintenance." C. "Agreement" means this Tax Abatement Agreement D. "Base Year Value" means the assessed value of the Improvements on the Property as certified by the Nueces County Appraisal District as of the January 1 preceding the execution of this Agreement plus the agreed upon value of Improvements made after January 1 but before the execution of this Agreement. E. "Deferred Maintenance" means improvements necessary for continued operations which do not improve productivity or alter the process technology. F. "Economic Life" means the number of years a property improvement is expected to be in service in a Facility. G. "Eliaible Jurisdiction" means the City of Corpus Christi or Nueces County and any municipality, the majority of which is located in Nueces County that levies ad valorem taxes upon and provides services to property located within the proposed or existing zone designated pursuant to the Act. H. "Enterprise Zone Residential Redevelopment Facility' means buildings and structures used or to be used primarily for residential purposes and which are located within an enterprise zone. ". Expansion" means the addition of buildings, structures, fixed machinery or equipment for the purposes of increasing capacity E xhl ~Jlt A 2 J. "Facilitv" means property improvements completed or in the process of construction which together compromise an integral whole. IK. Mixed use facilitv" means a facility having residential and commercial uses where the commercial use occupies more than 20% of the structure L. "Multi-familv housinq" means a facility designed, arranged, or used exclusively for the use and occupancy of three or more families living independently of each other. The dwelling structure may Include a triplex, apartment, townhouse, condominium, cooperative, high-rise. etc. M. "Modernization" means the replacement and upgrading of existing facilities which increase the productive Input or output, updates the technology or substantially lowers the unit cost of the operation, and extends the economic life of the facilities. Modernization may result from the construction, alteration or installation of buildings, structures, fixed machinery or equipment it shall not be for the purpose of reconditioning, refurbishing, repairing or completion of deferred maintenance. N. "New Facilitv" means a property previously undeveloped which is placed Into service by means other than or in conjunction with an expansion or modernization. O. "Owner means the owner of a Facility subject to abatement. If the Facility is constructed on a leased property, the owner shall be the party which owns the property subject to tax abatement. The other party to the lease shall join in the execution of Agreement but shall not be obligated to assure performance of the party receiving abatement. P. "Permanent full-time iob" means a new employment position created by a business that provides a regular work schedule of at least 35 hours per week or 1820 hours of employment per year to a Nueces County resident and maintains the employment position during the term of the abatement agreement. a. "Renewal Communitv Facilitv" means a building or structure in the Corpus Christi Renewal Community which includes Census Tracts 1,3,4, 10 and 11 to be used for the creation of a new business or business expansion, but not a relocation of a business. A project may be considered on a case by case basis for abatement if it is a Renewal Community Facility and if the building or structure will be defined as a rehabilitation project or is defined as new facility. Projects that may be considered as Renewal Community Facilities include: multi-family housing facilities, mixed-use facilities, retial facilities, hotel accommodations. R. "Rehabilitation" means that the Added Value, as defined, of the project exceeds the base year of a development property by $250,000. S. "Texas Enterprise Zone" means any census block group with greater than 20% poverty, federally designated Renews Community, or area designated as a Texas Enterprise Zone prior to 2003. T "Improvements" means the buildings or portions thereof and other improvements, used for commercial purposes on the Property. U. "Construction Phase" means the period during which a material and substantial improvement of the Property occurs which represents a separate and distinct construction operation undertaken for 3 the purpose of erecting the Improvements. The Construction Phase ends upon the earliest to occur of the following events: (1) when a certificate of occupancy is issued for the project (if within City limits); or (2) when commercial production of a product or provision of a service is achieved at the facility, or (3) when the architect or engineer supervising construction issues a certificate of substantial completion, or some similar instrument, or (4) two (2) years after the date of this Agreement. The determination of the end of the Construction Phase shall be made by the Governmental Unit, in its sole and absolute discretion, based upon the above criteria and such other factors as the Governmental Unit may deem relevant. The determination of the end of the Construction Phase by the Governmental Unit shall be conclusive, and any judicial review of such determination shall be governed by the substantial evidence rule. V. "Eligible Property" means the buildings, structures, site Improvements, and that office space and certain personal property necessary to the operation and administration of the Facility and Renewal Community facilities to be constructed pursuant to this Agreement. A list of the Eligible Property is set forth in the Project Description which is attached hereto as Exhibit "A" and made a part hereof. W "Ineligible Property" means land; inventories; supplies; tools; furnishings and other forms of movable personal property; vehicles; vessels; aircraft; housing; hotel accommodations; deferred maintenance investments; improvements for the generation or transmission of electrical energy not wholly consumed by a New Facility or expansion; any improvements, including those to produce, store or distribute natural gas, fluids or gases, which are not integral to the operation of the Facility; improvements to real property which have an economic life of less than 15 years; property owned or used by the State of Texas or its political subdivisions or by any organization owned, operated or directed by a political subdivision of the State of Texas: unless any of the above types of property are specifically authorized by the Governmental Unit. X. "The Guidelines and Criteria for Granting Tax Abatement" means the document that was adopted by City Council in April 2004 by Resolution 025740, as amended. The Guidelines and Criteria for Granting Tax Abatement are incorporated as a part of this Agreement. Except as the same may be modified herein, all definitions set forth therein are applicable to this Agreement. III. PROPERTY The Property is an area within the City of Corpus Christi, Texas, located in whole or in part within the jurisdiction of the Governmental Unit as is more fully described in Exhibit "B" attached hereto and made a part hereof. Said Property is located within a zone for tax abatement established pursuant to Chapter 312 of the Texas Tax Code, as amended, by the City of Corpus Christi, Texas. The Nueces County Appraisal District has established the following values for the Property as of the January 1 valuation date prior to the date of execution of this Agreement. 4 Account No. 0797-0005-0070 Land Improvements $ 135.000 $ 8.531 Account No. 0797-0010-0050 Land Improvements $111,660 $80,000 Addition of the above amount to the valuation of the Improvements as of the January 1 valuation date prior to the date of execution of this Agreement results in a Base Year Value as follows: Base Year Value: $ 335,191 IV. TERM OF ABATEMENT AND AGREEMENT The Governmental Unit agrees to abate the ad valorem taxes on the Eligible Property in accordance with this paragraph and paragraphs V and VI hereof. The Abatement shall be effective with the January 1 valuation date immediately following the date of execution of this Agreement. The Abatement shall continue for up to two (2) years during the period of the Construction Phase and for the next three (3) full tax years thereafter, expiring as of December 31 of such fifth tax year. If the period of the Construction Phase exceeds two (2) years, the Facility shall be considered completed for purposes of Abatement, and in no case shall the period of Abatement inclusive of construction and completion exceed five (5) tax years. The years of Abatement provided herein shall in each instance coincide with the tax year commencing on January 1 and expiring on December 31, and in no event shall the Abatement extend beyond December 31 of the fifth tax year. The term of this Agreement shall continue for a period of five (5) years following expiration of the abatement period. All terms and conditions imposed upon the Owner shall continue in effect during such period, and the Owner shall be obligated specifically to continue the minimum employment levels specified herein. Any default shall be subject to the provisions of Article VIII hereof. V. TAXABILITY During the period that the Abatement is effective, taxes shall be payable as follows: (1) The value of the land comprising the Property shall be fully taxable; (2) The Base Year Value of existing Improvements comprising the Property shall be fully taxable; (3) The value of Ineligible Property shall be fully taxable; and (4) The Added Value of Eligible Property shall be abated as set forth in Part VI herein. 5 VI. AMOUNT OF ABATEMENT The Abatement provided by this Agreement shall be based upon the Added Value of Eligible Property as a result of the project. For a Non-Renewal Community Facility which provides not less than 50 (but not more than 99) new permanent jobs, the percentage of tax abated shall be in accordance with the following schedule: Year Construction Period (not to exceed 2 years) Year I Year 2 Year 3 Year 4 Year 5 Percentaqe of Abatement 100% 50% 50% 50% 50% 50% Provided that, for a Non-Renewal Community Facility which provides not less than 100 (but not more than 199) new permanent jobs, the percentage of tax abatement shall be in accordance with the following schedule: Construction Period (not to exceed 2 years) Year I Year 2 Year 3 Year4 Year 5 Percentage of Abatement (for first $10 million) 100% Percentage of Abatement (over $10 million) 100% 75% 75% 75% 75% 75% 50% 50% 50% 50% 50% Provided that, for a Non-Renewal Community Facility which provides at least 200 new permanent jobs, the percentage of tax abatement shall be in accordance with the following schedule: Construction Period (not to exceed 2 years) Year I Year2 Year3 Year4 Year 5 Percentage of Abatement (for first $10 million) 100% Percentage of Abatement (over $10 million) 100% 100% 100% 100% 100% 100% 50% 50% 50% 50% 50% In the event that upon completion of the Construction Phase the Added Value of permanent Improvements, as determined by said Appraisal District, shall at any time thereafter during the period of Abatement be less than eight-five percent (85%) of the Estimated Added Value, not due to circumstances beyond the control of Owner, the Owner agrees to pay, as additional taxes hereunder, an amount equal to the then current tax rate of the Governmental Unit applied to the difference between the Added Value from eighty'five percent (85%) of the Estimated Added Value, multiplied by 6 100% minus the net percentage of Abatement provided under this Agreement. For the purposes of this provision, the term "circumstances beyond the control of Owner" shall include casualty losses, national economic factors, shutdowns due to governmental regulations, strikes, acts of war; and the like The formula for calculating such additional tax is outlined as follows: (Tax Rate] x [(85% of Est. Added Value - Actual AV) x (100% - Abatement%)] = Additional Tax For Renewal Community Facilities involving rehabilitation, the Abatement provided by this Agreement shall be based upon the Added Value of Eligible Property as a result of the project. For a Renewal Community Facility which provides not less than one (1) new permanent full-time job per $50,000 of Added Value to a property following the completion of construction, and maintains the same level of employment for the term of this Tax Abatement Agreement, the percentage of tax abated shall be in accordance with the following schedule: YEAR Percentaqe of Abatement of Added Value of Renewal Communitv Facilitv involvinq Rehabilitation Construction Period (not to exceed 2 years) Year 1 Year 2 Year 3 100% 100% 100% 100% For Renewal Community Facility which is a residential Multi-Family Housing, the job requirement shall be waived. For Renewal Community Facility which is a Mixed Use Facilities, the job requirement shall be prorated. For example, if Owner is constructing a Mixed-use Facility that is 30% non-residential and the Added Value is $1,500,000, the job requirement shall be to create and maintain a minimum of 9 permanent full-time jobs during the term of the abatement agreement. ($1,500,000 x .30 = $450,000, $450,000/$50,000=9). In order to be counted as a permanent job under this Agreement, the job must be a full-time position providing regular work schedules at least 35 hours per week. For compliance purposes, the determination date shall be January 1 of each year commencing with the January 1 following the date of completion of construction. The percentage of abatement provided each year under this Agreement shall be based upon the employment information as of January 1 of such year. As a result, the actual amount of abatement may vary from year to year based upon employment levels and property valuations. If this project is designated as a "rehabilitation project" under the Guidelines and Criteria which involves the adaptive reuse of an existing structure or building for a Facility, the project must involve a minimum capital expenditure of $250,000. The rehabilitation project must involve the adaptive reuse of an existing structure or building currently on the property tax rolls so that the Base Year Value associated with the project will include both the value of the land and the existing improvements. For compliance purposes, the date for determining a permanent full-time job shall be six months from the date of completion. The Owner must maintain the same level of employment or increase employment during the term of the Agreement. The percentage of abatement provided shall be based upon the employment information as of January 1 each year. The target living wage shall be 7 that annual amount equal to or greater than poverty level for a family of three, as established by the 2004 U.S. Department of Health and Human Services Poverty Guidelines, divided by 1820 hours per year, which is currently $8.60 per hour. The Governmental Unit shall have the right to adjust the living wage target under these Guidelines and insert a specific target in each Tax Abatement Agreement to govern the abatement offered under this Agreement. This project is designated as a "rehabilitation project" under the Guidelines and Criteria which involves the adaptive reuse of an existing structure or building for a Facility. Owner represents and warrants that the project shall involve a minimum capital expenditure of $250,000. The rehabilitation project must involve the adaptive reuse of an existing structure or building currently on the property tax rolls so that the Base Year Value associated with the project will include both the value of the land and the existing improvements. At the time of execution of this Agreement, the Owner reasonably estimates and represents to the Governmental Unit that the Added Value of the Renewal Community Mixed User Facility comprising permanent Improvements upon completion of the Construction Phase shall be: $387.500 ("Estimated Added Value"). VII. CONTEMPLATED IMPROVEMENTS Owner represents that it shall improve a Facility at the cost, for the purpose, and in the manner as set forth in the Project Description attached as Exhibit"A. During the Construction Phase, the Owner may make such change orders to the project as are reasonably necessary, provided that no such change order may be made which will change the qualification of the project as a "Facility" under the Guidelines for Granting Tax Abatement approved by the Governmental Unit. All improvements shall be completed in accordance with all applicable laws, ordinances, rules or regulations. During the term of this Agreement, use of the Property shall be limited to operation of the Facility described in the Project Description consistent with the general purpose of encouraging development or redevelopment of the zone during the period of this Agreement. VIII. EVENTS OF DEFAULT AND RECAPTURE A. Failure to Commence Operation Durinq Term of Aqreement. In the event that the Facility does not create within six months of construction completion the required number of permanent full-time job(s) per $50,000 of Added Value to a property and maintain the same level of employment or increase employment during the term of this Agreement, no abatement shall be given for that tax year, and the full amount of taxes assessed against the property shall be due and payable for that tax year. In the event that the Owner fails to create and maintain the required number of full-time jobs by the next January 1, then the abatement Agreement shall terminate and all abated taxes during the period of construction shall be recaptured and paid within 60 days of such termination. B. Discontinuance of Operations Durinq Term of Aqreement. In the event the Facility is completed and begins operation with the required minimum number of 2 permanent jobs but subsequently discontinues operations and the required minimum number of 2 permanent jobs is not maintained on any January 1 during the term of the Agreement after the completion of construction, for any reason except on a temporary basis due to fire, explosion 8 or other casualty or accident or natural disaster, the Agreement may be terminated by the Governmental Unit, and all taxes previously abated by virtue of the Agreement shall be recaptured and paid within 60 days of such termination. C Delinquent Taxes. In the event that the Owner allows its ad valorem taxes to become delinquent and fails to timely and properly follow the legal procedures for their protest and/or contest, this Agreement shall terminate and so shall the abatement of the taxes for the calendar year of the delinquency. The total taxes assessed without abatement for that calendar year shall be paid within 60 days from the date of termination Penalty and interest shall not begin to accrue on the additional amount of taxes due as the result of recapture under this provision until the first day of the month following such sixty (60) day notice, at which time penalty and interest shall accrue in accord with the laws of the State of Texas. Penalty and interest on the amount of taxes originally levied based upon the Abatement shall, of course, begin to accrue as of the date such taxes were due in accord with the laws of the State of Texas. D. Notice of Default. Should the Governmental Unit determine that the Owner is in default according to the terms and conditions of this Agreement, it shall notify the Owner that if such default is not cured within sixty (60) days from the date of such notice ('Cure Period'), then this Agreement may be terminated. In the event the Owner fails to cure said default during the Cure Period, this Agreement may be terminated and the taxes abated by virtue of the Agreement will be recaptured and paid as provided herein. E. Actual Added Value. Should the Nueces County Appraisal District determine that the total level of Added Value during any year of the term of this Agreement after completion of the Construction Phase is lower than the Estimated Added Value, for each year during which an Abatement has been granted, the difference between the tax abated and the tax which should have been abated based upon the actual Added Value shall be determined by the Governmental Unit and paid within 60 days of notification to the Owner of such determination. Penalty and interest shall not begin to accrue upon such sum until the first day of the month following such sixty (60) day notice, at which time penalty and interest shall accrue in accord with the laws of the State of Texas. F. Reduction in Rollback Tax Rate. If during any year of the period of Abatement any portion of the abated value is added to the current total value of the Governmental Unit but is not treated as 'new property value' (as defined in Section 26.012 (17) of the Texas Tax Code) for the purpose of establishing the "effective maintenance rate" in calculating the 'rollback tax rate' in accord with Section 26.04 (c) (2) of the Texas Tax Code and if the Governmental Unit's budget calculations indicate that a tax rate in excess of the 'rollback tax rate' is required to fund the operations of the Governmental Unit for the succeeding year, then the Governmental Unit shall recapture from the Owner a tax in an amount equal to the lesser of the following: (1) The amount of the taxes abated for that year by the Governmental Unit with respect to the Property. (2) The amount obtained by subtracting the rollback tax rate computed without the abated property value being treated as new property value from the rollback tax rate computed with the abated property value being treated as new property value and multiplying the difference by the total assessed value of the Governmental Unit. If the Governmental Unit has granted an abatement of taxes to more than one taxpayer, then the 9 amount of the recapture calculated in accord with subparagraph (2) above shall be prorated on the basis of the value of the abatement with respect to each taxpayer. This event shall not constitute a 'default" under this Agreement, and the sixty (60) day Cure Period provided above shall not apply. Such recaptured taxes must be paid within thirty (30) days after notice thereof has been given to the Owner. Penalty and interest shall not begin to accrue upon such sum until the first day of the month following such thirty (30) day notice, at which time penalty and interest shall accrue in accord with the laws of the State of Texas. G. Continuation of Tax Lien. The amount of tax abated each year under the terms of this Agreement shall be secured by a first and prior tax lien which shall continue in existence from year to year until such time as this Agreement between the Governmental Unit and Owner is fully performed by Owner, or until all taxes, whether assessed or recaptured, are paid in full. In the event of any default by Owner, the governing body of the Governmental Unit reserves the right to terminate or modify this Agreement. Owner shall be afforded written notice of such default and the opportunity to cure as provided above. If Owner believes such action was improper, Owner may file an appeal in Nueces County district court within sixty (60) days after written notice of the action by the Governmental Unit. Owner shall remit to the Governmental Unit, within such 60-day period, any additional or recaptured taxes levied pursuant to the payment provisions of Texas Tax Code S 42.08. If the final determination of the appeal increases Owner's tax liability above the amount paid, Owner shall remit the additional tax pursuant to Tax Code S 42.42. If the final determination of the appeal decreases Owner's tax liability, the Governmental Unit shall refund the Owner the difference between the amount of tax paid and the amount of tax for which Owner is liable pursuant to Tax Code S 42.43. IX. ADMINISTRATION A. Inspections. The Owner shall allow employees and/or representatives of the Governmental Unit to have access to the Property during the term of this Agreement to inspect the Facility to determine compliance with the terms and conditions of this Agreement. All inspections will be made only after the giving of twenty-four (24) hours prior notice and will only be conducted in such manner as to not unreasonably interfere with the construction or operation of the Facility. All inspections will be made with one or more representatives of the Owner and in accordance with Owner's safety standards. B. Appraisals. The Chief Appraiser of the Nueces County Appraisal District shall annually determine (i) the taxable value of the real and personal property comprising the Property taking into consideration the Abatement provided by this Agreement, and (ii) the full taxable value without Abatement of the real and personal property comprising the Property. The Chief Appraiser shall record both the abated taxable value and the full taxable value in the appraisal records. The full taxable value figure listed in the appraisal records shall be used to compute the amount of abated taxes that are required to be recaptured and paid in the event this Agreement is terminated in a manner that results in recapture. Each year the Owner shall furnish the Chief Appraiser with such information outlined in Chapter 22, Texas Tax Code, as amended, as may be necessary for the administration of the Agreement specified herein. C. Annual Reports. Owner shall certify to the governing body of the Governmental Unit on or before April 1 each year that the Owner is in compliance with each applicable term of this Agreement. Additionally, during the initial four years of the term of property tax abatement, Owner shall provide to the Governmental Unit an annual report covering those items listed on Schedule I attached hereto in order to document the efforts of the Owner to acquire goods and services on a local basis. Such 10 annual report shall be prepared on a calendar year basis and shall be submitted to the Governmental Unit no later than ninety (90) days following the end of each such calendar year. The annual report shall be accompanied by an audit letter prepared by an independent accounting firm which has reviewed the report. D. "Buv Local' Provision. The Owner additionally agrees to give preference and priority to local manufacturers, suppliers, contractors and labor, except where not reasonably possible to do so without added expense, substantial inconvenience, or sacrifice in operating efficiency. In any such exception cases involving purchases over $10,000.00 a justification for such purchase shall be included in the annual report. The Owner further acknowledges that it is a legal and moral obligation of persons receiving property tax abatements to favor local manufacturers, suppliers, contractors and labor, all other factors being equal. For the purposes of this provision, the term 'local" as used to describe manufacturers, suppliers, contractors and labor shall include firms, businesses, and persons who reside in or maintain an office in either Nueces County or San Patricio County. In the event of a breach of the buy local provision, the percentage of abatement shall be proportionately reduced equal to the amount the disqualified contract bears to the total construction cost for the project. X. ASSIGNMENT The Owner may assign this Agreement to anyone or more corporation(s), 50% or more of the outstanding voting securities of which are owned, directly or indirectly, by one of the Owners, or any partnership(s) or limited partnership(s) in which an Owner, or a subsidiary of an Owner, is a general partner. The Owner may assign this Agreement to any other new owner or lessee of the Facility with the prior written consent of the Governmental Unit, which consent shall not be unreasonably withheld. Any assignment shall provide that the assignee shall irrevocably and unconditionally assume all the duties and obligations of the assignor and become the Owner upon the same terms and conditions as set out in this Agreement. In the event more than one entity is Owner hereunder, the obligations of said entities shall be joint and several. Any assignment of this Agreement shall be to an entity that will provide substantially the same improvements to the Property, except to the extent such improvements have been completed. No assignment shall be approved if the Owner or any assignee are indebted to the Governmental Unit for ad valorem taxes or other obligations. XI. NOTICES Any notice required to be given under the provisions of this Agreement shall be in writing and shall be duly served when it shall have been deposited, with the proper postage prepaid thereon, and duly registered or certified, return receipt requested, with the United States Postal Service, addressed to the Governmental Unit or Owner at the following addresses. If mailed, any notice or communication shall be deemed to be received three days after the date of deposit in the United States Mail. Unless otherwise provided in this Agreement, all notices shall be delivered to the following addresses: To the Governmental Unit. CITY OF CORPUS CHRISTI, TEXAS 1201 Leopard Street P. O. Box 9277 Corpus Christi, Texas 78469 Attn: City Manager II To the Owner: Lofty Developments, Ltd. Attn David Loeb, Vice President 921 N. Chapparal Suite 100 Corpus Christi, Texas 78401 Either party may designate a different address by giving the other party ten days' written notice. This Agreement has been executed by the parties in multiple originals or counterparts, each having full force and effect. Executed this - day of ,2004 CITY OF CORPUS CHRISTI ATTEST: By: Armando Chapa City Secretary George K. Noe City Manager APPROVED AS TO FORM 2004 By: Lisa Aguilar Assistant City Attorney For City Attorney STATE OF TEXAS ~ COUNTY OF NUECES ~ ~ This instrument was acknowledged before me on the day of George K. Noe, City Manager, or his designee Corpus Christi, a Texas home rule municipal corporation, on behalf of the corporation. ,2004, by of City of Notary Public, State of Texas Printed Name Commission expires OWNER: By: Name: Title 12 Date: STATE OF TEXAS ~ ~ COUNTY OF NUECES ~ This instrument was acknowledged before me on as partnership, on behalf of said partnership. , 2004, by for Lofty Development, Ltd., a Texas limited Notary Public 13 SCHEDULE 1 "Buy local' Annual Reports The following information shall be reported to the Governmental Unit on a calendar-year basis during the first four years of the tax abatement program: 1. 2 3 4. 5. 6. 7. 8. Dollar amount spent for materials' (local). Dollar amount spent for materials (total). Dollar amount spent for labor" (local). Dollar amount spent for labor" (total). Number of jobs created in the construction project (local). Number of jobs created in the construction project (total). Number of jobs created on a permanent basis (local). Number of jobs created on a permanent basis (total). . 'Materials' is defined to include all materials used in excavation, site improvement, demolition, concrete, structural steel, fire proofing, piping, electrical, instruments, paintings and scaffolding, insulation, temporary construction facilities, supplies, equipment rental in construction, small tools and consumables. This term does not include major items of machinery and equipment not readily- available locally. .. 'labor' is defined to include all labor in connection with the excavation, site improvement, demolition, concrete construction, structural steel, fire proofing, equipment placement, piping, electrical, instruments, painting and scaffolding, insulation, construction services, craft benefits, payroll burdens, and related labor expenses. This term does not include engineering services in connection with the project design. The term "Iocal' as used to describe manufacturers, suppliers, contractors and labor shall include firms, businesses, and persons who reside in or maintain an office in either Nueces County or San Patricio County. November 1, 2004 14 Exhibit A Corpus Christi Project Plan [Insert letters dated September 23, 2004 and October 11, 2004 from David Loeb] The subject property consists of two parcels of land. Parcel A is approximately 11,094 square feet of land improved with a 24,000 square foot office structure. Parcel B is approximately 15,000 square feet of land improved with asphalt paving and used as a parking lot. This project will rehabilitate the ground floor as commercial office/retail/studio space, and the upper three floors as approximately 18 mid income loft-style apartments. The site is currently an empty office building with a paved parking lot. The cost for this rehabilitation is estimated at $ Task Closing Final plans Budgeting Financing Asbestos Remediation Permitting Demolition Re-Roofing Cutting Chases Utility Connections Interior Utilities Elevator repair Stairwell extension Walkway Modifications Facade changes Cleanup & overruns Opening Plan for completion: Est. days for completion Running Date 30 30 30 30 30 30 60 60 60 ??? 60 60 30 30 60 60 60 October 1, 2005 15 EXHIBIT 'B' Part, Lot 6A Block 10, Bluff Addition, a subdivision in the City of Corpus Christi, Texas, as shown by map or plat thereof recorded in the Map Records of Nueces County, Texas, and being known as 817 Carancahua Street North, Corpus Christi, Texas. Lots 7 and 8, Block 5, Bluff Addition, a subdivision in the City of Corpus Christi, Texas, as shown by map or plat thereof recorded in the Map Records of Nueces County, Texas, and being known as Carancahua St North at Buffalo Street, Corpus Christi, Texas.