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HomeMy WebLinkAboutC2018-731 - 1/30/2018 - NA EXECUTION VERSION DOWNTOWN DEVELOPMENT REIMBURSEMENT AGREEMENT Frost Bank Building This Downtown Development Reimbursement Agreement (the "Agreement") is entered into by and between the City of Corpus Christi, Texas (the "City"), as the agent of the Corpus Christi Tax Increment Reinvestment Zone#3 ("TIRZ#3"), and Frost Bank, a Texas state bank(the"Developer"). Recitals WHEREAS on December 16, 2008, the City Council of the City (the "City Council") approved Ordinance 027996,which established the TIRZ#3 in accordance with Texas Tax Code Chapter 311.TIRZ#3 promotes economic development and stimulates business and commercial activity in its downtown Corpus Christi area (the"Zone"); WHEREAS on August 25,2015,the City Council approved a Project and Financing Plan(the"Plan")for TIRZ #3; WHEREAS the Board of Directors of TIRZ#3 (the"Board") includes members of the City Council in a non- public-official capacity, as well as a representative from each Nueces County and Del Mar College, who have committed to contribute to TIRZ#3 through Interlocal Agreements created in 2009 and amended in 2012 and 2016; WHEREAS the Corpus Christi Downtown Management District ("DMD") assists the City with administration of TIRZ#3, recommends projects and recommends a DMD representative to be appointed to the Board through an Interlocal Agreement; WHEREAS on November 10, 2015, the City Council approved Ordinance 030680, which amended Ordinance 027996 and authorized the Board to approve agreements in this form, to be entered into by the City,as the Board considers necessary or convenient to implement the Plan and achieve its purpose; WHEREAS the Plan contained certain programs designed to improve conditions and increase commerce within the Zone; WHEREAS the Developer has proposed a development plan (the "Development") for the certain improvements listed on attached Exhibit A (each, an "Improvement" and, collectively, the "Improvements"). The Improvements are planned to be constructed on the property located at 501 S. Shoreline Drive, Corpus Christi,Texas 78401, with such property being more fully described on attached Exhibit B(the"Property"). The Property is located within the Zone,and the Improvements fall within one of the programs approved in the Plan; WHEREAS the Development concept has been refined through cooperation between the Developer,the City and the DMD to meet the desired goals of revitalization within the Zone and serve a public benefit; WHEREAS any reference to"City"or"City Staff," is entirely in agency capacity for TIRZ#3,and further the City as a home-rule municipal corporation is not a party to this Agreement;and C2018-731 1/30/18 1 Frost Bank SCANNED WHEREAS the Developer desires to be reimbursed for certain future costs incurred pursuant to the Development, and TIRZ #3 desires to reimburse the Developer for these costs in accordance with this Agreement; Agreement Now therefore, in consideration of the mutual covenants and obligations,the parties agree as follows: Section 1. Reimbursement Obligations. The City shall reimburse the Developer from available TIRZ#3 funds in an amount up to the estimated project cost listed next to each Improvement in attached Exhibit C(the"Estimated Project Costs"),except that(a)the total amount of all such reimbursements for the Development may not exceed SIX HUNDRED THOUSAND AND NO/DOLLARS$600,000.00(the"Cap")and (b) if the Developer actually incurs a cost for an Improvement less than that Improvement's Estimated Project Cost, the City shall reimburse the Developer for only the amount of the cost that the Developer actually incurred for that Improvement. Based on qualifications of the Development,the Program reimbursement structure is as follows: Project Specific Development Agreement: (1) Beginning the year after the Developer receives a Certificate of Occupancy for the Improvements ("CO")the City shall reimburse annually 75%of the property taxes paid on the Improvements to the participating taxing entities in TIRZ#3,up to the Cap for a maximum of ten(10)years. In the event that reimbursement of 75% of the property taxes paid on the Improvements in a given year will cause the total reimbursement to exceed the Cap, only the amount needed to reach the Cap will be reimbursed. (2) Each such payment shall be made no later than 30 days following the Developer's submittal of a valid Request for Reimbursement. (3) After City has paid to Developer an amount equal to all of the Project Costs referenced herein, City shall have no further obligation to pay any amount to Developer. (4) No interest shall accrue on any amount of unreimbursed Project Costs, and City shall not be obligated to pay Developer any interest whatsoever under this Agreement. Section 2. Closing Statement Required. Not Applicable Section 3. Conditions for Reimbursement. The City shall reimburse Developer in accordance with Section 1 only if the following conditions are fulfilled: (a) The Developer constructs all the Improvements on the Property on or before August 31, 2019 (the "Completion Date") in accordance with the Development Plan attached hereto as Exhibit A and the City's building codes and policies. (b) Developer obtains all required building permits from the City and commences construction of the Improvements within six(6) months of the date this Agreement is signed by the City. Any extensions of this deadline must be requested by Developer in writing and be approved by the Board. 2 (c) The completed Improvements must include all elements (including but not limited to: all design, structural, architectural, lighting, landscaping, etc.) which are shown or referenced in the Development Plan attached hereto as Exhibit A. Any amendments to the Development Plan must be submitted in writing and be approved by all parties to this Agreement. (d) The City's Development Services Department issues a CO for the Improvements. (e) Within 60 days of the issuance of CO,the Developer submits a Request for Reimbursement for actual Project Costs, in the form contained in Exhibit D, including: (i.) CO; (ii.) specific improvements completed under the Project and the amount of money that Developer paid for completion of such work and that Developer claims as actual Project Costs; (iii.) supporting documents demonstrating that such amounts were actually paid by Developer, including, but not limited to, invoices, receipts and final lien waivers signed by the general contractor; (f) City Staff has inspected the Improvements and certifies that the Improvements are complete, acceptable,and comport to the terms of this Agreement. (g) Upon acceptance by City Staff, Request for Reimbursement form is reviewed and approved by the Board. (h) If the Developer fails to pay the required taxes on the Property or files an appeal to the Nueces County Appraisal District or any state or federal court of the assessed value of Property for ad valorem tax purposes, the City and TIRZ #3 shall be under no obligation to make any payments under this agreement until such time as the appeal is resolved and all taxes are paid in full. Any late fees,fines, or interest assessed as a result of the failure to pay taxes or the appeal process shall not be reimbursed to the Developer under this agreement. Reimbursement is limited to the actual amount of property tax paid on the Improvements. Section 4. Audit Upon ten days' prior written notice from City to Developer, Developer will make available for inspection by designated City Staff all financial and business records of Developer that relate to the Project, in order to assist City Staff in verifying the Developer's compliance with the terms and conditions of this Agreement. TIRZ#3 shall have the right to have these records audited at TIRZ#3's sole cost and expense. Section 5. Maintenance of Improvements. Developer must maintain the Property for the entirety of the Agreement in accordance with applicable law.Three (3) citations from the Code Enforcement Division for property maintenance issues may result in the termination of this Agreement in accordance with Section 6. If the Developer constructs the Improvements, the Developer shall maintain the Property, the Improvements,and adjacent public right of way in good condition and so as to not contribute to blight in the Zone. The Developer's obligation to maintain the Improvements and public right of way adjacent to the Property, includes without limitation, maintaining the landscaping,sidewalks,aesthetics,and general cleanliness of the Property. 3 Section 6. Termination. Unless sooner terminated in accordance with this Section,this Agreement shall survive the expiration of TIRZ #3. If the Developer has not fully complied with Section 3 (Conditions for Reimbursement by the Completion Date), this Agreement shall terminate immediately, unless the parties mutually agree to an extension of time in writing in accordance with Section 17. Any citations from the City's Code Enforcement Division for property maintenance issues will initiate a review process by the TIRZ#3 Board. If three(3)or more citations are issued against the Property by City Code Enforcement during the term of this Agreement,or any extensions thereof, the Board may elect to terminate the agreement. Section 7. Representations and Warranties. Developer warrants and represents to City the following: (a) Developer is a state bank chartered under the laws of the State of Texas, and further has all power and authority to carry on its business as presently conducted in Corpus Christi,Texas. (b) Developer has the authority to enter into and perform,and will perform,the terms of this Agreement. (c) Developer has timely filed and will timely file all local, State, and Federal tax reports and returns required by law to be filed,and has timely paid and will timely pay(subject to all permitted extensions) all assessments,fees,and other governmental charges, including applicable ad valorem taxes,during the term of this Agreement. (d) If an audit determines that the request for funds was defective under the law or the terms of this agreement, Developer agrees to reimburse the City for the sums of money not authorized by law or this Agreement within 30 days of written notice from the City requesting reimbursement. (e) The parties executing this Agreement on behalf of Developer are duly authorized to execute this Agreement on behalf of Developer. (f) Developer does not and agrees that it will not knowingly employ an undocumented worker. If,after receiving payments under this Agreement,Developer is convicted of a violation under 8 U.S.C.Section 1324a(f), Developer shall repay the payments at the rate and according to the terms as specified by City Ordinance,as amended, not later than the 120th day after the date Developer has been notified of the violation. Section 8. Force Majeure. If the City or Developer are prevented, in whole or in part, from fulfilling its obligations under this Agreement by reason of any act of God,unavoidable accident,acts of enemies,fires,floods,governmental restraint or regulation, other causes of force majeure, or by reason of circumstances beyond its control, then the obligations of the City or Developer are temporarily suspended during continuation of the force majeure. If either party's obligation is affected by any of the causes of force majeure,the party affected shall promptly notify the other party in writing, giving full particulars of the force majeure as soon as possible after the occurrence of the cause or causes relied upon. 4 Section 9. Assignment. Developer may not assign all or any part of its rights, privileges, or duties under this Agreement without the prior written approval of the Board. Any attempted assignment without such approval is void, and constitutes a breach of this Agreement.Assignment can only be requested for multi-year reimbursements after completion of obligations by Developer. Section 10. Indemnity. Developer covenants to fully indemnify,save, and hold harmless the TIRZ#3, the City, their respective officers, employees, and agents ("Indemnitees") against all liability, damage, loss, claims, demands, and actions of any kind on account of personal injuries (including, without limiting the foregoing, workers'compensation and death claims),or property loss or damage of any kind, which arise out of or are in any manner connected with, or are claimed to arise out of or be in any manner connected with Developer activities conducted under or incidental to this Agreement, excluding any injury, loss or damage arising out of or resulting from lndemnitee's sole negligence,act or omission. Developer must, at its own expense, investigate all those claims and demands, attend to their settlement or other disposition, defend all actions based on those claims and demands with counsel satisfactory to Indemnitees,and pay all charges of attorneys and all other costs and expenses of any kind arising from the liability,damage,loss,claims,demands or actions. Section 11. Events of Default. The following events constitute a default of this Agreement: (a) Failure of Developer to timely, fully, and completely comply with any one or more of the requirements,obligations,duties,terms,conditions,or warranties of this Agreement. (b) TIRZ#3,the Board or City Staff determines that any representation or warranty on behalf of Developer contained in this Agreement or in any financial statement,certificate, report,or opinion submitted to the TIRZ #3 in connection with this Agreement was incorrect or misleading in any material respect when made. (c) Developer fails to maintain the Property and Improvements described in this Agreement in compliance with the City Code of Ordinances resulting in three (3) or more Code Enforcement citations. (d) Developer makes an assignment for the benefit of creditors. (e) Developer files a petition in bankruptcy, or is adjudicated insolvent or bankrupt. Section 12. Notice of Default. Should the City determine that Developer is in default according to the terms of this Agreement,the City shall notify Developer in writing of the event of default and provide 60 days from the date of the notice ("Cure Period")for Developer to cure the event of default. Section 13. Results of Uncured Default. After exhausting good faith attempts to address any default during the Cure Period, and taking into account any extenuating circumstances that might have occurred through no fault of Developer, as 5 determined by the City, the following actions must be taken for any default that remains uncured after the Cure Period. (a) Developer shall immediately repay all funds paid from TIRZ#3 funds under this Agreement. (b) Developer shall pay reasonable attorney fees and costs of court. (c) The City and TIRZ#3 shall have no further obligations to Developer under this Agreement. (d) Neither the City nor the TIRZ#3 may be held liable for any consequential damages. THE FOREGOING SHALL BE THE SOLE AND EXCLUSIVE REMEDIES AVAILABLE TO THE CITY AND TIRZ #3 UPON THE OCCURRENCE OF A DEFAULT HEREUNDER AND UPON EXPIRATION OF THE CURE PERIOD. EXCEPT FOR LIABILITY FOR INDEMNIFICATION, IN NO EVENT SHALL DEVELOPER OR ANY OF ITS REPRESENTATIVES BE LIABLE TO THE CITY, TIRZ #3, OR ANY THIRD PARTY FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR ENHANCED DAMAGES, ARISING OUT OF, OR RELATING TO, AND/OR IN CONNECTION WITH ANY BREACH OF THIS AGREEMENT, REGARDLESS OF (A) WHETHER SUCH DAMAGES WERE FORESEEABLE, (B) WHETHER OR NOT THE CITY OR TIRZ#3 WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND (C)THE LEGAL OR EQUITABLE THEORY(CONTRACT,TORT OR OTHERWISE)UPON WHICH THE CLAIM IS BASED. Section 14. No Waiver. (a) No waiver of any covenant or condition,or the breach of any covenant or condition of this Agreement, constitutes a waiver of any subsequent breach of the covenant or condition of the Agreement. (b) No waiver of any covenant or condition,or the breach of any covenant or condition of this Agreement, justifies or authorizes the nonobservance on any other occasion of the covenant or condition or any other covenant or condition of this Agreement. (c) Any waiver or indulgence of Developer's default may not be considered an estoppel against the City or TIRZ#3. (d) It is expressly understood that if at any time Developer is in default in any of its conditions or covenants of this Agreement, the failure on the part of the City to promptly avail itself of the rights and remedies that the City may have,will not be considered a waiver on the part of the City, but City may at any time avail itself of the rights or remedies or elect to terminate this Agreement on account of the default. Section 15. Available Funds. Developer specifically agrees that City and the TIRZ #3 shall only be liable to Developer for the actual amount of the money due Developer under this Agreement from TIRZ#3 funds,and shall not be liable to Developer for any actual or consequential damages, direct or indirect, interest, attorney fees, or cost of court for any act of default by City or the TIRZ#3 under the terms of this Agreement. Payment by City is strictly limited to the total amount of increment funds for TIRZ #3. City shall use its best efforts to anticipate economic conditions and to budget accordingly. However, it is further understood and agreed that,should the actual tax increment funds be less than the total amount paid to all contracting parties at the time,then in that event, all contracting parties shall receive only their pro rata share of the available increment funds for that year, as compared to each contracting parties'grant amount for that year, and City and the TIRZ#3 shall not be liable to for any deficiency at that time or at any time in the future. In 6 this event, City will provide all supporting documentation, as requested. Reimbursements paid to Developer shall require a written request from Developer accompanied by all necessary supporting documentation,as outlined in Section 2. Section 16. Notices. Any required written notices shall be sent by certified or registered mail, postage prepaid, addressed as follows: Developer: Frost Bank 3838 Rogers Road San Antonio,Texas 78401 Attn.: Properties Management Department with a copy to: Frost Bank 100 W. Houston Street,Suite 1270 San Antonio,Texas 78205 Attn.: Legal Affairs Department City: City of Corpus Christi Attn.: City Manager's Office Tax Increment Reinvestment Zone#3 P.O. Box 9277 Corpus Christi,Texas 78469-9277 Notice is effective on the third day after the date mailed, by certified or registered mail (in each case, return receipt requested, postage prepaid). Section 17. Amendments or Modifications. No amendments or modifications to this Agreement may be made, nor any provision waived, unless in writing signed by a person duly authorized to sign agreements on behalf of each party. Section 18. Captions. The captions in this Agreement are for convenience only and are not a part of this Agreement. The captions do not in any way limit or amplify the terms and provisions of this Agreement. Section 19. Severability. If for any reason,any section, paragraph,subdivision,clause, provision, phrase or word of this Agreement or the application of this Agreement to any person or circumstance is,to any extent, held illegal, invalid, or unenforceable under present or future law or by a final judgment of a court of competent jurisdiction, 7 then the remainder of this Agreement, or the application of the term or provision to persons or circumstances other than those as to which it is held illegal, invalid,or unenforceable,will not be affected by the law or judgment, for it is the definite intent of the parties to this Agreement that every section, paragraph,subdivision,clause, provision,phrase,or word of this Agreement be given full force and effect for its purpose. To the extent that any clause or provision is held illegal, invalid,or unenforceable under present or future law effective during the term of this Agreement,then the remainder of this Agreement is not affected by the law, and in lieu of any illegal, invalid, or unenforceable clause or provision, a clause or provision, as similar in terms to the illegal,invalid,or unenforceable clause or provision as may be possible and be legal, valid,and enforceable,will be added to this Agreement automatically. Section 20. Interpretation. For purposes of this Agreement, (a) the words "include," "includes," and "including" are deemed to be followed by the words"without limitation;" (b)the word "or" is not exclusive;and (c)the words"herein," "hereof," "hereby," "hereto," and "hereunder" refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x)to sections, schedules, and exhibits mean the sections of, and schedules and exhibits attached to,this Agreement; (y)to an agreement, instrument, or other document means such agreement, instrument, or other document as amended, supplemented, and modified from time to time to the extent permitted by the provisions thereof;and (z)to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The schedules and exhibits referred to herein shall be construed with, and as an integral part of,this Agreement to the same extent as if they were set forth verbatim herein. Section 21. Governing Law;Venue. This Agreement and all matters arising out of or relating to this Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas without giving effect to any choice or conflict of law provision or rule (whether of the State of Texas or any other jurisdiction).Venue for any legal action related to this Agreement is in Nueces County,Texas. Section 22. Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses. Section 23. No Third Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right,benefit,or remedy of any nature whatsoever under or by reason of this Agreement. 8 • Section 24. Sole Agreement. This Agreement constitutes the sole agreement between City and Developer. Any prior agreements, promises, negotiations, or representations,verbal or otherwise, not expressly stated in this Agreement, are of no force and effect. [Signatures on the following pages] 9 Z0Vg APPROVED AS TO FORM: ZZday of I(n.r^ `✓l , 2017. cLVLLA 13,664awitt,t4 Assistant City Attorney For City Attorney By: Jkaxw e t1�1 uuZ 3.AU I NUKIL.► City Manager/Designee SY Met Date: eft City of Corpus Christi on behalf of Tax Increment Reinvestment Zone#3 9EClRTAR1►i"P Attest: By: - l � Rebecca Huerta City Secretary Developer: Frost Bank,a Texas state bank By: lia-.)44 Name: S Aer►+ Title: GG, Vis;te Ptei- Date: [lac_ 2.4 a o r? 10 Exhibit A—Development/Improvements Exhibit B—Property Description Exhibit C—Estimated Project Costs Exhibit D—TIRZ#3 Reimbursement Request Form 11 Exhibit A—Development/Improvements New construction of a 70,000-square-foot five-story office building with structured and surface parking. In accordance with the Streetscape Zone Ordinance, exterior lighting will meet the specifications of the Illuminating Engineering Society of North America (IESNA) Guideline for Security Lighting for People, Property and Public Spaces. Pedestrian and safety lighting improvements will include sidewalks, perimeter of the property, perimeter of the building, and surface parking lots. Additional pedestrian improvements include designated improved walkways, at least one shade tree (not palm) every 25 feet and increased landscaping on perimeter of the Property. Renderings VoistAs 4 11111** 1110' IE 11111,1, o' 111111V f 11111* �+" ! Aruji 2 X2.1. 12 Night Time Renderings & Lighting Concepts io ear PIllti ,. I, 4 . � ' r; !NM x 4°"' o! 114 PO}Arlifi hl i i I II 'ali i it 0 ' " . J._ j m ii tb, dht„ I;1: Ii'it 4' ,llt I I1ijit l II . = in i LAMiM rn 13 Exhibit B—Property Description At time of approval,this property included 5 parcels to be re-platted. Once Re-Platted,the Developer will provide a single plat to the TIRZ#3 and it will be added as an addendum to this Agreement. Property ID: 200027436 Legal Description: SOUTH WATER BEACH LT 1 BK 5 Geographic ID: 8234-0005-0010 Type: Real Property Use Code: Property Use Description: Address: 501 SHORELINE BLVD S Corpus Christi, 78401 Neighborhood: SOUTH WATER BEACH Map ID: U-10 Neighborhood CD: S8234 Property ID: 200027439 Legal Description: SOUTH WATER BEACH BLK 5 LOT 2 Geographic ID: 8234-0005-0020 Type: Real Property Use Code: Property Use Description: Address: 505 SHORELINE BLVD S Corpus Christi, TX 78401 Neighborhood: SOUTH WATER BEACH Map ID: U-10 Neighborhood CD: S8234 Property ID: 200027442 Legal Description: SOUTH WATER BEACH LTS 3A AND 3B BK 5 Geographic ID: 8234-0005-0030 Agent Code: A1041 Type: Real Property Use Code: OFFICE' Property Use Description: OFFICE Address: 525 SHORELINE BLVD S Corpus Christi, 78401 Neighborhood: SOUTH WATER BEACH Map ID: U-10 Neighborhood CD: S8234 Property ID: 200027445 Legal Description: SOUTH WATER BEACH BLK 5 LOT 4 Geographic ID: 8234-0005-0040 Agent Code:A1041 Type: Real Property Use Code: Property Use Description: Address: 531 S SHORELINE BLVD Corpus Christi, TX 78401-3506 Neighborhood: SOUTH WATER BEACH Map ID: U-10 Neighborhood CD: S8234 Property ID: 200027448 Legal Description: SOUTH WATER BEACH BLK 5 LOT 5 Geographic ID: 8234-0005-0050 Agent Code:A1004 Type: Real Property Use Code: OFFICE Property Use Description: OFFICE Address: 555 SHORELINE BLVD S Corpus Christi, 78401 Neighborhood: SOUTH WATER BEACH Map ID: U-10 Neighborhood CD: S8234 Both Metes& Bounds, Plat or Survey will be separate pages. 14 Exhibit C—Project Costs Improvement Estimated Cost Category 1) Landscape/Irrigation 350,000 Urban Design/Landscaping 2) Pedestrian/Site Lighting 250,000 Urban Design/Landscaping Total Possible Reimbursement(Needs Based): 600,000 *Total Possible Reimbursement/Reimbursement Basis identifies the Project Costs that make the Development eligible under the Incentive Guidelines.The Actual Reimbursement is identified in Section 1 of the Agreement. 15 Exhibit D—Request for Reimbursement Form City of Corpus Christi—City Manager's Office Corpus Christi Downtown Management District Tax Increment Reinvestment Zone #3 Request for Reimbursement Project Name: Grant Program: Type of Reimbursement: DOne Time ❑Re-Occurring(First Payment) Requestor: Date Requested: Improvement E rtimated Cost Actual cost Invoice per aronertesisq per annum oxer+:.) Revere w 1) 2) 3) 4) 5) TOTAL Attached is the Following: 1'I Executed T1RZ#3 Reimbursement Agreerren: n 2'I Certificate of Occupancy Date: ❑ 3) Docurnentation of Expenses ❑ Signatures for Submittal: Authorized Developer: Date: Authorized General Contractor: Date: An incomplete Requestfor Reinbrusenrent ad not be processed Sublet o hard copy and=Wined POF version maryssoSeccrexas.corn.Upon leceiptofRegnesa:fired inspection w besdreduled. Signatures for Approval Process Request Recd By City: Date: Documentation Complete: inspection of Project: Notes: Reimbursement Approved by TIRZ#3 Board: Date: Tax Increment Reinvestment Zone R5 Request four Reimbursement updated October 2015 16