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HomeMy WebLinkAboutResolution No. 2010-008 RESOLUTION NO. 2010- 000 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS, APPROVING THE ECONOMIC DEVELOPMENT AGREEMENT BY AND BETWEEN THE COLONY ECONOMIC DEVELOPMENT CORPORATION AND RUTH VENDING, INC. AND JUMBO SHOTS, INC., WHICH IS ATTACHED HERETO AND INCORPORATED HEREIN AS EXHIBIT A; AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the Bylaws of The Colony Economic Development Corporation, a Type A Economic Development Corporation as defined by state law, require that economic development grants in excess of one hundred thousand ($100,000.00) dollars be approved by the City Council; and WHEREAS, Ruth Vending, Inc. and Jumbo Shots, Inc. has applied for a grant of funds and The Colony Economic Development Corporation has determined, and finds that the relocation of the Company to the City will promote new and expanded business enterprises in the City and qualifies as a "project" under the Act; and WHEREAS, the City Council, after review of the Agreement, hereby approves the Economic Development Agreement by and between The Colony Economic Development Corporation and Ruth Vending, Inc. and Jumbo Shots, Inc. and hereby authorizes the Mayor to execute all documents, if any, related to said Agreement on behalf of the City of The Colony. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS THAT: Section 1. The City Council hereby approves the Economic Development Agreement by and between The Colony Economic Development Corporation and Ruth Vending, Inc. and Jumbo Shots, Inc., which is attached hereto and incorporated herein as Exhibit A. Section 2. The Mayor is hereby authorized to execute any and all documents necessary, if any, relative to the Economic Development Agreement. Section 3. This Resolution shall become effective immediately from and after its passage, as the law and charter in such cases provides. PASSED, APPROVED and EFFECTIVE this 19th day of January, 2010. J e McCo rry, Mayor ATTEST: mot'. I Christie Wilson, City Secretary, . APPRO D AS TO FORM: Robert E. Hager, C' Attorney B (REH/cdb) =;t g TM 40760.76.1113009 ORIGINAL STATE OF TEXAS § § ECONOMIC DEVELOPMENT AGREEMENT COUNTY OF DENTON § This Economic Development Agreement ("Agreement") is made by and between The Colony Economic Development Corporation ("TCEDC") and Ruth Vending, Inc. and Jumbo Shots, Inc., doing business as Tuffronts and/or Jumbo Shots (collectively, the "Company"), acting by and through their respective authorized officers. WITNESSETH: WHEREAS, the Company operates a "themed" front for vending machines and desires to expand its operations in the City; and WHEREAS, Company has leased or intends to lease approximately 25,000 square feet of space in the Cascades located at 6300 Fallwater, The City of the Colony, Texas 75056 (the "Improvements") for a period of at least five (5) years (the" Lease") and intends to relocate its "themed front" vending machine operations to the Improvements; and WHEREAS, the Company had advised TCEDC that a contributing factor that would induce the Company to continue to relocate to and occupy the Improvements would be an agreement by TCEDC to provide an economic development grant to defray a portion of the costs of relocation to the Improvements; and WHEREAS, TCEDC has adopted programs for promoting economic development; and WHEREAS, the Development Corporation Act, Chapters 501-505 of the Texas Local Government Code (the "Act"), authorizes TCEDC to provide economic development grants for expenditures to promote or develop new or expanded business enterprises and other projects as defined by the Act; and WHEREAS, the TCEDC Board of Directors has determined, and finds that the relocation of the Company to the City will promote new and expanded business enterprises in the City and qualifies as a "project" under the Act; and WHEREAS, TCEDC has determined that making economic development grants to Company in accordance with this Agreement will further the objectives of TCEDC and will benefit TCEDC and the inhabitants of the City; NOW THEREFORE, in consideration of the foregoing, and on the terms and conditions hereinafter set forth, and for other valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: TCEDC/Ruth Vending, Inc. and Jumbo Shots Economic Development Agreement - Page 1 40265 Article I Definitions Wherever used in this Agreement, the following terms shall have the meanings ascribed to them: "Annual Grant" shall mean five (5) annual payments consisting of the aggregate payment of the Property Tax Grant and the Sales Tax Grant not to exceed the Maximum Grant Amount. "Capital Investment" shall mean the total capitalized cost of the Company for the relocation to the Improvements. "City" shall mean The City of The Colony, Texas. "Company" shall mean, collectively, Ruth Vending, Inc. and Jumbo Shots, Inc., doing business as Tuffronts and/or Jumbo Shots. "Consummated" shall have the same meaning assigned by the Texas Tax Code. "Employment Positions" shall mean non-temporary, full-time Primary Jobs eligible for employee benefits that have been created, maintained and filled at the Improvements. In the event of voluntary or involuntary termination of an employee, which termination causes the number of Employment Positions to fall below the number of required Employment Positions pursuant to this Agreement, the Company shall not be in default provided the required number of Employment Positions is re-established within sixty (60) days of the employee termination. Two (2) or more part-time employees totaling thirty (30) hours or more per week may be substituted for one (1) full-time employee. "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 such party's Land 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. "Expiration Date" shall mean the sixth (6th) anniversary date of the Lease Inception Date. "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, government or de facto TCEDC/Ruth Vending, Inc. and Jumbo Shots Economic Development Agreement - Page 2 40265 governmental action (unless caused by acts of omissions of the party), fires, explosions or floods, strikes, slowdowns or work stoppages. "Freeport Goods" shall have the same meaning as assigned by Section 11.251 of the Texas Tax Code and Article VIII, Section 1 j of the Texas Constitution and located on the Property. Freeport Goods does not include "Goods in Transit" as defined by Texas Tax Code, Section 11.253. "Goods in Transit" shall have the same meaning assigned by Texas Tax Code, Section 11.253. "Grant Period" shall mean twelve (12) consecutive months immediately preceding the Annual Payment Date except the first Grant Period shall begin on the first day of the calendar month in which the Lease Inception Date occurs and end the last date of the twelfth (12th) calendar month thereafter. Thereafter, Grant Period shall mean each of four (4) consecutive periods of twelve (12) consecutive calendar months each, following the first Grant Period. For example assume the Lease Inception Date is January 15, 2010 then the first Grant Period would be Januaryl, 2010 through and including January 31, 2010. "Grants" shall collectively mean the Property Tax Grant, the Sales Tax Grant and the Relocation Grant. "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 and/or any of the respective owners of the Land with respect to any property or any business owned or controlled by Company and/or the respective owners of the Land within the City. "Improvements" shall mean approximately 25,000 square feet of space in the Cascades located at 6300 Fallwater, The City of The Colony, Texas "Lease" shall mean the Company's lease of the Improvements for a period of at least five (5) years beginning the Lease Inception Date. "Lease Inception Date" shall mean the commencement date of the Lease term for the Improvements, but no later than March 31, 2010. "Payment Request" shall mean a written request from the Company to the TCEDC for payment of the Relocation Grant or the annual Sales Tax Grant accompanied by receipts and invoices for the moving costs incurred and paid by the Company to relocate to the Improvements, and the amount of Sales Tax for the applicable Grant Period, and such other evidence as may be reasonably requested by the TCEDC, as the case may be. TCEDC/Ruth Vending, Inc. and Jumbo Shots Economic Development Agreement - Page 3 40265 "Primary Jobs" shall have the same meaning as assigned by Section 501.002(12) of the Texas Local Government Code and shall mean non-temporary, full-time Company employment positions eligible for employee benefits and located at the Improvements. "Property Tax Grant(s)" shall mean annual economic development grants to be provided by the TCEDC in an amount equal to one hundred percent (100%) of the ad valorem tax assessed by the City against the Tangible Personal Property for a given tax year for a period of five (5) consecutive tax years beginning with the first calendar year following the Lease Inception Date, to be paid as set forth herein. "Relocation Grant" shall mean an economic development grant equal to the actual costs paid and incurred by the Company for moving expenses to the Improvements not to exceed $25,000.00, to be paid as set forth herein. "Required Use" shall mean the Company's continuous lease and occupancy of the Improvements and the Company's continuous operation of its "themed" fronts vending machine business which services the sign manufacturing industry at the Improvements. "Sales Tax Grant" shall mean an annual economic development grant equal to one hundred percent (100 of the Sales and Use Tax for the applicable Grant Period "Sales and Use Tax" shall mean City's receipts from the State of Texas from the collection of the local sales tax collected by the State of Texas in the amount of one percent (1%) imposed by the City pursuant to Chapter 321, Texas Tax Code (it being expressly understood that the City's one percent (1%) sales and use tax receipts are being used only as a measurement for its participation through the use of general funds), as the result of the sale of Taxable Items by the Company Consummated at the Improvements in the City for the applicable Grant Period "Tangible Personal Property" shall have the same meaning assigned by Tax Code, Section 1.04 and shall mean all tangible personal property, equipment, fixtures, and machinery, but excluding inventory and supplies, owned or leased by the Company and located on the Land at the Project on January 1 of each applicable tax year. "Taxable Items" shall mean taxable services and taxable items as those terms are defined by the Texas Tax Code. "Taxable Value" shall mean the appraised value as certified by the appraisal district, or its successor, for a given year. "TCEDC" shall mean The Colony Economic Development Corporation. TCEDC/Ruth Vending, Inc. and Jumbo Shots Economic Development Agreement - Page 4 40265 Article II Term The term of this Agreement shall begin on the last date of execution hereof (the "Effective Date") and continue until the Expiration Date, unless sooner terminated as provided herein. Article III Economic Development Grants 3.1 Property Tax Grants. Subject to the Company's continued satisfaction of all the terms and conditions of this Agreement, and the Company's obligation to repay the Grants pursuant to Section 5.2 hereof, the TCEDC agrees to provide the Company with the Property Tax Grants to be paid on March 1 of each calendar year, (or the immediately following business day if March 1 is not a business day), beginning with March 1 of the first full calendar year following the Lease Inception Date, provided the Company has paid prior to delinquency the ad valorem taxes assessed against the Tangible Personal Property in full for the respective tax year (i.e., the tax year immediately preceding the year in which an Property Tax Grant is made; and such ad valorem taxes with respect to that immediately preceding tax year are used to determine the amount of each Property Tax Grant). For illustration purposes only, assume that the Lease Inception Date is January 15, 2010 and ad valorem taxes assessed against the Tangible Personal Property for tax year 2011 is $10,000.00 then the first Property Tax Grant for the Tangible Personal Property would be for Tax Year 2011 in the amount of $10,000.00, and would be paid on March 1, 2012. 3.2 Sales Tax Grants. Subject to the continued satisfaction of all the terms and conditions of this Agreement by the Company and the obligation of the Company to repay the Grants pursuant to Section 5.2 hereof, the TCEDC agrees to provide Company with five (5) annual Sales Tax Grants. The annual Sales Tax Grants shall be paid within thirty (30) days after TCEDC receipt of a Payment Request following the end of each Grant Period (the "Annual Sales Tax Grant Payment Date"). Each Payment Request for payment of the annual Sales Tax Grant shall be submitted to the TCEDC not later than thirty (30) days prior to the Annual Sales Tax Grant Payment Date of each calendar year. For illustration purposes, assume the Lease Inception Date is January 15, 2010, in which case the first Grant Period would begin January 1, 2010 and end December 31, 2010, and the first annual Sales Tax Grant would be paid within thirty (30) days after TCEDC receipt of the Payment Request following December 31, 2010 (the "Annual Sales Tax Grant Payment Date"), and the applicable Grant Period would be January 1, 2010 through and including December 31, 2010. Thereafter, the Grant Period would be the consecutive twelve (12) month period of January 1 through and including December 31 of the calendar year. The amount of the first annual Sales Tax Grant shall be the amount of the Sales Tax for the Grant Period from January 1, 2010 through and including December 31, 2010. TCEDC/Ruth Vending, Inc. and Jumbo Shots Economic Development Agreement - Page 5 40265 3.3 Relocation Grant. Subject to the continued satisfaction of all the terms and conditions of this Agreement by the Company and the obligation of the Company to repay the Grants pursuant to Section 5.2 hereof, the TCEDC agrees to provide Company with the Relocation Grant to be paid within thirty (30) days after TCEDC receipt of a Payment Request following the Lease Inception Date. 3.4 Current Revenue. The Grants made hereunder shall be paid solely from lawful available funds that have been appropriated by TCEDC. Under no circumstances shall the obligations of TCEDC hereunder be deemed to create any debt within the meaning of any constitutional or statutory provision. Consequently, notwithstanding any other provision of this Agreement, TCEDC shall have no obligation or liability to pay any portion of the Grant unless the TCEDC appropriates funds to make such payment during the budget year in which the Grant is payable. Further, TCEDC shall not be obligated to pay any commercial bank, lender or similar institution for any loan or credit agreement made by Company. None of the obligations of the TCEDC under this Agreement shall be pledged or otherwise encumbered in favor of any commercial lender and/or similar financial institution. Article IV Conditions to Economic Development Grant The obligation of the TCEDC to pay the Grants hereunder shall be conditioned upon the continued compliance and satisfaction of the terms and conditions of the Agreement by the Company and each of the following conditions. 4.1 Payment Request. Company shall have submitted the applicable Payment Request. 4.2 Good Standing. Company shall not have an uncured breach or default of this Agreement. 4.3 Capital Investment. The Capital Investment shall be at least equal to or greater than the amount of the Grants as of the first anniversary of the Lease Inception Date. 4.4 Employment Positions. During the term of this Agreement following the Lease Inception Date and continuing thereafter until the Expiration Date the Company shall create, fill and maintain at least fifteen (15) Employment Positions. 4.5 Required Use. During the term of this Agreement following the Lease Inception Date and continuing thereafter until the Expiration Date, the Company agrees to continuously lease and occupy the Improvements and shall not allow the operation of the Improvements in conformance with the Required Use to cease for more than thirty (30) days except in connection with, and to the extent of an event of a Force Majeure. TCEDC/Ruth Vending, Inc. and Jumbo Shots Economic Development Agreement - Page 6 40265 4.6 Lease. The Company shall have entered into the Lease on or before March 31, 2010; and provided a fully executed copy thereof to the TCEDC on or before March 31, 2010. Article V Termination 5.1 This Agreement shall terminate upon any one or more of the following: (a) by written agreement of the parties; (b) Expiration Date; (c) 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; (d) by TCEDC if Company suffers an Event of Bankruptcy or Insolvency; (e) by TCEDC if any Impositions owed to the City by Company shall become delinquent (provided, however the Company retains the right to timely and properly protest and contest any such Impositions); and (f) by TCEDC 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 the Agreement is terminated by TCEDC pursuant to Section 5.1(c), (d), (e), or (f) the Company shall immediately repay to TCEDC the total amount of the Grant paid to the Company as of the date of termination, plus interest at the rate of interest periodically announced by the Wall Street Journal as the prime or base commercial lending rate, or if the Wall Street Journal shall ever cease to exist or cease to announce a prime or base lending rate, then at the annual rate of interest from time to time announced by Citibank, N.A. (or by any other New York money center bank selected by TCEDC) as its prime or base commercial lending rate, from the Effective Date until paid. The payment obligation of Company set forth in this section 5.2 shall survive termination. 5.3 Right of Offset. The TCEDC may at its option, offset any amounts due and payable under this Agreement against any debt (including taxes) lawfully due to the City and/or the TCEDC from the Company, regardless of whether the amount due arises pursuant to the terms of this Agreement or otherwise and regardless of whether or not the debt due the City and/or the TCEDC has been reduced to judgment by a court. TCEDC/Ruth Vending, Inc. and Jumbo Shots Economic Development Agreement - Page 7 40265 Article VI Miscellaneous 6.1 Binding Agreement. The terms and conditions of this Agreement are binding upon the successors and assigns of all parties hereto. This Agreement may not be assigned without the prior written consent of TCEDC. 6.2 Limitation on Liability. 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. It is understood and agreed between the parties that Company, in satisfying the conditions of this Agreement, has acted independently and TCEDC assumes no responsibilities or liabilities to third parties in connection with these actions. Company agrees to indemnify and hold harmless TCEDC and the City from all such claims, suits, and causes of actions, liabilities and expenses, including reasonable attorney's fees, of any nature whatsoever arising out of the Company's breach of this Agreement. 6.3 Authorization. Each party represents that it has full capacity and authority to grant all rights and assume all obligations that is granted and assumed under this Agreement. 6.4 Notice. Any notice required or permitted to be delivered hereunder shall be deemed received three (3) days thereafter sent by United States Mail, postage prepaid, certified mail, return receipt requested, addressed to the party at the address set forth below or on the day actually received as set by courier or otherwise hand delivered. If Intended for TCEDC, to: With a copy to: Attn: Keri Sanford Attn: Peter G. Smith Director of Economic Development Nichols, Jackson, Dillard, Hager The Colony Economic Development Corp. & Smith, L.L.P. 6800 Main Street 1800 Lincoln Plaza The Colony, Texas 75056 500 North Akard Dallas, Texas 75201 If Intended for Company, to: Attn: Robert Liva Chief Executive Officer Ruth Vending, Inc./ Jumbo Shots, Inc. 11144 Ables Lane # 8 Dallas, Texas 75229 (972) 406-1989 - telephone (972) 620-1175 - fax TCEDC/Ruth Vending, Inc. and Jumbo Shots Economic Development Agreement - Page 8 40265 6.5 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. 6.6 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 Denton County, Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. 6.7 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 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. 6.8 Recitals. The recitals to this Agreement are incorporated herein. 6.9 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. 6.10 Exhibits. All exhibits to this Agreement are incorporated herein by reference for all purposes wherever reference is made to the same. 6.11 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. 6.12 Employment of Undocumented Workers. During the term of this Agreement the Company agrees not to knowingly employ any undocumented workers and if convicted of a violation under 8 U.S.C. Section 1324a (f), the Company shall repay the amount of the Grant and any other funds received by the Company from the TCEDC as of the date of such violation within 120 business days after the date the Company is notified by the TCEDC of such violation, plus interest at the rate periodically announced by the Wall Street Journal as the prime or base commercial lending rate, or if the Wall Street Journal shall ever cease to exist or cease to announce a prime or base lending rate, then at the annual rate of interest from time to time announced by Citibank, N.A. (or by any other New York money center bank selected by the TCEDC) as its prime or base commercial lending rate, from the date of such notice until paid. 6.13 Condition Precedent. This Agreement is subject to and conditioned upon the: (i) the Company entering into the Lease on or before March 31, 2010; and (ii) the TCEDC/Ruth Vending, Inc. and Jumbo Shots Economic Development Agreement - Page 9 40265 Company providing the TCEDC with a fully executed copy of the Lease on or before March 31, 2010. (Signature page to follow) TCEDC/Ruth Vending, Inc. and Jumbo Shots Economic Development Agreement - Page 10 40265 Executed on this ! day of J7'0w"O~ , 2010. THE COLONY ECONOMIC DEVELOPMENT CORPORATION By: ~..-L. 7 Tom Tvardzik, President APPROVED BY: THE CITY OF THE COLONY By: Joe McC rry, Mayor Executed on this 0A- day of r 2010. RUTH VEN ING, INC., d/b/a Tuffronts By: W ik'-tk Robert Liva, Chief Executive Officer Executed on this o~ day of a0 fL c , 2010. JUMBO SHOTS, INC., d/b/a Jumbo Shots By: fl'A t'fA - Robert Liva, Chief Executive Officer TCEDC/Ruth Vending, Inc. and Jumbo Shots Economic Development Agreement - Page 11 40265