19-R-144 Amendment No. 3 to the EDC Incentive Agreement -Amazon.com ServicesRESOLUTION NO. 19 -R -144
A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ,
TEXAS AUTHORIZING AMENDMENT NO. 3 TO THE ECONOMIC
DEVELOPMENT INCENTIVE AGREEMENT AMONG THE CITY OF
SCHERTZ, THE CITY OF SCHERTZ ECONOMIC DEVELOPMENT
CORPORATION, GUADALUPE COUNTY, AND AMAZON.COM
SERVICES, INC.; AND OTHER MATTERS IN CONNECTION
THEREWITH
WHEREAS, the City of Schertz and the City of Schertz Economic Development
Corporation ( "SEDC ") adopted the Schertz Incentive Policy in May 2017 to guide and ensure
consistency when providing incentives within the City to promote economic development; and
WHEREAS, this Amendment amends that certain Economic Development Incentives
Agreement (Amazon.com.kydc LLC) between the Parties dated November 6, 2012, as amended
by that certain Amendment No. 1 to the Economic Development Incentives Agreement
(Amazon.com.kydc LLC), and Amendment No. 2 to the Economic Development Incentives
Agreement (Amazon.com.kydc LLC) (collectively, the "Agreement "); and
WHEREAS, according to a request dated December 21, 2018, the City, SEDC, and County
authorized the assignment of the Agreement from Amazon.com.kydc LLC to Amazon.com
Services, Inc.; and
WHEREAS, according to the 2018 Annual Report, the Developer reported a Taxable
Property of One Hundred Twenty -Four Million, Six Hundred -Eight Thousand, Three Hundred
Forty -Five and No/ 100 Dollars ($124,608,345.00) which is below the minimum requirement of at
least One Hundred Twenty -Five Million and No /100 Dollars ($125,000,000.00), which absent this
Amendment, would create a default under the Agreement (the "Taxable Property Shortfall "); and
WHEREAS, absent the Taxable Property Shortfall, the Developer would have been in
compliance with the Agreement; and
WHEREAS, the Parties wish to amend the Agreement to modify its terms related to the
satisfaction of the Taxable Property for the Calendar Year 2018 and address the Taxable Property
Shortfall whereby the Developer will remain compliant to the Agreement but will not be eligible
to receive a 2018 City Property Tax Incentive or 2018 County Property Tax Incentive; and
WHERAS, this Amendment does not extend or change the timeline specified in the
Agreement for the City Incentives or County Incentives in the schedule; and
WHEREAS, Section 8.9 of the Agreement provides that the Agreement may be amended
by a written agreement executed by the Parties; and
WHEREAS, on September 26, 2019, the SEDC Board of Directors met and authorized
Amendment No. 3 to the Economic Development Incentive Agreement subject to the approval by
the City of Schertz and Guadalupe County.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SCHERTZ, TEXAS THAT:
Section 1. The City Council hereby authorizes Amendment No. 3 to the Economic
Development Incentive Agreement hereto attached as Exhibit A subject to the subsequent
authorization by Guadalupe County.
Section 2. The recitals contained in the preamble hereof are hereby found to be true,
and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a
part of the judgment and findings of the City Council.
Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with
any provision of this Resolution are hereby repealed to the extent of such conflict, and the
provisions of this Resolution shall be and remain controlling as to the matters resolved herein.
Section 4. This Resolution shall be construed and enforced in accordance with the laws
of the State of Texas and the United States of America.
Section 5. If any provision of this Resolution or the application thereof to any person
or circumstance shall be held to be invalid, the remainder of this Resolution and the application of
such provision to other persons and circumstances shall nevertheless be valid, and the City Council
hereby declares that this Resolution would have been enacted without such invalid provision.
Section 6. It is officially found, determined, and declared that the meeting at which
this Resolution is adopted was open to the public and public notice of the time, place, and subject
matter of the public business to be considered at such meeting, including this Resolution, was
given, all as required by Chapter 551, Texas Government Code, as amended.
Section 7. This Resolution shall be in force and effect from and after its final passage,
and it is so resolved.
PASSED AND ADOPTED, this 22nd day of October, 2019.
CITY OF.�~TZ, TEXAS
Carpenter, Mayor
ATTEST:
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Exhibit A
AMENDMENT NO.3 TO THE
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT
(AMAZON.COM SERVICES, INC.)
AMENDMENT NO.3 TO THE
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT
(AMAZON.COM SERVICES, INC.)
This Amendment No. 3 to the Economic Development Incentives Agreement (this "Amendment ")
is entered into among the City of Schertz, Texas, a Texas home -rule municipality ( "City" or
"Schertz "), the City of Schertz Economic Development Corporation, a Texas non -profit industrial
development corporation ( "SEDC "), Guadalupe County, Texas, apolitical subdivision of the State
of Texas ( "County "), and Amazon.com Services, Inc., a Delaware limited liability company
( "Developer ", and collectively with Schertz, the SEDC, and the County, the "Parties ", and each
a "Party ") and is dated as of the date signed by the last Party hereto to be effective as of
2019 (the "Effective Date ").
RECITALS
WHEREAS, the City and the SEDC adopted the Schertz Incentive Policy in May 2017 to guide
and ensure consistency when providing incentives within the City to promote economic
development; and
WHEREAS, Section 381.004(b) of the Texas Local Government Code authorizes the County to
create a community and economic development program that stimulates business and commercial
activity in the county, and authorizes the commissioner's court to authorize another entity to
administer the program; and
WHEREAS, this Amendment amends that certain Economic Development Incentives Agreement
(Amazon.com.kyde LLC) between the Parties dated November 6, 2012, as amended by that certain
Amendment No. 1 to the Economic Development Incentives Agreement (Amazon.com.kydc
LLC), and Amendment No. 2 to the Economic Development Incentives Agreement
(Amazon.com.kydc LLC) (collectively, the "Agreement "); and
WIIERAS, according to a request dated December 21, 2018, the City, SEDC, and County
authorized the assignment of the Agreement from Amazon.com.kydc LLC to Amazon.com
Services, Inc.; and
WHEREAS, according to the 2018 Annual Report, the Developer reported a Taxable Property of
One Hundred Twenty -Four Million, Six Hundred -Eight Thousand, Three Hundred Forty -Five and
No /100 Dollars ($124,608,345.00) which is below the minimum requirement of at least One
Hundred Twenty-Five Million and No /100 Dollars ($125,000,000.00), which absent this
Amendment, would create a default under the Agreement (the "Taxable Property Shortfall "); and
WHEREAS, absent the Taxable Property Shortfall, the Developer would have been in compliance
with the Agreement; and
WHEREAS, the Parties wish to amend the Agreement to modify its terms related to the satisfaction
of the Taxable Property for the Calendar Year 2018 and address the Taxable Property Shortfall
whereby the Developer will remain compliant to the Agreement but will not be eligible to receive
a 2018 City Property Tax Incentive or 2018 County Property Tax Incentive; and
WHERAS, this Amendment does not extend or change the timeline specified in the Agreement
for the City Incentives or County Incentives in the schedule; and
WHEREAS, Section 8.9 of the Agreement provides that the Agreement may be amended by a
written agreement executed by the Parties.
NOW, THEREFORE, in consideration of the mutual covenants, benefits and agreements described
and contained in this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and further described herein, the Parties agree as
follows:
AMENDMENT
1. Addition of Section 5.3(h)_= Taxable Proiert\ Safe Harbor. The following new
Section 5.1 h( is hereby added to the Agreement:
"(h) Taxable Property Safe Harbor.
(i) The parties hereby agree that a taxable property safe harbor shall be
received if the Developer fails to satisfy the minimum Taxable Property of at least
One Hundred Twenty -Five Million and No /100 Dollars ($125,000,000.00) but
achieves a Taxable Property of at least One Hundred Million and No /100
($100,000,000.00) (the "Taxable Property Safe Harbor "). Under a Taxable
Property Safe Harbor, the Developer will not be deemed to be in default or breach
of the Agreement. Under a Taxable Property Safe Harbor, the Developer shall
forfeit any City Incentive or County Incentive for that Calendar Year.
(ii) Example Scenario I. For example, if the Developer has a Taxable Property
value of One Hundred Twenty Million and No /I00 Dollars ($120,000,000.00), the
Developer would fail to receive the City Incentive or County Incentive for the given
year but would remain compliant to the Agreement.
(iii) Example Scenario II. For example, if the Developer has a Taxable Property
value of Ninety -five million and No /100 Dollars ($95,000,000.00), the Developer
would be in default of the Agreement and subject to Section 6.1 of the Agreement."
2. Amendment of Section 2.3 — Term. The following shall replace Section 2.3 of the
Agreement:
"Term. The term of this Agreement (the "Term ") shall begin on the Effective Date and
shall terminate on the later of (a) September 30, 2028, or (b) the date that is one (1) year after any
grant adjustment required in connection with Section 5.7 c , (the "ExAration Date "), unless
sooner terminated as provided herein."
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3. Addition of Section 5.3(i)
"53(i) Operational Requirement. Notwithstanding anything to the contrary contained in
the Agreement, and provided the Agreements remains in full force and effect as of January
1, 2024, then commencing January 1, 2024 and continuing to the Expiration Date, the
Developer's responsibility shall be limited to the Developer's continuous lease or
ownership operation of a fulfillment center in the Building (the "Operational Requirement
Period "). The ownership and operation of a fulfillment center may include other functions
and activities consistent with the Developer's business purposes, including but not limited
to an employee store, a product return center, and a sortation center (the "Required Use ").
During the Operational Requirement Period, the operation of the Building in conformance
with the Required Use shall not cease for more than thirty (30) continuous days except in
connection with, and to the extent of an event of a Force Majeure, a casualty to the Building
preventing the Developer from using the Building for the Required Use, or a temporary
cessation of operations for business purposes related to and consistent with the Company's
use of the Building for the Required Use, such as a temporary cessation of operations to
remodel or modernize the Building . The Developer shall not be responsible to maintain
the Minimum Number of Jobs, Minimum Annual Payroll, or Minimum Investment Value
of Taxable Property beyond December 31, 2023. Developer shall not sublease or vacate
any significant portion of the building without written consent of the Parties, which shall
not be reasonably denied.
4. Addition of 5.6 (m)
Throughout the Operational Requirement Period established in 5.3 (i), the Developer shall
provide the City, the SEDC, and the County, no later than sixty (60) calendar days
following the end of each Calendar Year, with a limited report consisting of a certification
letter confirming that the facility is operational in a manner consistent with the requirement
of 5.3(i). During the Operational Requirement Period, Developer shall not be required to
provide any reports or other information regarding jobs, value of taxable property or
taxable sales, including without limitation, the number of Full -Time Jobs, value of Taxable
Property, Project Taxable Sales, and Project Sales Taxes. Such report may be submitted
electronically to the person designated by each entity for receipt of said reports.
5. The following shall replace the first sentence of Section 6.1 of the Agreement:
"Subject to Section 8.12 and Section 5.3(h), this Agreement shall terminate upon the
occurrence of any one or more of the following:"
6. The following shall be added to the beginning of the first sentence of each Section
5.1, Section 5.3, Section 5.4, Section 5.5, and Section 5.6 of the Agreement:
"Subject to Section 5.3(i) with respect to the Operational Requirement Period,"
7. Amendment of Section 8.5 — Notices. The following shall replace Section 8.5 of
the Agreement:
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"Notice. Any notice required or permitted to be delivered hereunder shall be deemed
received (i) three (3) business 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, a recognized overnight
delivery service, or otherwise hand delivered.
The Developer: Amazon.com Services, Inc.
c/o Amazon.com, Inc.
Attention: Director of Economic Development
410 Terry Avenue North
Seattle, Washington 98109 -5210
With a cop � to:
Amazon.com Services, Inc.
c/o Amazon.com, Inc.
Attention: Real Estate Manager
410 Terry Avenue North
Seattle, Washington 98109 -5210
And with a co; v to:
Amazon.com Services, Inc.
c/o Amazon.com, Inc.
Attention: Economic Development Compliance
2121 7th Ave.
Seattle, Washington 98121
And with a col, �+ to:
Amazon.com Services, Inc.
c/o Amazon.com, Inc.
Attention: General Counsel
410 Terry Avenue North
Seattle, Washington 98109 -5210
The County: Guadalupe County, Texas
Attention County Judge's Office
101 E Court Street
Seguin, Texas 78155
Schertz: City of Schertz
Attention: City Manager
1400 Schertz Parkway
Schertz, TX 78154
4
With a co;) , to:
Denton Navarro Rocha Bernal & Zech PC
Attention: Charles E. Zech
2517 North Main Avenue
San Antonio, TX 78212
The SEDC: City of Schertz Economic Development Corporation
Attention: Exec. Dir. of Economic Development
1400 Schertz Parkway
Schertz, TX 78154
With a co v to:
Denton Navarro Rocha Bernal & Zech PC
Attention: Charles E. Zech
25I7 North Main Avenue
San Antonio, TX 78212
Any Party may designate a different address at any time upon written notice to the other
Parties.
8. No Defaults. Developer represents and warrants to the City, the SEDC, and the
County that to the best of the Developer's actual knowledge without additional investigation
or inquiry, as of the Effective Date no default, nor any event which upon notice or lapse of
time or both would constitute a default, has occurred, other than the Taxable Property Shortfall.
The City, the SEDC, and the County each individually on its own behalf represent and warrant
to Developer that to the best of their individual respective actual knowledge without additional
investigation or inquiry, as of the Effective Date no default, nor any event which upon notice
or lapse of time or both would constitute a default, has occurred, other than the Taxable
Property Shortfall.
9. Waiver and Ratification of the Agreement. The City, the SEDC and the County
each waive their right under the Agreement to declare Developer in default for the Taxable
Property Shortfall for the Calendar Year 2018. Developer represents and warrants that the
Agreement, as amended by this Amendment, is in full force and effect and ratifies the same.
The City, the SEDC and the County each individually on its own behalf represents and warrants
that the Agreement, as amended by this Amendment, is in full force and effect, and each
individually on its own behalf ratifies the same.
10. No Claims b� the Developer. Developer represents and warrants to the City, the
SEDC, and the County that to the best of the Developer's actual knowledge without additional
investigation or inquiry, as of the Effective Date the Developer does not have any claims
against the City, the SEDC, or the County with respect to the Agreement or this Amendment.
11. Entire Agreement; Conflict. Except as amended by this and previous
Amendment, the Agreement is and shall remain in full force and effect. This Amendment,
together with the Agreement as amended by this Amendment: (a) is intended by the Parties as
a final, complete and exclusive expression of the terms of their agreement, and (b) supersedes
all prior agreements and understandings between the Parties with respect to the subject matter
hereof. If there is a conflict between the Agreement and this Amendment, the terms of the
Amendment will prevail.
12. Counw rarts and Facsimile Deliver_ This Amendment may be executed in two
or more counterparts, each of which shall be deemed an original and all ofwhich taken together
shall be deemed to constitute one and the same document. The Parties may sign and deliver
this Amendment by facsimile transmission, via electronic mail or other electronic method
mutually acceptable to the Parties, including but not limited to DocuSign.
13. Cai,italized Terms. All capitalized terms used in this Amendment and not
defined in this Amendment have the meanings given to such terms in the Agreement.
14. SindinR Agreement. The terms and conditions of this Amendment are binding
upon the successors and permitted assigns of the Parties hereto.
15. Leal Construction. In the event any one or more of the provisions contained in
this Amendment 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 Amendment that in lieu of each provision that is found to
be illegal, invalid, or unenforceable, a provision shall be added to this Amendment which is
legal, valid, and enforceable and is as similar in terms as possible to the provision found to be
illegal, invalid or unenforceable to the extent that it does not deprive the Parties of the benefit
of the bargain and only to the extent permissible by law.
16. Governing Law. This Amendment shall be governed by the laws of the State of
Texas, and venue for any action concerning this Amendment shall be exclusively in the State
District Court of Guadalupe County, Texas. The Parties agree to submit to the jurisdiction of
said court.
[SIGNATURE PAGE IMMEDIATELY FOLLOWING]
0
SIGNATURE PAGE TO
AMENDMENT NO.3 TO THE
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT
(AMAZON.COM SERVICES, INC.)
Partner, Denton 'varro Rocha Bernal & Zech, P.C.
Legal Counsel to the City and the SEDC
APPROVED AS TO CONTENT:
Kyle Kinateder
SEDC Executive Director
7
Date
Date
SIGNATURE PAGE TO
AMENDMENT NO.3 TO THE
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT
(AMAZON.COM SERVICES, INC.)
In Witness Whereof, the Partiers have executed this Amendment as to the date(s) set forth
below to be effective as of the Effective Date.
The SEDC:
City of Schertz Economic Development
Corporation
a Texas non - profit industrial development
corporation
$y:
Paul Macaluso, President
Date Signed
THE STATE OF TEXAS §
COUNTY OF GUADALUPE §
This instrument was acknowledge before me on the day of D e, v 6 -41v_ , 2019, by
Paul Macaluso, President of the City of Schertz Economic Development Corporation, on behalf
of said non - profit industrial development corporation.
WMNM
t TART PU• StAll OF 1FXAS
141VOM4111�
8
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Not rry Public, Staten! Texas
Notary's typed or printed name
My commission expires
SIGNATURE PAGE TO
AMENDMENT NO.3 TO THE
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT
(AMAZON.COM SERVICES, INC.)
In Witness Whereof, the Partiers have executed this Amendment as to the date(s) set forth
below to be effective as of the Effective Date.
The County:
Guadalupe County, Texas
a political subdivision of the State of Texas
� y
By:
Kyle utscher, `ounty Judge
/0
Date Signed
THE STATE OF TEXAS §
COUNTY OF GUADALUPE §
This instrument was acknowledge before me on the _ day of 2019, by
Kyle Kutscher, the County Judge of Guadalupe County, Texas, a political subdivision of the
State of Texas, on behalf of said County.
TRICIA 0 TUMLINSON
Nt*
:Notary Public State of Texas
Commission# 8187119
Comm. Ems. pn. o1.2020
0
% - C /,� ., z ,
Notary Public, State of as
Notary's typed or printed name
My commission expires
SIGNATURE PAGE TO
AMENDMENT NO.3 TO THE
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT
(AMAZON.COM SERVICES, INC.)
In Witness Whereof, the Partiers have executed this Amendment as to the date(s) set forth
below to be effective as of the Effective Date.
The Developer:
Amazon.com Services, Inc.
a Delaware corporation
By-
-6011y Su ivy , Vice President
to I I aO101
Date Signed
\TftEQS,A kn mn , DC,
This instrument was acknowledge before me on the � — ' day of C)C_ C. r , 2019, by
Holly Sullivan, Vice President of Amazon.com Services, Inc, a Delaware corporation, on behalf
of said corporation.
NWHER E. LEASE
NaMPUBLICDISi' WOFCOUMM
MY CorrR ftm Evkm Mmd %, 2022
10
otary Public, x �h�Yl°j1 D C
Notary's typed or printed name
My commission expires