22-R-110- SEDC and 3009 AOC Investments, LLCRESOLUTION NO. 22-R-110
A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF
SCHERTZ, TEXAS AUTHORIZING AN ECONOMIC DEVELOPMENT
PERFORMANCE AGREEMENT BETWEEN THE CITY OF SCHERTZ,
CITY OF SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
AND 3009 OAC INVESTMENTS, LLC; AND OTHER MATTERS IN
CONNECTION THEREWITH
WHEREAS, the City of Schertz Economic Development Corporation ( "SEDC ") is a non-
profit industrial development corporation duly established under the Development Corporation
Act of 1979, as amended (Section 501.001 et seq. Texas Local Government Code, formerly the
Development Corporation Act of 1979) (the "Act ");
WHEREAS, all of the powers of the corporation are vested in the SEDC Board of
Directors (the "Board ") appointed by the governing body of the corporation's authorizing unit;
and
WHEREAS, the Act authorizes a development corporation to fund certain projects as
defined by the Act and request development corporations enter into performance agreements to
establish and provide for the direct incentive or make an expenditure on behalf of a business
enterprise under a project; and
WHEREAS, by Ordinance No. 12 -T -15, the City established a City of Schertz Economic
Development Incentives Policy under Chapter 380, Texas Local Government Code, as amended
( "Chapter 380 "), and under the Development Corporation Act, Texas Local Government Code
Chapters 501 and 505, as amended (the "Development Corporation Act "), to promote economic
development and to stimulate business and commercial activity in the City; and
WHEREAS, in accordance with Article III, Section 52 -a of the Texas Constitution, and
Section 380.001 of the Texas Local Government Code ( "Section 380 "), the City may establish
and provide for the administration of a program for making loans and grants of public money to
promote state or local economic development and to stimulate business and commercial activity
in the City; provided the program created or loan or grant made is not secured by a pledge of ad
valorem taxes or financed by the issuance of any bonds or other obligations payable from ad
valorem taxes of the City; and
WHEREAS, City and the SEDC are willing to participate in enhancing, expanding, and
retaining businesses within the City that are qualified economic development prospects; and
WHEREAS, Developer owns approximately 1.3 acres of real property in the City,
generally described as Lot 1, Block 1 of the Blackburn Subdivision, as depicted in the attached
Exhibit "A" (the "Property"); and
A -1
WHEREAS, Developer intends to develop the Property primarily as a commercial/retail
project consisting initially of an approximately 9,900 square foot office building (the "Project,"
as more fully shown in the Project Site Plan attached as Exhibit "B" that will require significant
investment, including the construction of public improvements and infrastructure; and
WHEREAS, the Property currently has an assessed value of $497,173.00, currently
generates less than $2,550 in annual ad valorem property taxes for the City, and currently
generates no sales tax for the City; and
WHEREAS, the Developer expects a total investment of approximately $3 million for the
development of the Project; and
WHEREAS, upon completion of the Project, the Property may potentially have an
appraised value of over $2,000,000; and
WHEREAS, Developer shall create and maintain a minimum ten (10) full -time
equivalent jobs during the entire term of this Agreement; and,
WHEREAS, the Project includes significant public infrastructure improvements, such as
the construction of public roads and other traffic improvements, the construction of water, sewer
and other utility infrastructure, and the construction of drainage improvements; and
WHEREAS, Section 501.103 authorizes expenditures for certain infrastructure
improvement projects that are found by the board of directors to be required or suitable for
infrastructure necessary to promote or develop new or expanded business enterprises; and
WHEREAS, Section 501.158 of the Act requires an incentive agreement to provide at a
minimum for a schedule of additional payroll or jobs to be created or retained and capital
investment to be made as consideration for any direct incentives provided or expenditures made
by the corporation under the agreement and to specify the terms under which repayment must be
made if the business enterprise does not meet the performance requirements specified in the
agreement; and
WHEREAS, Section 505.159 of the Act requires that a corporation hold at least one
public hearing on the proposed project before spending money to undertake the project, the
public hearing was held on August 25, 2022; and
WHEREAS, Section 501.073 of the Act requires the SEDC's authorizing unit to approve
all programs and expenditures.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SCHERTZ TEXAS THAT:
Section 1. The City Council hereby approve the Economic Development Performance
Agreement and the assistance approved by the City of Schertz Economic Development
2
Corporation hereto as Exhibit C and authorizes the City Manager to execute same, in
substantially the same form as attached.
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 Board.
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 board
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 day of 622.
,
CITY OF SCHERTZ TEXAS
Ra p i Gutierrez, Mayor
ATTEST:
Interim City Secretary
Exhibit A
Exhibit B
ECONOMIC DEVELOPMENT AGREEMENT
STATE OF TEXAS
,0111U1 M in III 1111 W 0
THIS AGREEMENT ( "Agreement ") by and between the CITY OF SCHERTZ, TEXAS,
a Texas municipal corporation (the "City"), the Schertz Economic Development Corporation, a
Texas Non - profit Type B Development Corporation (hereinafter referred to as "SEDC ") and
3009 OAC Investments, LLC, a Texas limited liability company, its successors or assigns
( "Developer "), (City, SEDC and Developer collectively referred to as the "Parties" and
sometimes individually as a "Party"), is entered into upon the "Effective Date," as more clearly
defined herein.
WHEREAS, by Ordinance No. 12 -T -15, the City established a City of Schertz Economic
Development Incentives Policy under Chapter 380, Texas Local Government Code, as amended
( "Chapter 380 "), and under the Development Corporation Act, Texas Local Government Code
Chapters 501 and 505, as amended (the "Development Corporation Act "), to promote economic
development and to stimulate business and commercial activity in the City; and
WHEREAS, in accordance with Article III, Section 52 -a of the Texas Constitution, and Section
380.001 of the Texas Local Government Code ( "Section 380 "), the City may establish and
provide for the administration of a program for making loans and grants of public money to
promote state or local economic development and to stimulate business and commercial activity
in the City; provided the program created or loan or grant made is not secured by a pledge of ad
valorem taxes or financed by the issuance of any bonds or other obligations payable from ad
valorem taxes of the City; and
WHEREAS, City and the SEDC are willing to participate in enhancing, expanding, and
retaining businesses within the City that are qualified economic development prospects; and
WHEREAS, Developer owns approximately 1.3 acres of real property in the City, generally
described as Lot 1, Block 1 of the Blackburn Subdivision, as depicted in the attached Exhibit
"A" (the "Property"); and
WHEREAS, Developer intends to develop the Property primarily as a commercial /retail project
consisting initially of an approximately 9,900 square foot office building (the "Project," as more
fully shown in the Project Site Plan attached as Exhibit "B" that will require significant
investment, including the construction of public improvements and infrastructure; and
WHEREAS, the Property currently has an assessed value of $497,173.00, currently generates
less than $2,550 in annual ad valorem property taxes for the City, and currently generates no
sales tax for the City; and
WHEREAS, the Developer expects a total investment of approximately $3 million for the
development of the Project; and
WHEREAS, upon completion of the Project, the Property may potentially have an appraised
value of over $2,000,000; and
WHEREAS, Developer shall create and maintain a minimum one (1) full -time job and 40 -60
independent contractors equivalent jobs during the entire term of this Agreement; and,
WHEREAS, the Project includes significant public infrastructure improvements, such as the
construction of public roads and other traffic improvements, the construction of water, sewer and
other utility infrastructure, and the construction of drainage improvements; and
WHEREAS, Section 501.103 authorizes expenditures for certain infrastructure improvement
projects that are found by the board of directors to be required or suitable for infrastructure
necessary to promote or develop new or expanded business enterprises; and
WHEREAS, Section 501.158 of the Act requires an incentive agreement to provide at a
minimum for a schedule of additional payroll or jobs to be created or retained and capital
investment to be made as consideration for any direct incentives provided or expenditures made
by the corporation under the agreement and to specify the terms under which repayment must be
made if the business enterprise does not meet the performance requirements specified in the
agreement; and
WHEREAS, Section 501.073 of the Act requires the SEDC's authorizing unit to approve all
programs and expenditures.
WHEREAS, the Parties agree that the provisions of this Agreement substantially advance a
legitimate interest of the City and SEDC by providing public infrastructure, expanding the tax
base of the City, increasing employment, and promoting economic development.
NOW, THEREFORE, for and in consideration of the promises and the mutual agreements set
forth herein, the Parties hereby agree as follows:
ARTICLE I
RECITALS
1. Recitals. The recitals set forth above are declared true and correct by the Parties
and are hereby incorporated as part of this Agreement.
ARTICLE II
AUTHORITY AND TERM
1. Authority. The City's execution of this Agreement is authorized by the Texas
Constitution, Chapter 380 of the Texas Local Government Code, the City Charter and through
the appropriate approval by its governing body, and constitutes a valid and binding obligation of
the City. The SEDC's execution of this Agreement is authorized by Chapters 501 and 505 of the
Texas Local Government Code and through the appropriate approval by its governing body and
constitutes a valid and binding obligation of the SEDC. The Parties acknowledge that the
Developer is acting in reliance upon the City's and SEDC's performance of their respective
obligations under this Agreement in making the decision to commit substantial resources and.
money to the establishment of the Project.
2. Term. This Agreement shall become enforceable upon the Effective Date,
hereinafter established, and shall continue until the Expiration Date (the "Term "), unless
terminated sooner in accordance with Article VII. The "Expiration Date" shall mean the earlier
o£
A. The City's fulfillment of all obligations and conditions herein and the
reimbursement pursuant to the City Tax Reimbursement Grant and Public
Infrastructure Grant of the Maximum Grant Amount to Developer; or
B. Ten (10) years from the last day of the First Full Grant Period.
3. Purpose. The purpose of this Agreement is to formalize the agreements between
the City, SEDC and Developer for the granting of public funds in the form of Infrastructure
Reimbursement Grants to assist with costs associated with Developer's Project and specifically
state the covenants, representations of the Parties associated with Developer's commitment to
abide by the terms of this Agreement which has been approved by the Parties as complying with
the specific requirements of the state law. It is expressly agreed that this Agreement constitutes
a single transaction. A failure to perform any obligation by the Developer may constitute a
breach of the entire Agreement and terminate any further commitments (if any) by the City and
SEDC unless an alternative penalty or remedy is provided for herein.
4. Administration of A greement. Upon the Effective Date, the City and SEDC
delegate the administration and oversight of this Agreement to the Executive Director of the
SEDC. All current or future administration and reporting to the State of Texas associated with
Chapter 380 of the Texas Local Government Code is delegated to the City of Schertz. Any
proposed amendments to the Agreement shall require the approval of the Board of Directors of
the SEDC and the City Council of the City of Schertz, Texas.
ARTICLE III
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings ascribed below.
All undefined terms shall retain their usual and customary meaning as ascribed by common and
ordinary usage.
"City Infrastructure Grant" shall mean the City's payment to a Developer reimbursing
that Developer for 50% of ad valorem taxes paid to the City of Schertz on real property and
personal property and attributed to the Project above the Base Year value.
"Bankruptcy" or "Insolvency" shall mean the dissolution or termination of a Party's
existence as a going business, insolvency, appointment of receiver for any party of such Party's
property and such appointment is not terminated within ninety (90) days after such appointment
is initially made, any general assignment for the benefit of creditors, or the commencement of
any proceeding under any bankruptcy or insolvency laws by or against such party and such
proceeding is not dismissed within ninety (90) days after the filing thereof.
"Base Year Value" shall mean the value of the Property as of January 1, 2022.
"Certificate of Occupancy" shall mean the signed certificate issued by the City of Schertz
Inspections Division granting the Developer the right to occupy the Facility and confirming that
the entire work covered by the permit and plans are in place.
"Default" shall mean failure by any Party to timely and substantially comply with any
performance requirement, duty, or covenant if uncured within sixty (60) days of receiving
written notice from any other Party.
"Developer" shall mean 3009 OAC Investments, LLC, a Texas limited liability
Developer, and/or its successors and assigns.
"Effective Date" shall mean the date in which the Agreement is effective, which is the
date the Agreement is executed by all parties.
"First Full Grant Period" shall mean the period beginning on January 1 and ending on
December 31 for the year following the year in which the Project receives a certificate of
occupancy and begins operation.
"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 governmental action (unless caused by the intentionally
wrongful acts or omissions of a party), fires, explosions, floods, strikes, slowdowns, or work
stoppages. It shall not include reasonably foreseeable interruptions in the material supply chain.
"Full -Time Equivalent Employee" means an employee with a regular work schedule of at
least 32 hours per week.
"Grant(s)" shall collectively mean the City Infrastructure Grant and /or SEDC
Infrastructure Grant to be paid to Developer as set forth herein; subject, however, at all times to
the Maximum Grant Amount (as defined below).
"Grant Period" shall mean each successive one (1) calendar year period, starting with the
First Grant Period.
"Maximum Grant Amount" shall mean up to $25,000.00 in City Infrastructure Grant and
up to $25,000.00 in SEDC Infrastructure Grant for a total of no more than $50,000.
"Payment Request" shall mean a written request from Developer(s) to the Schertz
Economic Development Corporation for payment of the applicable Grant for the applicable
Grant Period.
"Project" shall mean the development of the Property and associated Public Infrastructure
within or adjacent to the Property. The Project shall consist of a commercial /retail development
consisting of approximately 9,900 square feet of office space and public and private
infrastructure. The Project shall comply generally in shape and form with the Project Site Plan,
attached hereto as Exhibit "B."
"Property" shall mean the real property described in Exhibit "A," upon which the
Project, authorized by this Agreement, shall be constructed.
"Public Infrastructure" shall mean the improvements constructed by the Developer
including, but not limited to, public roads, traffic improvements, utility infrastructure, drainage
facilities, and other infrastructure as may be illustrated in the Project Site Plan, attached hereto as
Exhibit "B ".
"State of Texas" shall mean the Office of the Texas Comptroller or its successor.
ARTICLE IV
ECONOMIC DEVELOPMENT INCENTIVES AND CONDITIONS
The Public Infrastructure shall be constructed by Developer, at no expense to the City,
and shall comply with the requirements of this Agreement and applicable ordinances rules and
regulations, of the City. The Public Infrastructure, combined with the bringing of office
development to Schertz, Texas, the increased tax revenue, and other benefits potentially created
by the Project, are intended to provide a catalyst to the economy of the City in numerous ways.
In exchange for construction of the Public Improvements and benefit conferred upon the City,
City agrees to provide Developer with the economic development incentives, which under no
circumstance shall exceed the Maximum Grant Amount, as outlined below.
1. City Infrastructure Grant. City shall provide a public infrastructure
reimbursement grant in an amount up to $25,000.00 for verified Developer public
infrastructure expenditures within the Project. City Infrastructure Grant shall be
paid on an annual basis in a maximum yearly amount of Fifty Percent (50 %) of
the annual ad valorem taxes paid to the City.
2. SEDC Infrastructure Grant. SEDC shall provide a public infrastructure
reimbursement grant in an amount up to $25,000.00 for verified Developer public
infrastructure expenditures within the Project. Said Infrastructure Grant shall be
paid within sixty (60) days after receipt of a copy of the Certificate of Occupancy.
3. The obligation of the City and SEDC to pay any Grants shall be conditioned. upon
Developer's continued compliance with and satisfaction of, in all material
respects, each of the applicable conditions set forth in this Agreement and
Table A.
Table A
Year Ending
Jobs
Minimum
Potential Infrastructure
Annual Report
December
Required
Property
Grant Payment as defined
Due
Value
in Article IV
Required
0-2022
1-2023
SEDC Infrastructure Grant
February 15,
$2,000,000
2024
2-2024
1
City Infrastructure Grant
February 15,
$2,000,000
2025
3-2025
1
City Infrastructure Grant
February 15,
_
2026
4-2026
1
$2,000,000
City Infrastructure Grant
February 15,
2027
1
$2,000,000
5 —2027
City Infrastructure Grant
February 15,
2028
February 15,
6 —2028
1
$2,000,000
City Infrastructure Grant
$2,000,000
2029
7 - 2029
1
City Infrastructure Grant
February 15,
_
$2,000,000
2030
8-2030
1
City Infrastructure Grant
February 15,
l
$2,000,000
2031
9 —2031
1
_
City Infrastructure Grant
February 15,
2032
City Infrastructure Grants are continued until the Maximum Grant Amount is reached or (10)
ears from the last day of the First Full Grant Period as described in Article II.
4. Required Reporting
Annual Report. The Company shall submit an Annual Certification Report (an
"Annual Report ") for the preceding Calendar Year to the Executive Director of
the Corporation each year not later than February 15'. The Annual Report should
substantially conform to the Form of Annual Certification Report attached as
Exhibit A to this Agreement. The first Annual Report will be due February 15',
2024.
Additional Reports, Information and Privacy.
(a) Upon written request by City, Developer shall within a reasonable time
provide additional information reasonably necessary to determine if Developer is
in compliance with this Agreement. All information required by this Agreement
shall be submitted to the City Manager at the address specified for giving notice
in this Agreement.
(b) All information provided by Developer to City under the required
reporting section shall be deemed confidential and shall not be provided to any
person outside City government and shall not be subject to public inspection in
accordance with the Texas Public Information Act, pursuant to section 552.110 of
the Texas Government Code. In the event a request is made for such information,
City will not disclose the information unless required to do so by the Attorney
General of Texas.
(c) The payment of all indebtedness and obligations incurred by Developer
in
connection with the development and construction of the Facility and the
operation of the Facility shall be solely the obligations of Developer. City shall
not be obligated to pay any indebtedness or obligations of Developer.
(d) Developer is obligated to make timely payment of Developer -owned Real
Property and Personal Property Taxes during the Term of this Agreement.
ARTICLE V
COVENANTS AND DUTIES
1. Developer's Covenants and Duties. Developer makes the following covenants
and warranties to the City and agrees to timely and fully perform such obligations and duties of
this Agreement. Any false or substantially misleading statements by Developer contained herein
or failure by Developer to timely and fully perform those obligations and duties of Developer
within this Agreement shall be an act of Default by the Developer after notice and opportunity to
cure as provided in this Agreement. Developer is responsible for complying with the conditions
provided herein.
(a) Developer is authorized to do business and is in good standing in the State
of Texas and shall remain in good standing in the State of Texas during the Term
of this Agreement.
(b) The execution of this Agreement has been duly authorized by Developer's
authorized agent, and the individual signing this Agreement is empowered to
execute such Agreement and bind the entity. Said authorization, signing, and
binding effect is not in material contravention of any law, rule, regulation, or of
the provisions of Developer's by -laws, or of any agreement or instrument to
which Developer is a party to or by which it may be bound.
(c) Developer is not a party to any Bankruptcy proceedings currently
pending or contemplated, and as of the date of Developer's execution of this
7
Agreement Developer has not been informed of any potential involuntary
Bankruptcy proceedings.
(d) To its current, actual knowledge, Developer has acquired and maintained
all necessary rights, licenses, permits, and authority to carry on its business in the
City and will continue to use its best efforts to maintain all necessary rights,
licenses, permits, and authority.
(e) Developer shall timely and fully comply with all of the terms and
conditions of this Agreement in all material respects.
(f) Developer agrees to complete, or cause to be completed, the Public
Improvements described herein at its sole cost and expense, except where
otherwise noted herein. Developer also agrees to obtain or cause to be obtained,
all necessary permits and approvals from City and/or all other governmental
agencies having jurisdiction over the construction of such Public Improvements to
the Property.
(g) Developer shall be responsible for paying, or causing to be paid, to City
and all other governmental agencies the cost of all applicable permit fees and
licenses required for construction of the portions of the Project for which
Developer is responsible. Developer may develop in accordance with the
ordinances, rules, and regulations of the City in effect as of the Effective Date,
unless specified otherwise in this Agreement.
(h) The cost of the Public Improvements and all other improvement expenses
associated with the Project shall be funded through the use of the Developer' own
capital or through credit secured solely by that Developer. Developer may use
any or part of the Property for which it has an ownership interest as collateral for
the construction loan or loans as required for the financing of the Project;
however, no property with a lien still attached may be offered to the City for
dedication.
(i) In accordance with Texas Government Code Chapter 2264.051, Developer
certifies that it, and all branches, divisions or departments of the Developer do not
and will not knowingly employ an undocumented worker, as that term is defined
in by Texas Government Code Chapter 2264.
0) Developer shall pay, or cause to be paid, monthly rates and charges for all
utilities (such as water, electricity, and sewer services) used by Developer in
regard to the development of the Project.
6. Citv's and SEDC's Covenants and Duties.
(a) City Grant Payments. Notwithstanding any provision herein to the
contrary, the City shall not be obligated to pay any amount that exceeds the
Maximum Grant Amount attributed to the City. Grant payments shall be made
from sources contemplated by this Agreement over a period not to exceed the
Expiration Date, subject to timely and full satisfaction of all applicable duties and
terms within this Agreement. Further, City's obligations to pay Developer shall
cease upon the earlier o£ (1) payment in full of the Maximum Grant Amount; (2)
reaching the Agreement's Expiration Date; or (3) Default by Developer.
(b) SEDC Grant Payments. Notwithstanding any provision herein to the
contrary, the SEDC shall not be obligated to pay any amount that exceeds the
Maximum Grant Amount attributed to the SEDC.
7. Substantial Compliance and Default. Failure by any Party to timely and
substantially comply with any performance requirement, duty, or covenant shall be considered an
act of "Default" by the failing Party if uncured within sixty (60) days of receiving written notice
from any other Party, subject to Force Majeure. Developer may request relief from performance
of any terms of this Agreement if Developer is prevented from compliance due to Force Majeure.
To obtain relief based on Force Majeure, Developer(s) shall submit a written request for consent
to the City, such consent not to be unreasonably withheld, delayed, or conditioned. Failure of
Developer to timely and substantially cure a Default will give the City the right to terminate this
Agreement as reasonably determined by the City Council of the City of Schertz, Texas.
(a) Construction. All Improvements constructed on or installed, including
personal property, within the Facility required by this Agreement shall be
completed within 730 days from the Effective Date, and failure to comply with
this section shall cause the automatic termination of this Agreement without the
need for any further action by City; and, City shall have no obligation to make
any Grant Payments to Developer. Enforcement of this section is subject to Force
Majeure. In the event of unforeseeable third -party delays, which are not Force
Majeure, and upon a reasonable showing by Developer that it has in good faith
commenced and is diligently pursuing the correction, removal, or abatement of
such delays by using commercially reasonable efforts, the City of Schertz City
Council may consent to and excuse any such delays.
(b) Full Time Employees. This section shall apply in any year that the
number of Full -Time Equivalent Employees falls below the number required by
this Agreement. The Grant Payments shall be prorated for each Year of the
Agreement in which the Developer fails to maintain the required number of
Employees for that year determined as follows:
(i) Full -Time Employees. Starting January 1, 2025, each year the
number of actual Full -Time Employees reported by Developer shall be
subtracted from the required number of Full -Time Employees and if the
difference is a positive number the Maximum Grant Amount shall be
reduced by multiplying the difference by $5,000.00. As an example, in
reporting year 2023 if the difference between the reported Full -Time
9
employees and required Full -Time employees is 1, the Maximum Grant
Amount shall be reduced by $5,000.00.
(c) Reports and Information. Developer's failure to timely and
substantially comply with the reporting requirements of this Agreement shall be a
default; and, City shall be under no obligation to make any Grant Payment until
compliance with such reporting requirements.
(d) Recapture. In the event of Default by the Developer, the City and SEDC
shall as the sole and exclusive remedy for Default hereunder, after providing
Company notice and an opportunity to cure, have the right to discontinue all
future Grant payments and recapture all amounts previously paid under this
Agreement (as applicable, the "Recaptured Amount ").
(i) The Recaptured Amount shall be paid by the Developer within one
hundred eighty (180) days after the date Developer is notified by the City
of such Default (the "Payment Date ") provided said Default was not
cured. In the event the Recaptured Amount is not repaid by the applicable
Payment Date, the unpaid portion thereof shall accrue interest at the rate
of two percent (2.00 %) per annum from the Effective Date until paid in
full.
ARTICLE VI
TERMINATION
1 Termination. This Agreement shall terminate upon the earliest occurrence of any
one or more of the following:
(a) The written agreement of the Parties;
(b) The Agreement's Expiration Date;
(c) Default by Developer and termination by the City.
2. Extension Beyond Term and Reimbursement. In recognition of the fact that
Grants are, by necessity, calculated and paid after taxes have been levied and paid to the City
and, therefore, will always be paid in arrears, the Expiration Date of this Agreement will be
extended until any and all Grants collected during the preceding year have been distributed
by the City to Developer.
ARTICLE VII
DISPUTE RESOLUTION
1. Mediation. If a dispute arises out of or relates to this Agreement or the breach
thereof, the Parties in dispute shall first in good faith seek to resolve the dispute through
negotiation between the upper management of each respective Party. If such dispute cannot be
settled through negotiation, the Parties in dispute agree to try in good faith to settle the dispute by
mediation under the Mediation Rules of the American Arbitration Association before resorting to
10
litigation, or some other dispute resolution procedure; provided that a Party may not invoke
mediation unless it has provided the other Party in dispute with written notice of the dispute and
has attempted in good faith to resolve such dispute through negotiation. The Parties in dispute
shall notify the Party not in dispute of any scheduled mediation at least fourteen (14) days prior
to the mediation. Notwithstanding the foregoing, any Party may seek immediate equitable relief,
without attempting to settle a dispute through mediation, in any case where such Party is entitled
to equitable relief by law, the terms of the Agreement, or otherwise. All costs of negotiation,
mediation, and arbitration collectively known as alternate dispute resolution ( "ADR ") shall be
assessed equally between the City and the Party in dispute with each party bearing their own
costs for attorneys' fees, experts, and other costs of ADR and any ensuing litigation. Any Party
not directly in dispute shall receive notice at least thirty days prior of any scheduled meditations
and/or arbitrations.
2. During the Term of this Agreement, if Developer files and / or pursues an
adversarial proceeding against the City or SEDC regarding this Agreement then, at the City's
and SEDC's option, all access to the Grants to that Developer provided for hereunder may be
deposited with a mutually acceptable escrow agent that will deposit such funds in an interest -
bearing account until the resolution of such adversarial proceeding.
ARTICLE VIII
MISCELLANEOUS
1. Binding Agreement. The terms and conditions of this Agreement shall be binding
on and inure to the benefit of the Parties, and their respective successors and assigns. The
Director of the Schertz Economic Development Corporation shall be responsible for the
administration of this Agreement and shall have the authority to execute any instruments, duly
approved by the City Council of the City of Schertz, Texas, on behalf of the City related thereto.
2. Mutual Assistance. City and Developer will do all things reasonably necessary or
appropriate to carry out the terms and provisions of this Agreement and to aid and assist each
other in carrying out such terms and provisions.
3. Representations and Warranties. City represents and warrants to Developer that
this Agreement is within their authority, and that they are duly authorized and empowered to
enter into this Agreement, unless otherwise ordered by a court of competent jurisdiction.
Developer represent and warrant to the City that each individually has the requisite authority to
enter into this Agreement.
Assignment. Developer shall have the right to assign all of their rights, duties, and obligations
under this Agreement for all or some of the Property to a duly qualified third party upon
approval by the City Council on behalf of the City. In addition, a Developer may assign its rights
to receive payment under this Agreement to a lender, and upon receipt of such assignment in
writing by the City, and the City's further receipt of a written notice from such lender to pay
such lender directly, the City will deliver amounts owing to such Developer hereunder to such
lender (payable to such lender) until such time such lender authorizes otherwise in writing, and
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City shall be entitled to rely on any such assignment, notice and/or authorization without
investigation.
4. Independent Contractors.
(a) It is expressly understood and agreed by all Parties hereto that in
performing their services hereunder, Developer at no time will be acting as agents
of the City or SEDC and that all consultants or contractors engaged by Developer
respectively will be independent contractors of the Developer; and nothing
contained in this Agreement is intended by the Parties to create a partnership or
joint venture between the Parties and any implication to the contrary is hereby
expressly disavowed. The Parties hereto understand and agree that neither the
City nor SEDC shall be liable for any claims that may be asserted by any third
party occurring in connection with services performed by each Developer
respectively under this Agreement, unless any such claims are due to the fault of
the City or SEDC.
(b) By entering into this Agreement, the Parties do not waive, and shall not be
deemed to have waived, any rights, immunities, or defenses either may have,
including the defense of parties, and nothing contained herein shall ever be
construed as a waiver of sovereign or official immunity by the City with such
rights being expressly reserved to the fullest extent authorized by law and to the
same extent which existed prior to the execution hereof.
(c) No employee of City, or any councilmember or agent of City, shall be
personally responsible for any liability arising under or growing out of this
Agreement; nor shall any board member of the SEDC.
5. Notice. Any notice required or permitted to be delivered hereunder shall be
deemed delivered by actual delivery at the time of such delivery, facsimile with receipt
confirmation at the time of transmission of such facsimile, or by depositing the same in the
United States Mail, postage prepaid and certified with return receipt requested, at the time of
such deposit, addressed to the Party at the address set forth below:
If intended for Cit y: City of Schertz
Attention: City Manager
1400 Schertz Parkway
Schertz, TX 78154
If intended for SEDC: Schertz Economic Development Corporation
Attention: Exec. Dir. of Economic Development
1400 Schertz Parkway
Schertz, TX 78154
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With a copy to:
Denton, Navarro, Rocha, Bernal, & Zech PC
Attention: T. Daniel Santee
2517 North Main Avenue
San Antonio, Texas 78212
If to Developer: 3009 OAC Investments, LLC
Attention: Nick Rispoli & Marlee Kutzer
18756 Stone Oak Pkwy Ste 102
San Antonio, TX 78258
nrispoli @cbharper.com & mkutzer @cbharper.com
With a copy to:
Langley & Banack
Attention: James Lowery
Address 745 E Mulberry Ave #700,
Address San Antonio, TX 78212
Any Party may designate a different address at any time upon written notice to the
other Party.
6. Governmental Records. All invoices, records and other documents required for
submission to the City pursuant to the terms of this Agreement are Governmental Records for the
purposes of Texas Penal Code Section 37.10.
7. Governing Law. The Agreement shall be governed by the laws of the State of
Texas, and the venue for any action concerning this Agreement shall be in Guadalupe County,
Texas. The Parties agree to submit to the personal and subject matter jurisdiction of said court.
8. Amendment. This Agreement may be amended by mutual written agreement of
the Parties, as approved by the City Council of the City of Schertz, Texas, and the SEDC Board
of Directors.
9. Legal Construction. In the event any one or more of the provisions contained in
this Agreement shall, for any reason, be held invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect other provisions of this Agreement,
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.
10. Interpretation. Each of the Parties has been represented by counsel of their
choosing in the negotiation and preparation of this Agreement. Regardless of which Party
prepared the initial draft of this Agreement, this Agreement shall, in the event of any dispute,
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whatever its meaning or application, be interpreted fairly and reasonably and neither more
strongly for or against any Party.
11. Pad inent of L anal Fees. Developer commits to reimburse the City for the
necessary legal fees and third -party consultant fees incurred by the City in the preparation of this
Agreement and any amendment to this Agreement requested by Developer. Timely payment
shall be made within 60 days of submittal of invoice to Developer by the City. Each Party shall
bear its own attorney's fees in connection with any dispute resolution necessary under this
Agreement.
12. Entire Agreement. This Agreement constitutes the entire agreement between the
Parties with respect to the subject matter covered in this Agreement. There is no other collateral
oral or written agreement between the Parties that, in any manner, relates to the subject matter of
this Agreement, except as provided for in any Exhibits attached hereto or duly approved
amendments to this Agreement.
13. Paragraph Headings. The paragraph headings contained in this Agreement are for
convenience only and will in no way enlarge or limit the scope or meaning of the various and
several paragraphs.
14. Countet-parts. 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.
15. Exhibits. Any Exhibits attached hereto are incorporated by reference for all
purposes.
16. 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.
17. Employment of Undocumented Workers. During the Term of this Agreement,
each Developer agrees to not knowingly employ any undocumented workers, and, if convicted of
a violation under 8 U.S.C. Section 1324a(1), that Developer shall be in Default and repay the
amount of the Grants and any other funds received by that Developer from the City as of the date
of such violation within one hundred twenty (120) days after the date the defaulting Developer is
notified by the City of such violation, plus interest at the rate of six percent (6.00 %) compounded
annually from the date of the violation until paid in full. A Developer is not liable for an
unknown violation of this Section by a subsidiary, affiliate, or franchisee of Developer or by a
person with whom the Developer contracts, or the other Developer, provided however that
identical federal law requirements provided for herein shall be included as part of any agreement
or contract which each Developer enters into with any subsidiary, assignee, affiliate, or
franchisee for which Grants provided herein will be used.
18. Indemnification. DEVELOPER AGREES TO DEFEND, INDEMNIFY AND
HOLD THE CITY AND SEDC, AND THEIR RESPECTIVE OFFICERS, AGENTS AND
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EMPLOYEES (COLLECTIVELY THE "CITY ") HARMLESS FROM AND AGAINST
ANY AND ALL REASONABLE LIABILITIES, DAMAGES, CLAIMS, LAWSUITS,
ADJUSTMENTS, ATTORNEY FEES, COSTS, EXPENSES AND ANY CAUSE OF
ACTION THAT DIRECTLY RELATES TO THIS AGREEMENT, AS A RESULT OF
ANY ACT OR OMISSION OR BREACH OR NON - PERFORMANCE BY SUCH
DEVELOPER UNDER THIS AGREEMENT EXCEPT THAT THE INDEMNITY
PROVIDED HEREIN SHALL NOT APPLY TO ANY LIABILITY RESULTING FROM
THE ACTION OR OMISSIONS OF THE CITY. DEVELOPER IS RESPONSIBLE FOR
ITS OWN ACTS OR OMISSIONS UNDER THIS SECTION. THE PROVISIONS OF
THIS SECTION ARE SOLELY FOR THE BENEFIT OF THE PARTIES HERETO AND
NOT INTENDED TO CREATE OR GRANT ANY RIGHTS, CONTRACTUAL OR
OTHERWISE, TO ANY OTHER PERSON OR ENTITY.
19. Additional Instruments. City and Developer agree and covenant to cooperate,
negotiate in good faith, and to execute such other and further instruments and documents as may
be reasonably required to fulfill the public purposes provided for and included within this
Agreement.
20. Estoppel Certificate. Any party hereto may request an estoppel certificate related
to the Project (hereafter referred to as "Certificate ") from another party hereto so long as the
Certificate is requested in connection with a bona fide business purpose. The Certificate may
include, but is not limited to, statements that this Agreement is in full force and effect without
default, information on Grants that have been issued and Grants that have been requested, and
such other matters reasonably requested by the Party requesting the Certificate.
The remainder of this page intentionally remains blank and signature pages to follow
15
Executed on this day of 2022.
ATTEST:
By:
Interim City Secretary
APPROVED AS To FORM:
:
City Attorney
CITY OF SCHERTZ, TEXAS
Lo
City Manager
Executed on this day of 2022.
SCHERTZ ECONOMIC DEVELOPMENT
CORPORATION
Lo
ATTEST:
LI-M
16
Executed on this day of _ 52022
DEVELOPER
a Texas limited liability
Name:
Title:
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EXHIBITS
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Exhibit A: Property
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Exhibit B: Project Site Plan
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