25-R-032 EDC_EASTGROUP PROPERTRESOLUTION 25-R-032
A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ,
TEXAS AUTHORIZING AN EXPENDITURE AS REFLECTED IN AN
ECONOMIC DEVELOPMENT PERFORMANCE AGREEMENT
BETWEEN THE CITY OF SCHERTZ ECONOMIC DEVELOPMENT
CORPORATION AND EASTGROUP PROPERTIES, L.P.; 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 incentive agreements to
establish and provide for the direct incentive or make an expenditure on behalf of a business
enterprise under a project; and
WHEREAS, Section 501.103 authorizes expenditures for certain infrastructure
improvement projects that are found by the Board of Directors to be required suitable for
infrastructure necessary to promote of develop new or expanded business enterprises; and
WHEREAS, EastGroup Properties, L.P. is pursuing the acquisition of four land parcels
totaling approximately 79.497 acres located on FM 3009 near Thousand Oaks in Comal County
and recorded by the Comal County Appraisal District; and
WHEREAS, EastGroup Properties, L.P. has requested assistance of the City and SEDC to
ensure a path to securing wastewater service and alleviate costs associated with extending
wastewater from the Properties to the nearest connection point located near FM 2252; and
WHEREAS, The SEDC held a public hearing at its February 27, 2025 meeting and the
Board approved SEDC Resolution 2025-1 authorizing an Economic Development Performance
Agreement between the City of Schertz Economic Development Corporation and EastGroup
Properties, L.P.; and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SCHERTZ, TEXAS THAT:
Section 1. The City of Schertz City Council hereby authorizes the expenditure reflected in the
Economic Development Performance Agreement attached hereto as ATTACHMENT A.
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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 \ , 2025.
ATTEST:
Sheree Courney, Deputy City Sec
a ry
CITY OF SCHERTZ
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Ralp uti r z, Mayor
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ATTACHMENT A
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ECONOMIC DEVELOPMENT PERFORMANCE AGREEMENT
EastGroup
This Economic Development Incentive Agreement ("Agreement") is by and between the
Schertz Economic Development Corporation, a Texas non-profit development corporation under
the Development Corporation Act and governed by TEx. Loc. Gov. CODE chapters 501, 502 and
505 and the Texas Non -Profit Corporation Act (hereinafter called "SEDC" or the "Corporation"),
and EastGroup Properties, L.P., a Delaware limited partnership authorized to do business in Texas
(hereinafter called "EastGroup" or "Developer"), otherwise known as the "Parties" to this
Agreement, is made and entered into effective as of , 2025.
RECITALS
WHEREAS, EastGroup is pursuing the acquisition of four land parcels set forth as Exhibit "A"
(the "EastGroup Property") totaling approximately 79.497 acres located on FM 3009 near
Thousand Oaks in Comal County and recorded by the Comal County Appraisal District as Parcel
IDs 147738, 147739, 147740, 147741; and
WHEREAS, EastGroup contemplates constructing 899,600 square feet in 8 buildings that will
result in an estimated assessed value of $69,435,275 on the Comal County Appraisal District tax
roll and noted in the proposed development plan illustrated as set forth in Exhibit `B" (the
"Project"); and
WHEREAS, EastGroup has requested the assistance of the SEDC to ensure a path to securing
wastewater service and alleviate costs associated with extending wastewater from the Project to
the nearest connection point as set forth in Exhibit "C" (the "Public Improvements"); and
WHEREAS, Exhibit "D" (the "Proposed Scope of Work") sets forth the associated costs for
Phase One (as more fully described below); and
WHEREAS, Sections 501,502, and 505 of the Texas Local Government Code ("Texas LGC")
authorize the SEDC to fund certain projects as defined therein and 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, EastGroup, in exchange and as consideration for the contemplated funding by
SEDC, wishes to satisfy and comply with certain terms and conditions, including the construction
of the Public Improvements (as more fully defined below); and
WHEREAS, the Parties believe that the provisions of this Agreement substantially advances a
legitimate interest of the City of Schertz, Texas, a Texas home rule municipal corporation (the
"City") and SECD by providing public infrastructure, expanding the tax base of the City,
increasing employment and promoting economic development.
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:
ARTICLE I
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 SEDC, by its execution of this Agreement, represents to other
Parties that the SEDC's execution of this Agreement is authorized by Chapter 501 and 505 of the
Texas LGC. The SEDC acknowledges that EastGroup is acting in reliance upon the SEDC's
performance and money to the establishment of the Project hereinafter set forth.
2. Term. This Agreement shall become enforceable upon the Effective Date,
hereinafter established, and shall continue until the Expiration Date, hereinafter established, unless
terminated sooner in accordance with the terms of this Agreement.
3. Administration of Agreement. Upon the Effective Date, the SEDC delegates the
administration and oversight of this Agreement to the Executive Director of the Corporation. Any
proposed amendments to the Agreement shall require the approval of the Board of Directors of the
Corporation.
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.
"Actual Additional Work Costs" means the actual cost of the Additional Work including,
but not limited to, architectural, engineering, legal fees, construction, labor, materials, construction
management, and the costs to "carry" the foregoing, as substantiated with receipts and invoices,
but in no event to exceed $750,000.00.
"Actual Total Improvement Costs" means the actual cost of the Public Improvements
including, but not limited to, Easement Acquisition Costs (as defined below), architectural,
engineering, legal fees, construction, labor, materials, construction management, and the costs to
"carry" the foregoing, as substantiated with receipts and invoices and submittal of construction
contract and copies of pay applications as documentation of actual costs.
"Additional Work" means the work described in "Exhibit E"
"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
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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.
"Easement Acquisition Costs" means all costs borne by Developer associated with
acquiring easements (including costs of the easements themselves) necessary to construct the
Public Improvements."
"Certificate of Occupancy" shall mean the signed certificate issued by the City of Schertz
Inspections Division granting EastGroup and/or its tenants the right to occupy a portion of the
Project 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 under this Agreement if uncured within sixty (60)
days of receiving written notice from any other Party.
"Effective Date" shall be , 2025.
"Expiration Date" shall mean the earlier of
1. The SEDC's reimbursement of the Maximum Grant Amount to EastGroup.
2. Five (5) years from the Effective Date of this Agreement, however, the Agreement
may be renewed by EastGroup in their sole discretion for an additional five (5 year)
period if they have not yet received the Maximum Grant Amount; and
3. The date of termination, provided for under Article VIII of this Agreement.
"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 parry), fires, explosions or floods, strikes, slowdowns or work
stoppages.
"Fiscal Year" means October 1" of any given calendar year through September 30th of any
given following calendar year.
"Maximum Grant Amount" means an amount not to exceed SIX MILLION EIGHT
HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($6,875,000).
"Phase One Minimum Requirements" means funding all Public Improvements as noted in
"Exhibit C" and "Exhibit D" to include acquisition of easements, oversite and construction of
the wastewater line, and final acceptance by the City of Schertz.
"Phase Two Minimum Requirements" means the construction of two buildings with a total
minimum 173,630 square feet valued at an amount equal to or exceeding THIRTEEN MILLION
FOUR HUNDRED ONE THOUSAND ONE HUNDRED SEVENTEEN DOLLARS
M
($13,401,117) as reflected by the records of the Comal County Appraisal District, and signed lease
agreements for total of 86,815 square footage in Building One and/or Building Two as described
in "Exhibit B".
"Property" shall have the meaning as ascribed to in Exhibit "A" and in such terms in the
recitals as set forth above.
"Project" shall have the meaning as ascribed to in Exhibit "B" and in such terms in the
recitals as set forth above.
"Public Improvements" means the improvements constructed by EastGroup for the
purpose of extending a wastewater line to serve the EastGroup Property as generally depicted in
Exhibit "C".
"Texas Comptroller" shall mean the Office of the Texas Comptroller of Public Accounts,
or its successor.
ARTICLE IV
ECONOMIC DEVELOPMENT GRANTS
1. SEDC's Funding
In consideration of EastGroup's pursuit of the construction of the Project and Public
Improvements, the SEDC agrees to participate in the funding of the Actual Total Improvements
Cost of the Public Improvements as set forth in Exhibit "C" in an amount not to exceed the
Maximum Grant Amount. Actual Total Improvement Costs shall be verified by the SEDC via
documentation of receipts and invoices. Notwithstanding the foregoing, the SEDC hereby agrees
that the tasks set forth in Exhibit "D" are reasonable and necessary to Phase One (as defined
below) and hereby approves such costs and expenses associated with such tasks and agrees to
make Grant Payments to the Developer for such Phase One costs and expenses in accordance with
the terms of this Agreement. The Developer will make reasonable attempts to provide the SEDC
with detailed proposals related to the work described in Exhibit I'D" for the SEDC's review and
approval, subject to the terms of Article X, Section 12 herein, prior to commencing work.
2. Reimbursement Basis
SEDC's grant payments shall be funded to EastGroup in two (2) separate installments (each
installment, a "Grant Payment," and together, the "Grant Payments").
(a) Phase One Payment: SEDC shall cause the first Grant Payment of not more than
55% of the Maximum Grant Amount to be paid to EastGroup within thirty (30)
days following completion of Phase One Minimum Requirements. Proof of
completion and final acceptance shall be the acceptance letter from the City of
Schertz and proof of all expenditures eligible for reimbursement for the Public
Improvements.
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(b) Phase Two Payment: SEDC shall cause the second Grant Payment of up to
the remaining 45% of the Maximum Grant Amount to be paid to EastGroup
within thirty (30) days after submitting all required documentation
evidencing the completion of Phase Two Minimum Requirements. Proof of
completion shall include (1) certificates of occupancy from the City for an
aggregated total of 173,630 square feet in two buildings, (2) signed leases
evidencing 50% occupancy in one or both buildings totaling a minimum of
86,815 square feet, and (3) records from the Comal County Appraisal
District reflecting taxable valuations of equal to or exceeding $13,401,117.
(c) Capital Recovery Fees: EastGroup shall be responsible for any Capital
Recovery Fees assessed by the City of Schertz. Any Capital Recovery
Credits from the construction of the Public Improvements are the sole
property of the SEDC as funding authority and may be used or applied at
their discretion for any building or facility constructed by EastGroup or any
other developer of the collective properties served by the Project. Credits
provided by the SEDC to a Developer are non -transferable to other entities.
3. Current Revenue
The Grant Payment distributed hereunder shall be paid solely from lawfully available funds
that have been appropriated by the SEDC. Under no circumstances shall the SEDC's obligations
hereunder be deemed to create any debt of the City within the meaning of any constitutional or
statutory provision. SEDC shall not be obligated to pay any commercial bank lender or similar
institution for any loan or credit agreement made by Developer, nor shall any of the SEDC's
obligations under this Agreement be pledged or otherwise encumbered in favor of any commercial
lender and/or similar financial institution.
4. Additional Work
(a) EastGroup, may, at its option in its sole discretion, perform the Additional Work. If
EastGroup elects to perform the Additional Work, EastGroup will commence such
work once EastGroup has obtained all easements necessary to perform such work and
EastGroup has commenced construction of the Public Improvements. If EastGroup
performs the Additional Work, upon the completion thereof, SEDC shall reimburse
EastGroup for the Actual Additional Work Costs up to the sum of $750,000 as set forth
below.
(b) SEDC shall cause fifty percent (50%) of the Actual Additional Work Costs to be paid
to Developer within thirty (30) days after Developer submits all required
documentation evidencing fifty percent (50%) completion of the Additional Work, and
the remainder of the Actual Additional Work Costs of up to $750,000 to be paid to
Developer within thirty (30) days after Developer submits all required documentation
evidencing completion of the Additional Work approved by the City as described in
"Exhibit E" attached hereto to re-route the existing sewer flows and decommission the
Tri-County Lift Station at 7303 FM3009.
ARTICLE V
CONDITIONS TO ECONOMIC DEVELOPMENT GRANTS
The obligation of the SEDC to pay each Grant Payment shall be conditioned upon
Developer's compliance with and satisfaction of each of the conditions set forth in this Agreement.
1. Phase One
Shall consist of public utility easement acquisition by Developer, at its sole cost and
expense. Exhibit "D", which is attached and incorporated herein, sets forth the Phase One tasks
which the SEDC hereby pre -approves.
(a) Developer shall diligently pursue the acquisition of all easements required for the
installation of the proposed wastewater line and shall have the right to request the
assistance of the SEDC and City for the acquisition of necessary easements.
(b) Developer shall be responsible for the cost of acquisition of the necessary
easements and will pay all costs and expenses necessary to acquire any easements,
however, any costs incurred by Developer on behalf of the SEDC or City shall be
reimbursed to Developer in accordance with the terms of this Agreement.
i. The Parties agree that should the SEDC and/or the City be unable to
assist the Developer in acquiring the necessary easement during Phase
One, the Developer may terminate this Agreement without further
obligations other than such obligations expressly set forth in this
Agreement that survive the Agreement's termination or expiration. The
Developer may terminate its obligations under this Agreement by
sending written notice thirty (30) days in advance to the SEDC and the
City (each a "Developer's Termination Notice") and included in the
Developer's Termination Notice shall be such Developer's demand for
reimbursement for their actual costs and expenses which the City and
SEDC shall reimburse Developer within thirty (30) days after receipt of
Developer's Termination Notice. SEDC will reimburse the Developer
for its actual costs and expenses in furtherance of the Project, including
but not limited to hiring third party consultants and easement acquisition
costs, up to $1,500,000.00 and this obligation shall survive termination
of the Agreement. The easements that have been acquired up to that
time shall be transferred by the Developer to the City.
ii. If the City has previously acquired certain easements that are beneficial
and necessary to the Developer's construction of the Public
Improvements, the City and SEDC hereby acknowledge and agree that
such easements, shall be made available for design and construction of
the Public Improvements contemplated hereby.
(c) Completion of all Public Improvements and evidence of dedication and acceptance
by the City as shown in Exhibit "C".
2. Phase Two
(a) Construction of two buildings in the Project as shown in Exhibit `B" totaling
173,630 square feet and valued at an amount equal to or exceeding THIRTEEN
MILLION FOUR HUNDRED ONE THOUSAND ONE HUNDRED
SEVENTEEN DOLLARS ($13,401,117) as certified by the Comal County
Appraisal District.
(b) Evidence of having leased 50% of either Building One or Building Two of the
Project as set forth in "Exhibit "B".
3. Order of Performance. SEDC and the City acknowledge and agree that Developer may
complete Phase One before Phase Two and further agree that the order in which
Developer completes Phase One and Phase Two shall not alter SEDC's payment
obligations under this Agreement.
4. Clawback. For a period of eighteen (18) months following the date of completion of
the Phase Two Minimum Requirements, if signed lease agreements covering Building
One and/or Building Two as described in "Exhibit B" fall below 86,815 square feet in
total (a "Lease Shortfall") at any time during such eighteen (18) month period, and
Developer does not cure such Lease Shortfall by entering into replacement leases or
expansions of existing leases covering Building One and/or Building Two within
twelve (12) months after the occurrence of such Lease Shortfall, a portion of the Phase
Two Payment is subject to reimbursement by Developer as follows:
(a) If the Lease Shortfall occurs during the first twelve (12) months following the
date of completion of the Phase Two Minimum Requirements and is not cured
by Developer as set forth above, Developer shall refund to SEDC a portion of
the Phase Two Payment equivalent to eighty percent (80%) of the percentage
by which the total leased space in Building One and/or Building Two falls
below 86,815 square feet. For example, if during the first twelve (12) months
following the date of completion of the Phase Two Minimum Requirements,
signed lease agreements covering Building One and/or Building Two reduce to
a total of 34,726 square feet, Developer would refund to SEDC 80% of ((86,815
sf-34,726 sf)/86,815 sf) or 48% of the Phase Two Payment.
(b) If the Lease Shortfall occurs during months 13 through 18 following the date of
completion of the Phase Two Minimum Requirements and is not cured by
Developer as set forth above, Developer shall refund to SEDC a portion of the
Phase Two Payment equivalent to sixty percent (60%) of the percentage by
which the total leased space in Building One and/or Building Two falls below
86,815 square feet. For example, if during the second twelve (12) months
following the date of completion of the Phase Two Minimum Requirements,
signed lease agreements covering Building One and/or Building Two reduce to
a total of 34,726 square feet, Developer would refund to SEDC 60% of ((86,815
sf-34,726 sf)/86,815 sf) or 36% of the Phase Two Payment.
ARTICLE VI
COVENANTS AND DUTIES
1. SEDC's Covenants and Duties
(a) SEDC Grant Payment. The SEDC is obligated to pay EastGroup an amount not to
exceed the Maximum Grant Amount from sources contemplated by this Agreement,
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subject to EastGroup's' timely and full satisfaction of all applicable terms and
conditions of this Agreement. Further, SEDC's obligations to pay EastGroup shall
cease upon the earlier of. (1) payment in full of the Maximum Grant Amount and
payment of any remaining Actual Total Improvements Costs through allocations and
reimbursements from a pro rata agreement between the City and EastGroup; (2)
reaching the Agreement's Expiration Date; or (3) Default by EastGroup in accordance
with the terms of this Agreement.
(b) 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 if uncured within sixty (60) days of receiving written notice from the
non -defaulting Party. Failure of EastGroup to timely and substantially cure a default
will give the SEDC the right to terminate this Agreement, as reasonably determined by
the Board of Directors of the Corporation, however, if EastGroup completes the
required curative action prior to SEDC's termination then EastGroup will no longer be
in Default and SEDC will no longer have the option to terminate this Agreement for
that specific default by EastGroup. Notwithstanding the foregoing, if the SEDC
terminates this Agreement in accordance with this provision, the SEDC's obligation to
fund the Grant Payment and any other reimbursement obligation that was otherwise
due and payable as of the date of termination shall not survive termination.
2. EastGroup's Covenants and Duties. EastGroup makes the covenants and warranties to
timely and fully perform the obligations and duties contained in Article V of this
Agreement. Any false or substantially misleading statements by Developer contained
herein or failure of Developer to timely and fully perform those obligations and duties
within this Agreement, subject to all applicable notice and cure periods, shall be an act of
Default by EastGroup.
(a) EastGroup is authorized to do business with the Texas Comptroller and is in good
standing with the Texas Secretary of State and shall remain in good standing with the
Texas Secretary of State during the term of this Agreement.
(b) The execution of this Agreement has been duly authorized by EastGroup's authorized
agent, and the individuals signing this Agreement are empowered to execute such
Agreement and bind the entity. Said authorization, signing and binding effect is not in
contravention of any law, rule, regulation, or of the provisions of EastGroup's
governing documents, or of any agreement or instrument to which EastGroup is a party
to or by which it may be bound.
(c) To its current, actual knowledge, EastGroup is not a party to any bankruptcy
proceedings currently pending or contemplated, and EastGroup has not been informed
of any potential involuntary bankruptcy proceedings.
(d) EastGroup shall acquire and maintain all necessary approvals for rights, licenses,
permits, and authority to carry on its business from the City and/or all other
governmental agencies having jurisdiction over the construction of Public
Improvements to the Property and shall continue to use reasonable efforts to maintain
all necessary approvals for rights, licenses, permits, and authority.
(e) EastGroup shall timely and fully, subject to any applicable notice and cure periods,
comply with all of the terms and conditions of this Agreement.
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(f) EastGroup agrees to use reasonable efforts to complete, or cause to be completed, the
Public Improvements described herein at its sole cost and expense, subject to SEDC's
funding of the Maximum Grant Amount.
(g) EastGroup's Project will not be obligated to directly create or retain any jobs and will
result in a minimum assessed value of a capital investment, including land, of at least
or exceeding THIRTEEN MILLION FOUR HUNDRED ONE THOUSAND ONE
HUNDRED SEVENTEEN DOLLARS ($13,401,117). Notwithstanding the foregoing,
should a disagreement arise over the calculation of the total capital investment, then
the full assessed property value, land plus all improvements, as determined by Comal
County Appraisal District shall govern.
(h) To the extent not already attached to this Agreement as Exhibit "C", EastGroup agrees
to prepare, or cause to be prepared, plans and specifications for the Public
Improvements prior to starting any construction.
(i) EastGroup agrees to supervise the construction of the Project and cause the
construction to be performed substantially in accordance with the Public Improvements
approved by the City in accordance with federal, state, and local laws and ordinances
and this Agreement.
(j) EastGroup 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 Project. Developer agrees to develop the Project in accordance with
the ordinances, rules and regulations of the City in effect on the date the project was
designated, unless specified otherwise in this Agreement. EastGroup, in its sole
discretion, may choose to comply with any or all the City rules promulgated after the
Effective Date of this Agreement.
(k) EastGroup, at the City's and SEDC's expense, shall dedicate, convey and transfer all
easements and public utilities to the City within ninety (90) days after the Public
Improvements are accepted by the City.
(1) EastGroup shall cooperate with SEDC in providing all necessary information to assist
the City in complying with this Agreement.
(m)The cost of the Public Improvements and all other improvement expenses associated
with the Project shall be funded through the use of EastGroup's own capital or through
credit secured solely by EastGroup.
(n) EastGroup shall not knowingly employ an undocumented worker as defined in the
Texas Government Code Section 2264.051.
ARTICLE VII
DEVELOPMENTSTANDARDS
1. Plan. The Project shall be developed in substantial accordance with the Project as
depicted in Exhibit "B".
ARTICLE VIII
TERMINATION
1. Termination. This Agreement shall terminate upon the earliest occurrence of any one or
more of the following:
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(a) The written agreement of the Parties;
(b) By Developer, in its sole and absolute discretion, if Developer does not
acquire the EastGroup Property;
(c) The Agreement's Expiration Date;
(d) Default by Developer (at the option of the Corporation), subject to all
applicable notice and cure provisions; or
(e) Upon thirty (30) days written notice from Developer to SEDC and City if
(i) Developer is unable to acquire, in Developer's sole and absolute discretion, the
necessary easements during Phase One, regardless of the SEDC or the City's
assistance, or (ii) Developer is unable to construct the Project or the Public
Improvements, in Developer's sole and absolute discretion.
ARTICLE IX
DISPUTE RESOLUTION
1. Mediation. If a dispute arises out of or relates to this Agreement or the breach
thereof, the Parties shall first in good faith seek to resolve the dispute through negotiation between
the authorized management of each respective Party. If such dispute cannot be settled through
negotiation, the Parties agree to try in good faith to settle the dispute by mediation under the
Commercial Mediation Rules of the American Arbitration Association, San Antonio, Texas,
before resorting to litigation; provided that a Party may not invoke mediation unless it has provided
the other Party with written notice of the dispute and has attempted in good faith to resolve such
dispute through negotiation. 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 and mediation collectively known as alternate dispute resolution ("ADR") shall be
assessed equally between the Parties with each party bearing their own costs for attorneys' fees,
experts, and other costs of ADR and any ensuing litigation.
2. Escrow Agent. During the term of this Agreement, if EastGroup files and/or
pursues an adversarial proceeding against the SEDC regarding this Agreement without first
engaging in good faith mediation of the dispute, then, at the SEDC's option, all access to the funds
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.
3. Attorney Fees. Under no circumstances will the funds received under this
Agreement be used, either directly or indirectly, to pay costs or attorney fees incurred in any
adversarial proceeding regarding this Agreement against either the Corporation or the City of
Schertz.
ARTICLE X
MISCELLANEOUS
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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 Executive Director of the Corporation shall be
responsible for the administration of this Agreement and shall have the authority to
execute any instruments, duly approved by the Corporation, on behalf of the Parties
related thereto.
2. Mutual Assistance. The Parties 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. The SEDC represents and warrants
to EastGroup 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. EastGroup represents and warrants to the
SEDC that it has the requisite authority to enter into this Agreement.
4. Assignment. EastGroup shall have the right to assign all of its
rights, duties, and obligations under this Agreement to a duly qualified third party
with prior written approval of the SEDC, which shall not be unreasonably withheld,
conditioned or delayed. Any assignment provided for herein shall not serve to
enlarge or diminish the obligations and requirements of this Agreement, nor shall
they relieve EastGroup of any liability to the SEDC including any required
indemnity in the event that any Assignee hereof shall at any time be in Default of
the terms of this Agreement. The SEDC may demand and receive adequate
assurance of performance including the deposit or provision of financial security
by any proposed Assignee prior to its approval of an assignment.
5. Indenendent Contractors.
(a) It is expressly understood and agreed by all Parties hereto that in performing their
services hereunder, EastGroup at no time will be acting as an agent of the SEDC and that
all consultants or contractors engaged by EastGroup respectively will be independent
contractors of EastGroup; 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
the SEDC will not be liable for any claims that may be asserted by any third party occurring
in connection with services performed by EastGroup under this Agreement, unless any
such claims are due to the fault of the SEDC.
(b) By entering into this Agreement, except as specifically set forth herein, 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 SEDC 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 the SEDC, or any board member, or agent of the SEDC, shall be
personally responsible for any liability arising under or growing out of this Agreement.
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(d) No employee of Developer, or any board member, director, shareholder or agent of
Developer, shall be personally responsible for any liability arising under or growing out of
this Agreement
6. Notice. Any notice required or permitted to be delivered hereunder shall be deemed
delivered by actual delivery, or on the first business day after depositing the same
in the hands of a reputable overnight courier (such as United States Postal Service,
FedEx or UPS) and addressed to the Party at the address set forth below:
If intended for SEDC: Schertz Economic Development Corporation
Attention: Exec. Dir. of Economic Development
1400 Schertz Parkway
Schertz, TX 78154
With a copy to:
Denton Navarro Rodriguez Bernal Santee and Zech
Attention: T. Daniel Santee
2517 North Main Avenue
San Antonio, TX 78212
If to the EastGroup: EastGroup Properties, L.P.
Attention: Matt Troutt
6565 N. MacArthur Blvd, Suite 255
Irving, Texas 75039
Parties.
With a copy to:
Butler Snow LLP
Attention: Craig D. Smith
1020 Highland Colony Parkway, Suite 1400
Ridgeland, Mississippi 39157
Any Party may designate a different address at any time upon written notice to the other
7. 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
8. Governin., Law. The Agreement shall be governed by the laws of
the State of Texas, and the venue for any action concerning this Agreement (subject
to the dispute resolution mechanisms of Article IX above) shall be in the Courts of
Guadalupe County. The Parties agree to submit to the personal and subject matter
jurisdiction of said court.
9. Amendment. This Agreement may be amended by mutual written
agreement of the Parties, as approved by the Board of Directors of the SEDC.
10. 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
-15-
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.
11. Payment of Legal Fees. Company commits to reimburse the
Corporation for the necessary legal fees in the preparation of any amendment to
this Agreement requested by Company. Timely payment shall be made within 60
days of submittal of invoice to Company by the SEDC or its assigns. Each Party
shall bear its own attorney's fees in connection with the negotiation of this
Agreement.
12. 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, whatever its meaning or application, be interpreted fairly
and reasonably and neither more strongly for or against any Party. Any approval
by the SEDC or the City as required by this Agreement shall be construed as such
approval shall not be unreasonably withheld, conditioned or delayed by the SEDC
or the City. Further, any proposal by the Developer submitted for approval by the
SEDC and/or the City shall be deemed approved if the approving authority, either
the SEDC or the City, fails to respond within ten (10) business days of delivery of
such proposal.
13. 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,
as approved by the Board of Directors of the SEDC.
14. 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.
15. 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. Signatures provided by
facsimile or electronic transmission shall have the same force and effect as original
signatures and shall be binding upon the Parties.
16. Exhibits. Any Exhibits attached hereto are incorporated by
reference for all purposes.
17. 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.
-16-
1 S. Indemnification.
DEVELOPER AGREES TO DEFEND, INDEMNIFY AND HOLD THE CORPORATION
AND CITY, AND THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES
HARMLESS FROM AND AGAINST ANY AND ALL REASONABLE LIABILITIES,
DAMAGES, CLAIMS, LAWSUITS, JUDGEMENTS, ATTORNEY FEES, COSTS,
EXPENSES AND ANY CAUSE OF ACTION THAT DIRECTLY RELATES TO ANY
WILLFUL ACT OR GROSS NEGLIGENCE BY THE DEVELOPER UNDER THIS
AGREEMENT, SAVE AND EXCEPT THAT DEVELOPER'S INDEMNITY PROVIDED
HEREIN SHALL NOT APPLY TO ANY LIABILITY RESULTING FROM ANY ACT OR
OMISSION OR NEGLIGENCE OF THE SEDC OR CITY. NOTWITHSTANDING THE
FOREGOING, THE SEDC AND CITY EXPRESSLY WAIVE ANY AND ALL RIGHTS
TO RECOVER OR SEEK INDEMNIFICATION FROM DEVELOPER FOR ANY
SPECIAL, CONSEQUENTIAL, INDIRECT, OR PUNITIVE DAMAGES ARISING
UNDER THIS AGREEMENT AND INCURRED BY SEDC OR THE CITY.
DEVELOPER'S INDEMNITY OBLIGATION SHALL ONLY APPLY TO CLAIMS
MADE DIRECTLY BY THE CITY OR SEDC AND SHALL NOT INCLUDE ANY
CLAIMS MADE BY THIRD PARTIES BY OR THROUGH THE CITY OR SEDC.
DEVELOPER'S LIABILITY AND OBLIGATIONS AS SET FORTH IN THIS SECTION
SHALL BE PROPORTIONAL TO EACH PARTIES' RESPONSIBILITY FOR THE
INDEMNIFICATION CLAIM'S PRECIPITATING ACT OR OMISSION. 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. THIS
PROVISION SHALL SURVIVE FOR SIX (6) MONTHS FROM THE DATE OF
TERMINATION OR EXPIRATION OF THIS AGREEMENT.
19. Additional Instruments. The Parties 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. Force Majeure. Whenever a period of time is herein prescribed for
action to be taken by the Developer, the Developer shall not be liable or responsible
for, and there shall be excluded from the computation of any such period of time,
any delays due to causes of any kind whatsoever which are caused by Force
Maj eure.
[Signatures begin next page]
-17-
[Signature page to Economic Development Incentive Agreement]
Executed on this day of
ATTEST:
Executed on this
2025.
SCHERTZ ECONOMIC
CORPORATION
LON
day of 52025
DEVELOPER
DEVELOPMENT
EASTGROUP PROPERTIES, L.P., a Delaware
limited partnership
By EastGroup Properties General Partners, Inc.,
a Delaware corporation, its general partner
By:
Name:
Title:
By:
Name:
Title:
Exhibit A
EASTGROUP PROPERTY
(80 ACRES)
if
P.
pill
Rl
is
Fm eNil
tz:
ro tF"I -9
. N -V�
k
A0
-19-
Exhibit B
EASTGROUP PROJECT
(8 BUILDINGS)
g^ } > 'L F1C R,g1LR0,0
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:i L��Lli�r LlL1LLL11 _ 71'In11n
1; B ,
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Rig
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t
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. 'l�iT�i1 J 'Jl7ifi11Tm'i>•nTIT,Ti;a_. � '�
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-20-
Teiopl-
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Exhibit D
SCOPE OF WORK
(PROJECT COST ESTIMATE)
Item
Cost
LF
$/LF
RC Page Bid
$ 4,683,925
9,000
$ 520.44
Civil
$ 70,000
ROW Surveying
$ 60,000
ROW Acquisition
$ 720,000
9,000
$ 4.00
ROW Acq. Agent
$ 226,800
Contingency
$ 288,036
Construction Management
$ 302,438
Construction Interest
$ 507,332
Total
$ 6,858,531
-22-
Exhibit E
ADDITIONAL WORK
Existing
Conditions
y '' s
eve,
Town Creek T�A7 Cn�i�i
Extension
GM Abandon
aY
Existing
Extension
Lift Station WwKt Flow W
Town Cmg, Ext.
Decommission ry
Lift Dec-.1,16. LL
Feet
- 23 -