HomeMy WebLinkAboutRes 2021-01-844 380 Agreement with First Texas Homes, Inc.RESOLUTION NOArm "01` g4q
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS
APPROVING A CHAPTER 380 GRANT AGREEMENT WITH FIRST TEXAS
HOMES, INC.
WHEREAS, the City Council of the City of Anna, Texas and First Texas Homes, Inc. desire
to enter into a Chapter 380 Grant Agreement; and
WHEREAS, the City Council of the City of Anna, Texas finds that approval of the
Agreement is in the best interest of the citizens of Anna;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ANNA, TEXAS, THAT:
SECTION 1. Recitals Incorporated
The recitals set forth above are incorporated herein for all purposes as set forth in
full.
SECTION 2. Approval of Project and Agreement
The City Council of the City of Anna, Texas hereby approves the Chapter 380 Grant
Agreement with First Texas Homes, Inc, attached hereto as Exhibit A, incorporated
herein for all purposes, and authorizes the City Manager to execute same on its
behalf, with said Agreement to be effective upon its approval by the City Council of
the City of Anna, Texas as set forth in the Agreement.
SECTION 3. Administration
The City hereby authorizes the City Manager or his designee to administer the
Agreement.
CONSIDERED, PASSED AND ADOPTED by the City Council of the City of Anna,
Texas at a regular meeting on the 26th day of January, 2021.
ATTEST:
Carrie L. Land,
N
'°
PROVED:
Mayor
CHAPTER 380 GRANT AGREEMENT BY
AND BETWEEN THE CITY OF ANNA, TEXAS
AND FIRST TEXAS HOMES, INC.
This CHAPTER 380 GRANT AGREEMENT ("Areement") is made by and between
The City of Anna, Texas ("City", also referred to as "Grantor") and First Texas Homes, Inc. (the
"Company"), acting by and through their respective authorized officers and representatives.
WHEREAS, the City Council of the City of Anna, Texas ("City Council") has investigated
and determined that it is in the best interest of the City and its citizens to encourage programs,
including programs for making loans and grants of public money to promote local economic
development and stimulate business and commercial activity in the City pursuant to Chapter 380,
Texas Local Government Code, as amended ("Chapter 380"); and
WHEREAS, the Company will be engaged in the business of purchasing building
materials for its use on construction projects within the City; and
WHEREAS, the Company has advised that it would like to partner with the City, and that
a contributing factor that would induce the Company to purchase items using a Texas Direct
Payment Permit and generate economic development and local use tax revenue for the City, that
would otherwise not be available to the City, would be an agreement by the Grantor to provide an
A
conomic development grant to the Company; and
WHEREAS, the Company desires to purchase and use new building materials within the
City that will generate additional economic development and use tax revenue for the City; and
WHEREAS, the City Council has investigated and determined that the Company meets
the criteria for providing the grants (hereinafter defined), pursuant to Chapter 380, based on,
among other things, the Company: (i) acquiring properties for development, and constructing
improvements; (ii) adding taxable improvements to real property in the City; and (iii) creating
employment opportunities for the citizens of Anna ("Approved Project"); and
WHEREAS, the Ciry has concluded that the Approved Project qualifies for a Grant under
Chapter 380; and
WHEREAS, with the approval of this Agreement, the City hereby establishes a program
authorized by Chapter 380 to encourage and induce the generation of local use tax; and
WHEREAS, the Grantor has determined that making an economic development grant to
the Company in accordance with this Agreement will further the objectives of the Grantor, will
benefit the City and the City's inhabitants and will promote local economic development and
stimulate business and commercial activity in the City;
NOW THEREFORE, in consideration of the foregoing, and on the terms and conditions
hereinafter set forth, the sufficiency of which is hereby acknowledged, the parties agree as follows:
CHAPTER 380 GRANT AGREEMENT BY AND BETWEEN
THE CITY OF ANNA AND FIRST TEXAS HOMES, INC. -PAGE 1
ARTICLE I
DEFINITIONS
1.01 For purposes of this Agreement, each of the following terans shall have the meaning
set forth herein unless the context clearly indicates otherwise:
"City" and "Grantor" shall mean The City of Anna, Texas.
"Company" shall mean First Texas Homes, Inc.
"Commencement Date" shall mean February 1, 2021.
"Effective Date" shall mean February 1, 2021.
"Direct Payment Permit" also referred to herein as a "Texas Direct Payment Permit" shall
can that permit issued by the State of Texas authorizing Company to self -assess and pay
applicable state and local use taxes directly to the State of Texas related to selected portions
of Company's taxable purchases. Texas Rule 3.288 of the Texas Administrative Code
defines the requirements and responsibilities of Texas Direct Payment Permit holders along
with any amendments, permutations, or recodifications of such Code or Rules whether
renaming such permits or otherwise modifying such provisions.
"Event of Bankruptcy or Insolvency" shall mean the dissolution or termination (other than
a dissolution or termination by reason of a party merging with an affiliate) of a party's
existence as a going business, insolvency, appointment of receiver for any part of a party's
property and such appointment is not terminated within ninety (90) business 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 a party and in the event such proceeding is not voluntarily commenced by the party,
such proceeding is not dismissed within ninety (90) business days after the filing thereof.
"Force Majeure" shall mean any delays due to strikes, riots, acts of God, shortages of labor
or materials, war, terrorism, governmental approvals, laws, regulations, or restrictions, or
any other cause of any kind whatsoever which is beyond the reasonable control of the party.
Pro
gram" shall mean the economic incentive program established by the City pursuant to
Chapter 380 of the Texas Local Government Code together with any amendments,
permutations, or recodifications of such Code provisions whether renaming such economic
incentive or other modifications thereof.
"Program Grant" shall mean the periodic payments paid by the City to the Company in
accordance with Section 3 of this Agreement.
"Grant Period" shall mean consecutive six (6) month periods during the term of this
Agreement, except that the first Grant Period shall begin on the Effective Date and continue
through and include the last day of June 2021 following the Effective Date. For illustration
CHAPTER 380 GRANT AGREEMENT BY AND BETWEEN
THE CITY OF ANNA AND FIRST TEXAS HOMES, INC. -PAGE 2
purposes, assume the Effective Date is February 1, 2021 then the first Grant Period would
begin on February 1, 2021 and continue through and include June 30, 2021. The next Grant
Period would begin on July 1, 2021 and continue through and include December 31, 2021.
The final Grant Period for the initial 10-year term of the Agreement would be from July 1,
2031 and end on December 31, 2031.
"Taxable Items" shall have the same meaning assigned by Sections 151.010 and 151.0101,
TEX. TAX CODE, as amended.
"Impositions" shall mean all use taxes that may be imposed by public or governmental
authority on the Company or any taxable items purchased and used by Company within
the City.
"Use Tax Receipts" shall mean the Grantar•'s net receipts fiom the State of Texas fiom the
collection of one and one -quarter percent (1.25%) general City use tax imposed by the City
pursuant to Chapter 321 of the Texas Tax Code, attributed to the collection of use tax by
Company associated with the issuance of Company's Texas Direct Payment for Taxable
Items used or consumed in the City.
"Use Tax Certificate" shall mean a certificate or other statement in a form reasonably
acceptable to the Grantor setting forth the Company's collection of use tax imposed by and
received by the Grantor from the State of Texas, for the use of Taxable Items by Company
in the City for the applicable calendar month during a Grant Period which are to be used to
determine Company's eligibility for a Grant, together with such supporting documentation
required herein, and as Grantor may reasonably request.
ARTICLE II
TERM
2.01 Term. The term of this Agreement shall begin on the Effective Date and continue
for a ten (10) year period.
2.02 This Agreement shall remain in effect until Grantor has made the Program Grants
set forth in Section 3 of the Agreement, or until otherwise terminated under the provisions of this
Agreement.
2.03 This Agreement maybe extended for an additional period of time on terms mutually
acceptable to both parties by a written agreement executed by both parties.
ARTICLE III
ECONOMIC DEVELOPMENT GRANT
3.01 Grant. Subject to the Company's continued compliance of all the terms and
conditions of this Agreement, the Grantor agrees to provide Company with an economic
development grant from lawful available funds payable as provided herein in an amount equal to
14% of the Use Tax Receipts, as previously defined herein (the "Grant"), The Grant will be paid
CHAPTER 380 GRANT AGREEMENT BY AND BETWEEN
THE CITY OF ANNA AND FIRST TEXAS HOMES, INC. -PAGE 3
semi-annually at the end of each Grant Period. The Grant will never include any monies the
Company pays or owes to the State of Texas for any penalties for late payments, failures to report
in a timely manner, and the like, related to the Use Tax Receipts.
3.02 Grant Payment. Grantor shall pay the Grant for the applicable Grant Period within
forty-five (45) days after receipt of a Use Tax Certificate from Company following the end of each
Grant Period, pursuant to Section 4.01. Company shall submit Use Tax Certificates to Grantor
within thirty (30) days following the end of the applicable Grant Period, beginning with the first
Grant Period. For illustration purposes, assume the first Grant Period begins on February 1, 2021
and continues through and includes June 30, 2021. Company would submit a Use Tax Certificate
to Grantor for the first Grant Period by July 30, 2021 and Grantor would pay the first Grant within
forty-five (45) days after receipt of the Use Tax Certificate and after actual receipt of all of the net
Use Tax Receipts attributable to the Grant Period. Further assume that the Use Tax Receipts for
the first Grant Period equal Five Thousand Dollars ($5,000.00), then the amount of the first Grant
would be Three Thousand Two Hundred Dollars ($3,200.00).
3.03 Amended Returns and Audits. In the event the Company files an amended use tax
return, or report, or if additional use tax is due and owing, as a result of an audit conducted by the
State of Texas that increases the Use Tax Receipts for a previous period covered within the term
of this agreement, the Grant payment for the Grant Period immediately following such State
approved amendment shall be adjusted accordingly, provided the Grantor must have received the
Use Tax Receipts attributed to such adjustment. As a condition precedent to payment of such
adjustment, Company shall provide Grantor with a copy of such amended use tax report, tax return
or audit adjustment, and the approval thereof by the State of Texas.
3.04 Refunds. In the event the State of Texas determines that the City erroneously
received Use Tax Receipts, or that the amount of use tax paid to the City exceeds the correct
amount of use tax for a previous Grant paid to the Company, the Company shall, within thirty (30)
days after receipt of notification thereof from the City specifying the amount by which such Grant
exceeded the amount to which the Company was entitled pursuant to such State of Texas
determination, pay such amount to the Grantor. The Grantor may at its option adjust the Grant
payment for the Grant Period immediately following such State of Texas determination to deduct
there from the amount of the overpayment. As a condition precedent to payment of such refund,
the City shall provide Company with a copy of such determination by the State of Texas.
ARTICLE IV
DOCUMENTATION SUPPORTING THE ECONOMIC DEVELOPMENT GRANT
The conditions contained in this Article IV are conditions precedent to the Grantor's
obligation to make any Grant payment.
4.01 Use Tax Certificate. During the term of this Agreement, the Company shall within
thirty (30) days after the end of each Grant Period, provide the Grantor with a Use Tax Certificate
relating to Use Tax Receipts paid during the Grant Period. The Grantor shall have no duty to
calculate the Use Tax Receipts or determine Company's entitlement to any Grant for a Grant
Period, or pay any Grant during the term of this Agreement until such time as Company has
CHAPTER 380 GRANT AGREEMENT BY AND BETWEEN
THE CITY OF ANNA AND FIRST TEXAS HOMES, INC. -PAGE 4
provided the Grantor a Use Tax Certificate for such Grant Period and the Grantor has received the
actual Use Tax Receipts from the State of Texas attributable to such calendar months within the
Grant Period. Company shall provide such additional documentation as may be reasonably
requested by Grantor to evidence, support and establish the use tax paid directly to the State of
Texas pursuant to Company's Direct Payment Permit. The Use Tax Certificate for each Grant
Period shall at a minimum contain, include or be accompanied by the following:
a. A copy of ail Texas Direct Payment Permit and self -assessment use tax returns and
reports during the applicable Grant Period, use tax audit assessments or credits,
including amended use tax returns or reports, filed by the Company during the
Grant Period showing use tax paid directly to the State of Texas related to
Company's operations for the Grant Period; and
b. Information concerning any refund or credit received by the Company of use tax
paid by the Company which has previously been reported by the Company as use
tax paid for a previous Grant Period within the term of this agreement.
Company will provide to Grantor the Use Tax Certificates from time to time pursuant to
the terms of the Agreement, which are confidential ("Confidential Information") and, except as
otherwise provided herein, may not be disclosed to a third party without the Company's consent.
To the extent that any disclosure of the Confidential Information may be required by law, Grantor
will use reasonable efforts to inform Company of the request in sufficient time for Company to
assert any objection it may have to such disclosure to an appropriate judicial or administrative
body.
4.02 Grantor must have received a Use Tax Certificate for the months within the Grant
Period for which payment of a Grant is requested, and Grantor must have received the actual Use
Fax Receipts for all calendar months within the Grant Period.
4.03 The Company intends to issue its Texas Direct Payment Permit to specific suppliers
or vendors that provide large quantities of building materials or other tangible personal property.
4.04 The Company shall provide the Grantor with a time and correct copy of its Texas
Direct Payment Permit, which permit shall be kept in full force and effect throughout the term of
the Agreement.
4.05 Company or the City shall not have an uncured material breach or default of this
Agreement.
ARTICLE V
TERMINATION
5.01 This Agreement maybe terminated upon any one of the following:
(a) by mutual written agreement of the parties;
CHAPTER 380 GRANT AGREEMENT BY AND BETWEEN
THE CITY OF ANNA AND FIRST TEXAS HOMES, INC. -PAGE 5
(b) by Grantor or Company, respectively, if the other party defaults or breaches
any of the terms or conditions of this Agreement in any material respect and
such default or breach is not cured within thirty (30) days after written
notice thereof by the Grantor or Company, as the case may be;
(c) by Grantor, if any Impositions owed to the Grantor or the State of Texas by
Company shall have become delinquent (provided, however, Company
retains the right to timely and properly protest and contest any such
Impositions);
(d) by Grantor, if Company suffers an Event of Banlu•uptcy or Insolvency;
(e) by Grantor or Company, respectively, if any subsequent Federal or State
legislation or any decision of a court of competent jurisdiction declares or
renders this Agreement invalid, illegal or unenforceable; or
(f) by Company, if the City does not pay the applicable Grant amount within
45 days of receipt of the Use Tax Receipts as required herein covered by a
valid Use Tax Certificate issued by Company or fails to cure this breach
within an additional 30 days and so long as the Company is not in default,
or;
(g) expiration of the term, or any subsequent renewal of the term.
The rights, responsibilities and liabilities of the parties under this Agreement shall be extinguished
upon the termination of this Agreement except for any rights, responsibilities and/ liabilities that
accrued prior to such termination.
ARTICLE VI
MISCELLANEOUS
6.01 Bindin Agreement. The terms and conditions of this Agreement are binding upon
the parties to this agreement and their respective successors and pez�rlitted assigns. This
Agreement may not be assigned without the express written consent of Grantor, which consent
shall not be unreasonably withheld or delayed.
6.02 Limitation on Liability. It is understood and agreed between the parties that the
Company and Grantor, in satisfying the conditions of this Agreement, have acted independently,
and Grantor assumes no responsibilities or liabilities to third parties in connection with these
actions. The Company agrees to indemnify and hold harmless the Grantor fiom all such claims,
suits, and causes of actions, liabilities and expenses, including reasonable attorney's fees, of any
nature whatsoever by a third party arising out of the Company's performance of the conditions
under this Agreement.
CHAPTER 380 GRANT AGREEMENT BY AND BETWEEN
THE CITY OF ANNA AND FIRST TEXAS HOMES, INC. -PAGE 6
6.03 No Joint Venture. It is acknowledged and agreed by the parties that the terms hereof
are not intended to and shall not be deemed to create a partnership or joint venture between the
parties.
6.04 Authorization. Each party represents that it has full capacity and authority to grant
all rights and assume all obligations that are granted and assumed under this Agreement.
6.05 Notice. Any notice required or permitted to be delivered hereunder shall be deemed
received three (3) days thereafter sent by United States Mail, postage prepaid, certified mail, return
receipt requested, addressed to the party at the address set forth below (or such other address as
such party may subsequently designate in writing) or on the day actually received if sent by courier
or otherwise hand delivered sent via fax.
If intended for City, to:
Attn: Jim Prose
Anna City Managel•
111 North Powell Parkway
Anna, TX 75409
With a copy to:
Attn: Clark McCoy
Wolfe, Tidwell & McCoy, LLP
2591 Dallas Parkway, Suite 300
Frisco, Texas 75034
If intended for the Company:
Attn: Misty Murday
Controller
First Texas Homes, Inc.
500 Crescent Court, Suite 350
Dallas, TX 75201
With a copy to:
Attn: John D. Sloan, Jr.
Sloan Matney, LLP
Two Turtle Creels
3838 Oak Lawn, Suite 1200
Dallas, TX 75219
CHAPTER 380 GRANT AGREEMENT BY AND BETWEEN
THE CITY OF ANNA AND FIRST TEXAS HOMES, INC. -PAGE 7
Otuo Entire Agreement. This Agreement is the entire Agreement between the parties
with respect to the subject matter covered in this Agreement. There is no other collateral oral or
written Agreement between the parties that in any manner relates to the subject matter of this
Agreement.
6.07 GoveiTling_Law. The laws of the State of Texas shall govern the Agreement; and
this Agreement is fully performable in Collin County, Texas with exclusive venue for any action
concerning this Agreement being in a court of competent jurisdiction in Collin County, Texas.
6.08 Amendment. This Agreement may only be amended by the mutual written
agreement of the parties.
6.09 Legal Construction. In the event any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect other provisions, and it is the
intention of the parties to this Agreement that in lieu of each provision that is found to be illegal,
invalid, or unenforceable, a provision shall be added to this Agreement which is legal, valid and
enforceable and is as similar in terms as possible to the provision found to be illegal, invalid or
unenforceable.
6.10 Recitals. The recitals to this Agreement are incorporated herein.
6.11 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 and any such counterparts shall be deemed to be incorporated herein.
6.12 Survival of Covenants. Any of the representations, warranties, covenants, and
obligations of the parties, as well as any rights and benefits of the parties, pertaining to a period of
time following the termination of this Agreement shall survive termination.
6.13 Sovereign Irrnnunity. The parties agree that the City has not waived its sovereign
immunity by entering into and performing its obligations under this Agreement.
6.14 Dispute Resolution. Any controversy or claim arising from or relating to this
Agreement, or a breach thereof shall be subject to non -binding mediation, as a condition precedent
to the institution of legal or equitable proceedings by any party unless the institution of such legal
or equitable proceeding is necessary to avoid the running of an applicable statute of limitation.
The parties shall endeavor to resolve their claims by mediation. Grantor and Company shall share
the costs of mediation equally. The mediation shall be held in Collin County, Texas, unless another
location is mutually agreed upon. Agreements reached in mediation shall be enforceable as
settlement agreements in any court having jurisdiction thereof.
SIGNATURE PAGES FOLLOWJ
CHAPTER 380 GRANT AGREEMENT BY AND BETWEEN
THE CITY OF ANNA AND FIRST TEXAS HOMES, INC. -PAGE 8
EXECUTED as of the ' I' ay of , 2021.
T E CITY OF ANNA,
Jim Pr�oce, City Manager
ATTEST:
City Secretary
EXECUTED as of the � day of , 2021.
First Texas Homes, Inc.
a Texas corporation
Title: Controller
CHAPTER 380 GRANT AGREEMENT BY AND BETWEEN
THE CITY OF ANNA AND FIRST TEXAS HOMES, INC. -PAGE 9
ACKNOWLEDGMENTS
STATE OF TEXAS §
CITY OF ANNA §
This instrument was acknowledged before me on the day of , 2021
by Jim Proce, City Manager of the City of Anna, Texas, on behalf of said city.
CABBIE L. tAND
My Notary ID # 11419404 Notary Public, State of Texas
Expires February 4, 2023
STATE OF TEXAS §
CITY OF � §
This instrument was acknowledged before me on the I ✓ day of MtWbL.,
2021 by Kristy Murday, Controller of First Texas Homes, Inc., a Texas corporation, on behalf of
said company.
V „a• ''e ^ AMY CLARK
� Notary ID K131951574
Z �I My Commissio nE023ires
<rF E' March 28. —
CHAPTER 380 GRANT AGREEMENT BY AND BETWEEN
THE CITY OF ANNA AND FIRST TEXAS HOMES, INC. -PAGE 10
Notary Public -State of Texas