2015_04.30 EDC Agenda Packet - Special )c
KENNEDALE
Kennedale Economic
Development Corporation
www.ciryofkennedale.com
ECONOMIC DEVELOPMENT CORPORATION
AGENDA
BOARD OF DIRECTORS - SPECIAL MEETING
April 30, 2015
CITY HALL CONFERENCE ROOM, 405 MUNICIPAL DRIVE
SPECIAL SESSION - 12:00 PM
I. CALL TO ORDER
II. ROLL CALL
III. REGULAR ITEMS
A. Consider authorizing an agreement, which the Executive Director may execute amending the
construction commencement performance date of TownCenter Building 7 from 2014 until 2016;
Building 4 from 2015 until 2017; Building 5 from 2016 until 2018; and Building 2 from 2017 until 2019,
subject to approval of form by the KEDC attorney.
B. Consider authorizing an agreement, which the Executive Director may execute indicating
acceptance of the general Economic Development Corporation/Lender Agreement dated June 24,
2011 for each future phase or lot of new construction, subject to applicable laws and duty authorized
economic development projects.
C. Consider authorizing an agreement, which the Executive Director may execute approving the
assignment of the Commercial Property Management Agreement with D. Johnson Companies, Inc. to
an entity to be designated by Hughes Commercial Texas, subject to approval of form by the KEDC
attorney.
D. Consider authorizing an agreement, which the Executive Director may execute approving the
assignment of the Economic Development Agreement for Development of Kennedale TownCenter
(and the First Amendment and Second Amendment to Economic Development Agreement for
Development of Kennedale TownCenter) from Kennedale Town Center, L.P. to an entity to be
designated by Hughes Commercial Texas and providing for the deletion of"Chicken Express" in
section 7g.
E. Consider authorizing an agreement, which the Executive Director to execute providing for the
assignment of the Ground Lease from Kennedale Town Center, L.P. to an entity to be designated by
Hughes Commercial Texas, subject to approval of form by the KEDC attorney.
F. Consider authorizing an agreement, which the Executive Director may execute, authorizing the
assignment of a Reciprocal Parking Agreement between the EDC and Kennedale Town Center, L.P.
to an entity to be designated by Hughes Commercial Texas
IV. ADJOURNMENT
In compliance with the Americans with Disabilities Act, the City of Kennedale will provide for reasonable
accommodations for persons attending City Council meetings. This building is wheelchair accessible, and
parking spaces for disabled citizens are available. Requests for sign interpreter services must be made
forty-eight (48) hours prior to the meetings. Please contact the City Secretary at 817.985.2104 or (TDD)
1.800.735.2989
CERTIFICATION
I certify that a copy of the April 30, 2015, Kennedale Economic Development Corporation agenda was posted on the City Hall
bulletin board next to the main entrance of the City Hall building, 405 Municipal Drive, of the City of Kennedale, Texas, in a place
convenient and readily accessible to the general public at all times and said agenda was posted at least 72 hours preceding the
schedule time of said meeting, in accordance with Chapter 551 of the Texas Government Code.
Leslie Galloway, City 8,6cretary
405 Municipal Drive, Kennedale, TX 76060 1 Telephone:. 817.985.2102 1 Fax: 8 17-478-71 69
B
KENNEDALE
Kennedale Economic
Development Corporation
www.cityofkennedale.com Staff Report to the Board of Directors
Date:April 30, 2015
Agenda Item No: REGULAR ITEMS-A.
I. Subject:
Consider authorizing an agreement, which the Executive Director may execute amending the construction
commencement performance date of TownCenter Building 7 from 2014 until 2016; Building 4 from 2015 until
2017; Building 5 from 2016 until 2018; and Building 2 from 2017 until 2019, subject to approval of form by the
KEDC attorney.
II. Originated by:
III.Summary:
See the original Second Amendment to the Economic Development Corporation Agreement for the
development of Kennedale TownCenter to be amended.
IV. Recommendation:
Approve
V. Alternative Actions:
VI. Attachments:
1. Isecond Amendment to EDC Agreement for TownCenter ISecond Amendment- EDC.pdf
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SECOND AMENDMENT TO
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ECONOMIC DEVELOPMENT AGREEMENT
FOR DEVELOPMENT OF KENNEDALE TOWNCENTER E
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This Second Amendment to Economic Development Agreement (the "Second Amendment") is
entered into between Kennedale TownCenter, L.P., (the "Partnership") and the Kennedale
Economic Development Corporation("Corporation"),effective on October 22,2013.
Recitals:
A. Partnership and Corporation entered into that certain Economic Development Agreement
for Development of Kennedale TownCenter dated March 30, 2010 (the "Development
Agreement").
B. Partnership and Corporation desire to modify the Development Agreement, as set forth in
this Second Amendment.
f,
Now, therefore, for a good and valuable consideration, Partnership and Corporation agree as
follows:
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1. The "Improvements Phasing Chart" as set forth in Par. 4(b) of the Development
Agreement is deleted in its entirety, and replaced with the following:
i
Improvements Phasing Chart
i
Estimated
Building to be Minimum Commencement Construction
Phase Constructed Sizes #t of Construction Costs
1 (Existing Building 1) NIA N/A N/A
2 5 8,820 2012 $882,000
3 7 7,620 2014 $762,000
4 4 4,500 2015 $450,000
5 3 9,810 2016 981,000
6 2 6,960 2017 696,000
7 Section House N/A N/A N/A
8 6 6,600 2023 $660,000
2. Except as otherwise provided herein, all capitalized terms used but not defined herein
shall have the meaning ascribed in the Development Agreement.
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3. The Development Agreement is in full force and effect, as modified by this Second
Amendment.
4. This Second Amendment may be executed in counterparts,which taken together shall
constitute one agreement. Electronic signatures shall be considered originals. E
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EXECUTED this 22nd day of October 2013
to be EFFECTIVE on the date set forth above.
KENNEDALE ECONOMIC
DEVELOPMENT CORPORATION
B _
Robert Mun , 'oa d President
ATTEST:
j4v�6 ,
!n[�
Board Secr tary
KENNEDALE TOWNCENTER,L.P.
By: K ,L,L.C.,its Gene 1 Partne
B :
David ohnson,Manager
B
KENNEDALE
Kennedale Economic
Development Corporation
www.cityofkennedale.com Staff Report to the Board of Directors
Date:April 30, 2015
Agenda Item No: REGULAR ITEMS- B.
I. Subject:
Consider authorizing an agreement, which the Executive Director may execute indicating acceptance of the
general Economic Development Corporation/Lender Agreement dated June 24, 2011 for each future phase or
lot of new construction, subject to applicable laws and duty authorized economic development projects.
II. Originated by:
III.Summary:
See the original Economic Development Corporation/Lender Agreement to be accepted for future phase or lot
of new construction.
IV. Recommendation:
Approve
V. Alternative Actions:
VI. Attachments:
1. JEDC Lender Agreement-TownCenter Lender Agreement.pdf
ECONOMIC DEVELOPMENT CORPORATIONALENDER
AGREEMENT
JIM 2011
Definitions-
Premises:Premrr� ses: The land described on Exhibit `tA" attached hereto,
together with all improvements now or hereafter
constructed on such land
Project: Kennedale. Town Center Building #S primary structure
and Exterior Envelope
Borrower: I ENNEDALE TOWN CENTER, LP, a Texas limited
partnership
KEDC: IKENNEDALE ECONOMIC DEVELOPMENT
CORPORATION
Lender: LONE STAR BANK,S.S.B.
Loan: That one certain promissory note executed by Borrower
and payable to the order of Lender in the original
principal amount of One Million and No/100 Dollars
($1,000,000.00) to be secured by, among other items, a
deed of trust lien on the fee simple interest on the
Premises.
This Economic Development Corporation/Under Agreement ("Ageement") is
entered into by and between KEDC and Lender for Ten dollars ($10.00) and other good
and valuable consideration provided by Lender to KEDC, the receipt of which is hereby
acknowledged by KEDC, and the further consideration consideration of Lender's
agreement with Borrower to finance construction ("Construction Funds") of the Project
in accordance with and subject to that certain Construction Loan Agreement (the "Loan
A ear emenf' of or about even date herewith, executed by the Borrower and Lender and
all related writings (collectively,the"Credit Documents"), executed or to be executed by
Borrower and others in favor of Lender. Except as provided for herein, all terms used in
this Agreement with their initial letters capitalized shall have the respective meanings
ascribed to such terms in the Loan Agreement.
As an inducement for Lender to advance construction funds to develop the
Project, KEDC is pledging its fee simple interest in the Premises to secure the Loan and
other sums due under the terms of the deed of trust securing the Loan. As a condition to
pledging the Premises to secure the Loan, Lender has agreed, that in the event
circumstances occur causing the Lender to accelerate the maturity of the debt, Lender
shall notify KEDC that the maturity of the debt has been accelerated and provide KEDC
with the opportunity to purchase the Loan without recourse and without warranty. From
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the date KEDC receives written notice that the maturity of the debt has been accelerated,
KEDC shall have sixty (60) days within which to purchase said Loan in full for cash
(herein called the "60-day Purchase Notice"). In the event that KEDC does not purchase
the Loan under the 60-day Purchase Notice, Lender shall have the right to proceed to
foreclose on the Premises as provided under the terms of the deed of trust.
Notwithstanding anything contained herein,KEDC expressly waives:
I. Any right to require Lender to do any of the following before Lender may
pursue its rights under the deed of trust securing the Loan:
A. exhaust remedies against Borrower or any other person or entity
liable for the Loan or any portion thereof;
B. sue on an accrued aright of action in respect of the Loan or bring
any other action, exercise any other right, or exhaust any other
remedy;or
C. enforce rights against Borrower's assets or the collateral pledged
by Borrower to secure the Loan.
2. Any right related to the timing, manner or conduct of Lender's
enforcement of rights against Borrower's assets or the collateral pledged
by Borrower to secure the Loan;
3. If Borrower(or any other person or entity)has pledged assets to secure the
Loan, any right to require Lender to proceed first against collateral
pledged by Borrower (or any other person or entity) before proceeding
against the collateral pledged by KEDC;
4. Promptness, diligence, notice of any default, notice of non-payment or
nonperformance,notice of acceleration or intent to accelerate,demand for
payment or performance (although Lender may,but have no obligation to,
make demand for payment or performance), acceptance or notice of
acceptance of the deed of trust, presentment, notice of protest, notice of
dishonor, notice of the incurring by Borrower of additional indebtedness,
notice of any suit or action by Lender against Borrower (or any other
person or entity), any notice to any person or entity liable for the Loan
which is the subject of the suit or action, and all other notices or demands
with respect to the Loan, except for the 60-day Purchase Notice set out
above.
S. Each of the foregoing rights or defenses,regardless of whether they arise
under (a) Rule 31 of the Texas Rules of Civil Procedure, (b) Section
17.001 of the Texas Civil Practice and Remedies Code, (c) Chapter 34 of
the Texas Business and Commerce Code, or (d) any other statute or law,
common law, in equity, under contract or otherwise, or any amendments,
2
recodif cations, supplements, or any successor statute or law of or to any
statute or law.
Any notice, request or other communication required or permitted to be given
under this Agreement shall be given in writing by delivering it against receipt for it, by
depositing it with an overnight delivery service or by depositing it in a receptacle
maintained by the United States Postal Service, postage prepaid, registered or certified
mail, return receipt requested, addressed to the respective parties at the addresses shown
in this Agreement (and if so given, shall be deemed given when mailed)_ KEDC's
address for notice may be changed at any time and from time to time,but only after thirty
(30) days' advance written notice to Lender and shall be the most recent such address
furnished in writing by KEDC to Lender. Lender's address for notice may be changed at
any time and from time to time, but only after ten (10) days' advance written notice to
KEDC and shall be the most recent such address furnished in writing by Lender to
KEDC. Actual notice, however and from whomever given or received, shall always be
effective when received.
This Agreement shall not be changed orally but shall be changed only by
agreement in writing signed by KEDC and Lender. Any waiver or consent with respect
to this Agreement shall be effective only in the specific instance and for the specific
purpose for which given. No course of dealing between the parties,no usage of trade and
no parol or extrinsic evidence of any nature shall be used to supplement or modify any of
the terms or provisions of this Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND
THE UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
Lender's exercise of any right, benefit or privilege under the Credit Documents or
any other related papers or at law or in equity shall not preclude the concurrent or
subsequent exercise of Lender's other present or future rights,benefits or privileges. The
remedies provided in this Agreement are cumulative and not exclusive of any remedies
provided by law,the Credit Documents or any related papers or instruments. No failure
by Lender to exercise, and no delay in exercising, any right under the Credit Documents
or any related papers or instruments shall operate as a waiver thereof.
All covenants, agreements,representations and warranties in this Agreement shall
be binding upon any successors and assigns of KEDC.
Wherever the term"including"or a similar term is used in this Agreement,it shall
be read as if it were written"including by way of example only and without in any way
limiting the generality of the referred to clause or concept." All exhibits described in this
Agreement as being attached to it are hereby incorporated into it.
If any provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws, the legality, validity and enforceability of the remaining
3
provisions of this Agreement shall not be affected thereby, and this Agreement shall be
liberally construed so as to carry out the intent of the parties to it.
This Agreement embodies the entire agreement and understanding between
KEDC and Lendu with respect to the subject matter of this Agreement and supersedes all
prior conflicting or inconsistent agreements, consents and understandings relating to such
subject matter. KEDC acknowledges and agrees that there is no oral agreement between
KEDC and Lender which has not been incorporated in this Agreement.
EXECUTED the��y of t1i+ 2011.
KEDC:
RENNEDALE ECONOMIC DEVELOPMENT
CORPORATION
By:
ROBERT MUNDY, reside
Address: 405 Municip
]Kennedale,TX 75050
LENDER:
LONE STAR BANK,S.S.B.
By: LX44
F
VAN P. SWIFT,Executive Vice President
Address:
100 South Main Street
PO Drawer A
Moulton,TX 77975
STATE OF TEXAS §
COUNTY OF §
This instrument was acknowledged before me on 2011, by
ROBERT MUNDY, President of KENNEDALE ECONOMIC DEVELOPMENT
CORPORATION,acting in said capacity. Q�
Notary Public in and for the exas
r CELESTE OLIVIA BROWN
�'''• r'�° Notary Public,State of Texas
B • �� My Commission Expires
s 1' {'• November 04,2 014
4
STATE OF TEXAS §
�-�� §
COUNTY of §
This instrument was acknowledged before me on —fUll 2011,by VAN P.
SWE T, Executive Vice President of LONE STAA RANK, S , acting i �
capacity. (5—ErZl
Notary Public in and for the State of Texas
� �� ;d1Y COMM45SiOtd F.Xi'iR�S
.,R�X , y4,7A15
5
EXMIT A
Lot 5 of Replat Block A,Kennedale Retail Center Addition,an Addition to the City
of Kennedale, Tarrant County,Texas, according to the Plat thereof recorded under
Instrument No.D209321169 of the Plat Records of Tarrant County,Texas.
6
B
KENNEDALE
Kennedale Economic
Development Corporation
www.cityofkennedale.com Staff Report to the Board of Directors
Date:April 30, 2015
Agenda Item No: REGULAR ITEMS-C.
I. Subject:
Consider authorizing an agreement, which the Executive Director may execute approving the assignment of the
Commercial Property Management Agreement with D.Johnson Companies, Inc.to an entity to be designated
by Hughes Commercial Texas, subject to approval of form by the KEDC attorney.
II. Originated by:
III.Summary:
See the original Commercial Property Management Agreement to be assigned.
IV. Recommendation:
Approve
V. Alternative Actions:
VI. Attachments:
1. �ownCenter ommercial Property Management Agreement- �greement.pclf ommercial Property Management
Commercial Property Management Agreement
This Commercial Property Management Agreement is made and entered into by and
between Kennedale Town Center, L.P., ("Agent") by and through David G. Johnson, Manager of
KTC GP, L.L.C. the General Partner the Partnership,the principal office of the Partnership being
3977 Fall Creek Road, Spicewood, Texas 78669, and the Kennedale Economic Development
Corporation ("Owner"), a nonprofit corporation organized as a Type B Corporation under the
Development Corporation Act of 1979, Tex. Loc. Gov't Code Ann. §§ 505.001-505.355 (Vernon
Supp. 2008) (the "Act"), for the purposes and consideration below.
WHEREAS, pursuant to a separate Economic Development Agreement, incorporated by
reference herein, between Owner and Agent, Agent has agreed with Owner to construct and
operate a retail shopping center and professional office complex to be known as the Kennedale
TownCenter on certain property owned by Owner;
WHEREAS, pursuant to a separate Ground Lease, incorporated by reference herein,
Agent will lease land necessary from Owner in order to develop the Property as Kennedale
TownCenter;
WHEREAS, structures currently existing on the property are occupied by tenants;
WHEREAS, Owner has determined that it will serve a public purpose to engage Agent
as the property manager for managing and leasing purposes of certain existing structures on the
Property and as the property manager to manage and lease the structures that will be built on the
Property;
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Lessor and Lessee agree as follows:
1. DEFINITIONS.
"Property" Lots 1R, 2R, 3R, 4R, 5, 6, 7, and 8, BLOCK A, KENNEDALE
RETAIL CENTER ADDITION, an Addition to the City of Kennedale, Tarrant County, Texas,
as filed in Doc. #D2093211169, Official Records of Tarrant County, Texas,together with all and
singular the rights and appurtenances pertaining to such tract of land, including any right, title
and interest of the Corporation in and to adjacent streets, alleys or rights-of-way.
2. TERM OF CONTRACT.
a. Primary Term: The primary term of this Commercial Property Management
Agreement ("Agreement") shall begin on the date of execution and shall end on
May 3, 2030 or on the date the purchase option as set out in the Ground Lease is
exercised, whichever is sooner("the Expiration Date").
b. Automatic Extension: Unless the aforesaid purchase option is exercised, this
agreement will automatically extend on a monthly basis until either party
terminates by providing at least 30 days written notice of termination to the other
party.
(03/14/10) Page 1
C. Partial Termination. Pursuant to the Ground Lease, Agent shall assume
responsibility for certain lots within the Propertyy as vertical construction is
substantially completed. A s result, there will be no need for the Agent to
perform duties after Lessee under the Ground ea se takes control of a particular
lot. Therefore, once Lessee becomes responsible for maintenance obligations of a
particular lot pursuant to Article 5.01 of the Ground Lease, then this Management
Agreement shall terminate with respect to that particular lot and the term
Property, as herein defined, shall be deemed to be amended accordingly.
3. MANAGEMENT SERVICES TO BE PERFORMED. Owner hereby authorizes
Agent to perform, an gent does here y agree to perform, in t e name of, for the account of,
and at the expense of Owner,the following:
a. General Responsibilities. Agent shall be responsible for overall management
and leasing of the Property as a retail shopping center and professional office
complex for the benefit of Owner, except for those responsibilities expressly
excluded by the terms of this Agreement.
b. Lease Execution. Agent shall negotiate lease agreements in the name of Owner
on standard forms approved by Owner with lease provisions as approved by
Owner. It is understood that Agent shall execute all leases on behalf of Owner,
after prior approval of Owner, which approval shall be deemed granted if Owner
has not rejected the lease applicant within 14 days after delivery of applicant
information to Owner. Owner shall not unreasonably withhold or delay Owner's
approval. Agent shall set written standards for screening and qualifying
prospective tenants, and shall screen and qualify all prospective tenants based
upon Agent's professional experience.
C. Statement and Invoices. Agent shall determine and prepare invoices and/or
statements, as applicable, for tenants of the Property for rent, common area
maintenance fees, taxes, insurance, assessments, and other charges as shall be due
from tenants in accordance with applicable lease provisions.
d. Collections Agent. Agent shall collect all rents and other monies due, including
percentage rents, from tenants of the Property as and when the same shall become
due and payable and give receipts therefor, and in the collection of percentage
rents: Agent shall keep records of gross sales of tenants and compute percentage
rent due, terminate tenancies, and sign and serve in the name of Owner such
notices as are deemed appropriate by Agent. Agent shall, with the prior written
consent of Owner, institute and prosecute actions, evict tenants and recover
possession of premises occupied by them, and sue in the name of Owner to
recover rents and other sums due. When expedient, Agent may settle, compromise
and release such actions or suits to reinstate such tenancies, when the total amount
sought in such actions or suits is less than$2,000.00.
e. Operating Account. Agent shall deposit all receipts collected for Owner in the
course of operating the Property, in an FDIC insured operating account
("Operating Account' for the benefit of Owner. Agent may endorse any and all
checks drawn to Owner (with the exception of checks for insurance,
condemnation, or lawsuit settlements) as may be required for deposit into the
Operating Account. Any funds remaining in the Operating Account at the end of
each month during the term hereof, after the deduction of a $10,000.00 operating
reserve and after the disbursements by the Agent of the expenses and other
expenditures authorized hereunder, shall be remitted to Owner. The $10,000.00
operating reserve may be adjusted from time-to-time as mutually agreed by
Owner and Agent. Agent will not be held liable in event of bankruptcy, failure or
negligence of the depository.
L Accounts Payable. Agent shall pay on behalf of Owner from the Operating
Account, all obligations and expenses in operating, managing, leasing and
(03/14/10) Page 2
maintaining the Property which are lawfully incurred by or on behalf of the
Property, includin but not limited to management fees (as described in Paragraph
5.b), leasing fees bas described in Paragraph 5.c) and personal property taxes. In
the event the funds in the Operating Account are not sufficient to pay such
obligations and expenses, Owner shall at the request of Agent cause to be
deposited additional funds necessary to pay such obligations and expenses of the
Property. A ent shall pay all invoices in a timely manner that will take full
advantage ofany discounts offered to the extent that there are monies available in
the operating account.
g. Records. Agent shall maintain full and detailed books and records at its principal
office in relation to its operation, management, and maintenance of the Property.
Such books and records shall be kept on a cash basis, as being maintained by
Agent for other commercial properties managed by Agent. Owner shall at all
reasonable times have access, electronically and in person, to such records for the
purpose of review and/or audit. Owner shall have the right to duplicate such
records. Any audit by Owner of the Agent's books covering the Property shall be
at the expense of Owner, but if Owner's audit discloses a difference equal to or
greater than 5% of the Agent's operating numbers, then the expenses incurred by
Owner in connection with said audit shall be paid by Agent.
h. Financial Reports. Agent shall provide to Owner on or before the 30th day of
each calendar month, an Operating Report prepared by Agent setting forth all
rents and other income collected and disbursements of all funds related to the
operation, management, leasing and maintenance of the Property, for the
immediately preceding fiscal month of operation. The fiscal year-end Operating
Report for the project shall be due within 120 days following the end of the last
month of the fiscal year for the Property. The Operatin Report shall compare
or
receipts and disbursements for such pri month and for the year-to-date. A
written memorandum is to be provided with the Operating Report settingg forth
explanations for deviations from budgeted amounts. Agent shall also Provide with
such report a list of all tenants who are delinquent, a cash reconciliation report,
and a leasing report.
i. Budget. Agent shall prepare and submit to Owner for approval at least thirty(30)
days prior to the start of each year, an annual operating budget (the "Budget") for
the Property showing monthly and annual income, operating expense and capital
expenditures. The fiscal year for the Property shall end December 31st of each
calendar year, unless otherwise agreed in writing by both Agent and Owner.
Subject to the terms of this Agreement, approval of the Budget by Owner will
constitute Agent's authority to incur the operating expenses and capital
expenditures as set forth in the Budget.
j. Sales and Use Tax Return. Agent shall prepare all sales and use tax returns, if
any, necessary in the operation of the Property, and make all deposits and
payments required with respect to such taxes.
k. Audited Statement. A ent shall, if requested by Owner and at the cost of
Owner, provide annual financial statements audited and certified by a certified
public accounting firm satisfactory to Owner.
1. Employees and Independent Contractors. Agent shall cause to be hired,
supervised, discharged and paid, at reasonable wages, all employees and
contractors reasonably necessary for the efficient operation, management, leasing
and maintenance of the Property. Agent shall use reasonable care In selection and
supervision of such employees and contractors. All persons employed shall be
employees of Agent and not of Owner. Agent's management employees, such as
Property Manager, Assistant Property Manager, accounting personnel, Building
Superintendent, Tenant Services Supervisor, secretarial and clerical staff, whether
(03/14/10) Page 3
part-time or full-time employees, utilized in the management of the Property are
referred to herein as "Building Management" employees.
m. Discrimination. Neither Agent nor any party acting by, through or on behalf of
Agent shall discriminate upon the basis of race, sex, color, creed, familial status,
religion, disability, or national origin in the sale, lease, or rental or in the use or
occupancy of the Property of any improvements erected or to be erected thereon,
or any part thereof, or in the management of the Property.
n. Utilities. Agent shall negotiate and enter into contracts in the name of Owner for
electricity, gas, fuel, water, telephone, window cleaning, refuse handling,
Janitorial service, extermination service and other services required in the
operation and maintenance of the Property. All contracts shall be on an "arms
length" market rate basis, and shall not be surcharged by Agent. Owner shall
assume the obligation of any contract so entered into and outstanding at the
termination of this Agreement. All service and maintenance contracts initiated by
Agent shall be negotiated to include thirty (30) days notice of termination clause
without penalty.
o. Maintenance. Agent shall maintain or cause to be maintained the Property and
common areas thereof, including sidewalks, signs, parking lots and landscaping-,
to make or cause to be made and supervise minor repairs (under $ 2,500.00) and
minor alterations or renovations (under $ 2,500.00); to purchase supplies required
for the operation and maintenance of the Property, and pay all bills therefor from
Owner's funds, and to report to Owner conditions related to the Property
requiring the attention of Owner.
Agent shall purchase all supplies, materials and equipment as Agent may
determine advisable. Agent agrees to secure the approval of Owner on all
expenditures in excess of $ 2,500.00 for any one item, unless said expenditure
was set forth in the Budget, or for an emergency repair necessary to the tenants
per the lease, or for the protection of human life.
P. Promotion. Agent may conduct or cause to be conducted a promotional program
as may be appropriate and customary for the tenants within the Property with the
consultation and prior approval of Owner.
q. Advertisement. Agent shall advertise the Property or portions thereof, as
available for rent, and prepare other forms of advertising relating to said rental
activity.
r. Insurance. Agent shall, if requested by Owner, (1) determine all insurance
coverage reasonably required or desirable for the Property, and on behalf of
Owner negotiate and procure such insurance coverage; (2) upon receiving the
prior written consent of Owner, institute and prosecute claims under all such
coverage; (3) upon receiving the prior written consent of Owner, settle and
compromise such claims; (4) procure periodic insurance appraisals as may be
required; and (5) make reports, upon Owner's request, but not less than annually,
to Owner of the kinds and amounts of insurance coverage in force, the expiration
dates thereof, and the premium costs thereof.
At all times during the term of this Agreement, Owner shall keep n full force and
effect one or more policies of commercial general liability and property damage
insurance with respect to the Property, and the business conducted by Owner, or
Agent on behalf of Owner, upon the Property. The limits of liability coverage
shall not be less than $500,000.00 per person and $1,000,000.00 per accident and
the property damage liability coverage shall not be less than $1,000,000.00. The
commercial general liability policy shall name Owner as insured and Agent as
additional insured, and shall contain a clause that the insurer will not cancel or
(03/14/10) Page 4
change the insurance without first giving the Agent at least ten (10) days prior
written notice.
At all times during the term of this Agreement, the Agent shall keep in full force
and effect one or more policies of commercial general liability insurance covering
the business conducted by Agent on behalf of Owner upon the Property. The
limits of liability coverage shall not be less than $500,000.00 per person and
$1,000,000.00 per accident and the property damage liability coverage shall not
be less than $1,000,000.00. The commercial general liability policy shall name
Agent as insured and Owner as additional insured, and shall contain a clause that
the insurer will not cancel or change the insurance without first giving Owner at
least ten(10) days prior written notice.
Agent shall cooperate with and provide reasonable access to the Property.to
agents of any and all insurance companies and/or insurance brokers or agencies
who may, from time to time, be involved with the issuance of insurance policies
or with inspections of the Property in connection with insurance policies then in
force.
Agent shall make, if requested by Owner and in the name of Owner, payments of
insurance premiums.
S. Agent's Office. Agent shall maintain a suitable business office with such
management, secretarial and bookkeeping personnel as may be required to
maintain such office and the books and records to adequately perform the terms of
this Agreement and reflect the transactions incidental to the operation and
maintenance of the Property.
t. Commercially Reasonable Efforts. Agent shall use commercially reasonable
efforts in the exercise of the power and duties conferred and assumed under this
Agreement and in the operation, management and maintenance of the Property for
the period and upon the terms herein provided.
U. Operating Account. Agent shall operate the Property and make expenditures
pursuant to this Agreement in a manner in accordance with the Budget submitted
to and approved by Owner. Except for emergency expenditures, any expenditures
or commitments which are not in accordance with the approved Budget must have
approval from Owner.
V. Taxes and Assessments. The parties have agreed in the Ground Lease on the
respective responsibility for property taxes and assessments. Property taxes or
assessments applicable to the Property may be passed along to the tenants of the
Property as a `triple-net" expense. Agent shall promptly forward to Owner or the
appropriate tax collecting agency any and all Assessments or property taxes
related to the Property which rt collects on behalf of the Owner or the lessee under
the Ground Lease..
W. Compliance With Laws. Agent shall use commercially reasonable efforts to
cause to be done in or about the Property all acts and things which are necessary
in order to comply with federal, state or municipal order, rules, regulations,
ordinances, or statutes affecting the Property and orders of any board of fire
underwriters or other similar body, subject to the limitations contained
hereinabove regarding maximum amounts or contracts requiring Owner's prior
written approval. Agent shall promptly notify Owner of all notices it receives
regarding governmental requirements affecting the Property. Agent shall obtain
and maintain current all licenses and/or permits as shall be required in the
operation and maintenance of the Property.
X. Professional Assistance. Agent shall with prior consultation and written
approval of Owner engage attorneys, accountants, ad valorem tax consultants,
(03/14/10) Page 5
data processing ersonnel, architects, engineers or other persons furnishing
services reasonably required in connection with the discharge of Agent's duties
hereunder, on behalf of Owner, and pay the reasonable charges for all such
services from Owner's funds.
Y. Service Notice. Agent shall advise and promptly send copies to Owner of the
service upon Agent of any summons, subpoena, or other like legal document,
including any notices, letters, or other communications setting out or claiming an
actual or alleged potential liability of Owner or Agent in managing or operating
the Property. Agent shall advise and send copies to Owner of any letter or notice
by the tenant that may lead to cancellation,voidance or termination of the lease or
any part thereof.
Agent shall (1) promptly notify Owner of any notice of violation of any
governmental requirement relating to the Property or of any defect in the
Property; (2) promptly notify Owner of any fire or other damage to the Property
and to complete customary loss reports in connection with such damage to the
Propertyy; (3) romptly file such reports with the insurers and Owner; and (4)
promptly noti y Owner's general liability insurance carrier and Owner of any
personal injury or property damage occurring to or claimed by any tenant or third
party on or with respect to the Property.
Z. Agent's Signage. Agent shall be permitted to install, at its sole cost and expense,
sign(s) identifying Agent's management and/or leasing of the Property. The
location of said sign(s) shall be at a place mutually acceptable to Owner and
Agent.
aa. Tenant Improvements. Agent shall manage and supervise construction of tenant
improvements.
bb. Security Deposits. Agent will collect the security deposits, but will transfer such
deposits to Owner to maintain. Agent will notify Owner when a security deposit
needs to be returned or used for lawful deductions.
4. EXCLUDED SERVICES. Agent shall not be required under the terms and provisions
of this Agreement to render any o the following services:
a. The planning, developing, financing or supervision of construction for any
additional building or land which may hereafter be added to or become a part of
the Property from time to time; however, such service may be performed by
Agent subject to written agreement between Owner and Agent for such additional
services at the rate of two percent (2 %) of expenditures.
b. Services requiring time in excess of the stated duties required hereunder, such as
in connection with litigation, arbitration or mediation other than suits for the
collection of rent or the enforcement of leases, whether such litigation, arbitration
or mediation shall be instituted by Owner, by tenant or others.
5. AGENT'S COMPENSATION.
a. Expenses and Expenditures. Agent will be reimbursed by Owner from the
Operating Account each month for the following listed expenses and expenditures
incurred or accrued by Agent in the operation of the Property:
i. All direct labor and contract costs, and all materials, supplies, equipment,
tools, components, and related systems and parts with respect to the
maintenance, repair, improvement and operation of the Property.
ii. Operating costs and expenses of supplies, materials, equipment, Property
stationery, forms, books and records, all with respect to the Property or
(03/14/10) Page 6
i
other locations approved by Owner, and audited financial statements and
certifications thereof as may be required by this Agreement.
iii. All necessary equipment, tools and supplies, whether purchased, leased or
otherwise acquired for the performance by Agent of the duties required
hereunder for the operation of the Property pursuant to this Agreement.
iv. All other ordinary and necessary expenses or expenditures paid or accrued
in the operation of the Property pursuant to the Budget.
V. All monies which Agent may elect to advance for the Owner for expenses
which Owner is required to pay under this Agreement; however, Agent
will not be obligated to make such advancements.
b. Management Fee. For the services rendered by Agent pursuant to this
Agreement, and in addition to other fees and reimbursements to Agent as set forth
in this Agreement, Owner shall pay Agent monthly a management fee in an
amount of$500.00 per month. All such fees are due and payable by the last day
of each month.
Agent shall have the authority to make such payments on Owner's behalf from the
Operating Account, so long as such payments are made in accordance with the
terms and conditions of this Agreement.
C. Leasing Commissions. This Paragraph shall appl exclusively to the existing
Buildings which are currently on the Property as of the date this contract is signed
and shall not apply to any newly constructed Building to be built by Agent
pursuant to the Economic Development agreement. Owner grants to Agent the
exclusive right to lease the Property described by this Paragraph and Owner shall
compensate Agent for its services as Leasing Agent in accordance with the
following:
i. Commissions on Initial Leases - Commission equal to Four percent (4%)
of the Aggregate Total Base Rental provided in the Lease Agreement for
the initial term shall be paid to Agent where Agent was the "procuring
cause" of the initial lease for Buildings.
ii. Commissions on Lease Renewals - Commission equal to Two percent
(2%) of the Aggregate Total Base Rental provided in the Agreement for
the renewal term shall be paid to Agent where an existing tenant renews a
lease for its existing premises, including the exercise of an option to
renew.
iii. Commissions on Tenant Expansion - For the purpose of determining
compensation under this Agreement, tenant expansions shall be
considered as an initial lease hereunder; however, such commission shall
only be applicable for the net increase in tenant's square footage.
Furthermore, the same method of determining Agent's commission shall
be used if an existing tenant relocates within the Property for the purpose
of expanding.
iv. Commissions on Month-To-Month Lease - A commission equal to one-
half (1/2) of the first month's rental, when a tenant initially occupies the
premises on a "month-to-month" basis; however, such commission shall
not be less than$250.00.
v. Commission When Other Brokers Are Procuring Cause - A commission
equal to Six percent (6%) of the Aggregate Total Base Rental provided in
the Lease Agreement for the initial lease term shall be paid to Agent when
an outsider broker (i.e. not an employee of Agent) is the "procuring cause"
(03/14/10) Page 7
of the lease as defined by the laws within the state the Property is located.
Agent shall indemnify Owner against any commission liability to such
outside broker. A commission equal to Four percent (4%) of the
Aggregate Total Base Rental provided in the Lease Agreement for the
renewal term shall be paid to Agent when an outside broker has been
appointed as the tenant's exclusive agent for the renewal and Agent shall
indemnify Owner from any commission claims from such outside broker
with respect to the renewal.
vi. Definition of Aggregate Total Base Rental - Aggregate Total Base Rental
shall mean all guaranteed minimum rent provided for in the primary tern
of the lease. Percentage rental and additional rent is excluded from this
definition.
vii. Leasing Commissions - Leasing commissions due Agent will be earned
and paid one-half upon signing of the lease and one-half upon tenant's
opening for business.
viii. Leasing Expenses - In addition to the commissions provided herein,
Owner shall pay to or reimburse Agent for the following expenses:
1. Advertising and promotion expenses paid by Agent as set forth in
the approved Budget, or as otherwise approved by Owner.
2. Space planning expenses paid by Agent as set forth in the
approved Budget, or as otherwise approved by Owner.
3. Special events and promotions, subject to prior approval by
Owner.
4. Any other special marketing projects which are approved by
Owner.
5. Any legal expenses incurred in connection with lease preparation
and negotiations which are pre-approved by Owner.
6. Travel expenses (excluding entertainment expenses) which are pre-
approved-by Owner.
6. AUTHORITY. Agent is vested with such general authority and powers as may be
necessary or advisable e to carry out the intent of this Agreement.
7. INDEMNIFICATION. Agent agrees to protect, defend, indemnify and hold Owner and
the Property harmless from and against any and all loss, cost, damage, liability and expense
(including court costs and reasonable attorneys' fees) arising out of(i) obligations or liabilities of
Owner incurred by Agent or any of its officers, employees or agents, other than those expressly
permitted hereby to be so inured by Agent, or (ii) any negligence, willful misconduct or fraud
of Agent or any of its officers, employees, or agents.
8. REIMBURSEMENT FOR CLAIMS. Owner agrees to reimburse Agent for Agent's
reasonable legal expenses incurred e en ing egal claims from third parties that may arise as a
result of Owner's performance of this Agreement, provided that such claims are not covered by
Owner's insurance policies or by the City's insurance policies. In the event that such legal
expenses exceed or are anticipated to exceed $10,000, then Agent will notify Owner, and the
parties will reasonably cooperate in determining a legal strategy with respect to such claim.
9. TERMINATION OF AGENT.
a. Termination By Either Party.
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i. Either party shall have the right to terminate this Agreement upon thirty
(30) days prior written notice.
ii. Either party shall have the right to terminate this Agreement upon ten (10)
days prior written notice in the event of a sale or exchange of all or any
portion of the Property, or substantial destruction of the Property.
iii. If either party shall file a petition in bankruptcy, or be granted relief under
the Bankruptcy Code of the United States of America, or make an
assignment for the benefit of creditors or like arrangement or composition
or file a petition in the federal court for reorganization or otherwise seek
relief under any bankruptcy or insolvency law, federal or state, or be
placed in the hands of a receiver or trustee, then this Agreement is
terminated.
iv. If either party fails to comply with any rule, order, determination,
ordinance, or law of any federal, state, or municipal authority, the
other party may terminate this Agreement upon ten (10) days prior
written notice.
b. Termination by Owner. Owner shall have the right to terminate this Agreement
in the event of Agent's breach of its obligations under this Agreement which shall
not have been cured within 7 days after Agent's receipt of Owner's written notice
thereof. Owner shall have the right to terminate this Agreement immediately
upon giving written notice to Agent in the event of gross negligence, willful
misconduct or fraud by Agent in the performance of any provision of this
Agreement. In such event, all obligations of Owner to Agent shall immediately
terminate, and Agent shall be deemed to have forfeited any outstanding fees and
commissions earned by Agent, including reimbursements of all amounts provided
herein, prior to and including the effective date of termination. Owner shall have
the right to terminate this Agreement immediately in the event of an uncured
Event of Default by Agent pursuant to the Economic Development Agreement or
the Ground Lease.
C. Termination By Agent. Agent shall have the right to terminate this Agreement
in the event of Owner's breach of its obligations under this Agreement which
shall not have been cured within 7 days after Owner's receipt of Agent's written
notice thereof.
d. Agent's Cooperation Upon Termination. Agent shall cooperate with Owner in
notifying all tenants of the Property of the expiration and termination of this
Agreement by written notice sent by certified mail, return receipt requested, and
Agent shall cooperate with Owner to accomplish an orderly transfer of the
operation and management of the Property to a party designated by Owner. Agent
shall, at its sole cost and expense, promptly remove from the Property all signs
indicating that Agent is the managing agent. Agent shall rovide a final
accounting and shall transfer all books, records, leases, keys and other materials
belonging to Owner, and shall, within thirty (30) days after termination, deliver a
list of prospective tenants whom Agent (or others working by or through Agent)
has introduced to the Property (the "Qualified Prospects"). If the Qualified
Prospects have demonstrated an interest to lease any portion of the Property, then
Agent shall be entitled to the scheduled commission for any lease executed by
Owner and any Qualified Prospect within one hundred eighty (180) days after
termination of this Agreement, payable as provided above, unless this Agreement
is terminated by Owner in accordance with Paragraph 9.b above, in which case no
commission shall be due to Agent.
10. CONFIDENTIALITY. Agent shall hold in strict confidence all information related to
Owner's business concerning the Property furnished to or obtained by Agent in the form of
information gathered from Owner's books or records. In no event shall Agent issue or make any
(03/14/10) Page 9
statement on behalf of Owner: to the press or other media, without Owner's prior approval in
each and every instance. Nothing herein shall prevent Agent from disclosing information that is
subject to disclosure through open records or open meetings laws of the state of Texas.
11. ASSIGNMENT. Agent may not assign its interest in this Agreement without the prior
written consent of t wner, except as may be otherwise specifically provided herein. By its
signature below, Owner consents to the assignment of this Agreement from the Agent to D.
Johnson Companies, Inc.
12. OWNER'S CREDITORS. Agent is not and never shall be liable to any creditor of
Owner.
13. NO JOINT VENTURE OR PARTNERSHIP. Nothing contained in this Agreement or
in the relationship of wner and Agent shall e deemed to constitute or be construed to be or
create a partnership or joint venture between Owner and Agent.
14. NO WAIVER OF RIGHTS. Failure by Owner or Agent at any time to exercise any
right or remedy herein granted or established by law shall not be deemed to operate as a waiver
of its right to exercise such right or remedy at any other future time.
15. COMPLIANCE WITH LAW. Owner and Agent shall comply with all statutes,
ordinances, aws, ru es an or den o any federal, state, or local government or department or
office thereof having jurisdiction over the Property respecting the use, operation, maintenance
and construction thereof.
16. GOVERNING LAW. If any one or more of the covenants, agreements or provisions of
this Agreement s hall e det ermined by a court of competent jurisdiction to be invalid, the
invalidity of such covenants, agreements and provisions shall in no way affect the validity or
effectiveness of the remainder of this Agreement and this Agreement shall continue in force to
the fullest extent permitted by law. This Agreement shall be governed by the laws of Texas and
all parties hereto submit to mandatory jurisdiction in Tarrant County, Texas.
17. NOTICES. Any notice which Agent may desire or be required to give to Owner shall be
deemed sufficiently given or rendered if in writing, delivered to Owner by courier, electronic
mail or facsimile, with evidence of delivery, or by certified or registered mail, return receipt
requested and addressed to Owner as follows:
OWNER:
KENNEDALE ECONOMIC DEVELOPMENT CORPORATION
Attn: President
405 Municipal Drive, Kennedale, TX 76060
FAX:817-478-7169 Tel: 817-985-2102
E-Mail: bhart@cityoflcennedale.com
Any notice which Owner may desire or be required to give to Agent shall be deemed sufficiently
given or render if, in writing, delivered to Agent by courier, electronic mail or facsimile, with
evidence of delivery, or by certified or registered mail, return receipt requested and addressed to
Agent as follows:
AGENT:
Kennedale Town Center, L.P.
Attention: David G. Johnson
3977 Fall Creek Road
Spicewood, Texas 78669,
18. ATTORNEYS FEES. In the event of any dispute between the parties hereto arising out
of or in connection wit t is greement,the prevailing party shall be entitled to recover from the
other its reasonable attorneys fees and costs incurred in connection therewith.
(03/14/10) Page 10
i
i
19. MULTIPLE COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which s a e regar ed for all purposes as an original constituting one and
the same instrument.
20. ENTIRE AGREEMENT. This Agreement and the exhibits attached hereto constitute
the entire agreement o t e parties hereto regarding the subject matter hereof, and may not be
amended or modified except by written instrument signed by the parties hereto.
21. BINDING EFFECT. This Agreement shall be binding upon the parties hereto, their
legal representatives, successors and assigns, and may not be changed except by agreement in
writing.
22. INTERMEDIARY DISCLOSURE. An Intermediary Disclosure Addendum is attached
hereto and incorporated herein and Owner authorizes Agent to act as an intermediary.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the
day and year written below by their officers thereunto duly authorized.
EXECUTED this day of V- , 2010.
OWNER: KENNEDALE ECONOMIC DEVELOPMENT CORPORATION
l t
ATTEST:
By:
Secretary
AGEtKE EDA TO CENTER, L.P.
DVJohnsod,M ager o KT P, L.L.C.,
General Partner of K nn%ale Town Center L.P.
(03/14/10) Page 11
INTERMEDIARY DISCLOSURE ADDENDUM
A broker who acts as an intermediary between parties in a transaction:
1. may not disclose to the buyer or tenant that the seller or landlord
will accept a price less than the asking price unless otherwise
instructed in a separate writing by the seller or landlord;
2. may not disclose to the seller or landlord that the buyer or tenant
will pay a price greater than the price submitted in a written offer to
the seller or landlord unless otherwise instructed in a separate
writing by the buyer or tenant;
3. may not disclose any confidential information or any information a
party specifically instructs the real estate broker in writing not to
disclose unless otherwise instructed in a separate writing by the
respective party or required to disclose such information by the
Texas Real Estate License Act or a court order or if the information
materially relates to the condition of the property;
4. shall treat all parties to the transaction honestly; and
5. shall comply with the Texas Real Estate License Act.
(03/14/10) Page 12
B
KENNEDALE
Kennedale Economic
Development Corporation
www.cityofkennedale.com Staff Report to the Board of Directors
Date:April 30, 2015
Agenda Item No: REGULAR ITEMS- D.
I. Subject:
Consider authorizing an agreement, which the Executive Director may execute approving the assignment of the
Economic Development Agreement for Development of Kennedale TownCenter(and the First Amendment and
Second Amendment to Economic Development Agreement for Development of Kennedale TownCenter)from
Kennedale Town Center, L.P. to an entity to be designated by Hughes Commercial Texas and providing for the
deletion of"Chicken Express" in section 7g.
II. Originated by:
III.Summary:
See the original Economic Development Agreement for the Development of Kennedale TownCenter to be
assigned.
IV. Recommendation:
Approve
V. Alternative Actions:
VI. Attachments:
1. �ownCenter conomic Development Agreement for Kennedale ownCenter Development-RD-10 3-3-10
1CLEAN.doc
ECONOM I C DEVELOPM ENT AGREEM ENT
FOR DEVELOPM ENT OF KENNEDALE TOWNCENTER
This Economic Development Agreement ("Agreement") is made and entered into by and
between Kennedale Town Center, L.P., ("the Partnership") acting by and through David G.
Johnson, Manager of KTC GP, L.L.C. the General Partner of the Partnership, the principal office
of the Partnership being 3977 Fall Creek Road, Spicewood, Texas 78669, and the Kennedale
Economic Development Corporation ("Corporation"), a nonprofit corporation organized as a
Type B Corporation under the Development Corporation Act of 1979, Tex. Loc. Gov't Code
Ann. §§ 505.001 — 505.355 (Vernon Supp. 2008) ("Act"), for the purposes and considerations
stated below. For convenience, the Partnership and the Corporation may be hereinafter referred
to collectively as"part ies" and individually asa"party.
"
RECITALS:
WHEREAS, the Corporation has purchased certain real property located within the
corporate limits of the City of Kennedale, Texas ("City") (hereinafter referred to as the
"
Property");
WHEREAS, the Corporation has determined and found that the Project and
Improvements, as hereinafter defined and described, and the expenditures of the Corporation set
forth i n this Agreement are suitable or required for the development of anew business enterprise
and fall within thedefinition of a"Project" asdefined in theAct;
WHEREAS, the Corporation, after diligent search for a development partner spanning in
excess of two years, requested the Partnership to develop the Property as a multi-use
development to be known as Kennedale TownCenter that will include office and retail uses, as
depicted in the approved plan showing the concept and phasing of the development, attached
hereto as Exhibit "A" (the"Concept/ Phasing Plan");
WHEREAS, the Corporation, having determined that substantial economic benefit and
the creation of new opportunities of employment will accrue to the City as a result of the
Partnership's development and operation of the Improvements, desires to have the Partnership
construct the Improvements and operate and/or lease the Property for the operation of the
KennedaleTownCenter, a retail shopping center and professional officecomplex.
WHEREAS, the Corporation has determined that the Partnership's development and
operation of the Improvements will eventually, after exercise of the option to purchase, increase
the taxable value of the Property and will directly and indirectly result in the creation of
additional jobs throughout the City, thevalueof which will outweigh the amount of expenditures
required of the Corporation under this Agreement;
WHEREAS, the Corporation, in order to encourage the development and operation of
the Property, desires to lease the Property to the Partnership to develop as hereinafter set forth,
and to extend an option to the Partnership to purchase the Property upon completion of the
Project or as phases of the Project are comp)eted, i n the di screti on of the Corporation;
ECONOMIC DEVELOPMENT AGREEMENT PAGE 1 OF 16
(3-3-10)
WHEREAS, the Partnership desires to obtain and the Corporation shall provide up to
three hundred fifty (350) parking spaces on the Property and the adjacent Municipal Drive for
use by TownCenter visitors and employees, and City of Kennedale municipal complex
employeesand visitors;
WHEREAS, the Partnership desires to obtain and the Corporation agrees to provide
certain additional Public Improvements such as landscaping, irrigation, parking lot lighting,
street access improvements, and utility extensions as hereinafter described-,
WHEREAS, the Corporation, in order to accomplish the purposes of this Agreement,
intends to utilize the resources of the Kennedale TownCenter Development District ("District")
as necessary or appropriate-,
WHEREAS, the Partnership acknowledges and accepts the benefits to be derived from
the construction of Public Improvements and the imposition of taxes, assessments and impact
fees by the District;
NOW, THEREFORE, in consideration of the mutual benefits and promises contained
herein and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Authorization.
ThisAgreement isauthorized by Tex. Loc. Gov't CodeAnn. Chapter 505.
2. Definitions
"Approved Plans" means the plans and specifications for the Partnership Improvements
prepared by, or on behalf of, the Partnership and to be approved by all applicable governmental
authorities and the EDC Board. In the event the plans and specifications comply with the
applicable Planned Development approved for the Property, then no additional approvals by the
E D C Board shat l be requi red.
"City" means the City of Kennedale, Texas.
"Construction Cost" means the costs of all hard construction, construction equipment
charges, the costs of construction materials, building systems installation and repairs, contractor
fees, architectural and engineering costs, impact fees, and fees attributable to the construction of
the Improvements plus tenant finish-out of the improvements located on the Property.
Construction Cost shall also include demolition of any existing improvements. Construction
Cost does not i ncl ude marked ng fees.
"Corporation" means the Kennedale Economic Development Corporation.
"District" means the Kennedale TownCenter Development District, created as a
ECONOM I C DEVELOPMENT AGREEMENT PAGE 2 OF 16
(3-3-10)
Municipal Management District by the Texas Legislature.
"EDC Board" means the board of directors of the Corporation.
"Existing Building 1 Improvements" means addition of a facade to the Existing
Building 1 shown on Exhibit "A".
"Force Majeure" means an event or circumstance which prevents one party from
performing its obligations under this Agreement, which event or circumstance is not within the
reasonable control of, or the result of the negligence of, the party claiming Force M4eure, and
which, by the exerci se of due di I i gence, the party claiming Force M a eure is unabl e to overcome
or avoid or cause to be avoided. Force M 4 eure includes, but is not limited to: acts of God, fire,
flood, hurricane, tornado, earthquake, war, and terrorism.
"Ground Lease" means that certain 45 year ground lease pursuant to which the
Corporation leases portions of the Property to the Partnership, the form of which is attached
hereto as Exhibit "B" and incorporated herein for all purposes. The Ground Lease wi I I contain a
Purchase Option granting the Partnership the right to purchase the Property at the completion of
the Project, or in the discretion of the Corporation, portions of the Project as they are completed.
Any sale of the Property pursuant to the Purchase Option will exclude mineral interests which
will be retained by the Corporation, but will contain a surface waiver preventing the surface of
the Property from being used for mineral exploration or production.
"Improvements" means collectively, the Partnership Improvements, the Public
Improvements, the Existing Building 1 Improvements, the Municipal Drive Improvements and
the Lot 8 Improvements.
"Lot 8 Improvement' means the building to be relocated and/or constructed and the
Public Improvements and public market area to be constructed on Lot 8, as depicted on Exhibit
"A", by the Corporation.
"Municipal Drive Improvements" meanstheparking improvementsto Municipal Drive
(which isowned by the City) asdepicted on Exhibit "A".
"Partnership Improvements" means the construction of six additional structures
labeled on Exhibit "A" as Buildings2through 7. Thesizesand phasing of such buildings isset
forth in Paragraph 4(b) below.
"Partnership" means Kennedale Town Center, L.P. a Domestic Limited Partnership
organized under the laws of Texas.
"Project" means the lease by the Partnership of the Property pursuant to the Ground
Lease and the opti on to purchase the Property by the Partnership, in accordance with the terms of
the Purchase Option; the development of the Property by the Partnership for use as a retail
shopping center and professional office complex; and the construction of Improvements to be
made by the Partnership and Corporation; all as morefully set forth in thisAgreement.
ECONOM I C DEVELOPMENT AGREEMENT PAGE 3 OF 16
(3-3-10)
"Property" means Lots 1R, 2R, 3R, 4R, 5, 6, 7, and 8, BLOCK A, KENNEDALE
RETAIL CENTER ADDITION, an Addition to the City of Kennedale, Tarrant County, Texas,
asfiled in Doc. #D2093211169, Official Recordsof Tarrant County, Texas, together with all and
singular the rights and appurtenances pertaining to such tract of land, including any right, title
and i nterest of the Corporation i n and to adj acent streets, a1 I eys or rights-of-way.
"Property M anagement Agreement" means the agreement, i n the form attached hereto
as Exhibit "C", between the Partnership and the Corporation, in which the Partnership agrees to
provide management and leasing services to the Corporation for portions of the Property.
"Public I mprovements" means the improvements to be constructed by or on behalf of
the Corporation i nci dented to the I mprovements to be constructed by the Partnershi p, i ncl udi ng
but not limited to street access improvements, sidewalks, landscaping, irrigation, parking lot
lighting, parking, and utility extensions. This definition does not prohibit the parties from
mutually agreeing to al low the Partnership to bear the costs of constructing improvements which
are defined as Public Improvements, as set forth in this Agreement.
"Purchase Option" means the right of the Partnership to purchase the Property pursuant
to the terms and conditions contained i n the Ground Lease.
"Substantially Complete" means the date the City issues a certificate of occupancy for
any Improvements.
3. Term.
This Agreement shall be effective as of the date of execution by the parties. This
Agreement will terminate on December 16, 2054 or as otherwise provided in this Agreement.
Notwithstanding the above, if either party is not in compliance with the covenants described in
this Agreement as of the date of termination, then this Agreement shall remain in full force and
effect for the purpose of enforcing the terms of this Agreement.
4. Covenants of the Partnership.
(a) In consideration of the Corporation agreeing to make certain Public
Improvements on the Property, to lease portions of the Property to the Partnership at a rate
temporarily below fair market value in accordance with the Ground Lease, and to grant the
Partnership a Purchase Option in accordance with the terms of the Ground Lease, the Partnershi p
agrees to:
(1) Engage civi I engineers and other qualified consultants for platting, zoning,
geotechni cad, utility, drainage, access, landscape and irrigation, and parking lot design on the
Property as necessary and desi rabl e to al I ow deved opment of the I mprovements i n accordance
with the Approved Plans and the Concept / Phasing Plan. The Partnership agrees and shall
include in any agreement with the engineer that the Corporation shall be entitled to receive all
ECONOM I C DEVELOPMENT AGREEMENT PAGE 4 OF 16
(3-3-10)
work product of the engineer related to the Project and shall be entitled to use al I work product of
the engineer for any purpose rel ated to the Proj ect.
(2) Engage an architect to design the Concept/Phasing Plan.
(3) Provided the Corporation is in compliance with Section 7 of this
Agreement, commence facade improvements (in accordance with the Approved Plans) of
Existing Building 1 when the funding is made available by the Corporation, and Substantially
Complete construction of the facade improvements within 180 days of commencement.
(4) Substantially Complete the construction of each building in accordance
with the Approved Plans and the Phasing Chart contained in Par. 4(b) below. Construction shall
include demolition of certain structures currently on the Property, but no demolition shall occur
until the necessary improvements have been completed and are prepared to allow tenants
currently in the existing structures to be relocated to those improvements.
(5) When the Corporation notifies the Partnership that it has funds available
for the Lot 8 Improvements and Municipal Drive Improvements, then the Partnership will
construct such i mprovements if requested. I n such event, the Partnership will be pai d a fee equal
to 10% of the total cost of the Lot 8 Improvements and Municipal Drive Improvements.
(6) Construct the I mprovements i n compl iance i n al I material respects with ad
appl i cabl e I ocal ordi nances and state and federal I aw.
(7) Operate the I mprovements or I ease the I mprovements for use as a retai I
space or office space pursuant to the Property Management Agreement for the enti re term of this
Agreement.
(8) Enter into and comply with obligations under the Property Management
Agreement with the Corporation to manage the existing structures on the Property and the
Improvements, once built. The Partnership agrees to use all commercially reasonable efforts
appl i cabl e to prof ects si mi I ar in nature, market type, and market share to the Project to keep the
I ease porti ons of the Property as f ul I y leased as i s commerci al I y reasonable, at all times.
(9) Comply with all obligations imposed under the Ground Lease.
(10) Construct the Partnership Improvements at the Partnership's sole cost
except as provided i n Section 7, and title to the I mprovements wi I I remai n i n the name of the
Corporation unless transferred to the Partnership in accordance with the Ground Lease.
(11) Execute a mutually agreeable reciprocal access easement on the Property
so that all phases of the Project will have access to the Public Improvements.
(12) Obtain and maintain insurance in the minimum amounts specified in the
Ground Lease, and naming the Corporation as an additional insured, covering damages and
ECONOM I C DEVELOPMENT AGREEMENT PAGE 5 OF 16
(3-3-10)
liabilities that may arise from the construction, use or occupancy of the Property by the
Partnership and its contractors.
(b) The construction of the Improvements shall take place pursuant to the following
Phasing Chart, and in compliance with the minimum sizes and estimated Construction Costs as
shown. The Corporation acknowledges that numerous factors and market conditions make it
difficult to predict a construction schedule and completion date for each Improvement. The
Partnership intends to construct the Partnership Improvements as the leasing market dictates,
while using commercially reasonable efforts to lease space in the buildings. However, the
Corporation requi res the Partnershi p exercise due di I igence i n constructi ng the I mprovements
within a reasonable time frame. While the Corporation is not imposing strict timelines for
completion dates for the Improvements, the Corporation and the Partnership agree to the
construction deadlines, as follows and further agree that unless properly extended, failure to
comply with the deadlines shall bean event of default. The construction deadl i ne on a building
can be extended by the Partnershi p payi ng "Extensi on Rent". "Extensi on Rent" i s rent at the fai r
market value(as determined pursuant to the Ground Lease), on the lot on which construction has
not commenced pursuant to the schedule below. Extension Rent shall be due and payable on the
f i rst day of each month duri ng the term of the Ground Lease, pursuant to the same terms set forth
in the Ground Lease for payment of rent. Extension Rent shall be due until commencement of
construction on that lot begins, at which time the Extension Rent requirement shall cease to be
due and payable on the lot on which construction has commenced. If Extension Rent is timely
paid, the Partnership shall not be considered in default. Further, the Partnership agrees that each
building will be substantially complete within eighteen (18) months of commencement of
construction and available for rent and that failure to finish each building within the specified
eighteen months shall be an event of default. The order of buildings to be constructed may be
substituted if market conditions dictate, except that Building 6 cannot be completed if the view
corridor, required by existing leases, is still in place.
I mprovements Phasing Chart
Building to be M inimum Commencement of Estimated
Phase Constructed Size ft Construction Construction Costs
1 (Existing Building 1) N/A N/A N/A
2 5 8,820 2011 $882,000
3 7 7,620 2012 $762,000
4 4 4,500 2013 $450,000
5 3 9,810 2014 $981,000
6 2 6,960 2015 $696,000
7 Section House N/A N/A N/A
8 6 6,600 2022 $660,000
(c) For the consideration recited above in Paragraph 4(a), in the event the Partnership
obtai ns f i nanci ng f rom any source to construct the Partnershi p I mprovements, the Partnershi p
further covenants and agrees that no lien will be allowed to attach to the Property nor will the
Partnership otherwise encumber the Property. Any documents executed by the Partnership that
allow for the creation of a lien shall provide that such lien may only attach to the Partnership's
ECONOM I C DEVELOPMENT AGREEMENT PAGE 6 OF 16
(3-3-10)
leasehold interest and/or rents due to the Partnership pursuant to the Ground Lease and shall in
no event apply to the Property or the Corporation's interest in this Agreement. The Partnership
further agrees that no lien that attaches to the leasehold estate shall be obtained in excess of the
cost of designi ng and constructing the Partnership I mprovements.
(d) The Partnership additionally covenants and agrees that it will be solely
responsible and liable for any labor or materials furnished for the construction of the Partnership
Improvements and that no mechanic's or other lien for any such labor or materials shall attach to
or affect the Property or the estate or interest of the Corporation in and to the Property. The
Partnership shat l provide in a1 I agreements executed by any contractor or subcontractor and a1 I
others who will furnish plans, labor or materials in connection with work on the Property that
any mechanic's or materialmen's lien which may arisefrom such person furnishing plans, labor,
or materialswith respect to any such work shall apply only to the Partnership's leasehold interest
hereunder and shall in no event apply to the Property or the Corporation's interest in this
Agreement.
(e) Whenever and as often as any I i en shat I be f i I ed aged nst the Property based upon
any act or i nterest of the Partnershi p or of anyone cl ai mi ng through or aged nst the Partnershi p,
the Partnershi p shat l take such acti on by bondi ng, deposit or payi ng any sum of money requi red
to discharge any such lien. In such event, and provided the lien has not been discharged within
thi rty (30) days after notice from the Corporation to the Partnershi p, the Corporation may pay the
amount of such lien or discharge the same by deposit, and the amount so paid or deposited shall
be immediately due and owing by the Partnership to the Corporation. If such payment is
demanded of the Partnership by the Corporation and the payment i s not made, the fai I ure to pay
shat l be an event of default.
5. Covenant Running with the Land.
As long as this Agreement is in effect, all rights, covenants, restrictions, burdens,
privileges and charges set forth in this Agreement shall exist. Any person who, within the
restrictions of this Agreement, shall assume or become vested of the leasehold estate of the
Partnership hereunder, shall be bound by and liable upon all such rights, covenants, restrictions,
burdens, privileges and charges set forth in this Agreement.
6. 1 mprovements
The Partnership shall be solely responsible for the design and construction of the
Partnership Improvements and shall comply with all zoning regulations, subdivision regulations,
building codes and other ordinances of the City applicable to the Partnership Improvements and
the A pproved Plans.
7. Covenants of theCorporation.
(a) The Corporation agrees to reimburse the Partnership or pay directly to the
provider, expenses incurred by the Partnership to engage civil engineers and other qualified
consultants for pl atti ng, zoni ng, geotechni cal, uti I ity, drai nage, access, landscape and i rri gati on,
ECONOM I C DEVELOPMENT AGREEMENT PAGE 7 OF 16
(3-3-10)
and parking lot design on the Property (all as required pursuant to Par. 4(a)(1) above) in an
amount not to exceed $50,000.
(b) The Corporation agrees to compensate the Partnershi p for services as construction
manager in the Existing Building 1 1 mprovements in an amount of 10% of the actual costs of
said improvements (including the Public Improvements associated therewith) to be paid in not
more than 6 monthly installments as work progresses upon the submission to the Corporation of
satisfactory documentation evidencing the expenditures for the construction of such
improvements, provided the Partnership is in compliancewith Section 4 of thisAgreement.
(c) Provided the Partnership is in compliance with Section 4 of this Agreement, the
Corporation agrees to construct certai n Publ is Improvements on the Property. The Corporation
may construct Public Improvements related to the construction of the Improvements in phases,
within timeframes mutually agreeable to the parties which shall take in to account the
construction schedule to be determined by the Partnership and the amount of funds available to
the Corporation. Alternatively, the Corporation may construct all Public I mprovements at once.
(d) If constructed in phases, the Corporation may contract with the Partnership as
construction manager to construct the Public Improvements for each phase in order to facilitate
construction on the Property. In such event, the Partnership will not be entitled to a fee for
coordinating the construction of the Public Improvements. If the Partnership elects to not
contract to construct the Public Improvements, then the Corporation shall contract with another
party. If constructed all at once, the Corporation will bid the project pursuant to applicable
requi rements, and the Partnershi p shat I be f ree to bi d on such proj ect. The Partnershi p shat I have
no preference to be awarded the project, and shat l compete for the project on the same terms and
conditions as any other bidder. I n either event, the Corporation shall pay the cost of the Public
Improvements directly to the contractors, and will not allow any liens to be placed on the
Property.
(e) The Public Improvements within the Municipal Drive right of way that are
designed in direct support of each of Phases 5, 6, & 7 must be constructed prior to or
simultaneously with construction of each said phase.
(f) The Corporation agrees to enter into and comply with a Ground Lease (with
Purchase Option) with the Partnership, in the form attached hereto as Exhibit "B". The
Corporation will lease to the Partnership the land necessary to construct Bui Idi ngs 2 through 7 in
the amount of $1.00 (one dollar) per year for the first 20 years of the term of the Ground Lease.
However, the rent will increase to the fair market value at the end of the 20 year period if the
Partnership does not exercise its option to purchase. During the term of the Ground Lease, all
rents on Buildings 2 through 7 will be paid to the Partnership. Rents from Existing Building 1
and the Lot 8 Improvements will be retained by the Corporation. Further, rents from all existing
tenants will be retained by the Corporation until the tenants are relocated into the Partnership
I mprovements.
(g) The Corporation agrees to subsidize the rents of certain tenants that will occupy
Buildings to be constructed on the Property by the Partnership. The tenants to which this
ECONOM I C DEVELOPMENT AGREEMENT PAGE 8 OF 16
(3-3-10)
subsection applies are Chicken Express, Ace Cash, Subway and any other tenant occupying
existing buildings on or after the effective date of this Agreement which were required to
relocate due to demolition of buildings in order to construct the Improvements related to this
Project. The Corporation agrees to pay the Partnership an amount ("the Rent Subsidy") to be
determined by calculating thedifference between thestated base rental of $24 per squarefoot for
Bui Idi ngs 4, 5, 6, & 7 and the amount per square foot paid by the existi ng tenants on the effective
date of this Agreement. The Rent Subsidy shall be paid to the Partnership monthly on the 1st
day of the month beginning the first month that the tenants to whom this subsection applies are
requi red to rel ocate due to the Proj ect, and shal I conti nue duri ng the pri mary term of such I eases
plus any exercised extensions. The Partnership will pay the first $30 per square foot of tenant
finish out expenses and the Corporation will pay the difference, subject to prior approval by the
EDC Board. The Corporation will pay for the relocation expenses. The tenant finish out and
relocation costs paid by the Corporati on will be consi dered part of the Project Costs as def i ned in
the Ground Lease.
(h) The Corporation agrees to execute a Property Management Agreement with the
Partnership for the management of the existing structures on the Property upon execution of this
Agreement. The form of the Property Management Agreement is attached hereto as Exhibit "C".
(i) The Corporation will use its resources and best efforts to help support the Project
and the I easi ng of space.
(j) The Corporation will execute a mutually agreeable reciprocal access easement on
the Property so that all phases of the Project will have access to the Public Improvements.
(k) The Corporation will not encumber any portion of the Property for which the
Partnership has an option to purchase. The Corporation additionally covenants and agrees that
on construction it undertakes, that it will be solely responsible and liable for any labor or
materials furnished for said construction and that no mechanic's or other lien for any such labor
or materials shall attach to or affect the Property for which the Partnership has an option to
purchase.
(1) If the Corporation does not have adequate funding to construct any portion of the
Public Improvements, then (i) the term of this Agreement (and the Partnership's option to
purchase) shall be extended for that portion of time that funding is not available; (ii) the
Partnership may pay for such Public Improvements and then get reimbursed through an
agreement to be reached between the parties at that ti me; and (i i i) the Corporation may sell one
or more of the comp)eted phases of the Project to the Partnership (including Existing Building 1
but not i ncl udi ng the Lot 8 1 mprovements or M unici pad Drive I mprovements) provided that the
Corporation must use the funds from such purchase to fund the requi red Publ is I mprovements. I n
the event the Partnership purchases any portion of the Property abutting Municipal Drive, the
Partnershi p shat I have no cl ad m of ownershi p or i nterest i n the I and on whi ch M uni ci pal D ri ve i s
located when the right-of-way is abandoned by the City of Kennedale.
ECONOM I C DEVELOPMENT AGREEMENT PAGE 9 OF 16
(3-3-10)
8. Sign.
The Partnership agrees to permit the Corporation to erect a sign on the Property which
may state that the Corporation has provided funding for the Project and to allow the Corporation
to use the name "Kennedale Town Center, L.P." and/or "Cypress Properties" and "David G.
Johnson" or his development company and representations of the Improvements and the Project
i n promoti on of the City, the Corporation, the Partnershi p, and the Proj ect.
9. Hold Harmless.
THE PARTNERSHIP, IN PERFORMING ITS OBLIGATIONS UNDER THIS
AGREEMENT ISACTING INDEPENDENTLY, AND THE CORPORATION ASSUMES NO
RESPONSIBILITIES OR LIABILITIES TO THIRD PARTIES IN CONNECTION WITH THE
PARTNERSHIP'S USE OR DEVELOPMENT OF THE PROPERTY, PROJECT OR
IMPROVEMENTS. THE PARTNERSHIP ASSUMES RESPONSIBILITY FOR AND
AGREES TO INDEMNIFY, DEFEND, AND HOLD HARMLESS THE CORPORATION, ITS
OFFICERS, AGENTS, EMPLOYEES, AND VOLUNTEERS IN BOTH THEIR PUBLIC AND
PRIVATE CAPACITIES, FROM AND AGAINST CLAIMS, SUITS, DEMANDS, LOSSES,
DAMAGES, CAUSES OF ACTION, AND LIABILITY OF EVERY KIND, INCLUDING,
BUT NOT LIMITED TO, EXPENSES OF LITIGATION OR SETTLEMENT, COURT
COSTS, CLAIMS FOR COPYRIGHT AND PATENT INFRINGEMENT, AND
ATTORNEYS' FEES WHICH MAY ARISE DUE TO ANY DEATH OR INJURY TO A
PERSON OR THE LOSS OF, LOSS OF USE OF, OR DAMAGE TO PROPERTY, ARISING
OUT OF OR OCCURRING ASA CONSEQUENCE OF THE ACTS OR OM ISSIONS OF THE
PARTNERSHIP AND ITS CONTRACTORS ON THE PROPERTY. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE CORPORATION WILL
FIRST LOOK TO INSURANCE COVERAGE PROVIDED BY THE PARTNERSHIP OR
OTHER RESPONSIBLE THIRD PARTIES IN EXERCISING THEIR RIGHTS PROVIDED
HEREIN.
10. Amato I nformation.
The Partnership agrees to provide the Corporation access (at its sole expense) to
information related to the construction of the Improvements during regular business hours upon
reasonable not ce.
11. Default.
(a) I n the event of a default by the Partnership with respect to any of its obligations
hereunder, and the failure, after delivery of written notice of such default from the Corporation,
to cure such default, then the Corporation may take the fol Iowi ng action(s):
(1) The Corporation may termi nate this Agreement and the Ground Lease and
pay the Partnership the "Termination Purchase Price" for its interest in this Agreement, the
Ground Lease, and the Partnership Improvements. The "Termination Purchase Price" is the
I esser of (i) the Partnershi p's cost of designi ng and constructi ng the Partnershi p I mprovements
ECONOM I C DEVELOPMENT AGREEMENT PAGE 10 OF 16
(3-3-10)
actually constructed plus 10%; or (ii) the Fair Market Value of such improvements, as
determined by the same method set forth i n the Ground Lease for determining fair market value
of rent. However, in no event shat I the Termi nation Purchase Price be less than any outstanding
loan on the Partnership's leasehold estate acquired to design and construct the Partnership
I mprovements. I n the event the Partnershi p has an outstandi ng I i en secured by the I easehol d
estate, or any other outstandi ng I iens on the property, then a portion of the Termi nation Purchase
Pri ce shal I be pai d to the I ender to sati sfy such I i en.
(2) In the event all buildings are not completed by May 3, 2030, and
regardless of whether the Partnership has been paying Extension Rent, the Corporation may
provide the Partnership with a "20 Year Default Notice". In such event, the Partnership must
purchase from the Corporation (i) all completed phasesof the project for$1.00; plus(ii) Existing
Building 1 for its fair market value as determined by the same method set forth in the Ground
Lease; plus (iii) all uncompleted phases of the project for its fair market value as determined by
the same method set forth in the Ground Lease. However, in no event shall the purchase price be
Iessthan the Corporation's"Outstanding Amortized Debt" as attached to the Ground Lease. The
purchase shall be on the same terms and conditions as the Option to Purchase set forth in the
Ground Lease, except that the purchase price shall be as set forth herei n, and the purchase must
be closed within 90 days from the 20 Year Default Notice. If the Partnership fails to purchase
the property as set forth herein, then the Corporation may exercise the remedies set forth in Par.
11(a)(1) above.
(3) 1 f the Partnershi p i s unabl e to make any payments to the bank on I owns for
or Ii ens aged nst any completed or partially completed Improvements, upon notice of default from
the bank, the Corporation shall have a first right of refusal to purchase any completed or partially
completed I mprovements and cure defaults on the bank loans, subject to the terms agreed to by
the bank. This provision shall be made a condition of any bank lending agreement executed by
the Partnershi p for any phase of the Proj ect.
(4) The Corporation may termi nate the Property Management Agreement.
(5) The Corporation may bring an action for reimbursement or payment of
actual amounts agreed to be paid under this Agreement, but not an action for consequential
damages.
(6) The Corporation may extend the time for performance.
(b) In the event of a default by the Corporation with respect to any of its obligations
hereunder, and thefailure, after delivery of written noticeof such default from the Partnership to
cure such default, then the Partnership may take the following action(s):
(1) The Partnership may terminate this Agreement as it applies to
uncompleted phases of the Project. In such event, the Partnership must also terminate the
Ground Lease and Property Management Agreement with respect to uncompleted phases of the
Project. In the event the Partnership terminates the Ground Lease with respect to uncompleted
phases, then the Corporation shall pay to the Partnership $50,000 for costs incurred by the
ECONOMIC DEVELOPMENT AGREEMENT PAGE 11 OF 16
(3-3-10)
Partnership under Paragraph 4(a)(2) (but only for the uncompleted portions of the Project, as
prorated on an equal basis among all six phases), and (ii) Conti nue to pay the Rent Subsidy asset
forth in Paragraph 7(g) aboveas if thisAgreement had not been terminated.
(2) The Partnership may bring an action for reimbursement or payment of
actual amounts agreed to be paid under this Agreement, but not an action for consequential
damages.
(3) If the Corporation does not have adequate funding to pay for any portion
of the Publ is I mprovements, Lot 8 1 mprovements, or M uni ci pal Drive I mprovements then (i) the
term of this Agreement (and the Partnership's option to purchase) shall be extended for that
portion of time that funding is not available; (ii) the Partnership shall have the option to pay for
such improvements and then get reimbursed through an agreement to be reached between the
parties at that time; and (iii) if offered for sale by the Corporation, the Partnership may purchase
the completed phases of the Project (including Existing Building 1 but not including the Lot 8
1 mprovements or M unici pal Drive I mprovements) provided that the Corporation must use the
funds from such purchase to fund the requi red Publ is I mprovements.
(4) The Partnershi p may extend the ti me for performance.
(5) The Partnership may enforce specific performance, including enforcing
the Option to Purchase contained in the Ground Lease, and may also exercise all other remedies
at law or in equity.
(c) In the event that a notice and opportunity to cure is required by either party
following an event of default, then such opportunity to cure shall be not less than 30 days from
receipt of notice. Furthermore, no remedy shall betaken following such 30 day period provided
the defaulti ng party i s di 1 i gently pursuing action to come into compliance.
(d) Prior to either party exercising the remedies hereunder (except for an extension of
ti me for performance or some agreed resol uti on), the parties agree to partici pate i n a medi ati on to
attempt to reach a sati sf actory resolution of the issues. The cost of such mediation shall be borne
equally by the parties. The non-defaulting party must send a request for mediation to the
defaulting party prior to exercising any remedies. That request may be simultaneous with the
notice and opportunity to cure. If the defaulting party refuses to participate in amediation within
30 days of receipt of a request for mediation by the non-defaulting party, then the non-defaulting
party isfreeto pursue available remedies(assuming the time period for notice and opportunity to
cure has passed.)
(e) An event of default hereunder shall mean:
(1) The party fails to comply with any obligation it has under this Agreement
or the Ground Lease;
(2) The party fails to comply with any term of this Agreement or the Ground
Lease, subject only to delays caused by Force M 4 eure;
ECONOM I C DEVELOPMENT AGREEMENT PAGE 12 OF 16
(3-3-10)
(3) An occurrence of an Event of Bankruptcy or Insolvency. For purposes
hereof, an "Event of Bankruptcy or Insolvency" shall mean if the party makes an assignment for
the benefit of creditors; or a receiver shall be appointed for any of the assets of the party and
such appointment is not terminated within ninety (90) days after such appointment is initially
made; or the party is the subject of a bankruptcy or other insolvency proceeding and such
proceeding shall not bedismissed within ninety (90) days after thefiling thereof.
12. M utual Assistance.
The Partnership and the Corporation shall 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 the terms and provisions.
13. Repr esentat i ons and Warranties
The Partnership represents and warrants to the Corporation that it will not knowingly or
i ntenti onal Iy violate any federal, state or local laws i n operati ng the Proj ect and that al I proposed
I mprovements shat I conform to the appl i cabl e bui I di ng codes, zoni ng ordi nances and al I other
ord i nances and regulations.
14. Section or Other Heading
Section or other headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meani ng or interpretation of this Agreement.
15. AttorneysFees.
In the event any legal action or process is commenced to enforce or interpret provisions
of this Agreement, the prevailing party in any such legal action shall be entitled to recover its
reasonable attorneys fees and expenses incurred by reason of such action.
16. Entire Agreement.
This Agreement, the Property Management Agreement, and the Ground Lease (with
Purchase Option) contain the enti re agreement between the parties with respect to the transaction
contemplated herei n.
17. Amendment.
This Agreement may only be amended, altered, or revoked by written instrument signed
by the Partnershi p and the Corporation.
ECONOM I C DEVELOPMENT AGREEMENT PAGE 13 OF 16
(3-3-10)
18. Successors and Assigns
This Agreement shall be binding on and inure to the benefit of the parties, their respective
successors and assigns. The Partnership may assign all or part of its rights and obligations
hereunder only upon prior written approval of the Corporation, such approval not to be
unreasonably withheld.
19. Notice.
Any notice and/or statement required and permitted to be delivered shall be deemed
delivered by depositing same in the United States mail, certified with return receipt requested,
postage prepaid, addressed to the appropriate party at the following addresses, or at such other
addresses provided by the parties in writing:
PARTNERSHIP: KENNEDALE TOWN CENTER, L.P.
Attn: David G. Johnson
3977 Fed Creek Road
Spi cewood, Texas 78669
with acopy to: Alan McGraw
Alan M. McGraw, P.C.
211 Round Rock Avenue
Round Rock, Texas 78664
CORPORATION: Kennedale Economic Development Corporation
Attn: Executive Director
405 Municipal Drive
Kennedale, Texas 76060
with a copy to: City of Kennedale
Attn: City Manager
405 Municipal Drive
Kennedale, Texas 76060
with a copy to: Wayne K. Olson
Taylor, Olson, Adkins, Sralla& Elam, L.L.P.
6000 Western Place, Sui to 200
Fort Worth, Texas 76107
20. Applicable Law.
This Agreement is made, and shall be construed and interpreted under the laws of the
State of Texas. In any proceeding brought for the enforcement or interpretation of this
Agreement, venue shat l l i e in Tarrant County, Texas.
ECONOM I C DEVELOPMENT AGREEMENT PAGE 14 OF 16
(3-3-10)
21. Severability.
In the event any provision of this Agreement is illegal, invalid, or unenforceable under
present or future laws, then, and in that event, it is the intention of the parties that the remainder
of this Agreement shall not be affected thereby, and it is also the intention of the parties that in
lieu of each clause or 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
possi bl e to the provision found to be i I legal, i nval id or unenforceable.
22. Counterparts
This Agreement may be executed in multiple counterparts, each of which shall be
considered an original, but all of which shall constitute one instrument.
23. No Joint Venture.
Nothing contained in this Agreement is i ntended by the parties to create a partnership or
joint venture between the parties.
24. Compliance with Texas Government Code Chapter 2264.
In compliance with Texas Government Code Chapter 2264, the Partnership certifies it
does not and will not, and the branches, divisions, or departments of the Partnership do not and
will not, knowingly employ an undocumented worker as defined in Chapter 2264. If, after
receiving a public subsidy, the Partnership, or a branch, division, or department of the
Partnership, is convicted of a violation under 8 U.S.C. Section 1324a(f), the Partnership shall
repay the amount of the public subsidy with interest, at the rate and according to the other terms
provided below, not later than the 120th day after the date the Corporation notifies the
Partnershi p of the violation. The rate of i nterest shall be 6% per annum, and shall be due at the
ti me the repayment of the subsi dy i s due.
ECONOM I C DEVELOPMENT AGREEMENT PAGE 15 OF 16
(3-3-10)
KENNEDALE ECONOM I C
DEVELOPM ENT CORPORATION
By:
Robert Mundy, Board President
Date:
ATTEST:
Board Secretary
KENNEDALE TOWN CENTER, L.P.
By: KTC GP, L.L.C., its General Partner
By:
David G. Johnson, Manager
Date:
ATTEST:
Notary Public
Exhibits Attached to this Agreement:
Exhibit "A" Concept Phasing Plan
Exhibit "B" Form Ground Lease
Exhibit "C Form Property Management Agreement
ECONOM I C DEVELOPMENT AGREEMENT PAGE 16 OF 16
(3-3-10)
B
KENNEDALE
Kennedale Economic
Development Corporation
www.cityofkennedale.com Staff Report to the Board of Directors
Date:April 30, 2015
Agenda Item No: REGULAR ITEMS- E.
I. Subject:
Consider authorizing an agreement, which the Executive Director to execute providing for the assignment of
the Ground Lease from Kennedale Town Center, L.P.to an entity to be designated by Hughes Commercial
Texas, subject to approval of form by the KEDC attorney.
II. Originated by:
III.Summary:
See the original Ground Lease for Kennedale TownCenter to be assigned.
IV. Recommendation:
Approve
V. Alternative Actions:
VI. Attachments:
1. lGround Lease-TownCenter ownCenter Ground Lease-RD-10 3-3-10 CLEAN.doc
GROUND LEASE
STATE OF TEXAS §
COUNTY OFTARRANT §
This lease (the"Lease") is made by and between the Kennedale Economic Development
Corporation, a nonprofit corporation organized as a Type B Corporation under the Development
Corporation Act of 1979, Tex. Loc. Gov't. Code Ann. §§505.001 — 505.355, acting through its
duly authorized president (hereinafter called "Lessor"), and K ennedal e Tow n Center, L.P., acting
by and through David G. Johnson, Manager of KTC GP, L.L.C. the General Partner the
Partnership, the principal office of the Partnership being 3977 Fall Creek Road, Spi CeNood,
Texas 78669, (hereinafter cal Ied "Lessee").
WHEREAS, Lessee wishes to enter into a lease with Lessor to use a parcel of Lessor's
land for economic development purposes;
WHEREAS, pursuant to a separate Economic Development Agreement for the
Development of Kennedale TownCenter ("Economic Development Agreement"), the terms of
which are incorporated herein by reference, Lessee has agreed with Lessor to construct and
operate a retail shopping center and professional office complex to be known as the Kennedale
TownCenter on the land;
WHEREAS, Lessor has determined that it will serve apublic purpose to lease such land
to Lessee initially for less than the fair market value rent because the proposed use of the land
will create substantial economic benefit and new employment opportunities for the citizens of
the City of Kennedale;
W H EREAS, capital ized terms contai ned i n thi s Lease shal I have the same meani ng as
set forth i n the Defi nitions contai ned i n this Agreement, or where the term is not deli ned i n this
Agreement, the term shall have the same meaning as set forth in the Economic Development
Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Lessor and Lessee agree as follows:
ARTICLE 1.
DEMISE
1.01 Leased Premises Lessor hereby leases to Lessee and Lessee hereby rents from
Lessor upon the terms and subject to t he cond i t i ons set forth in this Lease, thefolIowing property
(hereinafter called "Premises"):
(3-3-10) Page 1
Lots 2R, 3R, 4R, 5, 6, and 7, BLOCK A, KENNEDALE RETAIL CENTER
ADDITION, an Addition to the City of Kennedale, Tarrant County, Texas, as
filed in Doc. #D2093211169, Official Records of Tarrant County, Texas The
Premises are visually shown in Exhibit "A" which is attached hereto and made a
part hereof by reference.
1.02 Quiet Enjoyment. Lessor warrants that, during the term of this Lease, so long as
Lessee is not in default hereunder, Lessee will have the quiet enjoyment of the Premises and the
uninterrupted right of use and possession thereof in accordance with the terms of this Lease.
1.03 Mineral Rights Reserved. Lessor reserves all oil, gas, and other mineral interests
in, under, and that may be produced from the Property, as defined in the Economic Development
Agreement, for Lessor, Lessor's heirs, successors and assi gns f orever. This reservation includes
any existing production or existing lease. However, Lessor hereby waives the right of ingress
and egress to and from the surface of the Premises for purposes of exploration or production
relating to the mineral estate reserved by Lessor.
ARTICLE 11.
DEVELOPMENT OF PREM I SES
2.01 As consideration for this Lease, Lessee agrees to develop the property in
accordancewith theterms and conditionsof the Economic Development Agreement.
2.02 Upon completion, Lessor and the City of Kennedale, shall have the right to
inspect and approve the improvements required to be made to the Premises to determine if they
are in compliancewith the Economic Development Agreement.
2.03 Lessor shall construct all Public I mprovements on the Premises, as wel I as the Lot
8 Improvements and Municipal Drive Improvements, in accordance with the terms and
conditions of the Economic Development Agreement.
ARTICLE 111.
TERM
3.01 Term. The term of this Lease shall be for a period of approximately forty five
(45) years commenci ng on the date of f i nal executi on and termi nati ng on December 16, 2054.
The term may be extended based on mutual agreement between the parties.
3.02 Termination. Either party may terminate this Lease only as provided in the
default provisions of Paragraph 11 of the Economic Development Agreement.
(3-3-10) Page 2
ARTICLE IV.
RENTALS PAYABLE
4.01 Lessee agrees to pay Lessor one dollar ($1.00) per year until May 3, 2030. This
amount maybe prepaid in the amount of $20.00 for rent for the period of time from the date of
commencement of this Lease until May 3, 2030. Lessee shall prepay said rent upon the
execution hereof. Lessor and Lessee acknowledge that the Premises are being rented to Lessee
for less than fair market rent in consideration of the construction of a facility by Lessee in the
City of Kennedale that will create substantial economic benefit and will provide new
employment opportunities for the citizens of Kennedale.
4.02 Beginning May 4, 2030, and assuming that Lessee has not given notice of its
intent to exercise the Option to Purchase, Lessee agrees to pay monthly to Lessor a fair market
val ue rental for the remai nder of the term of the Lease. The fai r market val ue shal I take i nto
consideration the land and Public Improvements only, and not any Improvements constructed at
Lessee's expense. In determining fair market value, the parties shall first try to reach an
agreement on a fair and equitable number. If the parties are unable to agree, then each party
shall hi re a M A I appraiser. Each appraiser shall determi ne an amount that they believe i s the fai r
market value, and then the two amounts shall l be averaged to determine the actual rental to be
paid hereunder for the next five years. Every five years thereafter, the rental amount shall be
adjusted proportionate to any increase or decrease in rental rates charged by Lessee to its
subtenants.
4.03 All payments shall be made by Lessee to Lessor without notice or demand, at
Lessor's address set forth above. Monthly rental payments shall be due on the 1st day of each
month. I f Lessee fad Is to pay any i nstal I ment of Rent on or before the 10th day of the month,
Lessee must pay to Lessor, in addition to the installment of Rent, an amount equal to 5% of the
past due installment as additional Rent.
4.04 In addition to the rental in Sections 4.01 and 4.02, Lessee agrees to reimburse
Lessor for all assessments on the Premises levied by the Kennedale TownCenter Municipal
Management District and paid by Lessor. The gents shall be paid to Lessor after Lessor
sends notice to Lessee, and shall be paid (or reimbursed) by Lessee prior to delinquency in the
same timeframe as normal property taxes. The assessment shall become due on a particular lot
only after vertical construction on that lot is complete (i.e., a certificate of occupancy issued by
the City). The amount of the assessment to be paid by Lessee shall be equal to what would have
been paid on that lot for ad valorem property taxes, had the Premises been taxable. Once the
Premises subject to the assessments are purchased by Lessee or other third party, such that the
Premises becomes taxable, the assessment shall no longer be payable. I n the event that the
Central Appraisal District determines that the property is taxable, then the assessments shall no
longer be due.
(3-3-10) Page 3
ARTICLE V.
M All NTENANCE, REPAI RS, AND UTI LI TI ES
5.01 Lessee agrees to maintain all structures to be constructed on the Premises by
Lessee, in a reasonable and habitable condition, and in condition marketable for lease. Lessee
shall also be responsible for the cost of all routine maintenance and repairs to the Public
Improvements on a particular lot on the Premises once vertical construction on that particular lot
has been completed. Lessor shall be responsible for the cost of (i) any major structural repairs
necessary to the Public Improvements on a particular lot on the Premises; and (ii) for all routine
maintenance and repairs of Public Improvements within the Premises prior to vertical
construction on the particular lot being completed. Pursuant to the purchase option granted by
this Lease, Lessor shall be responsible for any major structural repairs to the Public
Improvements on Lot 1 and all routine maintenance and repairs to the Public Improvements
contained on Lot 1 until the time Lessee purchases Lot 1 from Lessor. Lessor's obligation for
repairs and maintenance as set forth herein shall terminate at the time Lessee purchases the
Premises from Lessor. It is understood by the parties that annual assessments wi I I be made upon
the Premises by the Kennedale Town Center Municipal Management District and such
assessments may be recovered by the Lessee (or Lessee's management company) through the
tenant I eases.
5.02 Lessee shat l be responsible for the cost of all utilities serving the Premises.
ARTI C L E V11.
NATURE OF RELATIONSHIP
Lessor and Lessee agree that the nature of the relationship between them is one of
landlord and tenant, and no other. Nothing contained in this Lease shall be deemed or construed
to create the rel ationshi p of pri nci pal and agent or that of partnershi p, j of nt venture or of any
association between Lessor and Lessee, and any intention to create ajoint venture or partnership
relationship between the parties hereto is hereby expressly disclaimed. No provision contained
in this Lease, or any acts of the parties hereto shall be deemed to create any relationship between
Lessor or Lessee, other than the relationship of landlord and tenant. Lessee and its assignees or
subtenants shall maintain exclusive control, direction and management of their employees, and
Lessor shall have no rights with respect thereto, except for Lessor's right to enforce covenants of
the L essee as set forth in this Lease.
ARTICLE VII.
ASSI GNM ENT AND SUBLEASE
Lessee may not assign this Lease or any portion thereof, except with the written consent
of Lessor, which consent will not be unreasonably withheld, nor may Lessee assign, transfer or
delegate to any person Lessee's rights or duties with respect to this Lease unless it obtains
Lessor's written consent, which consent will not be unreasonably withheld. Lessee may sublease
space in the buildings to be constructed on the Premises as provided in the Economic
(3-3-10) Page 4
Development Agreement and in accordance with this Lease and Section 1.02, so long as such
subtenants operate businesses that would be permitted by the Kennedale TownCenter Planned
Development Zoning Ordinance. At no time shall the Premises ever be used by a Sexually
Oriented Business, as deli ned in Section 11-203 of the City of Kennedale Code of Ordi nances or
by any other type of business that offers the selling, renting or exhibition of devices or any other
items designed or intended to provide sexual stimulation or gratification, including any
photographic depiction of nudity, or provision of a service designed or intended to provide
sexual stimulation or gratification.
ARTICLE VI 11.
PARKING SPACES
Lessee agrees that al I parki ng spaces located or to be constructed on the Premises and the
Adjoining Property in accordance with the Economic Development Agreement shall be used as
common parking and shall remain open to all visitors of the Premises, the Adjoining Property,
and the City of Kennedale Municipal Complex. This common parking covenant shall include a
right of access through the common parking areas. This Article shall not be construed as to
prohibit Lessee from placing reasonable restrictions on the use of parking spaces (such as
designating disabled parking permit spaces); however, no restriction may prohibit the use of any
parking space on the Premises by visitors to the Adjoining Property or the City of Kennedale
Municipal Complex. Notwithstanding anything to the contrary, Lessee may in its discretion
designate up to two spaces per building as dedicated spaces duri ng store hours to facilitate tenant
speci a1 parking needs.
ARTICLE IX.
GENERAL PROVISIONS
9.01 Notices All rent shall be paid or mailed to Lessor at the address set forth below,
and all notices required herein shall be sent to the respective parties by certified mail, return
recei pt requested, at the fol I ow ng addresses:
To Lessor: Kennedale Economic Development Corporation
Attention: Executive Director
405 Municipal Drive
Kennedale, Texas 76060
with a copy to: City of Kennedale
Attn: City Manager
405 Municipal Drive
Kennedale, Texas 76060
with a copy to: Wayne K. Olson
Taylor, Olson, Adkins, Sralla& Elam, L.L.P.
6000 Western Place, Sui to 200
Fort Worth, Texas 76107
(3-3-10) Page 5
To Lessee: Kennedale Town Center, L.P.
Attention: David Johnson
3977 Fall Creek Road
Spi cewood, Texas 78669
with a copy to: Alan McGraw
Alan M. McGraw, P.C.
211 Round Rock Avenue
Round Rock, Texas 78664
9.02 Binding Effect. The provisions of this Lease shall be binding upon and inure to
the benefit of the parties hereto and thei r respective hei rs, successors and assigns.
9.03 1 nterpretation and Place of Performance. This Lease shall be construed under
the laws of the State of Texas and is deemed by the parties to be performable i n Tarrant County,
Texas.
9.04 Partial I nvalidity. If any one or more of the provisions contained in this Lease
shall for any reason be held invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or u nenf orceabi I i ty shall not affect any other provision herein, and this Lease shall be
construed as i f such i nval i d, i I I egal or unenforceabl e provi si on had never been contai ned herei n.
9.05 Amendment. This Lease may not be altered, waived, or otherwise modified,
except wheredone in writing, and signed by Lessor and Lessee.
9.06 Attorneys Fees In the event any legal action or process is commenced to
enf orce or interpret provi si ons of thi s L ease, the prevai I i ng party in any such legal action shall be
entitled to recover its reasonable attorneys fees and expenses incurred by reason of such action.
9.07 Casualty/Total or Partial Destruction.
(a) If the Partnership Improvements are damaged by casualty and can be
restored within ninety days, Lessee will, at its expense, restore them to
substantially the same condition that existed before the casualty. If Lessee
fails to complete restoration within ninety days from the date of casualty,
then Lessee shall l be i n default.
(b) If the Premises cannot be restored within ninety days, Lessee has an
option to restore the Partnership Improvements. Lessee must notify
Lessor within 90 days of the casualty whether it intends to restore or not.
If Lessee notifies that it is not going to restore, then Lessee shall be in
default, unless Lessee begins paying Extension Rent, as defined in the
Economic Development Agreement, on the lot containing the damaged
improvements beginning on the 91st day following casualty. If Lessee
notifies that it is going to restore, then Lessee shall, at its expense, restore
(3-3-10) Page 6
them to substantially the same condition that existed before the casualty.
Lessee will diligently pursue construction, including pursuing all
insurance proceeds and other requirements to enable construction. If
Lessee fails to complete restoration with two years from the date of
casualty, then Lessee shall be in default. Notwithstanding, Lessee shall
not be in default if Lessee is able to present sufficient evidence of its
diligence in attempting to complete construction, but has been hampered
by situations beyond its control.
9.08 Condemnation/Substantial or Partial Taking.
(a) If the Premises cannot be used for the purposes contemplated by this
Lease because of condemnation or purchase in lieu of condemnation, this
Leasewill terminate.
(b) Lessee and Lessor will each have a claim to the condemnation award or
proceeds in lieu of condemnation respective to each party's percentage of
interests in the portion of land and improvements that was condemned.
ARTICLE X
INSURANCE
Lessee, at its expense, shall maintain public liability insurance, including bodily injury
and property damage, for the Premises and the conduct of Lessee's business on the Premises.
The insurance must insure against injuries or damages to persons or property sustained on or
about the Premises and the appurtenances thereto, including but not limited to the parking lots,
sidewalks and alleyways adjacent thereto. Lessor must be named as an additional insured who
shall be provided with 30 day notice of cancellation or material change in coverage, with
minimum coverage as follows:
(a) Bodily Injury: $250,000 per person, or
$500,000 per occurrence; and
(b) Combined singlelimit for bodily
i nj ury and property damage: $1,000,000
Lessee shall deliver certificates of i nsurance to Lessor before the commencement date of
this Lease, and thereafter when requested. All insurance companies and coverage must be
authorized by the Texas Department of I nsurance to transact business in the State of Texas and
must be acceptable to the Lessor
(3-3-10) Page 7
ARTICLE XI.
HOLD HARMLESS
THE LESSEE, IN PERFORMING ITS OBLIGATIONS UNDER THIS LEASE IS ACTING INDEPENDENTLY,
AND THE LESSOR ASSUMES NO RESPON SI BI L I TIES OR L I AB I L I TIES TO TH I RD PARTIES IN
CONNECTION WITH THE LESSEE'S USE OR DEVELOPMENT OF THE PROPERTY, PROJECTOR
IMPROVEMENTS. THE LESSEEASSUMES RESPONSIBILITY FORAND AGREESTO INDEMNIFY,
DEFEND,AND HOLD HARMLESSTHE LESSOR, ITSOFFICERS,AGENTS, EMPLOYEES,AND
VOL U NTEERS I N BOTH THEIR PUBLIC AND PRIVATE CAPACITIES, FROM AND AGAINST CLAIMS,
SUITS, DEMANDS, LOSSES, DAMAGES, CAUSESOFACTION,AND LIABILITY OF EVERY KIND,
INCLUDING, BUT NOT LIMITED TO, EXPENSESOF LITIGATION ORSETTLEMENT, COURT COSTS,
CLAIMS FOR COPYRIGHTAND PATENT INFRINGEMENT,AND ATTORNEYS FEESWHICH MAY
ARISE DUE TO ANY DEATH OR INJURY TO A PERSON OR TH E LOSS OF, LOSS OF USE OF, OR
DAMAGE TO PROPERTY,ARISING OUT OF OR OCCURRI NG AS A CONSEQUENCE OF THE ACTS OR
OMISSIONS OF THE LESSEE AND ITS CONTRACTORS ON THE PROPERTY. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN, LESSOR WI LL FIRST LOOK TO INSURANCE
COVERAGE PROVIDED BY LESSEE OR OTHER RESPONSIBLE THIRD PARTIES IN EXERCISING THEIR
RIGHTS PROV I DED HEREIN.
ARTICLE XI 1.
TAXES
The Premises are currently exempt from property taxes because they belong to the City of
Kennedale Economic Development Corporation. If the County's Central Appraisal District
determines that the property is taxable, Lessee agrees that it shall promptly pay any such taxes
but the assessments required in Article 4.04 shall no longer be due. The Corporation will obtain
the consent of the Kennedale TownCenter Development District to this provision, and provide to
the Partnership. If consent has not been obtained within 60 days from the date hereof, then the
Corporation will be in default.
ARTICLE XI 11.
OPTION TO PURCHASE
13.01 Grant of Option to Purchase. Lessor, for the consideration expressed in this
Lease, grants to Lessee an option to purchase the Premises and Lot 1R including Existing
Building 1, at the price and subject to the terms set forth in this Article. In the event Lessee
purchases the Premises and Lot 1R including Existing Building 1, Lessee agrees it will not
change the name of the Premises from "Kennedale TownCenter" without the written permission
of L essor.
13.02 Conditions Precedent. In order to exercise its option, Lessee must not be in
default of this Lease or the Economic Development Agreement.
13.03 Time and Manner of Acceptance. To exercise the purchase option extended in
this Article, Lessee must give written notice to Lessor, in the manner required for notices under
this Lease, of the Lessee's election to exercise the option. The purchase option must be exercised
by May 3, 2030. The written notice to exercise this purchase option shall be accompanied by a
signed and tendered real estate contract setting forth the terms and conditions of the purchase of
the Premises by Lessee. The real estate contract shall provide that the cost of the title insurance
(3-3-10) Page 8
and all closing costs shall be paid by Lessee. The purchase must close within 60 days of the
exercise of the option to purchase.
13.04 Parking. In the event Lessee exercises the purchase option, the provisions of
Article V I I I ("Park ng Spaces") are to remai n i n effect after the sale of the Premises, and the
parties shall l be requi red to enter i nto a mutual I agreeable reci procal access easement as requi red
in the Economic Development Agreement.
13.05 Consideration. If the purchase closes after May 3, 2030, and all Partnership
Improvements have been completed, then Lessee shall pay for the purchase of the Premises plus
Lot 1R including the Existing Building 1 theamount of $1.00.
If the purchase closes before May 3, 2030, and all Partnership Improvements have been
completed, then the purchase price for the Premises and Lot 1R including the Existing Building 1
shall I be the"U namorti zed Proj ect Cost" as def i ned bel ow.
I f L essee exerci ses the opti on to purchase and cl oses prior to or after M ay 3, 2030, and
all Partnership Improvements have not been completed, then the purchase price shall be the
greater of (a) the"Unamortized Project Cost" or (b) the sum of (i) the fair market value of Lot
1R containing Existing Building 1, plus (ii) the fair market value of lots with uncompleted
Partnership Improvements, plus (iii) $1.00 for lots with completed Partnership Improvements,.
Fad r market val ue shall l be determi ned i n the same manner set forth above.
The Unamortized Project Cost is the sum of the four cost categories of Lessor as set forth
in Exhibit "B" (that is, Land Cost, Debt Issuance #1, Debt Issuance #2, and Cash Injection,
total i ng $4,200,000) attached hereto, amortized usi ng the attached schedules up unti I the date of
closing. I n no event shall any additional amounts be added to the Unamortized Project Cost, the
parties agreeing that $4,200,000 shall be the maximum amount to be amortized.
Lessee and Lessor shall have the option until May 3, 2030 to make additional Public
Improvements to the Premises if mutually agreed to in writing by both parties ("Additional
Public Improvements"). If Additional Public Improvements are constructed as mutually agreed,
the cost of the Additional Public Improvements shall be amortized and shall be added to the
purchase price.
13.06 Expiration. The option to purchase the Premises shall expire on May 3, 2030
unless exercised by Lessee prior to that date. Lessor may, at its sole discretion, give written
permission to allow the purchase option to be extended beyond the expiration date. To avoid an
inadvertent fai I ure to exercise the option at such a long period into the f uture, Lessor agrees that
prior to fair market value rent becoming due, it shall provide a written notice and request to
Lessee to calculate the fair market value of rent, as required by Article 4.02. If such a notice is
given after May 3, 2030, then notwithstanding anything to the contrary, Lessee shall have a
period of 30 days within which to still exercise the option to purchase.
13.07 M ineral Rights: The real estate contract shall provide that Seller (Lessor)
reserves all oil, gas, and other mineral interests in, under, and that may be produced from the
(3-3-10) Page 9
Property for Seller, Sel I ers's heirs, successors and assigns forever, but will contain a surface
waiver preventing the surface of the Property from being used for mineral exploration or
production. This reservation includes any existing production or existing lease.
13.08 Municipal Drive. In the event Lessee purchases any portion of the Premises
abutting Municipal Drive, the Lessee shall have no claim of ownership or interest in the land on
which Municipal Drive is located when the right-of-way is abandoned by the City of Kennedale.
13.09 Protection of Existing Building 1. In the event of a casualty to Existing
Building 1, Lessor agrees to restore it to substantial ly the same condition prior to the casualty.
ARTICLE XI V
DEFAULT
14.01 All events of default shall be governed by Paragraph 11 of the Economic
Development Agreement.
14.02 An event of default hereunder shall mean:
(a) The party fails to comply with any obligation it has under thisAgreement;
(b) The party fails to comply with any term of this Agreement, subject only to
delays caused by Force M a eure;
(c) An occurrence of an Event of Bankruptcy or Insolvency. For purposes
hereof, an "Event of Bankruptcy or Insolvency" shall mean if the party
makes an assignment for the benefit of creditors; or a receiver shall be
appointed for any of the assets of the party and such appointment is not
terminated within ninety (90) days after such appointment is initially
made; or the party is the subject of a bankruptcy or other insolvency
proceeding and such proceeding shall not be dismissed within ninety (90)
days after the f i I i ng thereof.
(3-3-10) Page 10
EXECUTED this day of , 2010.
LESSOR:
KENNEDALE ECONOM I C DEVELOPM ENT CORPORATI ON
By:
Robert M undy, President
ATTEST:
Secretary
LESSEE:
KENNEDALE TOWN CENTER, L.P.,
By: KTC GP, L.L.C.,
Its General Partner
By:
David G. Johnson, M anager
Attest:
Notary Public
(3-3-10) Page 11
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority in and for County, Texas, on thisday personally
appeared David G. Johnson, known to me to be the person and officer whose name is subscri bed
to the foregoing instrument and acknowledged to me that he is the manager of KTC GP, L.L.C.,
the General Partner of Kennedale Town Center, L.P., and that he/she is authorized by said
corporation to execute the foregoing instrument as the act of such corporation for the purposes
and consideration therein expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, thisthe day of
, 2010.
Notary Public in and for the State of Texas
Type or Print Notary's Name
My Commission Expires:
Exhibits Attached to this Agreement:
Exhibit "A" Concept Phasing Plan showing the Premises
Exhibit "B" Unamortized Project Cost
(3-3-10) Page 12
B
KENNEDALE
Kennedale Economic
Development Corporation
www.cityofkennedale.com Staff Report to the Board of Directors
Date:April 30, 2015
Agenda Item No: REGULAR ITEMS- F.
I. Subject:
Consider authorizing an agreement, which the Executive Director may execute, authorizing the assignment of a
Reciprocal Parking Agreement between the EDC and Kennedale Town Center, L.P.to an entity to be designated
by Hughes Commercial Texas
II. Originated by:
III.Summary:
See the original Agreement Declaring Reciprocal Driveway Ingress-Egress, and Parking Easements to be
assigned.
IV. Recommendation:
Approve
V. Alternative Actions:
VI. Attachments:
1. JParking Agreement-TownCenter JEasement Agreements- Parking.pdf
AGREEMENT DECLARING RECIPROCAL DRIVEWAY,
INGRESS-EGRESS,AND
PARKING EASEMENTS
STATE OF TEXAS §
COUNTY OF TARRANT §
THIS AGREEMENT establishing a non-exclusive easement (hereinafter "Agreement") is
made and entered into by and between Kennedale Town Center, L.P., ("the Partnership") acting
by and through David G. Johnson, Manager of KTC GP, L.L.C. the General Partner of the
Partnership, the principal office of the Partnership being 3977 Fall Creek Road, Spicewood,
Texas 78669, the Kennedale Economic Development Corporation (the "Corporation"), a
nonprofit corporation organized as a Type B Corporation under the Development Corporation
Act of 1979, Tex. Loc. Gov't Code Ann. §§ 505.001 — 505.355 (Vernon Supp. 2008) ("Act"),
acting by and through its President, Robert Mundy, and the City of Kennedale, Texas ("the
City"), a home rule municipality in the State of Texas, acting by and through its City Manager,
Bob Hart.
Recitals:
WHEREAS, the Corporation is the owner of Lots 1R, 2R, 3R, 4R, 5, 6, 7, and 8,
BLOCK A, KENNEDALE RETAIL CENTER ADDITION, an Addition to the City of
Kennedale, Tarrant County, Texas, as filed in Doc. #D2093211169, Official Records of Tarrant
County, Texas (hereinafter"TownCenter Property").
WHEREAS, the City is the owner of the real estate adjacent to the TownCenter Property
on which the street known as Municipal Drive was located and vacated by the City on April 8,
2010, as more particularly described in Exhibit "A" attached hereto (hereinafter "Municipal
Drive Property").
WHEREAS, the TownCenter Property and the Municipal Drive Property shall
hereinafter be collectively referred to as the"Property".
WHEREAS, the Corporation intends to transfer Lot 8 to the City and the City intends to
replat Lot 8 to include the Municipal Drive Property(hereinafter"Lot 8 Replat").
WHEREAS, the Partnership has leased Lots 2R, 3R, 4R, 5, 6, and 7 with an option to
purchase Lots 1R, 2R, 3R, 4R, 5, 6, and 7 pursuant to an Economic Development Agreement and
a Ground Lease entered into with the Corporation.
WHEREAS, pursuant to the Economic Development Agreement the Corporation will be
constructing parking lots for the benefit and use of the Kennedale Municipal Complex (including
currently the city hall, community center, library, police station, and city park),the public market
i
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C:\Documents and Settings\kturner\Local Settings\Temporary Internet Files\Content.Outlook\Q2QB5GDD\Kennedale
TownCenter Parking Agreement FN.doc
I
i
area to be constructed on the Lot 8 Replat, and the retail and office development to be
constructed on the TownCenter Property by the Partnership.
WHEREAS, in addition to the access provided through the Municipal Drive Property,
there will be at lease five other points of access constructed on the Property, as well as driveways
throughout the Property, to allow ingress and egress to the Kennedale TownCenter, the public
market area to be constructed on the Lot 8 Replat, and the Kennedale Municipal Complex.
WHEREAS, the Parties desire to make provisions for the continued use, enjoyment, and
benefit of the present and future owners of the Property, including the TownCenter Property, the
Municipal Drive Property, and the Kennedale Municipal Complex, of the common driveways,
ingress/egress and curb cuts.
WHEREAS, parking facilities will be constructed on the TownCenter Property and the
Municipal Drive Property.
WHEREAS, the Parties desire to grant reciprocal parking rights to and for the benefit of
the present and future owners of the Property, including the TownCenter Property, the Municipal
Drive Property, and the Kennedale Municipal Complex.
WHEREAS, the Partnership understands and agrees that the TownCenter Property being
leased and to be purchased by the Partnership will be subject to the covenants, easements,
licenses and restrictions in this Agreement and agrees to be bound thereby.
NOW THEREFORE, in consideration of the mutual terms, covenants and agreements
contained herein, the Corporation, the Partnership and the City hereby agree to create an
easement and agreement for reciprocal driveways, ingress/egress and parking, described as
follows:
1. There is hereby imposed upon the TownCenter Property and the Municipal Drive
Property the following non-exclusive perpetual private easements on, over, and across the
servient estate, such easements being appurtenant to and for the benefit of the Kennedale
Municipal Complex and their customers, associates, invitees, assigns and employees and
for the benefit of the Kennedale TownCenter and their customers, associates, invitees,
assigns and employees and for the benefit of the owners of the Property, and each of the
mortgagees, heirs, successors, permittees, and assigns of the owners of such dominant
estate and all others acting under their authority, but subject to the limitations set out
below:
(a) Reciprocal Driveway and Ingress/Egress Easements. Perpetual, non-exclusive
licenses, privileges, and easements for the free, continuous and uninterrupted
ingress, egress and regress of vehicular and pedestrian traffic over and across the
vehicular street entrances, curb cuts, driveways, walkways, fire lanes, emergency
access easements, and sidewalks (the "Driveway Easement") as from time to time
exist on the TownCenter Property and the Municipal Drive Property, but
excluding therefrom any area then covered by buildings or other improvements.
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(b) Reciprocal Parking Easement. Perpetual, non-exclusive licenses, privileges and
easements for the free, continuous and uninterrupted use of all paved areas
designated and/or used as parking areas for the tenants (the "Parking Easement")
as from time to time exist on the TownCenter Property and the Municipal Drive
Property, but excluding therefrom any area then covered by buildings or other
improvements, subject to the right of the Partnership to designate up to two spaces
per building as restricted spaces during store hours to be dedicated to tenant
special parking needs on the TownCenter Property pursuant to the Ground Lease.
2. Validity. In case 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 any other provision hereof, and this
Agreement shall be construed as if such invalid, illegal, or unenforceable provision had
never been contained herein.
3. Matters of Record. The conveyance of the licenses, privileges and easements in this
Agreement is expressly made subject to all matters of record to the extent still in effect
with respect to the Property.
4. Relocation of Certain Easements. The owner of any lot within the Property may
relocate any of the easements located on the lot so long as the relocation is done at the
sole cost and expense of the owner of the servient estate and does not materially or
unreasonably interfere with service to the dominant estate.
5. Run with Land. The Property shall be held, transferred, improved, sold, conveyed, used
and occupied subject to the restrictions, licenses, privileges and easement herein set forth,
all of which shall (i) run with and bind the Property, (ii) inure to the benefit of and be
enforceable by the record owner or mortgagees) from time to time of the dominant
estate, and (iii) be binding upon and enforceable against all subsequent owners of the
Property or any portion thereof whether by purchase, descent, devise, gift, trade, or
otherwise and each and all individuals and entities by the acceptance of the title to any
portion of the Property, shall and do thereby agree and covenant to abide by and perform
and observe the restrictions, licenses, privileges and easement herein set forth on their
part to be performed. Notwithstanding any provisions hereof to the contrary, said grant of
restrictions, licenses, privileges, and easements shall not inure to the benefit of any third
party not expressly named herein, specifically or by class,nor shall said grant constitute a
public dedication of the Property or any part thereof.
6. Obstruction of Easements. The owner of each lot within the Property shall not erect or
permit any obstruction of any restriction, license,privilege, or easement granted herein.
7. Maintenance. The owner of each lot, at its cost and expense, shall maintain and repair
(and replace when necessary), all improvements constructed upon the Driveway
Easement and Parking Easement located upon such Party's tract so that such access areas
are kept in a reasonably safe, sightly and serviceable condition for vehicular and
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pedestrian passage including the patching of holes, seal coating, and any other repairs
which may be necessary to repair and maintain the same in a quality condition and in
keeping with first-class commercial properties located in Tarrant County, Texas.
However, nothing in this Paragraph 7 shall have the effect of modifying the maintenance
rights and responsibilities of the parties as allocated in the Economic Development
Agreement or Ground Lease.
8. Amendment; Termination. This Agreement shall not be terminated, released, or
amended unless by written agreement among the record owner(s) of fee title to all lots
within the Property and the Kennedale Municipal Complex, all mortgagees of the fee
estates of record at the time of such termination, release, or amendment, and the
Partnership (or its successor and assign) so long as the Ground Lease is still in effect.
EXECUTED this day of , 2010.
KENNEDALE ECONOMIC DEVELOPMENT CORPORATION
B
Robert Mund Eiden
ATTEST:
Board Secref6ry
CITY OF KENNEDALE
By: -,
ob Hart, City Manager
ATTEST:
City Secrdary
KENNEDALE TOWN CENTER,L.P.
B KTC GP,L.L. .,
Its enera artne
By:
David G. Jdms n, Manager
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STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority in and for County, Texas, on this day personally
appeared David G. Johnson, known to me to be the person and officer whose name is subscribed
to the foregoing instrument and acknowledged to me that he is the manager of KTC GP, L.L.C.,
the General Partner of Kennedale Town Center, L.P., and that he/she is authorized by said
corporation to execute the foregoing instrument as the act of such corporation for the purposes
and consideration therein expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of
2010.
Notary Public in and1for the State of Texas
?G .pees a
KATHY TURNER Type or Print Notary's Name
My Commission Expires
rua rY Fob 17,200813
My Commission Expires: � �'t
AFTER RECORDING RETURN TO:
CITY SECRETARY'S OFFICE
CITY OF KENNEDALE
405 MUNICIPAL DRIVE
KENNEDALE, TX 76060
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Exhibit "A"
[Municipal Drive Property]
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Being 0.739 acres of land located in the Canzada Rose Survey,Abstract No. 1285, Tarrant
County,Texas and being more particularly described by metes and bounds as follows:
BEGINNING at an 1/2" iron rod found at the Southeast corner of Lot 1, Block 1, Municipal
Addition, an addition to the City of Kennedale,Tarrant County, Texas according to the plat
recorded in Cabinet A, Slide 6502, Plat Records, Tarrant County,Texas;
THENCE N0001 1'52"W, a distance of 569.57 feet along the East line of said Lot 1 to a point
lying S0001 1'52"E a distance of 50.33 feet from the most Easterly Northeast corner of said Lot
1;
THENCE N89 042'14"E, a distance of 29.98 feet to a point;
THENCE S00012'1 0"E, a distance of 60.87 feet to a point;
THENCE N89 049'48"E, a distance of 30.00 feet to a Southwestern Bell Telephone Company
monument found at the Southwest corner of a tract of land described in the deed to
Southwestern Bell Telephone Company recorded in Volume 3156, Page 453, Deed Records,
Tarrant County, Texas, said monument being the Northwest corner of Lot 3R, Block A,
Kennedale Retail Addition, an addition to the City of Kennedale, Tarrant County, Texas
according to the revised plat recorded in County Clerks Document No. D209321169, Deed
Records,Tarrant County, Texas;
THENCE S00 007'52"E, a distance of 508.44 feet along the West line of said Block A to an 1/2"
iron rod found at the Southwest corner of Lot 2R in said Block A, Kennedale Retail Addition;
THENCE S89 030'49"W, a distance of 59.40 feet to the point of beginning, containing 0.739
acres of land.
The bearings recited hereon are oriented to NAD 83 North Central Texas Grid.
qE.OF. t
Herbert S. Beasley
Registered Professional .:
.
Land Surveyor No.4050 RT �
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W. REWrERED,PROFESW-X SURVEYORS
bERIBERT S. LAND SLNtVE"=LP.
0 EAM EY LAND •70POGRAPHO
4 CONSTRUCTION SURVEYING
''D P.0.BOX 8873 METRO 817-42"04
FORT WORTH,TMM 78124 FAX 817-448-8188
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J suR� Being 0.739 acres of land
located in the
Canzada Rose Survey, Abstract, 1285,
ixe. S. auo'nx Nw'`4ow 2R Tarrant County, Texas,
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0 100 200 300
SCALE 1"=100'
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SB9.30'49"W 0 /^ The bearings recited hereon ore oriented to NAD 83.Texas North Central Zone.
a Grid Scole Footor=0.99987292055
,. Third Street The
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SUZANNE'HENDERSON ..____..
COUNTY CLERK 3 Y
100 West Weatherford Fort Worth,TX 76196-0401
"•"' PHONE (817) 884-1195
CITY SECRETARY'S OFFICE
CITY OF KENNEDALE
405 MUNICIPAL DR
KENNEDALE, TX 76060
Submitter: CITY OF KENNEDALE
DO NOT DESTROY
WARNING - THIS IS PART OF THE OFFICIAL RECORD.
Filed For Registration: 5/21/2010 2:37 PM
Instrument#: D210120847
A 9 PGS $44.00
By:
D210120847
ANY PROVISION WHICH RESTRICTS THE SALE, RENTAL OR USE OF THE DESCRIBED REAL PROPERTY
BECAUSE OF COLOR OR RACE IS INVALID AND UNENFORCEABLE UNDER FEDERAL LAW.
Prepared by: DNCLARK