R-12-08-09-G7 - 8/9/2012 F
RESOLUTION NO. R-12-08-09-G7
WHEREAS, Round Rock RE Holdings, LLC ("RE Holdings") is in the process of acquiring a
4.089 acre tract of land ("Property") in the City; and
WHEREAS, RE Holdings intends to construct a 50 bed acute care hospital ("Facility") on the
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Property and to lease the Property and Facility to CHG Cornerstone for the operation of the acute care
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hospital; and a
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WHEREAS, the City of Round Rock ("City") desires businesses such as RE Holdings to
locate in the City and is willing to consider granting certain incentives to RE Holdings if it locates in
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the City; and
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WHEREAS, the City and RE Holdings wish to enter into a Memorandum of Understanding to
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set forth the terms and conditions regarding the incentives to be offered to RE Holdings in exchange
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for locating the Facility in the City, Now Therefore
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BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK,TEXAS,
That the Mayor is hereby authorized and directed to execute on behalf of the City a f
Memorandum of Understanding with Round Rock RE Holdings, LLC, a copy of same being attached
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hereto as Exhibit"A" and incorporated herein.
The City Council hereby finds and declares that written notice of the date, hour, place and
subject of the meeting at which this Resolution was adopted was posted and that such meeting was
open to the public as required by law at all times during which this Resolution and the subject matter
hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act,
Chapter 551, Texas Government Code, as amended.
RESOLVED this 9th day of August, 2012.
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ALAN MCGRAW, Mayor
City of Round Rock, Texas
ATTEST: '
SARA L. WHITE, City Clerk
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EXHIBIT
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MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding (MOU) is made by and between the City of Round Rock,
Texas (the "City") and Round Rock RE Holdings, LLC ("RE Holdings").
RECITALS it
WHEREAS, RE Holdings is considering acquiring a 4.089 acre tract of land (the "Property") in
the City as more specifically described in Exhibit "A" attached hereto and incorporated herein;
and
WHEREAS RE Holdings intends to construct a long-term acute care hospital containing 60,000
square feet and a minimum of 50 beds (the "Facility") on the Property, and to lease the Property !
and Facility to a Cornerstone Hospital Group affiliate entity ("CHG") for the operation of the
Facility; and
WHEREAS, RE Holdings is considering investing approximately $14 million in the
construction of the Facility, and CHG is considering investing approximately $4 million in
equipment and furnishings; and
WHEREAS, CHG intends to ultimately hire at least 100 full-time employees with an average
annual salary of at least $55,000 per FTE; and
WHEREAS, the City desires businesses such as RE Holdings and CHG to locate in the City;
and
WHEREAS, the City is willing to consider granting certain incentives to RE Holdings if it and
CHG locate in the City; and
WHEREAS, the parties acknowledge that the terms and conditions listed herein are not legally
binding against either party, but merely serve as a memorandum of the understanding of the
parties;
NOW THEREFORE, the City and RE Holdings agree to work cooperatively and in good faith
to draft and approve future agreements and to develop the Facility in the manner set forth herein.
ARTICLE I
GENERAL SCOPE OF FACILITY
The Facility will consist of a hospital building containing approximately 60,000 square feet with
a minimum of 50 beds.
ARTICLE II
RE HOLDINGS AND CHG INTENTIONS
RE Holdings intends to acquire the Property on or before November 30, 2012.
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RE Holdings intends to invest approximately $14 million in Facility improvements.
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CHG intends to invest approximately $4 million in equipment and furnishings for the Facility.
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CHG intends to hire at least 85 full-time employees within six months of opening the Facility
and an additional 15 full-time employees no later than three years thereafter, at an average
annual salary of at least $55,000.
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ARTICLE III
CITY INTENTIONS
3.01 In consideration of RE Holdings and CHG performing as set forth in Article II above, the
City intends to enter into one of more economic development incentive agreements containing
the following provisions:
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(a) Waiver of all City construction, building, impact, and permit fees with a cap of$50,000;
(b) Expedited City approval of all required permits by way of a customized development
review and approval timeline for the Facility;
(c) A tax abatement for eligible property as follows: and a
Year 1 100%
Year 2 100%
Year 3 50%
Year 4 25%.
(d) Reimbursement to RE Holdings of the roll back property taxes owed to the City as the
result of the sale of the Property to RE Holdings.
ARTICLE IV
LEGAL EFFECT OF MOU
This MOU is intended to provide an outline of the current understanding of the parties
hereto, and is not intended to legally bind the parties to the terms and conditions stated herein.
The parties, however, agree that the terms and conditions stated herein are reasonable and
provide an outline for future actions by the parties.
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Executed and effective this day of , 2012.
CITY OF ROUND ROCK, TEXAS
By:
Alan McGraw, Mayor
ROUND ROCK RE HOLDINGS, LLC
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By:
Printed Name:
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ROUNDROCK,TEXAS City Council Agenda Summary Sheet
PURPOSE.PASSION.PROSPERITY.
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Agenda Item No. G7.
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Consider a resolution authorizing the Mayor to execute a Memorandum of Understanding
with Round Rock RE Holdings, LLC regarding incentives for locating an acute care hospital }
Agenda Caption: in the City. fi
Meeting Date: August 9, 2012
Department: Administration `
Staff Person making presentation: Steve Norwood, City Manager
Ben White,VP Economic Development, Round Rock Chamber of Commerce i
Item Summary:
Cornerstone Healthcare Group, based in Dallas, Texas, specializes in the treatment of medically complex patients
who require acute care hospital services and rehabilitation for an extended period of time. Cornerstone currently
owns and operates sixteen freestanding and "hospital-in-hospital" long-term acute care ("LTAC) facilities in Texas,
Louisiana, Arizona and West Virginia and manages four hospital-in-hospital facilities in Cleveland, Ohio.
Cornerstone is planning for a new 60,000 square foot LTAC hospital and has identified Round Rock as a potential site 4'
to build a new 50 bed facility. t
The Memorandum of Understanding (MOU) is between the City of Round Rock and Round Rock RE Holdings
(developer). The MOU outlines the expectations the City has in regards to development of the new hospital. The
MOU also outlines the incentives that are needed to make this hospital become a reality.Those are listed below:
RE Holdings Intentions:
• Acquire the property on or before November 30, 2012
• RE Holdings intends to invest approximately$14 million in Facility improvements. F
• CHG intends to invest approximately$4 million in equipment and furnishings for the Facility.
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• CHG intends to hire at least 85 full-time employees within six months of opening the Facility and 100 no
later than 3 years thereafter, at an average annual salary of at least$55,000.
City Intensions:
• Waiver City construction fees
• Expedited City approval of required permits
• Tax abatement of eligible property as follows: Year 1 at 100%, Year 2 @ 100%, Year 3 @ 50% and Year 4 @
25%
• Reimbursement to RE Holdings of the roll back property taxes owed to the City as the result of the sale of
the Property to RE Holdings.
Cost: N/A
Source of Funds: N/A
Date of Public Hearing(if required): N/A
Recommended Action: Approval
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MEMORANDUM OF UNDERSTANDING
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This Memorandum of Understanding (MOU) is made by and between the City of Round Rock,
Texas (the "City") and Round Rock RE Holdings, LLC ("RE Holdings").
RECITALS
WHEREAS, RE Holdings is considering acquiring a 4.089 acre tract of land (the "Property") in
the City as more specifically described in Exhibit "A" attached hereto and incorporated herein;
and
WHEREAS, RE Holdings intends to construct a long-term acute care hospital containing 60,000
square feet and a minimum of 50 beds (the "Facility") on the Property, and to lease the Property
and Facility to a Cornerstone Hospital Group affiliate entity ("CHG") for the operation of the
Facility; and
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WHEREAS, RE Holdings is considering investing approximately $14 million in the `
construction of the Facility, and CHG is considering investing approximately $4 million in
equipment and furnishings; and
WHEREAS, CHG intends to ultimately hire at least 100 full-time employees with an average
annual salary of at least $55,000 per FTE; and
WHEREAS, the City desires businesses such as RE Holdings and CHG to locate in the City;
and
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WHEREAS, the City is willing to consider granting certain incentives to RE Holdings if it and
CHG locate in the City; and
WHEREAS, the parties acknowledge that the terms and conditions listed herein are not legally
binding against either party, but merely serve as a memorandum of the understanding of the
parties;
NOW THEREFORE, the City and RE Holdings agree to work cooperatively and in good faith
to draft and approve future agreements and to develop the Facility in the manner set forth herein.
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ARTICLE I
GENERAL SCOPE OF FACILITY
The Facility will consist of a hospital building containing approximately 60,000 square feet with
a minimum of 50 beds.
ARTICLE II
RE HOLDINGS AND CHG INTENTIONS
RE Holdings intends to acquire the Property on or before November 30, 2012.
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RE Holdings intends to invest approximately $14 million in Facility improvements.
CHG intends to invest approximately $4 million in equipment and furnishings for the Facility.
CHG intends to hire at least 85 full-time employees within six months of opening the Facility
and an additional 15 full-time employees no later than three years thereafter, at an average
annual salary of at least $55,000.
ARTICLE III
CITY INTENTIONS
3.01 In consideration of RE Holdings and CHG performing as set forth in Article II above, the
City intends to enter into one of more economic development incentive agreements containing
the following provisions:
(a) Waiver of all City construction, building, impact, and permit fees;
(b) Expedited Cit approval of all required permits by way of a customized development
review and approval timeline for the Facility;
(c) A tax abatement for eligible property as follows: and
Year 1 100%
Year 2 100%
Year 3 50%
Year 4 25%.
(d) Reimbursement to RE Holdings of the roll back property taxes owed to the City as the
result of the sale of the Property to RE Holdings.
ARTICLE IV
LEGAL EFFECT OF MOU
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This MOU is intended to provide an outline of the current understanding of the parties
hereto, and is not intended to legally bind the parties to the terms and conditions stated herein.
The parties, however, agree that the terms and conditions stated herein are reasonable and
provide an outline for future actions by the parties.
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Executed and effective this day of , 2012.
CITY OF ROUND ROCK, TEXAS
By:
Alan McGraw, Mayor
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ROUND ROCK RE HOLDINGS, LLC
By:
Printed Name:
Its: poles movr
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