Contract - EastGroup Properties - 6/8/2023 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
This Economic Development Program Agreement("Agreement") is entered into this e—day of
LAIJt , 2023, by and between the City of Round Rock, Texas, a Texas home rule
municipal corporation ("City"), and EastGroup Properties, L.P. a Delaware Limited
Partnership, ("EastGroup").
WHEREAS, the City has adopted Resolution No. attached as Exhibit A ("City
Resolution"),establishing an economic development program, and authorizing the Mayor to enter
into this Agreement with EastGroup in recognition of the positive economic benefits to the City
through EastGroup's decision to demolish an existing building located at 350 Texas Ave., and to
replace it with two light industrial buildings; and
WHEREAS,the purpose of this Agreement is to promote economic development as contemplated
by Chapter 3 80 of the Texas Local Government Code whereby EastGroup intends to construct the
two light industrial buildings,which will house new primary jobs; and
WHEREAS, the City agrees to provide a performance-based Economic Incentive Payment
("EIP") (as defined below);
NOW, THEREFORE, in consideration of the mutual benefits and promises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
City, and EastGroup agree as follows:
1. Authority. The City's execution of this Agreement is authorized by Chapter 380 of the
Texas Local Government Code, and the City Resolution, and constitutes a valid and
binding obligation of the City in the event EastGroup proceeds with the demolition of the
existing building and replacing it with two light industrial buildings.
2. Definitions.
2.1 "Economic Incentive Payment" ("EIP") means the amount paid by the City to
EastGroup under the Program.
2.2 "Effective Date" is the date this Agreement is executed to be effective by the City
and EastGroup.
2.3 "Program" means the economic development program established by the City
pursuant to Chapter 380 of the Texas Local Government Code and under the City
Resolution to promote local economic development and stimulate business and
commercial activity within the City.
2.4 "Property" means the parcel of land located at 350 Texas Ave., Round Rock, TX
78664.
R•2o2 3 - 1�3
2.5 "Recapture Liability" means the total amount of the EIP that is paid as result of
this Agreement that are subject to recapture by the City from EastGroup in the event
of EastGroup's default.
3. Intention of Parties. The City Council of Round Rock has previously determined that one
of its priority goals is to encourage economic development within the City.To further these
goals, the City is willing to provide an EIP to assist EastGroup in the demolition of the
existing building on the Property and replacing it with two light industrial buildings.
4. Term. This Agreement shall become enforceable upon its Effective Date and shall
terminate on December 31, 2026.
5. Rights and Obligations of EASTGROUP.
5.1. Demolition of Existing Building. EastGroup agrees to demolish the existing
building on or before March 31, 2024. EastGroup agrees that the demolition will
cost at least $125,000. EastGroup agrees to provide the City with receipts and/or
other documentation to show that it has spent at least$125,000 for the demolition.
5.2. Construction of New Buildings.EastGroup agrees to replace the existing building
with a minimum of 100,000 SF of light industrial space on or before December
31, 2026.
5.3. Clawback. In the event that EastGroup fails to comply with any of the actions as
described in Sections 5.1 and 5.2,and such failure continues for a period of thirty
(30)days after EastGroup's receipt of written notice of such failure from the City,
EastGroup will immediately pay to the City an amount equal to,but not to exceed,
the Recapture Liability.
6. Economic Incentive Payments.
6.1 In consideration, and subject to EastGroup's compliance with this Agreement, the
City agrees to pay an EIP to EastGroup equal to $125,000, or the actual cost of the
demolition,whichever is less.
6.2. Schedule for EIP. The City shall, subject to EastGroup's satisfaction of its
obligations set forth herein,make an EIP to EastGroup within sixty(60) days after
the documentation described in Sec. 5.1 has been provided to and accepted by the
City.
6.3. EIP Subject to Future Appropriations. This Agreement shall not be construed as a
commitment, issue or obligation of any specific taxes or tax revenues for payment
to EastGroup. The EIP by the City under this Agreement is subject to the City's
appropriation of funds for such payments in the budget year for which they are
made. The EIP to be made to EastGroup, if paid, shall be made solely from annual
appropriations from the general funds of the City or from such other funds of the
City as may be legally set aside for the implementation of Article III, Section 52a
of the Texas Constitution or Chapter 380 of the Local Government Code or any
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other economic development or financing program authorized by statute or home
rule powers of the City under applicable Texas law, subject to any applicable
limitations or procedural requirements. In the event that the City does not
appropriate funds in any fiscal year for the EIP due under this Agreement, such
failure shall not be considered a default under Section 7.3,and the City shall not be
liable to EastGroup for such EIP, however, the City shall extend this Agreement
for another year(s),until EastGroup has received all of the EIP provided for herein.
In addition, EastGroup shall have the right but not the obligation to rescind this
Agreement. To the extent there is a conflict between this paragraph and any other
language or covenant in this Agreement,this paragraph shall control.
6.4. EIP Recapture. In the event the City terminates this Agreement as a result of
EastGroup's default that is not cured within thirty (30) days after EastGroup's
receipt of written notice of such failure from the City, the City may recapture and
collect from EastGroup the Recapture Liability. EastGroup shall pay to the City
the Recapture Liability within thirty (30) days after the City makes demand for
same, subject to any and all lawful offsets, settlements, deduction, or credits to
which EastGroup may be entitled.Notwithstanding anything herein to the contrary,
such Recapture Liability shall not exceed, in the aggregate, an amount equal to the
EIP that was paid pursuant to this Agreement from the Effective Date to the date of
termination (together with interest thereon to be charged at the statutory rate for
delinquent taxes as determined by Section 33.01 of the Property Tax Code of the
State of Texas, but without the addition of a penalty). The City shall have all
remedies for the collection of the Recapture Liability as provided generally in the
Tax Code for the collection of delinquent property taxes.
7. Miscellaneous.
7.1.Mutual Assistance. The City and EastGroup will do all things reasonably necessary or
appropriate to carry out the terms and provisions of this Agreement.
7.2.Representations and Warranties. The City represents and warrants to EastGroup that
the Program and this Agreement are within its authority, and that it is duly authorized
and empowered to establish the Program and enter into this Agreement, unless
otherwise ordered by a court of competent jurisdiction. EastGroup represents and
warrants to the City that it has the requisite authority to enter into this Agreement.
7.3.Default. If either the City or EastGroup should default in the performance of any
obligations of this Agreement,the other party shall provide such defaulting party with
written notice of such default and thirty (30) days' opportunity to cure, prior to
instituting an action for breach or pursuing any other remedy for default. If the City
remains in default after notice and opportunity to cure, EastGroup shall have the right
to pursue any remedy at law or in equity for the City's breach. If EastGroup remains in
default after notice and opportunity to cure, City shall have the right to pursue any
remedy at law or in equity for EastGroup's breach,but only up to an amount equal to
the Recapture Liability.
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7.4.Attorney_s Fees. In the event any legal action or proceeding is commenced in a court
of competent jurisdiction between the City and EastGroup to enforce provisions of this
Agreement and recover damages for breach, the prevailing party in such legal action
shall be entitled to recover its reasonable attorney's fees and expenses incurred by
reason of such action, to the extent allowed by law.
7.5.Entire Agreement. This Agreement contains the entire agreement between the parties.
This Agreement may only be amended, altered, or revoked by written instrument
signed by the City and EastGroup.
7.6.13inding Effect. This Agreement shall be binding on and inure to the benefit of the
parties, their respective successors, and assigns.
7.7.Assignment.EastGroup may not assign all or part of its rights and obligations to a third
party without the express written consent of the City provided, however, that this
Agreement may be assigned by either party without the consent of the other to an
affiliate or to any third party who succeeds to substantially all of its business or assets.
7.8.Amendment. This Agreement may be amended by the mutual written agreement of the
parties.
7.9.Termination. In the event EastGroup elects not to demolish the building as
contemplated by this Agreement, EastGroup shall notify the City in writing, and this
Agreement and the obligations on the part of both parties shall be deemed terminated
and of no further force or effect.
7.10. Notice. Any notice and or statement required and permitted to be delivered shall be
deemed delivered by actual delivery, facsimile with receipt of confirmation, or by
depositing the same in the United States mail, certified with return receipt requested,
postage prepaid, addressed to the appropriate party at the following addresses:
If to City: City of Round Rock
221 E. Main Street
Round Rock, TX 78664
Attn: City Manager
Phone: (512)218-5400
Email: lhadley(a,roundrocktexas.gov
With a required copy to:
Sheets & Crossfield
309 E. Main Street
Round Rock, TX 78664
Attn: Stephanie L. Sandre
Phone: (512) 255-8877
Email: stephanie(&scrrlaw.com
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If to EastGroup: EastGroup Properties, L.P.
Attn: Asset Manager
6565 N. MacArthur Blvd., Suite 255
Irving, TX 75039
Phone: (972) 386-8700
Email: david.hicks@eastgroup.net
Either party may designate a different address at any time upon written notice to
the other party.
7.11. Applicable Law. This Agreement is made, and shall be construed and interpreted,
under the laws of the State of Texas and venue shall lie in Williamson County, Texas.
7.12. Severability. In the event any provisions of this Agreement are illegal, invalid, or
unenforceable under present or future laws, and in that event, it is the intention of the
parties that the remainder of this Agreement shall not be affected. It is also the intention
of the parties of this Agreement that in lieu of each clause and provision that is found
to be illegal, invalid, or unenforceable, a provision be added to this Agreement, which
is legal, valid, or enforceable and is as similar in terms as possible to the provision
found to be illegal, invalid, or unenforceable.
7.13. Paragraph Headings. The paragraph headings contained in this Agreement are for
convenience only and will in no way enlarge or limit the scope or meaning of the
various and several paragraphs.
7.14. No Third-Party Beneficiaries. This Agreement is not intended to confer any rights,
privileges, or causes of action upon any third party.
7.15. Force Majeure. Except as otherwise provided herein, an equitable adjustment shall
be made for delay or failure in performing if such delay or failure is caused,prevented,
or restricted by conditions beyond that Party's reasonable control (a `force majeure
event"). A force majeure event for the purposes of this Agreement shall include, but
not be limited to,acts of God,fire; explosion,vandalism; storm or similar occurrences;
orders or acts of military or civil authority; litigation; changes in law, rules, or
regulations outside the control of the affected Party; national emergencies or
insurrections; riots; acts of terrorism; or supplier failures, shortages or breach or delay.
Except as otherwise expressly provided, herein, there shall be an equitable adjustment
allowed for performance under this Agreement as the result of any event of force
majeure.
7.16. No Joint Venture. It is acknowledged and agreed by the parties that the terms hereof
are not intended to and shall not be deemed to create any partnership or joint venture
among the parties. The City, its past, present, and future officers, elected officials,
employees, and agents of the City, do not assume any responsibilities or liabilities to
any third party in connection with the development of the Facility or the design,
construction, or operation of any portion of the Facility.
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EXECUTED to be effective as of the day of J"E , 2023.
CITY OF ROUND ROCK, TEXAS
By:
Craig orga ayor
APPROVED as to form:
tepha ie L. San e, City Attorney
EASTGROUP PROPERTIES,L.P.
By: EastGroup Properties General Partners,
Inc., a Delaware corporation, its sole general
partner
By:
Davi icks, its Vice President
By:
Reid bunbar, its Senior Vice President
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EEXHIBIT
„A„ 1
RESOLUTION NO. R-2023-169
WHEREAS, the City Council has determined that one of its priority goals is to encourage
economic development within the City of Round Rock; and
WHEREAS, EastGroup Properties, L.P. ("EastGroup") intends to demolish an existing
building located at 350 Texas Ave., and to replace it with two light industrial buildings; and
WHEREAS, the Council wishes to promote economic development as contemplated by
Chapter 380 of the Texas Local Government Code whereby EastGroup demolishes the building and
replaces it with two light industrial buildings; and
WHEREAS, §380.001 Local Government Code provides that a municipality may establish an
economic development program ("Program") to promote local economic development and to stimulate
business and commercial activity in the municipality; and
WHEREAS, the City Council has determined that the Program described in Exhibit "A" will
encourage economic development within the City and will also meet the goals set forth in said
§380.001, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK,TEXAS,
That the City offers to EastGroup a §380.001 Program whereby the City will grant an
Economic Incentive Payment ("EIP"), and
BE IT FURTHER RESOLVED
That the offer of the Program shall be as generally outlined in Exhibit "A" attached hereto and
incorporated herein for all purposes.
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
0112.20232;4856-7502-2438
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 8th day of June, 2023.
CRAIG ORGAN ayor
City of ound Roc , Texas
ATTEST:
MEAGAN S S, dity Clerk
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EXHIBIT A
ECONOMIC DEVELOPMENT PROGRAM
The terms of the §380.001 Economic Development Program to be offered to EastGroup
Properties, L.P. ("EastGroup") in exchange for EastGroup demolishing the existing building located at
350 Texas Ave., and to replace it with two light industrial buildings that are as generally outlined
below:
1. EASTGROUP's intentions and obligations:
1.1. EastGroup will demolish the existing building located at 350 Texas Ave., Round Rock,
Texas on or before March 31, 2024.
1.2. EastGroup intends to spend at least $125,000 for the demolition of the existing building,
and to replace the existing building with a minimum of 100,000 SF of light industrial
space on or before December 31, 2026.
1.3. EastGroup agrees that it will comply with the City's development approval processes
and shall construct and install the improvements consistent with City ordinances,
development regulations and requirements.
2. City's obligations:
2.1. In consideration of EastGroup's compliance with the aforesaid requirements, the City
agrees to grant an Economic Incentive Payment to EastGroup in the amount of
$125,000, or the actual cost of the demolition, whichever is less.
3. The terms and provisions of this Program will be set out in more detail in the Economic
Development Program Agreement of even date herewith.
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