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R-05-09-08-11H2 - 9/8/2005RESOLUTION NO. R -05-09-08-11H2 WHEREAS, the City of Round Rock has established an Economic Development Program to encourage IKEA Property, Inc. ("IKEA") to locate an IKEA retail furniture store in the City, and WHEREAS, to further promote economic development, the City wishes to enter into an Economic Development Program Agreement ("Agreement") with IKEA regarding IKEA's development of an IKEA retail furniture store in the City of Round Rock, Now Therefore 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, an Economic Development Program Agreement with IKEA Property, Inc., a copy of same being attached hereto as Exhibit "A" 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 asrequired 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 8th day of September, R7n NYLE %ice LL, Mayor City o Round Rock, Texas CHRISTINE R. MARTINEZ, City Secr-`iary @PFDesktop\::ODMA/WORLDOX/O:/WDOX/RESOLUTI/R50908H2.WPD/sls ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This Economic Development Program Agreement ("Agreement") is entered into this day of , 2005, by and between the City of Round Rock, Texas, a Texas home rule municipal corporation ("City"), and IKEA Property, Inc., a Delaware corporation ("IKEA"). WHEREAS, the City has adopted (a) Resolution No. , attached as Exhibit A-1 ("Program Resolution"), establishing an economic development program and Resolution No. , attached hereto as Exhibit A-2 (the "Authorizing Resolution"), authorizing the Mayor to enter into this Agreement with IKEA in recognition of the positive economic benefits to the City through IKEA' s development of approximately 21.36 acres of land, as more particularly described on the attached Exhibit B ("Property") as an IKEA destination retail furniture store containing approximately two hundred fifty-two thousand (252,000) square feet of retail space, including related office, warehouse and restaurant space as set forth on the Site Plan described in the attached Exhibit C ("Project") (the Program Resolution and the Authorizing Resolution being collectively referred to herein as the "City Resolutions"); and WHEREAS, the purpose of this Agreement is to promote economic development as contemplated by Chapter 380 of the Texas Local Government Code whereby IKEA intends to construct, develop and operate the Project, or cause the Project to be operated, in conformance with the City's development approvals for the Project, and; WHEREAS, the City agrees to provide performance based economic development grants to IKEA to defray a portion of the Project's costs. 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 IKEA 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 Resolutions, and constitute a valid and binding obligation of the City in the event IKEA proceeds with the development of the Property. The City acknowledges that IKEA is acting in reliance upon the City's performance of its obligations under this Agreement in making its decision to commit substantial resources and money to develop the Property. 2. Definitions. 2.1 "Economic Incentive Payment(s)" ("EIPs") means payments of the amount required to be paid by the City to IKEA under the Program and this Agreement. 2.2 "Effective Date" is the date this Agreement is executed to be effective by the City and IKEA. 2.3 "One Cent Sales Tax Revenues" means that portion of Sales Tax Revenues (defined below) resulting from the imposition of a one percent municipal sales tax on sales ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.6 1 CITY OF ROUND ROCK / IKEA PROPERTY, INC. EXHIBIT "A arising from the Project, such as that presently in effect pursuant to Texas Tax Code §321.101(a) and §321.103. If the City ever elects to charge less than a one percent (1%) sales tax but is allowed by law to collect a sales tax of one percent (1 %) or more, then instead of being based on actual collections, One Cent Sales Tax Revenues attributable to sales tax collected shall be deemed to be computed as if the City did elect to charge a one percent sales tax. 2.4 "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. 2.5 "Project" means IKEA's planned development of the Property which shall consist of a retail furniture center and related facilities. The Project shall include approximately two hundred fifty-five thousand (252,000) square feet of retail space, including related office, warehouse and restaurant space. 2.6 "Sales Tax Effective Date" means the first day of the month following the date upon which IKEA certifies in writing that it has received one or more certificates of occupancy for and has begun retail operation of the Project. 2.7 "Sales Tax Revenues" means the amount of sales tax collected by the City arising from the Project. The term "Sales Tax Revenues" shall include any taxes authorized by the State in the future that are intended to replace sales or use tax revenues currently available to the City. 3. Term. This Agreement shall become enforceable upon its Effective Date. This Agreement shall terminate upon the earlier to occur of: (a) seven (7) years after the Sales Tax Effective Date; or (b) IKEA's receipt of $5,000,000.00 in the aggregate pursuant to this Agreement and that certain Property Tax Abatement Agreement by and between the City and IKEA (the "Tax Abatement Agreement"). 4. Rights and Obligations of IKEA. In consideration of the City's compliance with this Agreement, IKEA agrees as follows: 4.1 Compliance with Development Regulations and Other Ordinances. IKEA shall comply with the City's development approval processes and shall develop the Project on the Property consistent with City ordinances, City -approved PUD zoning ordinance for the Property, City -approved development regulations, and other City development requirements. 4.2 IKEA Accounting. IKEA shall maintain complete books and records showing all expenses of any nature that City is to or will reimburse or pay under this Agreement which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Delaware corporations. Such books and records shall be available for examination by the duly authorized officers or agents of the City during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. IKEA shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 2 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 4.3 Waiver of Sales Tax Confidentiality. IKEA agrees to provide the City with a Waiver of Sales Tax Confidentiality in a form approved by the Texas Comptroller's Office ("Waiver Form"), a copy of which is attached hereto as Exhibit D. The Waiver Form will be utilized by the City to obtain reports filed by IKEA to determine the amount of sales tax revenues generated from the Project for the previous calendar quarter. Such reports shall be based upon reports filed by IKEA with the Texas Comptroller's office. The City agrees to maintain the confidentiality of the information provided in such reports and to not disclosure any of such information unless otherwise required by applicable law. 4.4 Submission of Data. Within thirty (30) days of the end of each calendar quarter, IKEA shall submit to the City a schedule detailing the Sales Tax Revenues for each month in thatquarter . As backup for the schedule, IKEA shall submit the following: (a) A copy of all sales tax reports for the Project, including amended reports, filed by IKEA with the Texas Comptroller's office for that quarter showing sales tax collected; (b) Such other data as the parties mutually determine reasonably appropriate to evidence the Sales Tax Revenues. 5. Rights and Obligations of the City. In consideration of IKEA 's compliance with this Agreement, the City agrees as follows: 5.1 Economic Incentive Payments. 5.1.1 City Payments. City shall pursuant to Chapter 380 of the Texas Local Government Code, but subject to the conditions set out here, make quarterly EIPs to IKEA within thirty (30) days after IKEA submits to the City the report and data for such quarter as required in Section 4.4 above. The EIPs are to be calculated as follows: (a) Calculations will be based upon sales subject to the City's one percent (1%) general sales tax; (b) The EIPs will be an amount equal to one hundred percent (100%) of the One Cent Sales Tax Revenues generated for the immediately preceding calendar quarter; (c) The Maximum Amount of the EIPs will be $5,000,000.00 less the value of abated taxes received by IKEA pursuant to the Tax Abatement Agreement. 5.1.2 Changes in Law. If, during the term of this Agreement, state law applicable to municipal taxation changes the form of sales taxes, and as a result, the ETPs differ from the amount which would have been paid to IKEA under the laws in effect as of the Effective Date of this Agreement, then the City shall adjust the EIPs using whatever other taxes and revenues generated by the Project that are legally available to City which can be allocated to the EIPs so as to achieve the same economic benefits to both parties as would have resulted had the law not changed. However, this section is not intended to require the City to use funds from ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 3 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 other sources which are not within the City's discretion to allocate to the Project, so as to achieve the same economic benefits to both parties as would have resulted had the law not changed. 5.1.3 Payments Subject to Future Appropriations. Although certain payments under this Agreement are calculated based on a formula applied to sales tax revenues, this Agreement shall not be construed as a commitment, issue or obligation of any specific taxes or tax revenues for payment to IKEA. All payments by the City under this Agreement are subject to the City's appropriation of funds for such payments in the budget year for which they are made. The payments to be made to IKEA, 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 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 payments due under this Agreement, such failure shall not be considered a default under Section 6.3, and the City shall not be liable to IKEA for such payments otherwise due during such fiscal year; however, the term of this Agreement shall be extended one (1) year for each year the City fails to appropriate funds for payments otherwise due under this Agreement. IKEA shall also 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. 5.1.4 City Accounting. The City shall maintain complete books and records showing sales taxes remitted to the City by the State and disbursements of income incentive grant payments, which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas municipalities. In addition, the City shall prepare an annual report documenting accrued interest, any carry -forward of accrued interest, unamortized balances, and amortized balances. Such books and records shall be available for examination by the duly authorized officers or agents of IKEA during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. The City shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 5.1.5 Utility Services for the Property. The City shall provide water and wastewater to IKEA for the Project, subject to the same fees and service charges assessed for water and waste water to similarly situated properties. 5.1.6 Permitting. The City shall cooperate with IKEA to expeditiously process all City permit applications and City inspections. 6. Miscellaneous. 6.1 Mutual Assistance. The City and IKEA will do all things reasonably necessary or appropriate to carry out the terms and provisions of this Agreement, and to aid and assist each other in carrying out such terms and provisions in order to put each other in the same economic condition contemplated by this Agreement regardless of any changes in public policy, the law, or taxes or assessments attributable to the Property. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 6.2 Representations and Warranties. The City represents and warrants to IKEA 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. IKEA represents and warrants to the City that it has the requisite authority to enter into this Agreement. 6.3 Default. If either the City or IKEA should default in the performance of any obligations of this Agreement, the other party shall provide such defaulting party written notice of the default, and a minimum period of thirty (30) days to cure such default, 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, IKEA shall have the right to pursue any remedy at law or in equity for the City's breach. If IKEA remains in default after notice and opportunity to cure, the City's remedy shall initially be limited to suspension of the EIPs that accrue after the date of such default until such default is cured. After any such default is cured, the City shall promptly forward any such suspended payment to IKEA. If IKEA's default is not cured within sixty (60) days after IKEA's receipt of a second notice of default from the City that clearly and conspicuously indicates the City's intention to terminate this Agreement, the City may teiiuinate this Agreement by giving IKEA written notice of such termination prior to the date IKEA cures such default. Any EIPs from City to IKEA which is not timely paid by City (unless due to IKEA's default) shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such EIPs are due until paid. Any funds owed by IKEA to the City which are not timely paid by IKEA shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such funds are due until paid. 6.4 Attorney's Fees. In the event any legal action or proceeding is commenced between the City and IKEA 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. 6.5 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 IKEA. 6.6 Binding Effect. This Agreement shall be binding on and inure to the benefit of the parties, their respective successors and assigns. 6.7 Assignment. IKEA may not assign all or part of its rights and obligations to a third party without the express written consent of the City (which consent shall not be unreasonably withheld, conditioned or denied). 6.8 Amendment. This Agreement may be amended by the mutual written agreement of the parties. 6.9 Termination. In the event IKEA elects not to proceed with the Project as contemplated by this Agreement, IKEA shall notify the City in writing of such election, and this Agreement and the obligations on the part of both parties shall thereafter be deemed terminated and of no further force or effect. Notwithstanding the above, in the event IKEA does not ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 5 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 substantially complete the construction of the Project and open for the business by December 31, 2008 (subject to delays caused by an event of force majuere), the City may terminate this Agreement by giving IKEA notice thereof prior to the date the Project is opened for business. 6.10 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 Fax (512) 218-7097 With a required copy to: Sheets & Crossfield 309 E. Main Street Round Rock, TX 78664 Attn: Stephan L. Sheets Phone: (512) 255-8877 Fax: (512) 255-8986 If to IKEA: IKEA Property, Inc. 496 West Germantown Pike Plymouth Meeting, PA 19462 Attn: President Phone: (610)834-0180 Fax: (610)834-0872 With required copies to: IKEA Property, Inc. 496 West Germantown Pike Plymouth Meeting, PA 19462 Attn: Vice President Real Estate Phone: (610) 834-0180 Fax: (610) 834-0872 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 6 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 and Larsson & Scheuritzel Centre Square West, Suite 3510 1500 Market Street Philadelphia, PA 19102 Attn: David Larsson Phone: (215)656-4221 Fax: (215)656-4202 and Jackson Walker, L.L.P. 100 Congress Avenue, Suite 1100 Austin, TX 78701 Alin: Jerry Webberman Phone: (512) 236-2270 Fax: (512) 391-2155 Either party may designate a different address at any time upon written notice to the other party. 6.11 Interpretation. Each of the parties have been represented by counsel of their choosing in the negotiation and preparation of this Agreement. Regardless of which party prepared the initial draft of this Agreement, this Agreement shall, in the event of any dispute, however its meaning or application, be interpreted fairly and reasonably and neither more strongly for or against any party. 6.12 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. 6.13 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. 6.14 Paragraph Headings. The paragraph headings contained in this Agreement are for convenience only and will in no way enlarge or limit the scope or meaning of the various and several paragraphs. 6.15 No Third Party Beneficiaries. This Agreement is not intended to confer any rights, privileges or causes of action upon any third party. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 7 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 6.16 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 (an "event of force majeure"). An event of force majeure 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. 6.17 Exhibits. The following Exhibits A - D are attached and incorporated by reference for all purposes: Exhibit A-1: Exhibit A-2: Exhibit B: Exhibit C: Exhibit D: City Resolution No. City Resolution No. IKEA Property Description Project Site Plan Waiver of Sales Tax Confidentiality Form 6.18 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 Project or the design, construction or operation of any portion of the Project. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 8 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 EXECUTED to be effective as of the day of , 2005 (the "Effective Date"). APPROVED as to form: Stephan L. Sheets, City Attorney CITY OF ROUND ROCK, TEXAS, a home rule city and municipal corporation By: Nyle Maxwell, Mayor IKEA PROPERTY, INC., a Delaware corporation By: Its: Date: By: Its: Date: ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 9 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 EXHIBIT A-1 CITY RESOLUTION NO. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 10 4019866v.6 CITY OF ROUND ROCK / IKEA PROPERTY, INC. EXHIBIT A-2 CITY RESOLUTION NO. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.6 11 CITY OF ROUND ROCK / IKEA PROPERTY, INC. Office: 512481-9602 Fax: 512-330-1621 Page 1 of 2 EXHIBIT B IKEA PROPERTY DESCRIPTION Waterloo Su ors inc. September 1, 2005 FIELD NOTES Thomas P. Dixon R.P.L.S. 4324 1980213 FIELD NOTES 2136 ACRES OF LAND, MORE OR LESS, OUT OF THE EPHADI EVANS SURVEY, ABSTRACT NO. 212, IN VVILLIAALSON COUNTY, TEXAS, SAME BEING OUT OF THAT CERTAIN 94.39 ACRE TRACT OF LAND DESCRIBED LN VOLUME 657, PAGE 659, DEED RECORDS, TRAVIS COUNTY, TEXAS; FOR WHICH A MORE PARTICULAR DESCRIPTION BY METES AND BOUNDS IS AS FOLLOWS: BEGINNING at an "X" found in concrete at the intersection of the east R.O.W. of Interstate Highway 35 North and the south R.O.W. of West Chandler Road (County Road 114), at the N.W. corner of said 94.39, for the N.W. corner hereof; THENCE N69°17'2rE along the south R.O.W. of Chandler Road for a distance of 662.03 feet to a point for the NE. corner hereof; THENCE the following eight (8) courses and distances crossing said 94.39 acre tract: 1. S20*4227"E for a distance of 659.45 to a iron rod set at the point of curvature of a curve curing to the right having a radius of 220.00; 2. 181.06 feet along the arc of said cum with a chord which bears NO2°51'16"E fora distance of 175.99 feet to the point of tangency of said curve; 3. S26`2555"W for a distance of 77.45 feet to the point of curvature of a curve curving, to the right with a radius of 158.15 feet; 4. 118.42 feet along the arc of said curve with a chord which bears S47°51'43'W for a distance of 115.67 feet to an iron rod set; 5. S69°17'39"W fora distance of 685.29 feet to an iron rod set at the point of cum-ature of a curve curving to the right having a radius of 406.00 feet; 6. 175.74 feet along the are of said curve with a chord which bears S8I*38'25"W for a distance of 173.68 feet to an iron rod set at the point of a reverse curve curving to the left with a radius of 263.86 feet; 7. 28.49 feet along the arc of said curve with a chord which bears N88°5835"W for a distance of 28.47 feet v.) an iron rod set at the point of tangency of said curve; 8. S880321"W for a distance of 71.42 feet to an iron rod set on the east R.O.W. of Interstate Highway 35 North at the S.W. corner hereof; P.O. Box 160176 Austin, Texas 78716-0176 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 12 4019866v.6 CITY OF ROUND ROCK / IKEA PROPERTY, INC. CJffice: 572-187-9602 Fax: 512-330-1621 Page 2 of 2 Witerloo Surveyors Inc. as P. Dixon P.i :S. 4324 7g802T3 September 1, 2005 FIELD NOTES THENCE the following three (3) courses and along the east R.O.W, of Interstate Highway 35 North: 1.1`02°03'55"W for a distance of 192.09 to a concrete highway monument found at the point of curvature of a curve curving to the right with a radius of 1095,90 feet; 2.398.72 feet along the arc of said curve with a chord which bears NO8°19'14"E for a distance of 396.52 feet to a concrete highway monument found at the point of tangency of said curve; 3. N14°46'52"E fora distance of 461.72 feet to the POINT OF EEGINN11NG, containing 21.36 acres of land. 1, the unde under my ed do hereby certify that the field notes hereon were prepared from an actual on -the -ground s� supervision and that they are true and correct to the best of my knowledge. Y Thomas P. Dixon R.P:C..S. 4324 P.O. Box 160176 Austin, Texas 78716-0176 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 13 4019866v.6 Y CITY OF ROUND ROCK / IKEA PROPERTY, INC. EXHIBIT C PROJECT SITE PLAN ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.6 14 CITY OF ROUND ROCK / IKEA PROPERTY, INC. EXHIBIT D WAIVER OF SALES TAX CONFIDENTIALITY Date I authorize the Comptroller of Public Accounts to release sales tax Information pertaining to the taxpayer indicated below to the City of Round Rock. Texas. I understand that this waiver applies only to our retail store located in the City of Round Rock, Williamson County, Texas. Please print or type the following information as shown on your Texas Sales and Use Tax permit: Name of Taxpayer Listed on Texas Sales Tax Permit: Name Under Which Taxpayer is Doing Business ( d/b/a or Store Name): Taxpayer Mailing Address: Physical Location of Business Permitted for Sales Tax in Round Rock, Texas: Texas Taxpayer ID Number Tax Outlet Number (As shown of Texas Sales Tax Permit) Authorized Signature': Printed Name: Title: Phone: 1 The authorized signature must be of an owner, officer, director, partner or agent authorized to sign a Texas Sales Tax Return. If you have questions concerning this Waiver of Confidentiality, please contact Sandra C. Joseph, Texas Comptroller of Public Accounts at (800) 531-5441, Ext. 5-0411. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 15 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 DATE: September 1, 2005 SUBJECT: City Council Meeting - September 8, 2005 ITEM: 11.H.2. Consider a resolution authorizing the Mayor to execute an Economic Development Agreement with IKEA Property, Inc. Department: Administration Department Staff Person: Jim Nuse, City Manager David Kautz, Assistant City Manager/Chief Financial Officer Steve Sheets, City Attorney Justification: The Economic Development Program Agreement enables the company to establish a store in our local market. The company provides quality jobs in that pay is competitive and full benefits including medical coverage are provided to employees working more than 20 hours per week. Additionally, the company is a destination retailer, bringing in customers from greater distances and providing needed diversity to our local sales tax base without over -burdening local government services. Funding: Cost: N/A Source of funds: Program Payments will be made from the 1% general sales tax generated by the retailer Outside Resources: N/A Background Information: In connection with IKEA's recent announcement to open a retail store in Round Rock at the southeast corner of IH 35 and Chandler Road the City has negotiated terms for an Economic Development Program Agreement with the company. IKEA is the world's leading furniture and home furnishings retailer and will open a 252,000 square foot retail store that provides 300 jobs as well as a 250 seat restaurant. The Economic Development Program Agreement provides financial incentive to the company to establish a store in our local market. The company provides quality jobs in that pay is competitive and full benefits including medical coverage are provided to employees working more than 20 hours per week. Additionally, the company is a destination retailer, bringing in customers from greater distances and providing needed diversity to our local sales tax base without over -burdening local government services. In summary, the agreement provides that the City will make program payments to IKEA equal to 100% of the 1% general sales tax derived from annual gross taxable sales made by the retailer. The economic development agreement between the City and IKEA will cease upon the earlier of IKEA receiving a total of $5,000,000 from the Economic Development Agreement and the Tax Abatement Agreement or the expiration of a 7 -year incentive term. Public Comment: N/A ECONOMIC DEVELOPMENT PROGRAM AGREEMENT crthdThis Economic Development Program Agreement ("Agreement") is entered into this -- day of , 2005, by and between the City of Round Rock, Texas, a Texas home rule municipal corporation ("City"), and IKEA Property, Inc., a Delaware corporation ("IKEA"). 08-11111 WHEREAS, the City has adopted (a) Resolution No. R -DD- , attached as Exhibit A-1 ("Program Resolution"), establishing an economic development program and Resolution No's"OS` °q; °aftachzeed hereto as Exhibit A-2 (the "Authorizing Resolution"), authorizing the Mayor to enter into this Agreement with IKEA in recognition of the positive economic benefits to the City through IKEA's development of approximately 21.36 acres of land, as more particularly described on the attached Exhibit B ("Property") as an IKEA destination retail furniture store containing approximately two hundred fifty-two thousand (252,000) square feet of retail space, including related office, warehouse and restaurant space as set forth on the Site Plan described in the attached Exhibit C ("Project") (the Program Resolution and the Authorizing Resolution being collectively referred to herein as the "City Resolutions"); and WHEREAS, the purpose of this Agreement is to promote economic development as contemplated by Chapter 380 of the Texas Local Government Code whereby IKEA intends to construct, develop and operate the Project, or cause the Project to be operated, in conformance with the City's development approvals for the Project, and; WHEREAS, the City agrees to provide performance based economic development grants to IKEA to defray a portion of the Project's costs. 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 IKEA 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 Resolutions, and constitute a valid and binding obligation of the City in the event IKEA proceeds with the development of the Property. The City acknowledges that IKEA is acting in reliance upon the City's performance of its obligations under this Agreement in making its decision to commit substantial resources and money to develop the Property. 2. Definitions. 2.1 "Economic Incentive Payment(s)" ("EIPs") means payments of the amount required to be paid by the City to IKEA under the Program and this Agreement. 2.2 "Effective Date" is the date this Agreement is executed to be effective by the City and IKEA. 2.3 "One Cent Sales Tax Revenues" means that portion of Sales Tax Revenues (defined below) resulting from the imposition of a one percent municipal sales tax on sales ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 1 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 R- 0s-0 -08 l Ht arising from the Project, such as that presently in effect pursuant to Texas Tax Code §321.101(a) and §321.103. If the City ever elects to charge less than a one percent (1%) sales tax but is allowed by law to collect a sales tax of one percent (1%) or more, then instead of being based on actual collections, One Cent Sales Tax Revenues attributable to sales tax collected shall be deemed to be computed as if the City did elect to charge a one percent sales tax. 2.4 "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. 2.5 "Project" means IKEA's planned development of the Property which shall consist of a retail furniture center and related facilities. The Project shall include approximately two hundred fifty-five thousand (252,000) square feet of retail space, including related office, warehouse and restaurant space. 2.6 "Sales Tax Effective Date" means the first day of the month following the date upon which IKEA certifies in writing that it has received one or more certificates of occupancy for and has begun retail operation of the Project. 2.7 "Sales Tax Revenues" means the amount of sales tax collected by the City arising from the Project. The term "Sales Tax Revenues" shall include any taxes authorized by the State in the future that are intended to replace sales or use tax revenues currently available to the City. 3. Term. This Agreement shall become enforceable upon its Effective Date. This Agreement shall terminate upon the earlier to occur of: (a) seven (7) years after the Sales Tax Effective Date; or (b) IKEA's receipt of $5,000,000.00 in the aggregate pursuant to this Agreement and that certain Property Tax Abatement Agreement by and between the City and IKEA (the "Tax Abatement Agreement"). 4. Rights and Obligations of IKEA. In consideration of the City's compliance with this Agreement, IKEA agrees as follows: 4.1 Compliance with Development Regulations and Other Ordinances. IKEA shall comply with the City's development approval processes and shall develop the Project on the Property consistent with City ordinances, City -approved PUD zoning ordinance for the Property, City -approved development regulations, and other City development requirements. 4.2 IKEA Accounting. IKEA shall maintain complete books and records showing all expenses of any nature that City is to or will reimburse or pay under this Agreement which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Delaware corporations. Such books and records shall be available for examination by the duly authorized officers or agents of the City during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. IKEA shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 2 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 4.3 Waiver of Sales Tax Confidentiality. IKEA agrees to provide the City with a Waiver of Sales Tax Confidentiality in a form approved by the Texas Comptroller's Office ("Waiver Form"), a copy of which is attached hereto as Exhibit D. The Waiver Form will be utilized by the City to obtain reports filed by IKEA to determine the amount of sales tax revenues generated from the Project for the previous calendar quarter. Such reports shall be based upon reports filed by IKEA with the Texas Comptroller's office. The City agrees to maintain the confidentiality of the information provided in such reports and to not disclosure any of such information unless otherwise required by applicable law. 4.4 Submission of Data. Within thirty (30) days of the end of each calendar quarter, IKEA shall submit to the City a schedule detailing the Sales Tax Revenues for each month in thatquarter . As backup for the schedule, IKEA shall submit the following: (a) A copy of all sales tax reports for the Project, including amended reports, filed by IKEA with the Texas Comptroller's office for that quarter showing sales tax collected; (b) Such other data as the parties mutually determine reasonably appropriate to evidence the Sales Tax Revenues. 5. Rights and Obligations of the City. In consideration of IKEA's compliance with this Agreement, the City agrees as follows: 5.1 Economic Incentive Payments. 5.1.1 City Payments. City shall pursuant to Chapter 380 of the Texas Local Government Code, but subject to the conditions set out here, make quarterly EIPs to IKEA within thirty (30) days after IKEA submits to the City the report and data for such quarter as required in Section 4.4 above. The EIPs are to be calculated as follows: (a) Calculations will be based upon sales subject to the City's one percent (1%) general sales tax; (b) The EIPs will be an amount equal to one hundred percent (100%) of the One Cent Sales Tax Revenues generated for the immediately preceding calendar quarter; (c) The Maximum Amount of the EIPs will be $5,000,000.00 less the value of abated taxes received by IKEA pursuant to the Tax Abatement Agreement. 5.1.2 Changes in Law. If, during the term of this Agreement, state law applicable to municipal taxation changes the form of sales taxes, and as a result, the EIPs differ from the amount which would have been paid to IKEA under the laws in effect as of the Effective Date of this Agreement, then the City shall adjust the EIPs using whatever other taxes and revenues generated by the Project that are legally available to City which can be allocated to the EIPs so as to achieve the same economic benefits to both parties as would have resulted had the law not changed. However, this section is not intended to require the City to use funds from ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 3 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 other sources which are not within the City's discretion to allocate to the Project, so as to achieve the same economic benefits to both parties as would have resulted had the law not changed. 5.1.3 Payments Subject to Future Appropriations. Although certain payments under this Agreement are calculated based on a formula applied to sales tax revenues, this Agreement shall not be construed as a commitment, issue or obligation of any specific taxes or tax revenues for payment to IKEA. All payments by the City under this Agreement are subject to the City's appropriation of funds for such payments in the budget year for which they are made. The payments to be made to IKEA, 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 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 payments due under this Agreement, such failure shall not be considered a default under Section 6.3, and the City shall not be liable to IKEA for such payments otherwise due during such fiscal year; however, the term of this Agreement shall be extended one (1) year for each year the City fails to appropriate funds for payments otherwise due under this Agreement. IKEA shall also 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. 5.1.4 City Accounting. The City shall maintain complete books and records showing sales taxes remitted to the City by the State and disbursements of income incentive grant payments, which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas municipalities. In addition, the City shall prepare an annual report documenting accrued interest, any carry -forward of accrued interest, unamortized balances, and amortized balances. Such books and records shall be available for examination by the duly authorized officers or agents of IKEA during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. The City shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 5.1.5 Utility Services for the Property. The City shall provide water and wastewater to IKEA for the Project, subject to the same fees and service charges assessed for water and waste water to similarly situated properties. 5.1.6 Permitting. The City shall cooperate with IKEA to expeditiously process all City permit applications and City inspections. 6. Miscellaneous. 6.1 Mutual Assistance. The City and IKEA will do all things reasonably necessary or appropriate to carryout the terms and provisions of this Agreement, and to aid and assist each other in carrying out such terms and provisions in order to put each other in the same economic condition contemplated by this Agreement regardless of any changes in public policy, the law, or taxes or assessments attributable to the Property. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 6.2 Representations and Warranties. The City represents and warrants to IKEA 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. IKEA represents and warrants to the City that it has the requisite authority to enter into this Agreement. 6.3 Default. If either the City or IKEA should default in the performance of any obligations of this Agreement, the other party shall provide such defaulting party written notice of the default, and a minimum period of thirty (30) days to cure such default, 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, IKEA shall have the right to pursue any remedy at law or in equity for the City's breach. If IKEA remains in default after notice and opportunity to cure, the City's remedy shall initially be limited to suspension of the ElPs that accrue after the date of such default until such default is cured. After any such default is cured, the City shall promptly forward any such suspended payment to IKEA. If IKEA's default is not cured within sixty (60) days after IKEA's receipt of a second notice of default from the City that clearly and conspicuously indicates the City's intention to terminate this Agreement, the City may terminate this Agreement by giving IKEA written notice of such termination prior to the date IKEA cures such default. Any EIPs from City to IKEA which is not timely paid by City (unless due to IKEA's default) shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such EIPs are due until paid. Any funds owed by IKEA to the City which are not timely paid by IKEA shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such funds are due until paid. 6.4 Attorney's Fees. In the event any legal action or proceeding is commenced between the City and IKEA 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. 6.5 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 IKEA. 6.6 Binding Effect. This Agreement shall be binding on and inure to the benefit of the parties, their respective successors and assigns. 6.7 Assignment. IKEA may not assign all or part of its rights and obligations to a third party without the express written consent of the City (which consent shall not be unreasonably withheld, conditioned or denied). 6.8 Amendment. This Agreement may be amended by the mutual written agreement of the parties. 6.9 Termination. In the event IKEA elects not to proceed with the Project as contemplated by this Agreement, IKEA shall notify the City in writing of such election, and this Agreement and the obligations on the part of both parties shall thereafter be deemed terminated and of no further force or effect. Notwithstanding the above, in the event IKEA does not ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 5 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 substantially complete the construction of the Project and open for the business by December 31, 2008 (subject to delays caused by an event of force majuere), the City may terminate this Agreement by giving IKEA notice thereof prior to the date the Project is opened for business. 6.10 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 Fax (512) 218-7097 With a required copy to: Sheets & Crossfield 309 E. Main Street Round Rock, TX 78664 Attn: Stephan L. Sheets Phone: (512) 255-8877 Fax: (512) 255-8986 If to IKEA: IKEA Property, Inc. 496 West Germantown Pike Plymouth Meeting, PA 19462 Attn: President Phone: (610)834-0180 Fax: (610)834-0872 With required copies to: IKEA Property, Inc. 496 West Germantown Pike Plymouth Meeting, PA 19462 Attn: Vice President Real Estate Phone: (610) 834-0180 Fax: (610) 834-0872 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 6 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 and Larsson & Scheuritzel Centre Square West, Suite 3510 1500 Market Street Philadelphia, PA 19102 Attn: David Larsson Phone: (215)656-4221 Fax: (215)656-4202 and Jackson Walker, L.L.P. 100 Congress Avenue, Suite 1100 Austin, TX 78701 Attn: Jerry Webberman Phone: (512) 236-2270 Fax: (512) 391-2155 Either party may designate a different address at any time upon written notice to the other party. 6.11 Interpretation. Each of the parties have been represented by counsel of their choosing in the negotiation and preparation of this Agreement. Regardless of which party prepared the initial draft of this Agreement, this Agreement shall, in the event of any dispute, however its meaning or application, be interpreted fairly and reasonably and neither more strongly for or against any party. 6.12 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. 6.13 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. 6.14 Paragraph Headings. The paragraph headings contained in this Agreement are for convenience only and will in no way enlarge or limit the scope or meaning of the various and several paragraphs. 6.15 No Third Party Beneficiaries. This Agreement is not intended to confer any rights, privileges or causes of action upon any third party. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 7 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 6.16 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 (an "event of force majeure"). An event of force majeure for the purposes of this Agreement shall include, but not be limited to, acts of God, fire; explosion, vandalism; stonn 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. 6.17 Exhibits. The following Exhibits A - D are attached and incorporated by reference for all purposes: Exhibit A-1: Exhibit A-2: Exhibit B: Exhibit C: Exhibit D: City Resolution No. R- 05- 09- O -11 H City Resolution No. Q- os- 09 -0g -111-1Z IKEA Property Description Project Site Plan Waiver of Sales Tax Confidentiality Form 6.18 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 Project or the design, construction or operation of any portion of the Project. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 8 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 EXECUTED to be effective as of the b day of "Effective Date"). APPROVED as to form: Steph.' L. Sheets, City Attorney , 2005 (the CITY OF ROUND ROCK, TEXAS, a home rule city and municipal corporation B Nyle ax ell, Mayor IKEA PROPERTY AI a Delaw. orporalio By: Its: Date: By: Its: Date: ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 9 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 EXHIBIT A-1 CITY RESOLUTION NO. R-O5-0ci-08-11 NI ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.6 10 CITY OF ROUND ROCK / IKEA PROPERTY, INC. RESOLUTION NO. R -05-09-08-11H1 WHEREAS, IKEA Property, Inc. ("IKEA") is one of the largest and most successful furniture retailers in the world, and WHEREAS, IKEA has expressed to the City of Round Rock ("City") its desire to locate an IKEA retail furniture store in the City which will attract shoppers from outside of the area and provide hundreds of new jobs, and WHEREAS, §380.001 Local Government Code provides that a municipality may establish a 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 meet the goals set forth in said §380.001 and will be of mutual benefit to both parties, Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the Mayor is hereby authorized and directed a §380.001 Program in exchange for IKEA locating furniture store in the City of Round Rock, and BE IT FURTHER RESOLVED That the offer of the Program shall be as to offer to IKEA an IKEA retail 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 hereof were discussed, considered and formally acted @PFDesktop\::ODMA/WORLDOX/O:/WDOX/RESOLUPI/R5O908R1.WPD/515 upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. RESOLVED this 8th day of Septemb- 005 MAXWEL , Mayor City of Round Rock, Texas CHRISTINE R. MARTINEZ, City Sectary 2 EXHIBIT A The terms of the §380.001 Program to be offer to IKEA in exchange for IKEA's locating an IKEA retail furniture store in the City of Round Rock are as generally outlined below: 1. The City agrees to make program payments to IKEA calculated on the basis of sales tax revenues actually received by the CITY from taxable sales generated by the IKEA retail furniture store as follows: a. The City will retain all of the sales tax revenues derived from the one-half cent of the tax devoted to the reduction of ad valorem property tax; b. The City will make program payments to IKEA equal to 100% of the 1% general sales tax revenues derived from annual gross taxable sales; c. The total amount of program payments to IKEA will not exceed the sum of $5,000,000. 2. The term of the Program shall not exceed seven years. 3. The terms and provisions of the Program will be set out in more detail in an Economic Development Program Agreement. 3 EXHIBIT A-2 CITY RESOLUTION NO. It-O5.Oq-Q '- // H� ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.6 11 CITY OF ROUND ROCK / IKEA PROPERTY, INC. RESOLUTION NO. R-05-09-08-11112 WHEREAS, the City of Round Rock has established an Economic Development Program to encourage IKEA Property, Inc. ("IKEA") to locate an IKEA retail furniture store in the City, and WHEREAS, to further promote economic development, the City wishes to enter into an Economic Development Program Agreement ("Agreement") with IKEA regarding IKEA's development of an IKEA retail furniture store in the City of Round Rock, Now Therefore 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, an Economic Development Program Agreement with IKEA Property, Inc., a copy of same being attached hereto as Exhibit "A" 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 asrequired 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 8th day of September, nfiQkti. CHRISTINE R. MARTINEZ, City Secr @PFDesktop\::0OHA/WORLDOX/O:/WDOX/RFSOLUTI/R50906H2.WPD/sls NYLE � LL, Mayor City o Round Rock, Texas ary ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This Economic Development Program Agreement ("Agreement") is entered into this day of , 2005, by and between the City of Round Rock, Texas, a Texas home rule municipal corporation ("City"), and IKEA Property, Inc., a Delaware corporation ("IKEA"). WHEREAS, the City has adopted (a) Resolution No. , attached as Exhibit A-1 ("Program Resolution"), establishing an economic development program and Resolution No. , attached hereto as Exhibit A-2 (the "Authorizing Resolution"), authorizing the Mayor to enter into this Agreement with IKEA in recognition of the positive economic benefits to the City through IKEA's development of approximately 21.36 acres of land, as more particularly described on the attached Exhibit B ("Property") as an IKEA destination retail furniture store containing approximately two hundred fifty-two thousand (252,000) square feet of retail space, including related office, warehouse and restaurant space as set forth on the Site Plan described in the attached Exhibit C ("Project") (the Program Resolution and the Authorizing Resolution being collectively referred to herein as the "City Resolutions"); and WHEREAS, the purpose of this Agreement is to promote economic development as contemplated by Chapter 380 of the Texas Local Government Code whereby IKEA intends to construct, develop and operate the Project, or cause the Project to be operated, in conformance with the City's development approvals for the Project, and; WHEREAS, the City agrees to provide performance based economic development grants to IKEA to defray a portion of the Project's costs. 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 IKEA 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 Resolutions, and constitute a valid and binding obligation of the City in the event IKEA proceeds with the development of the Property. The City acknowledges that IKEA is acting in reliance upon the City's perfoiuiance of its obligations under this Agreement in making its decision to commit substantial resources and money to develop the Property. 2. Definitions. 2.1 "Economic Incentive Payment(s)" ("EIPs") means payments of the amount required to be paid by the City to IKEA under the Program and this Agreement. 2.2 "Effective Date" is the date this Agreement is executed to be effective by the City and IKEA. 2.3 "One Cent Sales Tax Revenues" means that portion of Sales Tax Revenues (defined below) resulting from the imposition of a one percent municipal sales tax on sales ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.6 1 CITY OF ROUND ROCK / IKEA PROPERTY, INC. EXHIBIT "A" arising from the Project, such as that presently in effect pursuant to Texas Tax Code §321.101(a) and §321.103. If the City ever elects to charge less than a one percent (1%) sales tax but is allowed by law to collect a sales tax of one percent (1%) or more, then instead of being based on actual collections, One Cent Sales Tax Revenues attributable to sales tax collected shall be deemed to be computed as if the City did elect to charge a one percent sales tax. 2.4 "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. 2.5 "Project" means IKEA's planned development of the Property which shall consist of a retail furniture center and related facilities. The Project shall include approximately two hundred fifty-five thousand (252,000) square feet of retail space, including related office, warehouse and restaurant space. 2.6 "Sales Tax Effective Date" means the first day of the month following the date upon which IKEA certifies in writing that it has received one or more certificates of occupancy for and has begun retail operation of the Project. 2.7 "Sales Tax Revenues" means the amount of sales tax collected by the City arising from the Project. The term "Sales Tax Revenues" shall include any taxes authorized by the State in the future that are intended to replace sales or use tax revenues currently available to the City. 3. Term. This Agreement shall become enforceable upon its Effective Date. This Agreement shall terminate upon the earlier to occur of: (a) seven (7) years after the Sales Tax Effective Date; or (b) IKEA's receipt of $5,000,000.00 in the aggregate pursuant to this Agreement and that certain Property Tax Abatement Agreement by and between the City and IKEA (the "Tax Abatement Agreement"). 4. Rights and Obligations of IKEA. In consideration of the City's compliance with this Agreement, IKEA agrees as follows: 4.1 Compliance with Development Regulations and Other Ordinances. IKEA shall comply with the City's development approval processes and shall develop the Project on the Property consistent with City ordinances, City -approved PUD zoning ordinance for the Property, City -approved development regulations, and other City development requirements. 4.2 IKEA Accounting. IKEA shall maintain complete books and records showing all expenses of any nature that City is to or will reimburse or pay under this Agreement which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Delaware corporations. Such books and records shall be available for examination by the duly authorized officers or agents of the City during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. IKEA shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 2 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 4.3 Waiver of Sales Tax Confidentiality. IKEA agrees to provide the City with a Waiver of Sales Tax Confidentiality in a form approved by the Texas Comptroller's Office ("Waiver Form"), a copy of which is attached hereto as Exhibit D. The Waiver Form will be utilized by the City to obtain reports filed by IKEA to determine the amount of sales tax revenues generated from the Project for the previous calendar quarter. Such reports shall be based upon reports filed by IKEA with the Texas Comptroller's office. The City agrees to maintain the confidentiality of the information provided in such reports and to not disclosure any of such information unless otherwise required by applicable law. 4A Submission of Data. Within thirty (30) days of the end of each calendar quarter, IKEA shall submit to the City a schedule detailing the Sales Tax Revenues for each month in thatquarter . As backup for the schedule, IKEA shall submit the following: (a) A copy of all sales tax reports for the Project, including amended reports, filed by IKEA with the Texas Comptroller's office for that quarter showing sales tax collected; (b) Such other data as the parties mutually determine reasonably appropriate to evidence the Sales Tax Revenues. 5. Rights and Obligations of the City. In consideration of IKEA's compliance with this Agreement, the City agrees as follows: 5.1 Economic Incentive Payments. 5.1.1 City Payments. City shall pursuant to Chapter 380 of the Texas Local Government Code, but subject to the conditions set out here, make quarterly EIPs to IKEA within thirty (30) days after IKEA submits to the City the report and data for such quarter as required in Section 4.4 above. The EIPs are to be calculated as follows: (a) Calculations will be based upon sales subject to the City's one percent (1%) general sales tax; (b) The EIPs will be an amount equal to one hundred percent (100%) of the One Cent Sales Tax Revenues generated for the immediately preceding calendar quarter; (c) The Maximum Amount of the EIPs will be $5,000,000.00 less the value of abated taxes received by IKEA pursuant to the Tax Abatement Agreement. 5.1.2 Changes in Law. If, during the term of this Agreement, state law applicable to municipal taxation changes the form of sales taxes, and as a result, the EIPs differ from the amount which would have been paid to IKEA under the laws in effect as of the Effective Date of this Agreement, then the City shall adjust the E%Ps using whatever other taxes and revenues generated by the Project that are legally available to City which can be allocated to the EIPs so as to achieve the same economic benefits to both parties as would have resulted had the law not changed. However, this section is not intended to require the City to use funds from ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 3 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 other sources which are not within the City's discretion to allocate to the Project, so as to achieve the same economic benefits to both parties as would have resulted had the law not changed. 5.1.3 Payments Subject to Future Appropriations. Although certain payments under this Agreement are calculated based on a formula applied to sales tax revenues, this Agreement shall not be construed as a commitment, issue or obligation of any specific taxes or tax revenues for payment to IKEA. All payments by the City under this Agreement are subject to the City's appropriation of funds for such payments in the budget year for which they are made. The payments to be made to IKEA, 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 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 payments due under this Agreement, such failure shall not be considered a default under Section 6.3, and the City shall not be liable to IKEA for such payments otherwise due during such fiscal year; however, the term of this Agreement shall be extended one (1) year for each year the City fails to appropriate funds for payments otherwise due under this Agreement. IKEA shall also 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. 5.1.4 City Accounting. The City shall maintain complete books and records showing sales taxes remitted to the City by the State and disbursements of income incentive grant payments, which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas municipalities. In addition, the City shall prepare an annual report documenting accrued interest, any carry -forward of accrued interest, unamortized balances, and amortized balances. Such books and records shall be available for examination by the duly authorized officers or agents of IKEA during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. The City shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 5.1.5 Utility Services for the Property. The City shall provide water and wastewater to IKEA for the Project, subject to the same fees and service charges assessed for water and waste water to similarly situated properties. 5.1.6 Permitting. The City shall cooperate with IKEA to expeditiously process all City permit applications and City inspections. 6. Miscellaneous. 6.1 Mutual Assistance. The City and IKEA will do all things reasonably necessary or appropriate to carry out the terms and provisions of this Agreement, and to aid and assist each other in carrying out such terms and provisions in order to put each other in the same economic condition contemplated by this Agreement regardless of any changes in public policy, the law, or taxes or assessments attributable to the Property. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.6 4 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 6.2 Representations and Warranties. The City represents and warrants to IKEA 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_ IKEA represents and warrants to the City that it has the requisite authority to enter into this Agreement. 6.3 Default. If either the City or IKEA should default in the performance of any obligations of this Agreement, the other party shall provide such defaulting party written notice of the default, and a minimum period of thirty (30) days to cure such default, 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, IKEA shall have the right to pursue any remedy at law or in equity for the City's breach. If IKEA remains in default after notice and opportunity to cure, the City's remedy shall initially be limited to suspension of the ETPs that accrue after the date of such default until such default is cured. After any such default is cured, the City shall promptly forward any such suspended payment to IKEA. If IKEA's default is not cured within sixty (60) days after IKEA's receipt of a second notice of default from the City that clearly and conspicuously indicates the City's intention to terminate this Agreement, the City may terminate this Agreement by giving IKEA written notice of such termination prior to the date IKEA cures such default. Any EIPs from City to IKEA which is not timely paid by City (unless due to IKEA's default) shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such EIPs are due until paid. Any funds owed by IKEA to the City which are not timely paid by IKEA shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such funds are due until paid. 6.4 Attorney's Fees. In the event any legal action or proceeding is commenced between the City and IKEA 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. 6.5 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 IKEA. 6.6 Binding Effect. This Agreement shall be binding on and inure to the benefit of the parties, their respective successors and assigns. 6.7 Assignment. IKEA may not assign all or part of its rights and obligations to a third party without the express written consent of the City (which consent shall not be unreasonably withheld, conditioned or denied). 6.8 Amendment. This Agreement may be amended by the mutual written agreement of the parties. 6.9 Termination. In the event IKEA elects not to proceed with the Project as contemplated by this Agreement, IKEA shall notify the City in writing of such election, and this Agreement and the obligations on the part of both parties shall thereafter be deemed terminated and of no further force or effect. Notwithstanding the above, in the event IKEA does not ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 5 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 substantially complete the construction of the Project and open for the business by December 31, 2008 (subject to delays caused by an event of force majuere), the City may terminate this Agreement by giving IKEA notice thereof prior to the date the Project is opened for business. 6.10 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 Fax (512)218-7097 With a required copy to: Sheets & Crossfield 309 E. Main Street Round Rock, TX 78664 Attn: Stephan L. Sheets Phone: (512) 255-8877 Fax: (512) 255-8986 If to IKEA: IKEA Property, Inc. 496 West Germantown Pike Plymouth Meeting, PA 19462 Attn: President Phone: (610)834-0180 Fax: (610)834-0872 With required copies to: IKEA Property, Inc. 496 West Germantown Pike Plymouth Meeting, PA 19462 Attn: Vice President Real Estate Phone: (610) 834-0180 Fax: (610) 834-0872 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.6 CITY OF ROUND ROCK / IKEA PROPERTY, INC. and Larsson & Scheuritzel Centre Square West, Suite 3510 1500 Market Street Philadelphia, PA 19102 Attn: David Larsson Phone: (215)656-4221 Fax: (215)656-4202 and Jackson Walker, L.L.P. 100 Congress Avenue, Suite 1100 Austin, TX 78701 Attn: Jerry Webberman Phone: (512) 236-2270 Fax: (512) 391-2155 Either party may designate a different address at any time upon written notice to the other party. 6.11 Interpretation. Each of the parties have been represented by counsel of their choosing in the negotiation and preparation of this Agreement. Regardless of which party prepared the initial draft of this Agreement, this Agreement shall, in the event of any dispute, however its meaning or application, be interpreted fairly and reasonably and neither more strongly for or against any party. 6.12 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. 6.13 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. 6.14 Paragraph Headings. The paragraph headings contained in this Agreement are for convenience only and will in no way enlarge or limit the scope or meaning of the various and several paragraphs. 6.15 No Third Party Beneficiaries. This Agreement is not intended to confer any rights, privileges or causes of action upon any third party. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 7 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 6.16 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 (an "event offorce majeure"). An event of force majeurefor 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. 6.17 Exhibits. The following Exhibits A - D are attached and incorporated by reference for all purposes: Exhibit A-1: Exhibit A-2: Exhibit B: Exhibit C: Exhibit D: City Resolution No. City Resolution No. IKEA Property Description Project Site Plan Waiver of Sales Tax Confidentiality Form 6.18 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 Project or the design, construction or operation of any portion of the Project. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 8 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 EXECUTED to be effective as of the day of , 2005 (the "Effective Date"). APPROVED as to form: Stephan L. Sheets, City Attorney CITY OF ROUND ROCK, TEXAS, a home rule city and municipal corporation By: Nyle Maxwell, Mayor IKEA PROPERTY, INC., a Delaware corporation By: Its: Date: By: Its: Date: ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 9 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 EXHIBIT A-1 CITY RESOLUTION NO. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.6 10 CITY OE ROUND ROCK / IKEA PROPERTY, INC. EXHIBIT A-2 CITY RESOLUTION NO. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.6 11 CITY OF ROUND ROCK / IKEA PROPERTY, INC. Oke: 512481-9602 Fax: 512-330-1621 Page 1 of 2 EXHIBIT B IKEA PROPERTY DESCRIPTION Waterloo Surveyors C. September 1, 2005 Thomas P. Dixon 1LP.L.S. 4324 19802T3 FIELD NOTES FIELD NOTES 2136 ACRES OF LAND, MORE OR LESS, OUT OF THE EPHAIM EVANS SURVEY, ABSTRACT NO. 212, Lei WILLIAM,SON COUNTY, TEXAS, SAME BEING OUT OF THAT CERTAIN 9439 ACRE TRACT OF LAND DESCRIBED IN VOLUME 657, PAGE 659, DEED RECORDS, TRAVIS COUNTY, TEXAS; FOR WHICH A MORE PARTICULAR DESCRIPTION BY METES AND BOUNDS IS AS FOLLOWS: BEGINNING at an "X" found in concrete at the intersection of the cast R.O.W. of Interstate Highway 35 North and the south R.O.W. of West Chandler Road (County Road 114), at the N.W. corner of said 94.39, for the N.W. corner hereof; THENCE N69° 17'21 "E along the south R.O.W. of Chandler Road for a distance of 662.03 feet to a point for the N.E. corner hereof; THENCE the following eight (8) courses and distances crossing said 94.39 acre tract: 1. S20°42'27"E for a distance of 659.45 to a iron rod set at the point of curvature of a curve curing to the right having a radius of' 220.00; 2. 181.06 feet along the arc of said curve with a chord which bears NO2°51'I6"E for a distance of 175.99 feet to the point of tangency of said curve; 3. 526'25'55"W for a distance of 77.45 feet to the point of curvature of a curve curving to the right with a radius of 158.15 feet; 4.118.42 feet along the arc of said eurve with a chord which bears 847°51'41"W for a distance of 115.67 feet to an iron rod set; 5. S69°17'39"W for a distance of 685.29 feet to an iron rod set at the point of curvature of a curve curving to the right having a radius of 406.00 feet; 6. 175.74 feet along the arc of said curve with a chord which bears S81 °38'25"W for a distance of 173.68 feet to an iron. rod set at the point of a reverse curve curving to the left with a radius of 263.86 feet; 7. 28.49 feet along the arc of said curve with a chord which bears N88°58`35" w for a distance of 28.47 feet to an iron rod set atthe point of tangency of said curve; 8. S88`03'21 "W for a distance of 71.42 feet to an iron rod set on the east R.O.W. of Interstate Highway 35 North at the S.W. comer hereof; P.O. Box 160176 Austin, Texas 74716-0176 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 12 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 Office: 512481-9602 Fax_5t2-330-1621 Page 2 of 2 Waterloo Surveyors Inc. Thomas P. Dixon R.P.L.S.4324 19802T3 September 1, 2005 FIELD NOTES THENCE the following three (3) courses and along the east R.O.W, of Inter ate Highway 35 North: 1. NO2°03'55"W for a distance of 192.00 to a concrete highway monument found at the point of curvature of a curve curving to the right with a radius of 1095.90 feet; 2. 398.72 feet along the arc of said curve with a chordwhich bears N08°19'14"E for a distance of 396.52 feet to a concrete highway monument found at the point of tangency of said curve; 3. N14°46`52"E for a distance of 461.72 feet to the POINT OF BEGINNING, containing 21.36 acres of land. L the under igned do hereby certify that the field notes hereon were prepared from an actual on -the -ground survey under my supervision and that they are true and correct to the best of my knowledge. Thomas P. Dixon R.P.L.S. 4324 P.O. Box 160176 Austin, Texas 78716-0176 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 13 4019866v.6 CITY OF ROUND ROCK / IKEA PROPERTY, INC. EXHIBIT C PROJECT SITE PLAN ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.6 14 CITY OF ROUND ROCK / IKEA PROPERTY, INC. EXHIBIT D WAIVER OF SALES TAX CONFIDENTIALITY Date I authorize the Comptroller of Public Accounts to release sales tax Information pertaining to the taxpayer indicated below to the City of Round Rock. Texas. I understand that this waiver applies only to our retail store located in the City of Round Rock, Williamson County, Texas. Please print or type the following information as shown on your Texas Sales and Use Tax permit: Name of Taxpayer Listed on Texas Sales Tax Permit: Name Under Which Taxpayer is Doing Business (d/b/a or Store Name): Taxpayer Mailing Address: Physical Location of Business Permitted for Sales Tax in Round Rock, Texas: Texas Taxpayer ID Number Tax Outlet Number (As shown of Texas Sales Tax Permit) Authorized Signature;: Printed Name: Title: Phone: The authorized signature must be of an owner, officer, director, partner or agent authorized to sign a Texas Sales Tax Return. If you have questions concerning this Waiver of Confidentiality, please contact Sandra C. Joseph, Texas Comptroller of Public Accounts at (800) 531-5441, Ext. 5-041 L ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 15 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6 Office: 512-481-9602 Fax: 512-330-1621 Page 1 of 2 EXHIBIT B IKEA PROPERTY DESCRIPTION Waterloo Surveyors Inc. septcnaber I, 2005 FIELD NOTES Thomas P. Dixon RRI„S, 4324 .19802-13 FIELD NOTES 21.36 ACRES OF LAND, MORE OR L,FSS, OUT OF THE EPHALVI EVANS SURVEY, ABSTRACT NO. 212, IN WILLIAMSON COUNTY, TEXAS, SAME BEING OUT OF THAT CERTAIN 94,39 ACRE TRACT OF LAND DESCRIBED LN VOLUME 657, PAGE 659, DEED RECORDS, TRAVIS COUNTY, TEXAS; FOR WHICH A MORE PARTICULAR DESCRIPTION 13Y METES AND BOUNDS IS AS FOLLOWS: BEGINNING at an "X" found in concrete at the intersection of the cast R.O.W. of Interstate Highway 35 North and the south R.O.W. of West Chandler Road (County Road 114), at the N.W. corner of said 94.39, for the N.W. corner hereof; THENCE N6917'21't along the south R.O.W. of Chandler Road for a distance of 662.03 feet to a point for the NE. corner hereof; THENCE the following eight (8) courses and distances crossing said 94.39 acre tract: 1. S20°42'27"E for a distance of 659.45 to a iron rod set at the point of curvature of a curve curing to the right having a radius of 220,00; 2. 181.06 feet along the arc of said curve with a chord which bears NOP51'16"E for a distance of 175.99 feet to the point of tangency of said curve; 3. S26°25'55"W for a distance of 77.45 feet to the point of curvature of a curve curving to the right with a radius of 158.15 feet; 4. 118.42 feet along the arc of said curve with a chord which bears S475141"W for a distance of 115.67 feet to an iron rod set; 5. S69`1739W for a distance of 68529 feet to an iron rod set at the point of curvatiu-e of a curve curving to the right having a radius of 406.00 feet; 6. 175.74 feet along the are of said curve with a chord which bears S819825W for a distance of 173.68 feet to an iron rod set at the point of a reverse curve curving to the left with a radius of 263.86 feet; 7. 28.49 feet along the arc of said curve with a chord which bears N88°58'35"W for a distance of 28.47 feet to an iron rod set at the point of tatigency of said curve; 8. 88800321"W for a distance of 71.42 feet to an iron rod set on the east R.O,W. of Interstate Highway 35 North at the S.W. comer hereof; P.O. Box 160176 Austin, Texas 78716-0176 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 12 4019866v.6 CITY OF ROUND ROCK / IKEA PROPERTY, INC. Waterloo Bury; ors to Oce: 5I2 -48I-9602 Fax:512-330-1621 Page 2 of 2 Thomas P, Dixon R.P.L.S. 4324 79802T3 September 1, 2005 FIELD NOTES THENCE ENCE the following three (3) courses and along the east R.O.W. of Interstate Highway 35 North: 1. NO2°03'55"W for a distance of 192.00 to a concrete highway monument found at the point of curvature of a curve curving to the right with a radius of 1095,90 fee 2. 398.72 feet along the arc of said curve with a chord which bears N0$°19'14"E for a distance of 396.52 feet to a concrete highway monument found at the point of tangency of said curve; 3. N14°46'52"E for a distance of461.72 feet to the POINT OF BEGINNING, containing 21.36 acres of land. I, the undo igned do hereby certify that the field notes hereon were prepared from an actual on-the-grau under my supervision and that they are true and correct to the best of my knowledge. • Thomas P. Dixon R.P.L .4324 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.6 P.O. Box 160176 Austin, Texas 78716-0176 13 CITY OF ROUND ROCK / IKEA PROPERTY, INC. EXHIBIT C PROJECT SITE PLAN ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.6 14 CITY OF ROUND ROCK / IKEA PROPERTY, INC. EXHIBIT D WAIVER OF SALES TAX CONFIDENTIALITY Date I authorize the Comptroller of Public Accounts to release sales tax Information pertaining to the taxpayer indicated below to the City of Round Rock. Texas. I understand that this waiver applies only to our retail store located in the City of Round Rock, Williamson County, Texas. Please print or type the following information as shown on your Texas Sales and Use Tax permit: Name of Taxpayer Listed on Texas Sales Tax Permit: Name Under Which Taxpayer is Doing Business ( d/b/a or Store Name): Taxpayer Mailing Address: Physical Location of Business Permitted for Sales Tax in Round Rock, Texas: Texas Taxpayer ID Number Tax Outlet Number (As shown of Texas Sales Tax Permit) Authorized Signature': Printed Name: Title: Phone: 1 The authorized signature must be of an owner, officer, director, partner or agent authorized to sign a Texas Sales Tax Return. If you have questions concerning this Waiver of Confidentiality, please contact Sandra C. Joseph, Texas Comptroller of Public Accounts at (800) 531-5441, Ext. 5-0411. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 15 CITY OF ROUND ROCK / IKEA PROPERTY, INC. 4019866v.6