RTIRZ-2011-11 - 2011-11-14RESOLUTION NO. RTIRZ2011-11
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
PEARLAND TAX INCREMENT REINVESTMENT ZONE #2 (TIRZ #2)
BOARD OF DIRECTORS, APPROVING A SUB -DEVELOPER
REIMBURSEMENT AGREEMENT WITH 518SCR, LTD.
BE IT RESOLVED BY TIRZ #2 BOARD OF DIRECTORS:
Section 1. That the Board of Directors for the Pearland Tax Increment Reinvestment
Zone #2 hereby approves a Sub -Developer Reimbursement Agreement with 518SCR
LTD, attached as Exhibit A.
PASSED, APPROVED, AND ADOPTED this 14th day of November, A.D. 2011.
KENNETH R. PljVIPS
TIRZ NO. 2 CHA MAN
ATTEST:
MIKE PYB R
TIRZ NO. 2 SECRETARY
Exhibit "A"
Resolution No. RTIRZ11-11
SUB -DEVELOPER REIMBURSEMENT AGREEMENT
This SUB -DEVELOPER REIMBURSEMENT AGREEMENT (this
"Agreement"), is made and entered into as of the 14th day of November, 2011, by and
between the CITY OF PEARLAND, TEXAS (the "City"), a municipal corporation and a
home -rule city located in the Counties of Harris, Brazoria, and Fort Bend, Texas (the
"City"); REINVESTMENT ZONE NUMBER TWO, CITY OF PEARLAND, TEXAS
(the "Reinvestment Zone"), a reinvestment zone created by the City pursuant to
Chapter 311, Texas Tax Code, acting by and through its Board of Directors (the "Zone
Board"); and 518SCR, LTD. ("Sub -Developer"), a Texas limited partnership.
RECITALS
A. Sub -Developer plans to develop approximately 315.292 acres of land, as
more particularly described on Exhibit A attached hereto (the "Property"), into single
family residential lots; and
B. The City created the Reinvestment Zone and appointed members of the
Zone Board which adopted the Project Plan and Reinvestment Zone Financing Plan,
including any amendments thereto, in particular Amendment No. 1 to the Plan which
was approved by the Zone Board on March 27, 2006, (collectively, the "Plans", and
singularly as relevant to this Agreement, "Amendment No. 1"), which Plans have been
approved by the City.
C. The Reinvestment Zone desires to implement the Plans and to provide for
the construction of certain TIRZ Improvements as described in the Plans.
D. The Sub -Developer has requested and Reinvestment Zone has agreed, that
Sub -Developer will construct and pre -finance certain TIRZ Improvements related to the
Property which are described as to be constructed by the Master Developer in
Amendment No. 1, subject to reimbursement by the City and the Reinvestment Zone
from the Tax Increment Fund, as provided in this Agreement and the Plans.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties do hereby agree as follows:
AGREEMENT
1. Incorporation of Recitals. The representations, covenants and recitations
set forth in the foregoing recitals are material to this Agreement and are hereby
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incorporated into and made a part of this Agreement as through they were fully set
forth in this Section.
2. Cooperation. The Parties agree to take such actions, including the
execution and delivery of such documents, instruments, petitions and certifications
(and, in the case of the Reinvestment Zone, the adoption of such orders and
resolutions), as may be necessary or appropriate, from time to time, to carry out the
terms, provisions and intent of this Agreement and to aid and assist each other in
carrying out said terms, provisions and intent.
3. Payment and Reimbursement.
(a) Sub -Developer shall let contracts for the design and construction of
those TIRZ Improvements described in Amendment No. 1 in the manner provided by
subsections (1) and (2) of this section (the "TIRZ Improvements').
(1) To initiate the construction of a TIRZ Improvement, Sub -
Developer shall provide a written request therefore to the Zone Board (i) describing the
requested TIRZ Improvements, (ii) specifying the estimated schedule for the design and
construction, (iii) estimating the likely costs thereof, as certified by the Reinvestment
Zone's engineer, and comparing such estimate to the TIRZ budget established for such
TIRZ Improvements in the Plans, and (iv) specifying the area within the Zone which is
benefited by such TIRZ Improvements over which the available Tax Increment is to be
applied for purposes of determining when reimbursement is to be made. If the
Reinvestment Zone's engineer determines that the requested TIRZ Improvements
qualify for reimbursement, Sub -Developer may proceed to design and construct the
requested TIRZ Improvements in accordance with the procedures set forth herein.
(2) For purposes of record -keeping and establishing a priority of
reimbursement, the Reinvestment Zone and Sub -Developer shall execute a letter
agreement for each phase of construction, substantially in the form attached as Exhibit
B. The purpose of the letter agreement is to confirm that Sub -Developer will design and
construct a phase of the TIRZ Improvements, will pre -finance all associated costs of
such phase, and will be reimbursed by the City and the Reinvestment Zone from bond
proceeds or uncommitted Tax Increment, all in accordance with the terms and
conditions of this Agreement and the Plans. It should be specifically noted that neither
the Alvin ISD nor the Fort Bend ISD participates in contribution of taxes to property
within Amendment No. 1.
(b) If Sub -Developer follows the procedures set forth herein and after
the Reinvestment Zone engineer and auditor have certified in letters in substantially the
form attached as Exhibits C and D that the TIRZ Improvements have been completed
and are in order for reimbursement, the Reinvestment Zone shall reimburse Sub -
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Developer for all amounts advanced to the Reinvestment Zone pursuant to this
Agreement, plus appropriate interest up to the amount certified by the Reinvestment
Zone engineer and auditor to be within the TIRZ budget (as may be adjusted for
inflation) established for such TIRZ Improvements in the Plans.
(c) The Reinvestment Zone shall be obligated to reimburse Sub -
Developer solely, and in order of priority, from (i) bond proceeds or (ii) uncommitted
Tax Increment if such funds are available and are not reasonably expected to be
required by the Reinvestment Zone for debt service on bonds issued for reimbursement
purposes or for administrative expenses. In accordance with the Plans, priority for the
reimbursement of advances is as follows: (i) creation and administration, (ii) Master
Developer TIRZ Improvements, and (iii) Sub -Developer TIRZ Improvements in the
order in which constructed and to the extent sufficient tax increment has been created
on the Property. The Reinvestment Zone agrees to request at the earliest feasible date
that the City issue bonds and the City agrees to use its best efforts to issue bonds to
fund reimbursements at such time as the City's financial advisor certifies that the
unencumbered Tax Increment (exclusive of Tax Increment contributed by the Alvin
ISD) generated within the area benefited by the TIRZ Improvements is sufficient to
support the applicable bonds and satisfies the coverage test and any additional
requirements set forth in the Plans. The Reinvestment Zone's obligation to reimburse is
conditioned on: (i) the approval of the issuance of the bonds by the City, the Attorney
General of Texas and any other governmental authority having jurisdiction thereover;
and (ii) the successful marketing, sale and closing of the bonds, or if bonds are not the
source of reimbursement, that sufficient tax increment allocated to the Property is
available pursuant to the Reinvestment Zone's priority of reimbursement policy
described herein.
4. Powers.
(a) The Reinvestment Zone hereby represents and warrants to Sub -
Developer that the Reinvestment Zone has full constitutional and lawful right, power
and authority, under currently applicable law, to execute and deliver and perform the
terms and obligations of this Agreement, and all of the foregoing have been or will be
duly and validly authorized and approved by all necessary proceedings, findings and
actions. Accordingly, this Agreement constitutes the legal, valid and binding obligation
of the Reinvestment Zone, is enforceable in accordance with its terms and provisions
and does not require the consent of any other governmental authority.
(b) Sub -Developer hereby represents and warrants to the Reinvestment
Zone that Sub -Developer has full lawful right, power and authority to execute and
deliver and perform the terms and obligations of this Agreement and all of the
foregoing have been or will be duly and validly authorized and approved by all
necessary actions of Sub -Developer. Concurrently with Sub -Developer's execution of
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this Agreement, Sub -Developer has delivered to the Reinvestment Zone copies of the
resolutions or other corporate actions authorizing the execution of this Agreement and
evidencing the authority of the persons signing this Agreement on behalf of Sub -
Developer to do so. Accordingly, this Agreement constitutes the legal, valid and
binding obligation of Sub -Developer and is enforceable in accordance with its terms
and provisions.
5. Time of Essence. Time is of the essence to this Agreement. The Parties
will make every reasonable effort to expedite the subject matters hereof and
acknowledge that the successful performance of this Agreement requires their
continued cooperation. All dates and time periods provided for in this Agreement shall
be delayed during any pending or threatened litigation that would affect the ability to
issue the bonds, acquire the Property or commence or continue with construction of
TIRZ Improvements or the project, for a time period equal to the duration of such
litigation.
6. Default.
(a) A Party shall be deemed in default under this Agreement (which
shall be deemed a breach hereunder) if such Party fails to materially perform, observe
or comply with any of its covenants, agreements or obligations hereunder or breaches
or violates any of its representations under this Agreement.
(b) Before any failure of any Party to this agreement to perform its
obligations under this Agreement shall be deemed to be a breach of this Agreement, the
Party claiming such failure shall notify, in writing, the Party alleged to have failed to
perform of the alleged failure and shall demand performance. No breach of this
Agreement may be found to have occurred if performance has commenced to the
reasonable satisfaction of the complaining Party within thirty (30) days of the receipt of
such notice, subject, however, to the terms and provisions of Section 6(c). Each of the
Parties shall have the affirmative obligation to mitigate its damages in the event of a
default by the other Party.
(c) Notwithstanding anything in this Agreement which is or may
appear to be to the contrary, if the performance of any covenant or obligation to be
performed hereunder by any Party is delayed as a result of circumstances which are
beyond the reasonable control of such Party (which circumstances include, without
limitation, pending or threatened litigation, acts of God, war, acts of civil disobedience,
fire or other casualty, shortage of materials, adverse weather conditions (such as, by
way of illustration and not limitation, severe rain storms or below freezing
temperatures, or tornados) labor action, strikes or similar acts) the time for such
performance shall be extended by the amount of time of such delay. The Party claiming
delay of performance as a result of any of the foregoing "force majeure" events shall
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deliver written notice of the commencement of any such delay resulting from such force
majeure even not later than seven (7) days after the claiming Party becomes aware of
the same, and if the claiming Party fails to so notify the other Party of the occurrence of
a "force majeure" event causing such delay, the claiming Party shall not be entitled to
avail itself of the provisions for the extension of performance contained in this Section.
7. Amendment. This Agreement, and any exhibits attached hereto, may be
amended only by the mutual agreement of the Parties evidenced by a written
amendment and by the execution of such written amendment by the Parties or their
successors in interest.
8. Entire Agreement. This Agreement (including all exhibits attached to this
Agreement) sets forth all agreements, understandings and covenants between and
among the Parties relative to those matters herein contained; provided, however, that
the terms of this Agreement shall be construed in pari materia so as to give effect to the
intent of the Parties. This Agreement supersedes all prior agreements, negotiations and
understandings, written and oral and shall be deemed a full integration of the entire
agreement of the Parties.
9. Severability. If any provision, covenant, agreement or portion of this
Agreement, or its application to any person, entity or property, is held invalid, such
invalidity shall not affect the application of any other provisions, covenants, agreements
or portions of this Agreement and, to that end, all provisions, covenants, agreements or
portions of this Agreement are declared to be severable.
10. Texas Law. This Agreement shall be construed in accordance with the
laws of the State of Texas, and any actions concerning this Agreement shall be brought
in either the Texas State District Courts of Brazoria County, Texas or the United States
District Court for the Southern District of Texas.
11. Notice. Any notice under this Agreement (except as otherwise expressly
required) shall be written and mailed, or sent by rapid transmission confirmed by
mailing written confirmation at substantially the same time as such rapid transmission,
or personally delivered to an officer of the receiving party at the following addresses:
If to the City: City Manager
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
Re: Reinvestment Zone Number Two
With a copy to: City Attorney
City of Pearland
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3519 Liberty Drive
Pearland, Texas 77581
Re: Reinvestment Zone Number Two
If to the Zone: City Manager
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
Re: Reinvestment Zone Number Two
With a copy to: Allen Boone Humphries Robinson LLP
3200 Southwest Freeway, Suite 2600
Houston, TX 77037
Attn: Lynne B. Humphries
If to the Developer: 518SCR, Ltd.
c/o Perry Homes
P.O. Box 34306
Houston, TX 77234
Attn: Richard C. Hale
12. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the same
agreement.
13. Consent or Approval. Except as otherwise provided in this Agreement,
whenever consent or approval of either Party is required, such consent or approval
shall not be unreasonably withheld.
14. Term of Agreement. The term of this Agreement shall commence on the
date first above written and shall continue until the date ("Termination Date") on which
Sub -Developer has been fully reimbursed for all amounts advanced to the
Reinvestment Zone and interest on such amounts in accordance with Section 3 of this
Agreement.
15. Interpretation. This Agreement has been jointly negotiated by the Parties
and shall not be construed against a Party because that Party may have primarily
assumed responsibility for the drafting of this Agreement.
16. Exhibits and Schedules. All exhibits and schedules attached hereto are
declared to be a part of this Agreement and are incorporated herein by this reference.
[EXECUTION PAGES FOLLOW.]
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement
pursuant to all requisite authorizations as of the date first above written.
CITY:
CITY OF PEARLAND, TEXAS
By:
Name: Bill Eisen
Title: City Manager
ATTEST:
4Qs�PW.gNo,,
By:
> ;X:
Nam0:0u]?(orfiniz= t
Titltary
ry"'REIJVESTMENT ZONE:
REINVESTMENT ZONE NUMBER
TWO, CITY OF PEARLAND, TEXAS
By'��'!//ice
Name: Kenneth R.
Title: TIRZ No. 2
ATTPC,T-
By:
Nar
Title:
TIRZ No. 2 Secretary
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SUB -DEVELOPER:
518SCR4 LTD.,
a Texas limited partnership
By: PWSA, Inc.,
a Texas corporation,
as the Sole General Partner
By: &��
Name: Richard C. Hale
Title: Senior Vice President
357249
SUB -DEVELOPER:
518SCR, LTD.,
a Texas limited partnership
By: PWSA, Inc.,
a Texas corporation,
as the Sole General Partner
By:
Name: Richard C. Hale
Title: Senior Vice President
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EXHIBIT B
REINVESTMENT ZONE NO. TWO, CITY OF PEARLAND, TEXAS
(518SCR, LTD.)
(Date]
518SCR, Ltd.
c/o Perry Homes
P.O. Box 34306
Houston, TX 77234
Attn: Richard C. Hale
Re: Financing for TIRZ Improvements: ; TIRZ Project No.
Dear Mr. Hale:
The City of Pearland, Texas (the "City"), Reinvestment Zone No. Two, City of Pearland, Texas
(the "Zone"), and 518SCR, Ltd. (the "Sub -Developer") entered into a Sub -Developer Reimbursement
Agreement (the "Reimbursement Agreement") dated November 14, 2011, to provide for the financing
and construction of TIRZ Improvements to serve land within the Zone. The Zone and the Sub -Developer
have determined to proceed with the design and construction of the following TIRZ Improvements in
accordance with the Reimbursement Agreement:
[description of TIRZ Improvements and location by section and/or plat name]
Attached to this letter is a map showing the area which is benefited by the TIRZ Improvements over
which the available Tax Increment will be applied for purposes of determining when reimbursement is
made. The Sub -Developer has agreed to pre -finance the design and construction of the TIRZ
Improvements to be reimbursed in accordance with the Reimbursement Agreement.
The Zone hereby gives its approval to proceed with the construction of the above described TIRZ
Improvements. All procedures set forth in the document entitled "TIRZ Project Implementation and
Reimbursement Process" must be followed and letters from the Zone's Engineer certifying the
completion of the TIRZ Improvements and from the Zone's Auditor must be issued before the Zone will
reimburse the Sub -Developer.
The Zone's Engineer has determined that the budget (adjusted for inflation) established in the
Zone's Project Plan and Reinvestment Zone Financing Plan for the above described TIRZ Improvements
is $ plus "developer interest" calculated per the Zone's Project Plan and Reinvestment Zone
Financing Plan. The Zone is not obligated to reimburse the Sub -Developer for any amount in excess of
that budgeted amount plus "developer interest." In accordance with the Zone's Project Plan and
Reinvestment Zone Financing Plan, as amended, "developer interest' on these TIRZ Improvements will
be simple interest calculated at 6.5 percent per annum for five years.
This agreement was duly authorized at a meeting of the Board of Directors of the Zone held on
the 141h day of November, 2011.
Very truly yours,
REINVESTMENT ZONE NO. TWO, CITY OF
PEARLAND, TEXAS (SHADOW CREEK
RANCH)
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By:
Chairman,Vard of Directors
ATTEST:
By: vil k' W�
gecWetary-, toard of Directors
(SEAL)
AGREED TO AND ACCEPTED THIS DAY OF , 2011.
518SCR, LTD.,
a Texas limited partnership
By: PWSA, Inc.,
a Texas corporation,
as the Sole General Partner
By:
Name: Richard C. Hale
Title: Senior Vice President
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EXHIBIT C
(Engineer's Letter)
REINVESTMENT ZONE NO. TWO, CITY OF PEARLAND, TEXAS
(518SCR, LTD.)
[date]
Reinvestment Zone No. Two,
City of Pearland, Texas
Attn: Chairman, Board of Directors
c/o City of Pearland, Texas
3519 Pearland Drive
Pearland, Texas 77581
Re: Completion of TIRZ Improvements described in Letter Financing Agreement dated
, 20J TIRZ Project No.
Dear Mr. Chairman and Members of the Board:
As the Engineer for the Reinvestment Zone No. Two, City of Pearland, Texas (the "Zone"), I have
reviewed the completed documentation submitted by 518SCR, Ltd. ("Sub -Developer") relating to the
construction of the TIRZ Improvements described by that Letter Financing Agreement dated
20_ (the "Letter Financing Agreement"). By the Letter Financing Agreement, the Sub -
Developer agreed to pre -finance the design and construction of the TIRZ Improvements to be reimbursed
in accordance with the Sub -Developer Reimbursement Agreement between the City of Pearland, the
Zone and Sub -Developer dated November 14, 2011 (the "Reimbursement Agreement").
The Letter Financing Agreement states that the budget (adjusted for inflation) established in the
Zone's Project Plan and Reinvestment Zone Financing Plan for the TIRZ Improvements is $
plus "developer interest." In accordance with the Zone's Project Plan and Reinvestment Zone Financing
Plan developer interest on these TIRZ Improvements is to be calculated at 6.5 percent per annum for five
years.
The Sub -Developer has provided, and I have reviewed, the necessary documentation to prove
compliance with all the procedures set forth in the document entitled "TIRZ Project Implementation and
Reimbursement Process." Based upon my review, I conclude that the construction of the TIRZ
Improvements was conducted in compliance with the Reimbursement Agreement and the procedures set
forth in the document entitled "TIRZ Project Implementation and Reimbursement Process," is complete,
and is in order for reimbursement. I therefore recommend that the Zone reimburse the Sub -Developer
the amount of $ for the funds advanced to the Zone for construction of the TIRZ Improvements,
plus "developer interest" as applicable. A detailed breakdown of the costs of the construction of the
TIRZ Improvements is attached to this letter.
Very truly yours,
Engineer for the Zone
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EXHIBIT D
(Auditor's Letter)
REINVESTMENT ZONE NO. TWO, CITY OF PEARLAND, TEXAS
(518SCR, LTD.)
[Date]
Reinvestment Zone No. Two, City of Pearland, Texas
Attn: Chairman, Board of Directors
c/o City of Pearland, Texas
3519 Pearland Drive
Pearland, Texas 77581
Re: Completion of TIRZ Improvements described in the Letter Financing
Agreement dated 20_
Dear Mr. Chairman and Members of the Board:
As the Auditor for Reinvestment Zone No. Two, City of Pearland, Texas (the "Zone'), I have
reviewed the completed documentation submitted by 518SCR, Ltd. (the "Sub -Developer") relating to the
construction of the TIRZ Improvements described by that Letter Financing Agreement dated
, 20_ (the "Letter Financing Agreement"). By the Letter Financing Agreement, the
Sub -Developer agreed to pre -finance the design and construction of the TIRZ Improvements to be
reimbursed in accordance with the Sub -Developer Reimbursement Agreement between the City of
Pearland (the "City"), the Zone and the Sub -Developer dated November 14, 2011 (the "Reimbursement
Agreement").
Based upon my review of the payments made and of the certification of the Zone's Engineer, I
conclude that the construction of the TIRZ Improvements was conducted and have been completed in
compliance with the Reimbursement Agreement and the document entitled "TIRZ Implementation and
Reimbursement Process" and are in order for reimbursement.
I have confirmed with Brazoria-Fort Bend County Municipal Utility District No. 1 ("MUD 1")
that these TIRZ Improvements are not being financed, and the Sub -Developer is not being reimbursed for
this project, by MUD 1. I therefore recommend that the Zone reimburse the Sub -Developer the amount of
$ for the funds advanced to the Zone for the design and construction of the TIRZ
Improvements, which amount is within the TIRZ budget (adjusted for inflation) established in the Zone's
Project Plan and Reinvestment Zone Financing Plan for the TIRZ Improvements.
In accordance with the Zone's Project Plan and Reinvestment Zone Financing Plan, "developer
interest" on this advance shall be calculated at 6.5 percent per annum for five years. Based upon this rate
of interest and assuming no partial reimbursements, interest due as of the date of the letter is $
with an additional per diem rate of interest equal to $ until reimbursed. The last day that interest
will accrue on this advance, if still unreimbursed, is , 20_.
Very truly yours,
Auditor for the Zone
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