HomeMy WebLinkAbout2003-136&^ .Aps .4W[ydu
ORDINANCE NO. 7WJ— IJ U
AN ORDINANCE ESTABLISHING AN ECONOMIC DEVELOPMENT PROGRAM UNDER
CHAPTER 380 OF THE LOCAL GOVERNMENT CODE FOR MAKING GRANTS OF
PUBLIC MONEY TO PROMOTE ECONOMIC DEVELOPMENT AND TO STIMULATE
BUSINESS ACTIVITY IN THE CITY OF DENTON; APPROVING AN ECONOMIC
DEVELOPMENT PROGRAM GRANT AGREEMENT WITH SALLY BEAUTY COMPANY,
INC. REGARDING THE DEVELOPMENT OF AN APPROXIMATE 24 ACRE PARCEL OF
LAND LOCATED NORTH OF THE INTERSECTION OF BRINKER ROAD AND
COLORADO BOULEVARD IN THE J. WHITE SURVEY, ABSTRACT NO. 1433, IN THE
CITY OF DENTON, TEXAS; AUTHORIZING THE EXPENDITURE OF FUNDS
THEREFOR; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, Sally Beauty Company. ("SBC") has made a request of the City of Denton
to establish an economic development program under Chapter 380 of the Texas Local
Government ("Chapter 380") to stimulate the development of commercial property within the
City of Denton; and
WHEREAS, the City Council by this ordinance is establishing an economic development
program under Chapter 380 which will stimulate business activity in the City and promote the
public interest (the "Program");
WHEREAS, to effectuate the Program the City and DCP have negotiated an Economic
Development Grant Agreement (the "Agreement"), a copy of which is attached hereto and made
a part hereof by reference; and
WHEREAS, the City Council finds that the Program and Agreement promote economic
development and will stimulate commercial activity within the City of Denton for the benefit of
the public; NOW, THEREFORE;
THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS:
SECTION 1. The recitals and findings contained in the preamble of this ordinance are
incorporated into the body of this ordinance.
SECTION 2. The City Manager, or his designee, is hereby authorized to execute the
Agreement on behalf of the City of Denton and to carry out the City's responsibilities and rights
under the Agreement, including without limitation the authorization to make the expenditures set
forth in the Agreement.
SECTION 3. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the l J day of 2003.
U-'
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
m
D AS TO LEGAL FORM:
L. PROUTY, CITY ATTORNEY
Page 2
ECONOMIC DEVELOPMENT PROGRAM GRANT AGREEMENT WITH
SALLY BEAUTY COMPANY, INC.
This Economic Development Program Grant Agreement ("Agreement") is made
and entered into as of the effective date provided for below, by and between SALLY
BEAUTY COMPANY, INC. ("SBC"), a Delaware corporation, and the CITY OF
DENTON (the "City"), a Texas municipal corporation, for the purposes and
considerations stated below:
WHEREAS, this Agreement is authorized by and made pursuant to the economic
development program provisions of Chapter 380 of the Texas Local Government Code
(the "Act") to promote local economic development and to stimulate business and
commercial activity in the City of Denton; and
WHEREAS, SBC is contemplating the development of that certain real property
located within the city limits of the City as more particularly described in Exhibit "A"
attached hereto and made a part hereof by reference (the "Property"); and
WHEREAS, on the 8 b day of April, 2003, SBC submitted an application for
economic development incentives with various attachments to the City concerning the
contemplated use and development of the Property, which is on file in the City's Office
of Economic Development, a copy of which is attached hereto and made a part hereof by
reference as Exhibit "B" (the "Application for Economic Development Incentives); and
WHEREAS, the City Council finds that the contemplated use and development of
the Property, the proposed improvements provided for herein and the other terms and
conditions of this Agreement will promote economic development and will stimulate
development activity within the City of Denton for the benefit of the public;
NOW, THEREFORE, the City and SBC for and in consideration of the premises
and the promises contained herein do hereby contract, covenant and agree as follows:
I.
CONDITIONS OF THE GRANT
The City's obligations under this Agreement are subject to the fulfillment of the
following conditions (the "Grant Conditions"):
A. No later than March 1, 2005, (subject to force majeure delays not to
exceed 180 days), SBC shall make a capital investment of at least $20 million for the
construction, equipping and furnishing of a building or buildings and other improvements
to be constructed or placed on the Property as more particularly described in the
Application for Economic Development (the "Improvements"). The Improvements
include the obligation of SBC to: (i) construct a building or buildings of least 200,000
1
square feet, and including at least 185,000 square feet of Class A office space, along with
other improvements to be constructed on the Property, with an estimated assessed value
of $17 million (the 'Building'); and (ii) purchase and install tangible personal property
valued at approximately $3 million, for a total increased assessed value of $20 million, as
finally determined by the Denton County Appraisal District (subject to statutory appeals
and any compromise settlements). The Improvements shall be substantially completed no
later than March 1, 2005 (subject to force majeure and other reasonable delays not to
exceed 180 days). The Building, once completed and furnished, shall be occupied by
SBC or an affiliate as an administrative center, for the duration of the term of this
Agreement. Throughout the term of this Agreement, the Building shall be continuously
operated and maintained as Class A office space (with appurtenant space for other
purposes as reasonably necessary) so that the uses of the Property shall be consistent with
the general purpose of encouraging development or redevelopment of the City of Denton,
except as otherwise authorized or modified by this Agreement.
B. SBC shall satisfy all of the provisions and requirements for the project as
set forth in the Application for Economic Development Incentives including the
requirement that the Improvements shall be used in accordance with the description of
the project set forth in the Application for Economic Development Incentives; and
C. As of January 1, 2003, there were no Improvements on the Property.
II.
GENERAL PROVISIONS
A. The Property is not in an improvement project financed by tax increment
bonds.
B. Neither the Property nor any of the Improvements are owned or leased by
any member of the City Council, any member of the City Planning and Zoning
Commission of the City or any member of the governing body of any taxing units joining
in or adopting this Agreement or similar agreement affecting the Property.
C. This Agreement is subject to rights of holders of outstanding bonds of the
City, if any.
D. In the event of any conflict between the City zoning ordinances, or other
City ordinances or regulations, and this Agreement, such ordinances or regulations shall
control, provided however the City shall not diminish the benefits to SBC under this
Agreement through ordinances or regulations.
III.
TERMS AND CONDITIONS OF GRANT
A. Subject to the terms and conditions of this Agreement, the City hereby
agrees to pay to SBC annually, after the first assessment following receipt by SBC of the
2
certificate of occupancy, an amount equal to 40% of the difference between: (a) the City
ad valorem taxes for the Property and the Improvements, excluding all tangible personal
property (including inventory and supplies) transferred to the Building from other
locations in the City of Denton, Texas (the excluded property being the "Transferred
Property"); over, (b) City ad valorem taxes payable for the Property as of January 1, 2003
(with the resulting payments known as the "Annual Payments"), such Annual Payments
to be subject to the following terms and conditions. The assessed value shall be
established using the Denton County Appraisal District appraisal process.
B. SBC shall have the right to protest and contest any or all appraisals or
assessments by the Denton County Appraisal District for the Property, the Improvements
or any other tangible personal property owned by SBC and located on the Property. All
calculations in this Agreement shall be based upon final assessed values after any such
protest or contest.
C. The Annual Payments shall be for a term of ten (10) years with the first
payment being due and payable on or before 60 days after the City is in receipt of all City
ad valorem taxes due and payable for the Property and Improvements as of January 1 of
the year following the calendar year in which a certificate of occupancy is issued by the
City for the Building (the `Beginning Date"), and, unless sooner terminated as herein
provided, shall end after the tenth Annual Payment. All subsequent Annual Payments
shall be due and payable on or before 60 days after the City is in receipt of all ad valorem
taxes due and payable for the Property and Improvements as of January 1 for subsequent
years.
D. The City's obligation to pay the Annual Payments is subject to the
fulfillment of the Grant Conditions. Nothwithstanding the foregoing, the City agrees to
pay to SBC reduced Annual Payments so long as the total minimum assessed value of the
Improvements (exclusive of Transferred Property) is not less than $10,000,000 as
determined by the Denton County Appraisal District valuation process. Such reduced
Annual Payments will be reduced by the percentage of reduction between the anticipated
and actual increase in assessed value. For example, if the total increase in assessed value
is $19 million, the total assessed value is 95 per cent of what was originally anticipated
(that is, $20 million). 95 per cent of 40 per cent is 38 per cent. Therefore, in such case
SBC would receive an Annual Payment equal to 38 per cent of the eligible ad valorem
taxes paid, a reduction of 2 percent.
IV.
RECORDS, AUDITS, AND EVALUATION OF PROJECT
A. No later than 60 days after the issuance of a certificate of occupancy for
the Building, SBC shall deliver an affidavit to the City signed by an authorized officer of
SBC certifying to a list and description of Transferred Property. Such list is subject to
verification and audit by the City at all reasonable times. SBC shall cooperate with the
City in providing any and all verifications that may be required by the City to establish
accuracy of the affidavit. When rendering its tangible personal property located on the
Property for ad valorem taxes for the year applicable to the first Annual Payment, SBC
shall segregate and list the values of the Transferred Property separate from other
tangible personal property located on the Property so that the City and Denton County
Appraisal District will be able to calculate the value attributable solely to the Transferred
Property (the "Value of the Transferred Property"). For subsequent Annual Payments,
the Value of the Transferred Property will be reduced by one -fifth per year (to account
for depreciation) until reduced to zero and will be simply deducted from the total
assessed value of all tangible personal property located on the Property, in determining
the amount of the Annual Payment.
B. During normal office hours throughout the term of this Agreement, after
providing reasonable notice to SBC, the City shall have access, on a reasonable number
of occasions, to the Improvements by City employees, consultants and authorized agents
for the purpose of inspecting the hnprovements to ensure that the Improvements are
made in accordance with the specifications and conditions of this Agreement and to
verify that the conditions of this Agreement are being complied with, provided that such
inspection shall not unreasonably interfere with SBC's normal business operations.
V.
FAILURE TO MEET CONDITIONS
In the event (i) SBC allows its ad valorem real property taxes owed to the City
with respect to the Property or Building, or its ad valorem taxes owed to the City with
respect to any tangible personal property owned by SBC which are located in the
Building, to become delinquent and fails to timely and properly follow the legal
procedures for protest and/or contest of any such ad valorem real property or tangible
personal property taxes; or, (ii) any other material conditions of this Agreement are not
substantially met (and subject to the provisions of paragraph III (D)), including the Grant
Conditions, then a "Condition Failure" shall be deemed to have occurred. It is understood
that a Condition Failure shall not be deemed to occur merely because at a particular time
it cannot be determined whether such condition will be met, but shall occur only if at a
particular time it can be determined that such condition will not be met. In the event that
a Condition Failure occurs, the City shall give SBC written notice of such Condition
Failure and if the Condition Failure has not been cured or satisfied within ninety (90)
days of said written notice, this Agreement may be terminated by the City; provided,
however, that if such Condition Failure is not reasonably susceptible of cure or
satisfaction within such ninety (90) day period and SBC has commenced and is pursuing
the cure or satisfaction of same, then after first advising the City of efforts to cure or
satisfy same, SBC may utilize such additional time as may be reasonably required to
cure such Condition Failure, but not less than ninety (90) days nor more than one hundred
eighty (180) days. Time in addition to the foregoing may be authorized by the City
Council. If a Condition Failure is not cured or satisfied after the expiration of the
applicable notice and cure or satisfaction periods ("Condition Failure Default"), as City's
sole and exclusive remedy, the Annual Payments shall be terminated with respect to the
year in which notice of the Condition Failure is given and for all future years, and SBC
shall repay to the City portions of the Annual Payments previously paid in accordance
rd
with the following criteria: In the event of a Condition Failure Default after receipt of the
first Annual Payment, SBC shall repay to the City 80% of the Annual Payment received;
for a Condition Failure Default after receipt of the second Annual Payment, SBC shall
repay to the City 70% of the Annual Payments previously received; after receipt of the
third, 60%; after receipt of the fourth, 50%; after receipt of the fifth, 40%; after receipt of
the sixth, 30%; after receipt of the seventh, 20%; after receipt of the eighth, 10%; and
thereafter no repayment is required.
VI.
ASSIGNMENT
This Agreement and SBC's rights and obligations hereunder may not be assigned
without the City's prior written approval, which will not be unreasonably witheld.
Provided, however, SBC may, without City's prior written approval, assign the Property
and this Agreement to any affiliate.
VII.
NOTICE
All notices called for or required by this Agreement shall be addressed to the
following, or such other party or address as either party designated in writing, by certified
mail postage prepare or by hand delivery:
SALLY BEAUTY COMPANY, INC. Atm.: President
wl copy: Attn: General Counsel
Sally Beauty Company, Inc.
3900 Morse Street
Denton, TX 76208
The notice address shall automatically change to that of the Property upon
issuance of a permit of occupancy.
CITY: City Manager
City of Denton
215 E. McKinney
Denton, Texas 76201
VIII.
CITY COUNCIL AUTHORIZATION
This Agreement is authorized by the City Council at its meeting on the 1.� k
day of 2003, authorizing the City Manager to execute this Agreement on
behalf of C' y.
LY.
BOARD OF DIRECTORS AUTHORIZATION
SBC represents that this Agreement is entered into by SBC pursuant to authority
granted by its Board of Directors to its President. An opinion of counsel supporting this
representation is attached hereto and made a part hereof as Exhibit C.
X.
SEVERABELTY
In the event any section, subsection, paragraph, sentence, or phrase is held
invalid, illegal or unconstitutional, the balance of this Agreement shall stand, shall be
enforceable and shall be read as if the parties intended at all times to delete said invalid,
illegal or unconstitutional provision.
XI.
ESTOPPEL CERTIFICATE
Any party hereto may request an estoppel certificate from another party hereto so
long as the certificate is requested in connection with a bona fide business purpose. The
certificate, which if requested will be addressed to SBC, shall include, but not necessarily
be limited to, statements that this Agreement is in full force and effect without default (or
if default exists the nature of default and curative action, which should be undertaken to
cure same), the remaining term of this Agreement, the levels and remaining term of the
Annual Payments in effect, and such other matters reasonably requested by the party(ies)
to receive the certificates.
XII.
SBC STANDING
SBC, as a party to this Agreement, shall be deemed a proper and necessary party
in any litigation questioning or challenging the validity of this Agreement or any of the
underlying ordinances, resolutions, or City Council actions authorizing same and SBC
shall be entitled to intervene in said litigation.
XIII.
APPLICABLE LAW
This Agreement shall be construed under the laws of the State of Texas. Venue
for any action under this Agreement shall be the appropriate court serving Denton
County, Texas. This Agreement is fully performable in Denton County, Texas.
XIV.
RECORDATION OF AGREEMENT
A fully executed original counterpart of this Agreement or a Memorandum of
Agreement, in recordable form, shall be recorded in the Deed Records of Denton County,
Texas.
XV.
AMENDMENT
This Agreement is the entire agreement of the parties and may only be modified
by a written instrument executed by both parties.
XVI.
EFFECTIVE DATE
This Agreement is effective as of the /% day of _%9%,� 2003.
ATTEST:
JENNIFER WALTERS, CJTY SECRETARY
APPROVED AS TO FORM:
HERB ERT L. UTY, ITY ATTORNEY
BY:
SALLY BEAUTY COMPANY, INC.
BY:
Michael enzulli -
Its President v
7
ACKNOWLEDGMENTS
STATE OF TEXAS
COUNTY OF DENTON
The f,Q regoing Economic Development Program Agreement was executed before
me on the/3ay of (� 2003 by Michael A. Conduff, City Manager
of the City of Denton, Texas, Texas municipal corporation, on behalf of said municipal
corporation.
N e:
JANE PE. ublic.
RICHARDSON Notary Public in and for the
Notary Pu61ic, State of Texas
3 My Commlasion Expires State of Texas
1•;,�0j, June 27, 2005
STATE OF TEXAS
COUNTY OF DENTON
The foregoing Economic Development Program Agreemen was executed before
me on thd:e day of rV, 2003 by :AAA President
of Sally Beauty Company, Inc., a Delaware corporati�p/]�on behalf of saia corporation.
Name:
°,� DARNELL LASLIE Notary Public in and for the
¢®"NOTARY PUBLIC State of Texas
STATE OF TEXAS
My Comm. Exp. 8-8-2003
EXHIBIT "A"
LEGAL
BA7NG A TRACT OF LAND IN IME J. WRITE SURVEY. ABSTRACT
8MI66NG AT A 1/2" I = ROD FOUND WITH A CAP SIAIMED VER & ASSOC. WC.' W 7HE
PIMHW07ERLY RIGHT-OF-11M LINE OF BRINIER ROAD. WO M M08r SOUIHERLY
SOUTNV M CORNER OF LAT 1. BLOCK 1. 110111HI 81 HUB MEDICAL KA7A. AS RECORDED IN
CMDU U, PAGE BBG. P"X-74
THENCE S 4103'32' W NAND THE NORMAERMY MIGHF-OF-VAY LINE OF SW BRINKER
ROM. 713A1 PEEP TO A 1/2" MN ROD SET WITH A GP SDVN'ED 'WIER & A'SS= W.
MM 7NE BEG68M OF A CURVE 70 7HE LEFT HM ING A RAOIU.4 OF 2AMOO FISM
THENCE NANO SAID NORONAMERI.Y =W-OF-*W LBO OF BRIN ER ROAD AND ALONG SAID
CURVE TO THE LEFT HMMNG A DELTA ANGLE OF 1'ILO'20'. A CHORD BEARING S 4741b7' W.
OL47 FEET. AND AN ARC LL7 M OF GSA7 FEET 10 A 1/2" IRON ROD SET WTIH A GP
STAMPED "MER i AM= BCC.: LTM 1HR MISMECTION OF THE NORTHRNESTERLY
1110 T-OF-1M LINE OF SAID BRINKER RGAD AND 'THE SOUINBSTEALY RWNP-OF-IW ME
OF C0IARADO BOULEIAARD. AND BEING IN A NON-%V*Mr CIAM 70 7HE RIGHT K%M A
RAUM OF 1.300A0 FEET:
ALM SLID CURVE 70 7HE RIGHT HMO A DELTA ANGLE OF 3G'24b6'. A CHORD BEARING N
26'17'46' W. MGM FEET. AND AN ARC LENGTH OF OL25 FEET 70 A 1/2" IRON ROD SET
WITH A CAP STAR 'WER & ASSOM IMMI
N OS3W44' W. 10000 FEET 70 A 1/Y IRON ROD SET WITH A CAP STIVLIPED VER t
ASSOC. INC ; SM 7HE BEGINNING OF A CURVE 70 THE LEff MAW A RAMS OF 640.01
FEET.
ALONG SAD CANE 10 THE LEFT HAVING A DELTA ANGLE OF 28W42'. A CHORD BEARING N
16'2D"04" W. 2am FEET. AND AN ARC UMN OF MAID FEET TO A 1/2' IRDN ROD SET
WITH A GP SBIIEED OWAER A ASSOC, INO.
ROM N W47'14' E. DERA UM THIN SOUOWASTEAI.Y RIGHT-OF-WAY LINE OF SAID
COLMDO BDLR,EWAR% 774.11 FEET 10 A 1/2' INCH ROD SET WITH A CAP STAMPED -MER
AI ASIIOC. Wftm, BEING IN THE SOURI 111011 R1.Y RIGHT-OF-41111Y LINE OF RAGS FOR 7RNM
THENCE S 41'2W40' E AL7HE SOUTIMMUI7ERLY RIGHT- WAY OF - LINE OF SA ONG D PALS FOR
7RMI$ 616.16 FEED 10 A 1/2' _ IRON ROD FOUND WITH A GP STAMPED 'M M & ASLTDC,
INC.". -" 'THE HOST NORMEflLY NORTHE74111' CORNER OF SAD TAT 1:
7H8JCE S 4S'33'21" W ALONG 7WE NLOR IMMERVY LINE OF SAID LOT 1. M40 FEET 70 A
1/2" IRON ROD SET WRH A CAP STNNIPED 'MER & ASSOC. INC.1
THENCE S 3P72'4G' E ALONG
7HE PLACE OF BEGBG6N0 AND
THE SOUTHWESTERLY UNE OF SAID LOP 1. 501.54 FEET TO
CONTAINING 23.746 ACRES (1.034,2 SQ. LAND:
{SR ... _y
EXHIBIT "B"
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City of Denton
Tax Abatement Application
City of Denton
Economic Development Department
Denton, Texas 76201
(940) 349-8305
(940) 349-8518 FAX
APPLICATION FOR TAX ABATEMENT
CITY OF DENTON
Property Owner: Sally Beauty Company. Inc.
Company or Project Name: .
Mailing Address: 3900 Morse Street
Denton, Texas 76208
Telephone: (940) 898-7500 Fax: (940) 898-7501
Company representative to be contacted:
Name and title: Gary Robinson, Senior Vice President, CFO
Mailing Address: 3900 Morse Street
Denton, Texas 76208
Telephone: (940) 898-7500 Fax: (940) 494-6114
2. Provide a chronology of plant openings, closing and relocations over past 15 years:
In excess of 2,750 stores opened and closed in the last 15 years. Will make available to City's Financial
Advisor if required.
3. Provide a record of mergers and financial restructuring during the last five years.
available to City's Financial Advisor if required.
4. V*U the occupants of the project be owner or lessees? If lessees, are occupancy commitments already
existing?
5. Is the project a relocation, expansion of existing facility, or new facility to expand operations. If
relocation, give current location. New facility.
6. If existing Denton business, will project result in abandonment of existing facility. If so; value of existing
facility will be subtracted from value of new facility to arrive at total project value.
The company will vacate the existing facility, however a significant portion of the existing furniture and
fixtures will remain in the existing facility. It is the company's intent to either lease or sell the existing
property. In any case the value of the property will remain on the tax rolls.
7. Eligibility Criteria- (Describe how the project meets the tax abatement policy criteria): .
A office space and 20,000 square feet of storage space to -the tax rolls The company plans to retain a number
of native trees so that the facility will have a campus appearance - located at the southern gateway of.Denton.
Property Description:
EDfraxAbatemenrApp.doc Page t of 4
8. Property Description:
• Attach copy of deed (or surveyor's notes) detailing property's metes and bounds.
• Attach map of project including all roadways, land use and zoning within 500 feet of site. See Exhibit 1, 2
and 3 for site drawings.
9. Current Value: Attach copy of latest property tax statement from Denton County Appraisal District (include
both real and personal property). See Exhibit 4 for existing Sally office statements.
10. Increased Value- Estimated Total Cost of Project:
A. Structures $ 23,000,000 C. Site Development $1,000,000
B. Personal Property $ 5,000,000 D. Other Improvements $
Briefly describe these investments (i.e. building square footage, types of personal property, type of site
development planned for this location, and other improvements):
11. For each taxing entity, indicate the amount of tax abatement requested.
City of Denton - 50% of Increased Value - 10 years
Denton County - 50% of Increased Value - 10 years
12. Give a brief description of the activities to be performed at this location, including a description of
products to be produced and/or services to be provided:
This location is the corporate headquarters in support of the Worldwide operations of 2,750 stores. Support
provided at this location encompasses Finance, Legal, Marketing, Real Estate, Merchandising, Human
Resources, Information Systems, Advertising, and Logistics Support.
13. Project Construction Phase:
A. Estimate percentage of Project Development and Construction Dollars to be spent with Denton
based Contractors or Sub -Contractors: Unknown %
B. Construction Employment Estimates
1. Start (Month/Year) Summer /2003
2. Completion Date: Late 2004
3. Number of Construction Jobs: Unknown
4. Estimated Total Construction Payroll: Unknown
C. Describe Any Off -Site Infrastructure Requirements:
Water: None
Sanitary Sewer:
Streets:
Drainage:
Other:
ED/ uAba==tApp.doc Page 2 of 4
14. Project Operation Phase
EMPLOYMENT INFORMATION
Existing
At Project
In the fifth year of
In the tenth year of
Operation (if
Start Date
operation
operation
applicable)
(month)
(year)
A. Total number of Permanent, Full-
391
450
500
time jobs
B. Employees Transferred From
0
0
0
Outside Denton
C. Net Permanent Full-time Jobs (A
391
450
500
minus B)
D. Percentage of Net Jobs (C.
above) filled by Denton
residents*
E. Total Annual Payroll for all
$ 19,064,000
21,704,000
23,984,000
Permanent, Full-time Jobs (A.
above)
*Each application will be reviewed on its merits. However, absent extraordinary circumstances, a mmimum of 25% of new employees should be
Denton residents. Company shall report annually and, if percentage is not met, a prorata reduction of the abatement may occur.
F. Types of Jobs Created (Job Titles)
The proposed office construction is expected to provide the capability to expand the corporate staff as it grows to support
the increasing international sales and stores. Current profile of positions are approximately:
Job positions encompass the full range from clerical administration to vice president Positions will be in accounting
marketing human resources MIS, finance advertising, real estate, and training. Salaries will be from $20,000 to
$150 000.
G.
rate utility usage for project: Current Usage
Gas: $ 10,800
Electric:
Water:
Solid w
Increase will be in proportion to increased office and occupancy utilization.
15. Describe any. other direct benefits to the City of Denton as a result of this project (e.g., sales tax revenue):
professionals. The Company performs on -site training for retail store management from across the nation, '
with individuals generating commerce for Denton's hotel and restaurants.
16. Is Property Zoned Appropriately? Yes A No
Current Zoning: RCC-N Regional Center Commercial Neighborhood
Required Zoning: same
EDfraxAbarementApp.dw - Page 3 of 4
17. Is Property Platted? Yes No X
Will Replatting be Necessary? Yes X No
18. Discuss any environmental impacts created by the project.
A. List any .permits for which applicant must apply. Applicant will be required to provide City with
copies of all applications for environmental permits upon completion.
B. Provide record of compliance to all environmental regulations for the past five years:
Sally Beauty Company, Inc. has not been notified of any non -co ance with environmental
regulations.
19. Provide specific detail of any businesses/residents that will be displaced and assistance that will be
available from requesting entity.
Not Applicable.
20. Provide description of any historically significant area included with the project's area. If any, give
detail of how the historically significant area will be preserved.
Not Apulicable.
21. Justification for Tax Abatement Request (Substantiate and more fully describe the justification for this
request. Include the amount of theabatement requested and show how it will contribute to the financial
viability of the project. Submit attachments if necessary.)
23. Financial Information: Attach a copy of the latest audited financial statement or, in the case of a new
project, a business plan.
Will make available to City's Financial Advisor.
This tax abatement application is submitted with the acknowledgement that additional certified financial
information may be required.
o ignature Pdfie .
ED/TaxAU tementApp.doe -Page 4 of 4
EXHIBIT 'C'
SALLYBEAUTY
COMFPANY,i
Partner to the Professional www.sallybeautyco`m,,
May 6, 2003
Honorable Euline Brock
Mayor
City of Denton, Texas
215 East McKinney
Denton, Texas
Dear Mayor Brock
The City of Denton has asked that I render an opinion as to the authority of Michael Renzulli,
President, to bind Sally Beauty Company, Inc. ("Sally") to the terms and conditions of the
Economic Development Program Grant Agreement With Sally Beauty Company, Inc., expected
to be dated in May, 2003 (the "Agreement").
I am familiar with the provisions of the Agreement and have examined copies of the Certificates
of Incorporation and By -Laws of Sally, resolutions adopted by the Board of Directors of Sally
and such other documents and data as I deemed relevant. Based on the foregoing, and in reliance
thereon, subject to the limitations set forth below, it is my opinion that Michael Renzulli,
President, is authorized to bind Sally to all the terms of the Agreement.
I am admitted to practice in the State of Texas. The opinion expressed herein is limited to the
laws of the State of Texas and the United States of America, and I express no opinion as to the
laws of any other jurisdiction.
This opinion is rendered solely for the City of Denton's use in connection with the transactions
contemplated by the Agreement, and may not be relied upon by other persons or for any other
purposes. This opinion may not be quoted or used, in whole or in part, for any other purpose or
delivered to any other person, except with my prior written consent.
Sincer
PaalH. Roos
Vice President and General Counsel
P.O. Box 490 (76202) 3900 Morse St. (76208) Denton, Texas (940) 898-7500
3331 04369
ECONOMIC DEVELOPMENT PROGRAM GRANT AGREEMENT WITH
SALLY BEAUTY COMPANY, INC. 079256
This Economic Development Program Grant Agreement ("Agreement") is made
and entered into as of the effective date provided for below, by and between SALLY
BEAUTY COMPANY, INC. ("SBC"), a Delaware corporation, and the CITY OF
DENTON (the "City"), a Texas municipal corporation, for the purposes and
considerations stated below:
WHEREAS, this Agreement is authorized by and made pursuant to the economic
development program provisions of Chapter 380 of the Texas Local Government Code
(the "Act") to promote local economic development and to stimulate business and
commercial activity in the City of Denton; and
WHEREAS, SBC is contemplating the development of that certain real property
located within the city limits of the City as more particularly described in Exhibit "A"
attached hereto and made a part hereof by reference (the "Property"); and
WHEREAS, on the 8`h day of April, 2003, SBC submitted an application for
economic development incentives with various attachments to the City concerning the
contemplated use and development of the Property, which is on file in the City's Office
of Economic Development, a copy of which is attached hereto and made a part hereof by
reference as Exhibit `B" (the "Application for Economic Development Incentives); and
WHEREAS, the City Council finds that the contemplated use and development of
the Property, the proposed improvements provided for herein and the other terms and
conditions of this Agreement will promote economic development and will stimulate
development activity within the City of Denton for the benefit of the public;
NOW, THEREFORE, the City and SBC for and in consideration of the premises
and the promises contained herein do hereby contract, covenant and agree as follows:
I.
CONDITIONS OF THE GRANT
The City's obligations under this Agreement are subject to the fulfillment of the
following conditions (the "Grant Conditions"):
A. No later than March 1, 2005, (subject to force majeure delays not to
exceed 180 days), SBC shall make a capital investment of at least $20 million for the
construction, equipping and furnishing of a building or buildings and other improvements
to be constructed or placed on the Property as more particularly described in the
Application for Economic Development (the "Improvements"). The Improvements
include the obligation of SBC to: (i) construct a building or buildings of least 200,000
1
5331 0431O
square feet, and including at least 185,000 square feet of Class A office space, along with
other improvements to be constructed on the Property, with an estimated assessed value
of $17 million (the "Building"); and (ii) purchase and install tangible personal property
valued at approximately $3 million, for a total increased assessed value of $20 million, as
finally determined by the Denton County Appraisal District (subject to statutory appeals
and any compromise settlements). The Improvements shall be substantially completed no
later than March 1, 2005 (subject to force majeure and other reasonable delays not to
exceed 180 days). The Building, once completed and furnished, shall be occupied by
SBC or an affiliate as an administrative center, for the duration of the term of this
Agreement. Throughout the term of this Agreement, the Building shall be continuously
operated and maintained as Class A office space (with appurtenant space for other
purposes as reasonably necessary) so that the uses of the Property shall be consistent with
the general purpose of encouraging development or redevelopment of the City of Denton,
except as otherwise authorized or modified by this Agreement.
B. SBC shall satisfy all of the provisions and requirements for the project as
set forth in the Application for Economic Development Incentives including the
requirement that the Improvements shall be used in accordance with the description of
the project set forth in the Application for Economic Development Incentives; and
C. As of January 1, 2003, there were no Improvements on the Property.
II.
GENERAL PROVISIONS
A. The Property is not in an improvement project financed by tax increment
l 4 o4 .n
B. Neither the Property nor any of the Improvements are owned or leased by
any member of the City Council, any member of the City Planning and Zoning
Commission of the City or any member of the governing body of any taxing units joining
in or adopting this Agreement or similar agreement affecting the Property.
C. This Agreement is subject to rights of holders of outstanding bonds of the
City, if any.
D. In the event of any conflict between the City zoning ordinances, or other
City ordinances or regulations, and this Agreement, such ordinances or regulations shall
control, provided however the City shall not diminish the benefits to SBC under this
Agreement through ordinances or regulations.
III.
TERMS AND CONDITIONS OF GRANT
A. Subject to the terms and conditions of this Agreement, the City hereby
agrees to pay to SBC annually, after the first assessment following receipt by SBC of the
2
3331 P431 1
certificate of occupancy, an amount equal to 40% of the difference between: (a) the City
ad valorem taxes for the Property and the Improvements, excluding all tangible personal
property (including inventory and supplies) transferred to the Building from other
locations in the City of Denton, Texas (the excluded property being the "Transferred
Property"); over, (b) City ad valorem taxes payable for the Property as of January 1, 2003
(with the resulting payments known as the "Annual Payments"), such Annual Payments
to be subject to the following terms and conditions. The assessed value shall be
established using the Denton County Appraisal District appraisal process.
B. SBC shall have the right to protest and contest any or all appraisals or
assessments by the Denton County Appraisal District for the Property, the Improvements
or any other tangible personal property owned by SBC and located on the Property. All
calculations in this Agreement shall be based upon final assessed values after any such
protest or contest.
C. The Annual Payments shall be for a term of ten (10) years with the first
payment being due and payable on or before 60 days after the City is in receipt of all City
ad valorem taxes due and payable for the Property and Improvements as of January 1 of
the year following the calendar year in which a certificate of occupancy is issued by the
City for the Building (the "Beginning Date"), and, unless sooner terminated as herein
provided, shall end after the tenth Annual Payment. All subsequent Annual Payments
shall be due and payable on or before 60 days after the City is in receipt of all ad valorem
taxes due and payable for the Property and Improvements as of January 1 for subsequent
years.
D. The City's obligation to pay the Annual Payments is subject to the
fulfillment of the Grant Conditions. Nothwithstanding the foregoing, the City agrees to
pay to SBC reduced Annual Payments so long as the total minimum assessed value of the
Improvements (exclusive of Transferred Property) is not less than $10,000,000 as
determined by the Denton County Appraisal District valuation process. Such reduced
Annual Payments will be reduced by the percentage of reduction between the anticipated
and actual increase in assessed value. For example, if the total increase in assessed value
is $19 million, the total assessed value is 95 per cent of what was originally anticipated
(that is, $20 million). 95 per cent of 40 per cent is 38 per cent. Therefore, in such case
SBC would receive an Annual Payment equal to 38 per cent of the eligible ad valorem
taxes paid, a reduction of 2 percent.
IV.
RECORDS, AUDITS, AND EVALUATION OF PROJECT
A. No later than 60 days after the issuance of a certificate of occupancy for
the Building, SBC shall deliver an affidavit to the City signed by an authorized officer of
SBC certifying to a list and description of Transferred Property. Such list is subject to
verification and audit by the City at all reasonable times. SBC shall cooperate with the
City in providing any and all verifications that may be required by the City to establish
accuracy of the affidavit. When rendering its tangible personal property located on the
3
5331 04312
Property for ad valorem taxes for the year applicable to the first Annual Payment, SBC
shall segregate and list the values of the Transferred Property separate from other
tangible personal property located on the Property so that the City and Denton County
Appraisal District will be able to calculate the value attributable solely to the Transferred
Property (the "Value of the Transferred Property"). For subsequent Annual Payments,
the Value of the Transferred Property will be reduced by one -fifth per year (to account
for depreciation) until reduced to zero and will be simply deducted from the total
assessed value of all tangible personal property located on the Property, in determining
the amount of the Annual Payment.
B. During normal office hours throughout the term of this Agreement, after
providing reasonable notice to SBC, the City shall have access, on a reasonable number
of occasions, to the Improvements by City employees, consultants and authorized agents
for the purpose of inspecting the Improvements to ensure that the Improvements are
made in accordance with the specifications and conditions of this Agreement and to
verify that the conditions of this Agreement are being complied with, provided that such
inspection shall not unreasonably interfere with SBC's normal business operations.
V.
FAILURE TO MEET CONDITIONS
-In the event (i) SBC allows its ad valorem real property taxes owed to the City
with respect to the Property or Building, or its ad valorem taxes owed to the City with
respect to any tangible personal property owned by SBC which are located in the
Building, to become delinquent and fails to timely and properly follow the legal
procedures for protest and/or contest of any such ad valorem real property or tangible
personal property taxes; or, (ii) any other material conditions of this Agreement are not
substantially met (and subject to the provisions of paragraph III (D)), including the Grant
Conditions, then a "Condition Failure" shall be deemed to have occurred. It is understood
that a Condition Failure shall not be deemed to occur merely because at a particular time
it cannot be determined whether such condition will be met, but shall occur only if at a
particular time it can be determined that such condition will not be met. In the event that
a Condition Failure occurs, the City shall give SBC writteh notice of such Condition
Failure and if the Condition Failure has not been cured or satisfied within ninety (90)
days of said written notice, this Agreement may be terminated by the City; provided,
however, that if such Condition Failure is not reasonably susceptible of cure or
satisfaction within such ninety (90) day period and SBC has commenced and is pursuing
the cure or satisfaction of same, then after first advising the City of efforts to cure or
satisfy same, SBC may utilize such additional time as may be reasonably required to
cure such Condition Failure, but not less than ninety (90) days nor more than one hundred
eighty (180) days. Time in addition to the foregoing may be authorized by the City
Council. If a Condition Failure is not cured or satisfied after the expiration of the
applicable notice and cure or satisfaction periods ("Condition Failure Default"), as City's
sole and exclusive remedy, the Annual Payments shall be terminated with respect to the
year in which notice of the Condition Failure is given and for all future years, and SBC
shall repay to the City portions of the Annual Payments previously paid in accordance
13
3331 04313
with the following criteria: In the event of a Condition Failure Default after receipt of the
first Annual Payment, SBC shall repay to the City 80% of the Annual Payment received;
for a Condition Failure Default after receipt of the second Annual Payment, SBC shall
repay to the City 70% of the Annual Payments previously received; after receipt of the
third, 60%; after receipt of the fourth, 50%; after receipt of the fifth, 40%; after receipt of
the sixth, 30%; after receipt of the seventh, 20%; after receipt of the eighth, 10%; and
thereafter no repayment is required.
VI.
ASSIGNMENT
This Agreement and SBC's rights and obligations hereunder may not be assigned
without the City's prior written approval, which will not be unreasonably witheld.
Provided, however, SBC may, without City's prior written approval, assign the Property
and this Agreement to any affiliate.
VII.
NOTICE
All notices called for or required by this Agreement shall be addressed to the
following, or such other party or address as either party designated in writing, by certified
mail postage prepare or by hand delivery:
SALLY BEAUTY COMPANY, INC.
Attn.: President
w/ copy: Attn: General Counsel
Sally Beauty Company, Inc.
3900 Morse Street
Denton, TX 76208
The notice address shall automatically change to that of the Property upon
issuance of a permit of occupancy.
CITY: City Manager
City of Denton
215 E. McKinney
Denton, Texas 76201
VIII.
CITY COUNCIL AUTHORIZATION
t�
This Agreement is authorized by the City Council at its meeting on the
day of , 2003, authorizing the City Manager to execute this Agreement on
behalf of th City.
3331 04374
IX.
BOARD OF DIRECTORS AUTHORIZATION
SBC represents that this Agreement is entered into by SBC pursuant to authority
granted by its Board of Directors to its President. An opinion of counsel supporting this
representation is attached hereto and made a part hereof as Exhibit C.
X.
SEVERABIILTY
In the event any section, subsection, paragraph, sentence, or phrase is held
invalid, illegal or unconstitutional, the balance of this Agreement shall stand, shall be
enforceable and shall be read as if the parties intended at all times to delete said invalid,
illegal or unconstitutional provision.
XI.
ESTOPPEL CERTIFICATE
Any party hereto may request an estoppel certificate from another party hereto so
long as the certificate is requested in connection with a bona fide business purpose. The
certificate, which if requested will be addressed to SBC, shall include, but not necessarily
be limited to, statements that this Agreement is in full force and effect without default (or
if default exists the nature of default and curative action, which should be undertaken to
cure same), the remaining term of this Agreement, the levels and remaining term of the
Annual Payments in effect, and such other matters reasonably requested by the party(ies)
to receive the certificates.
XII.
SBC STANDING
SBC, as a party to this Agreement, shall be deemed a proper and necessary party
in any litigation questioning or challenging the validity of this Agreement or any of the
underlying ordinances, resolutions, or City Council actions, authorizing same and SBC
shall be entitled to intervene in said litigation.
XIII.
APPLICABLE LAW
This Agreement shall be construed under the laws of the State of Texas. Venue
for any action under this Agreement shall be the appropriate court serving Denton
County, Texas. This Agreement is fully performable in Denton County, Texas.
m
5331 04315
xfV.
RECORDATION OF AGREEMENT
A fully executed original counterpart of this Agreement or a Memorandum of
Agreement, in recordable form, shall be recorded in the Deed Records of Denton County,
Texas.
XV.
AMENDMENT
This Agreement is the entire agreement of the parties and may only be modified
by a written instrument executed by both parties.
XVI.
EFFECTIVE DATE
This Agreement is effective as of the IJ Ly of 2003.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY: 1
APPROVED AS TO FORM:
HERBERT L,POUTY„E'ITY ATTORNEY
M
SALLY BEAUTY COMPANY, INC.
B
Michael Re.
Its President
5331 04316
ACKNOWLEDGMENTS
STATE OF TEXAS
COUNTY OF DENTON
The foregoing Economic Development Program Agreement was executed before
me on thefjday of , 2003 by Michael A. Conduff, City Manager
of the City of Denton, Texas, Texas municipal corporation, on behalf of said municipal
corporation.
r:w*��'••. JANE E. RICHARDSON
-•; - Notary Public, State of Texas
My Commission Expires
June 27, 2005
STATE OF TEXAS
COUNTY OF DENTON
Notary Public in and for the
State of Texas
The foregoing Economic Development Program Agreement was executed before
me on thegt'`"day of rVVA , 2003 by Ntvc \c t jnL31,t.Q,t t, , President
of Sally Beauty Company, Inc., a Delaware corporat' , on behalf of said corporation.
Name:
DARNELLLASLIE
®9 NOTARY PUBLIC
STATE OF TEXAS
OF My Comm. Exp. 8-8-2003
Notary Public in and for the
State of Texas
EXHIBIT IAA" 5337 0.4377
SEW" AT A 1/Y INON ROD FOUND PATH A CAP STAMPED OOM & ASSOC. INC.' W THE
NORIINWFStER1.Y RIOW-OF-WAY 1NE OF BRIGM ROAD. SOW THE MOST SOUifl XY
SMMWEST CORNER OF UDR 1. KOCK 1. SOUDERN HlUS ME X PLAZA, AS RECORDED D
CASWEr U. PAGE M. P.R D.C.T.;
THENCE S 4W33'3r W ALONG THE HORDIINESFEFtLY RWff-OF-WAY LATE OF SAID MNKER
ROAD, 71301 FEED TO A 1/Y' IMN ROD SET WITH A CAP STAMPED NRER & ASS= MC.',
SOW THE 8MO MIG OF A CURVE 70 7HE LEFT NOWS A RAORIS OF 2.MO.OD FEET:
THENCE ALONG SAD NORTHWESTERLY RMW-OF-WAY LLNE OF E RNM ROAD AND ALONG SAD
CURVE TO THE LEFT K%= A DELTA ANGLE OF 165W20. A CDRD BEARING S 4741007' W,
OL47 FEET. AND AN ARC UEMGTH OF OL47 FEET 70 A 1/r IRON ROD SET WITH A CAP
STAMPED NWR & ASSOC. W. BEING THE INTERSECTION OF THE NORnfamiEAL.Y
RIGHT-)F WAY LINE OF SAD BRI SM ROAD AND THE 9DURNFASTEALY INW-OF-WAY LINE
OF COLORADO BMILEIMRO. AND BONG IN A NON -TANGENT CURVE TO THE RIGHT K%W A
RAOIUS OF 1.300.00 FEET. -
ALONG SAD CURVE TO THE RIGHT HAVING A DELTA ANGLE OF 3W24'060. A Own BEMONG N
26.17'46' W, 916.84 FEET. AND AN ARC LENGTH OF 930.28 FEET TO A 1/2" IRON ROD SQ
WITH A CAP STRIPED OMER 8 ASS= Wto,
N 06'3W44' W. 100.00 FEET TO A 1/r IRON ROD SET WITH A CAP STAMPED 'MAER &
ASSOC. MNC . SM THE BEMNNM OF A CURVE 70 THE LEFT HAVINW A RADIUS OF 640.01
FEET;
ALONG SAD CURVE TO THE LEFT KM MKi A DELTA ANGLE OF 252WQ!2 A OEM SEkgm N
181"04' W. 282.26 FEET. AND AN ARC LENGTH OF 28CM FEET TO A 1/2' OWN ROD SET
WTH A CAP STAMPED 'WIEN & ASSOC. INC.
THENCE N 3O'47'12' E. DEPARTWG THE SOUlNEASOLY LOGNT-OF-MAY LW OF SND
COLORADO BOU EWPO. 774.11 FEET TO A 1/2- IRON ROD SET WITH A GAP STAIAPED VIER
& ASSOC. RAC.', SEW IN THE SOURNWESTERLY RIDHf--OF-WA1Y LINE OF RAIS4 FOR TRAIM
THENCE S 41-2W40' E ALONG THE SOUTHWESTERLY ROO-OF- VAY UNE OF SND RAGS FOR
TRMLS. 616.16 FEET TO A 1/2' . RO N ROD FOUND WTM A CAP STAMPED "MER M ASS=
M'. 11 THE MOST NORnOtLY NORTHEAST CORNER OF SAD LOT 1;
THENCE S 48'33'21' W ALONN' THE NORnwitsTERLY UNE OF SAD wr 1. 37&40 FEET TO A
1/2" RON ROD SET WITH A CAP STAMPED 'MAFR M ASSOC. INC.':
THENCE S 36'12'400 E ALONG THE SOUTHWESTBxY umE OF SAD LOT 1. 081.84 FELT TO
THE PLACE OF SEGIN NM AND CONTA6NG 23.746 ACRES (IA%= M Mg LOW
EXHIBIT "B"
�O.,eQV�000�
o: o
10
City of Denton
Tax Abatement Application
City of Denton
Economic Development Department
Denton, Texas 76201
(940)349-8305
(940) 349-8518 FAX
3337 G4379
APPLICATION FOR TAX ABATEMENT
CITY OF DENTON
Property Owner: Sally Beauty Company, Inc.
Company or Project Name: .
Mailing Address: 3900 Morse Street
Denton Texas 76208
Telephone: (940) 898-7500 Fax: (940) 898-7501
Company representative to be contacted:
Name and title: Gary Robinson, Senior Vice President, CFO
Mailing Address: 3900 Morse Street
Denton, Texas 76208
Telephone:_ (940) 898-7500 Fax: (940) 484-6114
2. Provide a chronology of plant openings, closing and relocations over past 15 years:
In excess of.2,750 stores opened and closed in the last 15 years. Will make available to City's Financial
Advisor if required.
3. Provide a record of mergers and fimncial restructuring during the last five years.
available to City's Financial Advisor if required.
4. Will the occupants of the project be owner or lessees? If lessees, are occupancy commitments already
existing?
5. Is the project a relocation, expansion of existing facility, or new facility to expand operations. If
relocation, give current location. New facility.
6. If existing Denton business, will project result in abandonment of existing facility. If so; value of existing
facility will be subtracted from value of new facility to arrive at total project value.
The comnanv will vacate the existing facility, however a significant portion of the existing_ furnitureand
fixtures will remain in the existing facility. It is the company's intent to either lease or sell the existing
property. In any case, the value of the property will remain on the tax rolls.
7. Eligibility Criteria- (Describe how the project meets the tax abatement policy criteria): .
The elect invests over $20 million into the community and adds approximately 180,000 square feet of Class
A office space and 20,000 square feet of storage space to -the tax rolls The company plans to retain a number
of native trees so that the facility will have a campus appearance - located at the southern gateway of Denton
S. Property Description:
ED/faxAbammeorApp.doc Page t of 4
5331 04380
8. Property Description:
• Attach copy of deed (or surveyor's notes) detailing property's metes and bounds.
• Attach map of project including all roadways, land use and zoning within 500 feet of site. See Exhibit 1, 2
and 3 for site drawings.
Current Value: Attach copy of latest property tax statement from Denton County Appraisal District (include
both real and personal property). See Exhibit 4 for existing Sally office statements.
10. Increased Value- Estimated Total Cost of Project:
A. Structures $ 23,000,000 C. Site Development $1,000,000
B. Personal Property $ 5,000,000 D. Other Improvements $
Briefly describe these investments (i.e. building square footage, types of personal property, type of site
development planned for this location, and other improvements):
11. For each taxing entity, indicate the amount of tax abatement requested.
City of Denton - 50% of Increased Value - 10years
Denton County - 50% of Increased Value - 10 years
12. Give a brief description of the activities to be performed at this location, including a description of
products to be produced and/or services to be provided:
This location is the corporate headouarters in sunoort of the Worldwide ouerations of 2.750 stores. SuDDort
provided at this location encompasses Finance, Legal, Marke ng, Real Estate, Merchandising, Human
Resources, Information Systems, Advertising, and Logistics Support.
13. Project Construction Phase:
A. Estimate percentage of Project Development and Construction Dollars to be spent with Denton
based Contractors or Sub -Contractors: Unknown %
B. Construction Employment Estimates:
1. Start (Month/Year) Summer /2003
2. Completion Date: Late 2004
3. Number of Construction Jobs: Unknown
4. Estimated Total Construction Payroll: Unknown
C. Describe Any Off -Site Infrastructure Requirements:
Water: None
Sanitary Sewer:
Streets:
Drainage:
Other: None
EDfrwLV m=n App.doc Page 2 of 4
5331 04381
14. Project Operation Phase
EMPLOYMENT INFORMATION
Existing
At Project
In the fifth year of
In the tenth year of
Operation (if
Start Date
operation
operation
applicable)
(month)
(year)
A. Total number of Permanent, Full-
391
450
500
time jobs
B. Employees Transferred From
0
0
0
Outside Denton
C. Net Permanent Full-time Jobs (A
391
450
500
minus B)
D. Percentage of Net Jobs (C.
above) filled by Denton
residents*
E. Total Annual Payroll for all
$ 19,064,000
21,704,000
23,984,000
Permanent, Full-time Jobs (A.
above)
*Each application will be reviewed on its merits. However, absent extraordinary circumstances, a minimum of 25% of new employees should be
Denton residents. Company shall report annually and, if percentage is not met, a proram reduction of the abatement may occur.
F. Types of Jobs Created (Job Titles)
The proposed office construction is expected to provide the capability to expand the corporate staff as it grows to support
Job positions encompass the full range from clerical administration to vice president. Positions will be in accounting
marketing, human resources, MIS, finance, advertising, real estate, and training. Salaries will be from $20,000 to
$150 000.
G. Estimate utility usage for project: Current Usage
15. Describe any. other direct benefits to the City of Denton as a result of this project (e.g., sales tax revenue):
professionals. The Company performs on -site training for retail store managementfrom across the nation, '
with individuals generating commerce for Denton's hotel and restaurants.
16. Is Property Zoned Appropriately? Yes X No
Current Zoning: RCC-N Regional Center Coming
Required Zoning: same
ED/'raxAb=nentApp.doc - Page 3 of 4
9331 D4382
17. Is Property Platted? Yes No X
Will Replatting be Necessary? Yes X No
18. Discuss any environmental impacts created by the project.
A. List any .permits for which applicant must apply. Applicant will be required to provide City with
copies of all applications for environmental permits upon completion.
B. Provide record of compliance to all environmental regulations for the past five years:
Sally Beauty Company. Inc. has not been notified of any non-compliance with environmental
regulations.
19. Provide specific detail of any businesses/residents that will be displaced and assistance that will be
available from requesting entity.
Not Applicable.
20. Provide description of any historically significant area included with the project's area. If any, give
detail of how the historically significant area will be preserved.
Not Applicable.
21. Justification for Tax Abatement Request (Substantiate and more fully describe the justification for this
request. Include the amount of theabatement requested and show how it will contribute to the financial
viability of the project. Submit attachments if necessary.)
23. Financial Information: Attach a copy of the latest audited financial statement or, in the case of a new
project, a business plan.
Will make available to City's Financial Advisor.
This tax abatement application is submitted with the acknowledgement that additional certified financial
information may be required.
ori�zr ignature
PdfE
ED/TaxAbatementApp.doc -Page 4 of 4
EXHIBIT 'C' 8331 04383
aALLYBEAUTY
C®MPANY.INC.
May 6, 2003
Honorable Euline Brock
Mayor
City of Denton, Texas
215 East McKinney
Denton, Texas
Dear Mayor Brock:
The City of Denton has asked that I render an opinion as to the authority of Michael Renzulli,
President, to bind Sally Beauty Company, Inc. ("Sally") to the terms and conditions of the
Economic Development Program Grant Agreement With Sally Beauty Company, Inc., expected
to be dated in May, 2003 (the "Agreement").
I am familiar with the provisions of the Agreement and have examined copies of the Certificates
of Incorporation and By -Laws of Sally, resolutions adopted by the Board of Directors of Sally
and such other documents and data as I deemed relevant. Based on the foregoing, and in reliance
thereon, subject to the limitations set forth below, it is my opinion that Michael Renzulli,
President, is authorized to bind Sally to all the terms of the Agreement.
I am admitted to practice in the State of Texas. The opinion expressed herein is limited to the
laws of the State of Texas and the United States of America, and I express no opinion as to the
laws of any other jurisdiction.
This opinion is rendered solely for the City of Denton's use in connection with the transactions
contemplated by the Agreement, and may not be relied upon by other persons or for any other
purposes. This opinion may not be quoted or used, in whole or in part, for any other purpose or
delivered to any other person, except with my prior written consent.
Since
Raal H. Roos
Vice President and General Counsel
P.O. Box 490 (76202) 3900 Nlorse St. (76208) Denton, Texas (940) 898-7500
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