2017-0702017-070
ORDINANCE 1 •. -
•' • ♦Ewwolm I U Kom n Me]03 a 0 1 to]'' • •'
DATE.SOPPLT LLC CAA T777777717,71% [TIE -11T
MAKING GRANTS OF PUBLIC MONEY TO PROMOTE ECONOMIC DEVELOPMENT;
PROVIDING FOR A SEVERABILITY CLAUSE; AND PROVIDING FOR AN EFFECTIVE
WHEREAS, on • rer 1, 2016, the City Counciladopted Ordinance No. 1 •
which ordinance approved an Economic Development Grant Agreement ("Agreement") between
as Exhibit. •
WHEREAS, due to an inadvertent clerical mistake, the Agreement adopted by Ordinance
No. 2016-341 is not the correct and final version, rather it is an earlier version of the Agreement;
and
WHEREAS, specifically, the Agreement, as adopted, incorrectly reflects an assessed
valuation of improvements to be $22,000,000.00, whereas the correct valuation should reflect
$28,600,000.00, as was intended by the City and Grantee; and
WHEREAS, both City Staff and the Grantee request that this inadvertent mistake be
corrected and that the correct and final version of the Agreement, attached as Exhibit "", replace
the incorrect Agreement version; and
WHEREAS, the City Council has the inherent power to retroactively correct such mistakes
to reflect the correct and final version of the Agreement negotiated between the City and the
Grantee; and
WHEREAS, the City Council finds that the action taken herein is in the public interest;
NOW, THEREFORE
SECTION 1. The findings and recitations contained in the preamble of this ordinance are
incorporated herein by reference.
SECTIONOrdinance r 1hereby amended • the limited extent necessary
to correct an inadvertent clerical mistake by replacing the incorrect Agreement attached to
Ordinance No.1, with the correct Agreement version• herein as Exhibit
SECTIONother provisions of Ordinance •. 1 • specifically amended
continueherein shall • •-however,- .• • of ordinancegovern
and control over any conflicting provisions of Ordinance No, 2016-341, to the extent of any such
conflict.
SECTION 4. This Ordinance shall take effect immediately on its passage and approval.
PASSED AND APPROVED this the -Z.- day of r Lk 2017.
UIVO—s' W A 1-I I' AY0R
ATTEST:
JENNIFER WALTERS, CITY SECRETARI
BY:
FAI U U I
&§jTj a W&V
AARON I-EAL, INTERIM CITY ATTORNEY
If
BY:
sAlegal\our documenMordinanceAMsally 2016
Exhibit A
ORDINANCE NO. 2016-341
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 SUPPLY
LLC, SETTING FORTH THE VARIOUS CONDITIONS PRECEDENT TO SALLY BEAUTY
SUPPLY LLC RECEIVING THE PROGRAM GRANT; PROVIDING FOR A
SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, Sally Beauty Supply LLC ("Grantee") 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"); and
WHEREAS, to effectuate the Program, the City and Grantee 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 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.
sAlegahour documents\ordinances\16sally 2016 380 ord.doc
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IS A'17S, MA
ATTEST.
JENNIFER WALTERS, CITY SECRETARY
APPRVnIJRGf--,-SS,
ISD A l'0 LEGAL FORM:
ANIT CITY ATTORNEY
ECONOMIC DEVELOPMENT PROGRAM GRANT AGREEMENT WITH
SALLY BEAUTY SUPPLY LLC
This Economic Development Program Grant Agreement ("Agreement") is made and
entered into as of the effective date provided for below, by SALLY BEAUTY SUPPLY LLC
(the "Grantee"), 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, Grantee is contemplating the development of that certain real property
located within the city limits of the City as more particularly described in Fxhibit "A'' attached
hereto and made a part hereof by reference (the "Property"); and
WHEREAS, on the 8th day of December, 2015, Grantee 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 "II" (the "Application for Economic Development Incentives"); and
WHEREAS, on the 9th day of March, 2016, the Economic Development Partnership
Board reviewed the Grantee's Application for Economic Development Incentives and
unanimously (8-0) recommended Council approval of a three-year, 50% grant of City ad valorem
taxes attributable to improvements resulting in an increase of assessed value (the "Grant"); and
WHEREAS, the City Council finds that the contemplated use and development of the
Property, the proposed improvements provided for herein that will remodel the interior space at
3900 Morse Street to accommodate an increase in the Grantee's employee base at that location,
and the other terms and conditions of this Agreement will promote economic development;
business retention and expansion efforts; and will stimulate development activity within the City
of Denton for the benefit of the public;
NOW, THEREFORE, the City and Grantee for and in consideration of the Property and
the promises contained herein do hereby contract, covenant and agree as follows:
I.
CONDITIONS OF THE GRANT
A. In consideration of this Agreement, the retention of the Grantee's ongoing
business and investment within the City of Denton; the planned improvements of an interior
remodel at the 3900 Morse property; and subject to the Grantee meeting all the terms and
conditions of the Grant as set forth herein, the City hereby grants the following:
I . A Grant equal to 50% of City ad valorem taxes attributable to Improvements (as the
term "Improvements" is defined below) resulting in an increase of assessed value
(excluding land value), above the base year of January 1, 2016, solely from the
property located at 3900 Morse Street as determined by the Denton Central Appraisal
District, of real property improvements to and tangible personal property (excluding
inventory, vehicles and supplies) located on the 3900 Morse Street Property, but only
if the combined assessed valuation of the 3900 Morse Street and the Sally Beauty
headquarters facility located at 3001 Colorado is at least $22,000,000 in assessed
valuation, as determined by the Denton Central Appraisal District, of the Properties
(excluding land) and tangible personal property (excluding inventory, vehicles and
supplies) located on the Properties, for a period of three years commencing the first
year following receipt by Grantee of the new certificate of occupancy based on the
Improvements completed after the base year (the "CO") for the 3900 Morse Street
Property. If the assessed value, as determined by the Denton Central Appraisal
District, is less than $22,000,000 for the combined aforementioned properties in
Denton (excluding Sally Beauty retail stores) there will be no Grant payment during
that year.
B. A condition of the Grant is that, by December 31, 2017 (subject to force majeure
delays not to exceed 180 days), Grantee shall have made Improvements on or to the Property,
which result in an increase in the assessed values, as determined by the Denton Central Appraisal
District, as contemplated by Section I.A.1. However, prior to the expiration of the said 180 day
period, the City, in its sole reasonable discretion, shall review the cause of such failure to make
such improvements to determine whether an additional extension of the said time period should
lie granted. In the event the City determines that an additional extension of the 180 day period is
appropriate, the City may grant such additional time for the making of improvements as it, in its
sale reasonable discretion, deerns appropriate. For the purposes of this paragraph, the term
"force majeure" shall mean any circumstance or any condition beyond the control of Grantee, as
set forth in Section XIV "Force Majeure" which prevents the above-mentioned thresholds or
time restraints from being met.
C. The terms "Improvements" or "Contemplated Improvements" are defined as the
construction, renovation, remodeling and equipping of the Property including but not limited to
(1) costs related to the development and improvement of the real estate, including, without
limitation, construction costs and design and engineering costs; (2) tangible personal property
located on or at the Property owned or controlled by Grantee, excluding inventory and supplies.
The kind and location of the Contemplated Improvements is more particularly described in the
Application for Economic Development Incentives.
D. A condition of the Grant is that the Contemplated Improvements be constructed.
and the Property be used substantially in accordance with the description of the project set forth
in the Application for Economic Development Incentives.
E. A condition of the Grant is that throughout the term of the Grant, the
Contemplated Improvements shall be operated and maintained for the purposes set forth herein
Page 2
so that the use of the Property shall be consistent with the general purpose of encouraging
development or redevelopment of the City except as otherwise authorized or modified by this
Agreement.
G. The City shall have the right to terminate the Grant if the Grantee does not occupy
the Contemplated Improvements continuously (subject to force majeure) for the term of the
Grant for the purposes set forth in the Application for Economic Development Incentives. In the
event of such termination, the Grantee shall refund to the City fifty percent of Grant payments
for the year in which Grantee ceases to occupy the Property, and Grant payments for future years
shall be terminated.
H. The City and Grantee agree to comply with all the terms and conditions set forth in this
Agreement. IL
GENERAL PROVISION
I A. 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 the Grantee under this Agreement
through ordinances or regulations (whether now or hereafter in effect).
Ill.
TERMS AND CONDITIONS OF GRANT
A. Subject to the terms and conditions of this Agreement, the City hereby agrees to
pay to Grantee, on an annual basis, after the first assessment following receipt by Grantee of the
certificate of occupancy for the Property, an amount equal to 50% of the difference between: (a)
the then current City ad valorem taxes for the Property and the Improvements, minus, (4) City ad
valorem taxes payable for the Property and improvements as of January 1, 2016, (with the
resulting payments known as the "Annual Payments"), such Annual Payments to be subject to
the terms and conditions provided in this Agreement.
B. Grantee 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 or controlled by Grantee 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 not to exceed three (3) 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 I` of the year
following the calendar year in which a certificate of occupancy is issued by the City for the
Property (the "Beginning Date"), and, unless sooner terminated as herein provided, shall end
after the third 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 I for the respective subsequent years.
Page 3
D. Grantee shall comply with local taxes, fees, and permits directly affecting the City
of Denton, such as local sales/use taxes, local permits, use of public easement, and their
associated fees, subject to reasonable dispute by Grantee.
IV.
RECORDS, AUDITS, AND EVALUATION OF PROJECT
A. Grantee shall provide access and authorize inspection of the Property by
authorized City employees and allow sufficient inspection of financial information to insure that
the Improvements are made and the threshold has been met according to the specifications and
conditions of this Agreement. Such inspections shall be done in a way that will not interfere
with Grantee's business operations or violate any laws, including any rules or regulations
promulgated by the Securities and Exchange Commission or the New York 'Stock Exchange.
The City shall, on an annual basis, evaluate the Project to ensure compliance with this
Agreement. Grantee shall provide information to the City on a Certificate of Compliance form
provided by the City as Exhibit "C" for the evaluation. The iatlormation shall include., without
limitation, an inventory listing the bind, number, and location of and the estimated total
investment value of all improvements to the property, including the value of all buildings and.
other structures and permanent improvements installed, renovated, repaired or located on the
Property.
V.
FAILURE TO MEET CONDITIONS
In the event (i) Grantee or the owner of the Property allow their ad valorem real property
taxes owed to the City with respect to the property or Building, or ad valorem takes owed to the
City with respect to any tangible personal property owned or controlled by the Grantee and
which are located on the Property to become delinquent and fails to tinkly 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, 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 has not been met after
notice and reasonable opportunity for Grantee to cure such failure. In the event that a Condition
Failure occurs, the City shall give Grantee 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
Grantee has commenced and is pursuing the cure or satisfaction of same, then after first advising..
the City of efforts to cure or satisfy same, Grantee may utilize such additional time as may be
reasonably required to cure such Condition Failure. 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 Payment shall be terminated
with respect to the year in which notice of the Condition Failure is given and for all future years.
Page 4
Provided, however, that prior to the expiration of the said applicable notice and cure periods, the
City, in it its sole reasonable discretion, may review the cause of such failure and may determine
whether an extension of the said time period(s) shall be granted. In the event the City determines
that an extension of the said time period(s) is appropriate, the City may grant such additional
time as it, in its sole discretion, deems appropriate.
V1.
ASSIGNMENT
This Agreement and Grantee's rights and obligations hereunder may not be assigned
without prior notice to the City, unless such notice is prohibited by contract or applicable law in
which case notice shall be provided as soon as allowable. In the event that Grantee ceases to
operate its business on the Property, this Agreement shall terminate and all future obligations of
the City, as set forth herein, shall terminate and be of no further force and effect.
vll,
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
prepaid or by hand delivery:
SALLY BEAUTY HOLDINGS, INC.:
Paul Myrick
Vice President, Real Estate
Sally Beauty Holdings
3001 Colorado Blvd.
Denton, TX 76210
Matt Haltom
Senior Vice President, General Counsel and Secretary
Sally Beauty Holdings
3001 Colorado Blvd.
Denton, TX 76210
CITY:
City Manager
City of Denton
215 E. McKinney
Denton, Texas 76201
VIII.
CITY COUNCIL AUTHORIZATION
his Agreement is authorized by the City Council at its meeting on the ---I— day of
VRAn 2016, authorizing the City Manager to execute this Agreement on behalf of the
City.
Page 5
IX.
AUTHORIZATION
Grantee represents that it has the corporate right, power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated herein have been duly and validly
authorized by all necessary corporate and member action. Evidence of such right, power and
authority shall be attached as Exhibit I'D".
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 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.
STANDING
Grantee, 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 Grantee 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.
Page 6
XIV.
FORCE MAJEURE
If, because of flood, fire, explosions, civil disturbances, strikes, war, acts of God, or other
causes beyond the control of either party, either party is not able to perform any or all of its
obligations under this Agreement, then the respective party's obligations hereunder shall be
suspended during such period but for no longer than such period of time when the party is unable
to perform
XV.
INDEMNIFICATION
No joint venture. Nothing contained in this Agreement is intended by the parties to create a
partnership or joint venture between the parties, and any implication to the contrary is hereby
disavowed. It is understood and agreed that this Agreement does not create a joint enterprise, nor
does it appoint either party as an agent of the other for any purpose whatsoever. Except as
otherwise specifically provided herein, neither party shall in any way assume any of the liability
of the other for acts of the other or obligations of the other. Further, this Agreement does not cause
or support any type of Joint Employment in any ways between the parties. The City, its past and
future officers, elected officials, employees, and agents expressly do not assume any
responsibilities or liabilities to any third party in connection with the project or the design,
construction, or operation of any portion of the Improvements.
XVI.
AMENDMENT
This Agreement is the entire agreement of the parties and may only be modified by a
written instrument executed by both parties.
XVII.
EFFECTIVE DATE
This Agreement is effective as of the 1 day of NOVG , 2016.
A=1- 'I ST:
B C
JE -I 11"I�,1 �,IAT'RS
C11"1 SE I _,TARY
CITY OF DENTON, TEXAS
BY: }
HOWARD*W1H
INTERIM CITY MANAGER
Page 7
APPROVED AS TO FORM:
ANITA BURGESS, CITY ATTORNEY
BY: _ %. e
SALLY BEAUTY SUPPLY LLC
B'° w�.
�
SENIOR VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY
ACKNOWLEDGMENTS
STATE OF TEXAS
COUNTY OF DENTON
The foregoing Economic Development Agreement was executed before me on th play
o1 , 2016 by Howard Martin, Interim City Manager of the City or 1.. emon,
Texas, a Texas nits icipal corporation, on behalf of said Municipal Corporation.
STATE OF TEXAS
COUNTY OF DENTON
�nac,:
)ta y ublic in and for the
State of Texas
"I"he c � Economic Development Program Agreement was executed before me on
the clay of $--j-
2016 by Matthew Haltom, of Sally Beauty Supply, LLC,
on behalf of said limited liability company.
MELISSA HENDOWN
Notary Public
State of Texas
Comm. Expires 09/13/2017
Name:t
Notary Public in and for the
State of Texas
Page 8 of 8
JENNIFER IF LT R
' s NOTARY
PUBLIC -STATE OF TF XAS
COMM, EXP 1-19®2018
NOTARY ID 1117650
1
STATE OF TEXAS
COUNTY OF DENTON
�nac,:
)ta y ublic in and for the
State of Texas
"I"he c � Economic Development Program Agreement was executed before me on
the clay of $--j-
2016 by Matthew Haltom, of Sally Beauty Supply, LLC,
on behalf of said limited liability company.
MELISSA HENDOWN
Notary Public
State of Texas
Comm. Expires 09/13/2017
Name:t
Notary Public in and for the
State of Texas
Page 8 of 8
Exhibit A
PROPERTY DESCRIPTION
Page 10
Loi's 1 and 6, in BLOCK 3, of GOLDEN TRIANGLE INDUSTRIAL PARK, PHASE V, an Addition
to the City of Denton,Denton County,a according • the Plot •recorded in
Cabinet C, - 87, Plot
Records, Texas.
The plat hereon Is a true and accurate representation of the property as determined by survey made
on the ground. the lines and ,dimensions of sald prop as being
Indicated on the Flat. no size, location
and type of buildings and Improvements are as sho..wn, all Improvements being within, the boundarlss of
the property except as shown, set back from the properly linos
Is as shown. and distance from the
nearest street or road Is as shown on the Plat. There are n
Islblo onoroach a visible protrusions
or apparent easements, except ,as shown on the Plat.
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I further certify that only portion shown of subject
property -flwithin a special flood hazard area
according to the. FLOOD INSURANCE RA [E MAP
for Denton County and Incorporated Areas, Mpg
Number 4812100980' Dated March 90, 1998. (Subject
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lya®P�ssxYOR
Property Iles In Zone A and Zone X a roximatel
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Lots 1 and 6, in BLOCK 3, of GOLDEN: TRIANGLE INDUSTRIAL PARK, PHASE V, an Addition
to the City of Denton, Denton County, Texas, according to the Plot thereof recorded in
Cabinet C, Page 87, Plaf Records, Donton County, Texas.
The plat hereon Is a true and accurate representation of the property as determined by survey made
on the ground, the Nms and dimensions ol'said propas being Indicated on the Plat. The size, location
and typo of buildings and Improvements are as shpMln, &I Improvements being within. the boundaries of
the property except as she", set back from the properly Itnes Is as shoWp, and distance from the
nearest stres( or road Is as shown on 'the Plat. There are nq"ylslble enoroochmeN v1sibule protrusions
or apparent easernents, except .as shown on the Plat.
I further certify that only portion 06wn :of sub)eot
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property -111" within a special flood hazard area
according to the FLOOD INSURANCE riAfP- MAP 4�
for Denton Co.onty and Incorporated Areas, Map
Number 4912100360, Dated March $0, 1998. (Subject kED
Property lies In Zone A and Zone X approximatol PROFESS YOR
as shown.)
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Exhibit B
APPLICATION FOR ECONOMIC DEVELOPMENT INCENTIVES
Page 11
2014 Tax Abatement Policy
CITY OF DENTON TAX ABATEMENT AND INCENTIVE POLICY
I. GENERAL PURPOSE AND OBJECTIVES
The City of Denton (City) is committed to the promotion of high quality development in all parts of
the city and to an ongoing improvement in the quality of life for its citizens. Insofar as these
objectives are generally served by the enhancement and expansion of the local economy, the City
will, on a case-by-case basis, give consideration to providing tax abatement or other incentive as a
stimulus for economic development in Denton. It is the policy of the City that said consideration will
be provided in accordance with the procedures and criteria outlined in this document. Nothing herein
shall imply or suggest that the City is under any obligation to provide an incentive to any applicant.
All applicants shall be considered on a case-by-case basis, Incentives will not be considered if
construction of a project already has begun.
Tax abatements, as described in this Policy, will be available for businesses wanting to locate, expand or
modernize, existing or new facilities and structures, including, without limitation, basic industries,
corporate office headquarters or distribution centers, except as this Policy may be limited for property
described in Section 312,211(a) of the Texas Property Tax Code (Vernons Texas Civil Statutes
Annotated, hereinafter referred to as "Tax Code.")
In addition to tax abatements, the City may provide alternative or additional incentives to businesses
utilizing its authority under Chapter 380 of the Texas Local Government Code (hereinafter referred to as
"Chapter 380,") Chapter 380 of the "I`exas Local Government Code states that a municipality may
establish and provide for the administration of one or more programs for making loans and grants of
public money and providing personnel and services of the municipality, to promote state or local
economic development and to stimulate business and commercial activity in the municipality.
The City of Denton will consider, on a case-by-case basis, the use of grants and loans as incentives to
accomplish one or more of the following economic development objectives:
• Development and diversification of the economy
• Elimination of unemployment or underemployment
• Expansion of transportation or commerce
• Attraction of major investment
• Expansion of primary employment
• Stimulation of agricultural innovation
The City of Denton may establish targeted incentive programs to accomplish one or more of the above
objectives. Such progralns could include, but are not limited to:
• Targeted industry Cluster or supply chain recruitment initiatives
• Capital grants or loans for start-up and small businesses to promote entrepreneurship
• Special incentive programs within certain boundaries of the: City in order to promote infill
redevelopment and attract businesses that met pre -determined desirable criteria
• Grants to offset costs associated with public infrastructure improvements and/or impact lees
• Cash incentives to gain a competitive position when in direct competition for a project
2014 Tax Abatement Policy
11. ECONOMIC DEVELOPMENT PARTNERSHIP BOARD
Requests for tax abatement or other incentives shall be reviewed by the Economic Development
Partnership (EDP) board, on a case-by-case basis unless otherwise directed by City Council, the ED11
board being comprised of two City Council members, two Chamber of Commerce board members, two
representatives from the top twenty taxpayers, one representative from the University of North Texas,
one member with aviation experience, and one member at -large.
The EDP board serves as a recommending body to the City Council regarding whether economic
development incentives should be offered in each individual case. Its recommendation shall be based
upon an evaluation of information submitted in the incentive application and any additional information
requested by the EDP board or presented to the EDP board. The Incentive Application shall be
substantially in the form of Exhibit A of this Policy. All meetings of the EDP board shall be held in
compliance with the Texas Open Meetings Act, Chapter 551 of the Texas Government Code,
111. VALUE OF INCENTIVES
The criteria outlined in the Application will be used by the EDP board in determining whether or not it
is in the best interests of the City to recommend that incentives be offered to a particular project.
Specific considerations will include the degree to which the individual project furthers the goals kind
objectives of the community as described in the Denton Comprehensive Plan, as well as the relative
irni-mct on growth, einployment, expansion of the tax base, economic development and human health
and the environment.
Tax Abatements b
New, expanding and modernizing businesses may be considered for a tax abatement if the minimum
threshold, as described in Table I below, is met. Once a determination has been made that a project is
eligible for a tax abatement, the following table will serve as a basis for determining amount and term of
abatement:
TABLE 1: Establishes a framework for considering the length and percentage of abatement
according to assessed property value of improvements and of tangible personal property located on the
real property.
Page 2 of 18
2014 Tax Abatement Policy
VALUE OF STRUCTURE
AND PERSONAL PROPERTY
YEARS OF
PERCENTAGE OF
IN MILLION DOLLARS
ABATEMENT
ABATEMENT
100
10
25%
80
9
25%
65
8
25%
50
7
25%
35
6
25%
20
5
25%
15
4
25%
10
3
25%
5
2
25%
To qualify, companies must meet the minimum threshold of the Policy in the first 24 months from the
execution of the agreement or as specified in the tax abatement agreement.
If upon initial application a project qualifies for tax abatement under the guidelines set forth in this
Policy, the City may consider granting an additional 5% abatement for each one of the following factors
provided, however, that the total tax abatement does not exceed 50% annually or continue for a period
of more than ten years. No applicant may receive credit for more than five of the following factors:
The project will occupy a building that has been vacant for at least two years;
■ The project will create high -skilled, high -paying jobs as documented by the applicant; (A
breakdown of number of jobs per job classification and entry level wage per classification will
be used to determine eligibility);
• The project will involve a significant relationship with one of the two universities in Denton;
■ At least 25% of the new jobs created by the project will be filled by Denton residents;
A minimum of 25% of local contractors and local subcontractors will be utilized during
construction of the project;
The project will provide knowledge-based jobs (at least 25 percent of jobs require college
bachelors degree at entry level);
■ The project will donate significant public art to the community. (To qualify, donation must be
approved by Greater Denton Arts Council and City Council);
■ The project will donate significant materials/equipment to the public schools (to qualify,
donation must be approved by DISD and City Council);
■ The project will create improvements to the Denton Downtown Implementation Plan area;
■ The project will result in the formation of a business park;
■ The project is an international or national headquarters facility.
■ The project is a medical manufacturing or research facility.
■ The project incorporates significant environmentally sustainable practices that includes:
Leadership in Energy and Environmental Design (LEED) certification, recycling initiatives, the
manufacture of sustainable materials or products that support sustainable industries, or the
incorporation of clean technology.
Page 3 of 18
2014 Tax Abatement Policy
• Renewable Energy will be generated, stored or utilized for the project on an ongoing basis;
• The applicant is committed to actively supporting the Denton Community.
The total tax abatement may not exceed 50% annually for ten years. All abatements are subject to final
approval of the City Council. Even though a project may meet the criteria as set forth in this
Policy, an application may be denied at the discretion of the City. Tax abatement shall not apply to
any portion of the land value of the project. The thresholds as described in Table I are considered
guidelines for establishing the Tax Abatement Agreement terms. However, the City may determine that
a lower or higher percentage and/or a shorter or longer term of abatement may be more appropriate for
an individual project. If the abaternent is approved, the City inay consider applying all or a portion of
the abatement in the first year or during any shorter period within the term of the tax abatement
agreement. For example, an approved abatement of 25 percent for four years may be applied as 100
percent abatement for one year.
When the City of Denton determines that incentives are required to retain existing businesses, which
propose to improve or redevelop property within the City limits, the Denton City Council may consider
these "special projects" on a case-by-case basis and reserve the right to waive the minimum threshold
,And/or exceed fifty percent (50%) in tax abatement. The City of Denton may also take into
consideration as "special projects" the expansion/redevelopment of existing businesses that create new
or additional professional jobs. New or existing businesses that incorporate environmentally sustainable
practices or have a renewable energy component may also be considered "special pro ' jects," Abatement
hereunder will only apply it) the incre,,isetl valuation of the impr()venients over the appraised value of the
property prior to Such improvements as same is established by the Denton Central Appraisal District the
year in which the tax abatement agreement is executed. The City may also consider other tax incentives
authorized by law.
Chapter 380 Incentives
At times when alternative incentives may be preferable to a tax abatement, the City Council has the
authority under Chapter 380 to create a custom incentive in order to accomplish specific economic
development goals. Chapter 380 incentives will be considered on a case-by-case basis, and may be
considered for one or more of the following criteria:
• A certain number of net new jobs with wages above Denton's rnedian household incorne
• The relocation of a company that promotes the growth of targeted industry clusters such as high-
tech companies, aviation/aerospace industry, or supply chain clusters that support Denton's
existing primary employers
• Incentives for businesses that cause infill redevelopment or other desirable development
objectives
• Any other activity which the City Council determines meets a specific public purpose for
economic development
Definitions:
Local contractors and local sub -contractors refers to vendors that have their "principal office or place
of business," as reported to the Texas Secretary of State Office, located within Denton City Limits or
Page 4 of 18
2014 Tax Abatement Policy
Extraterritorial Jurisdiction (ETJ). The minimum requirement of 25%, to be eligible under this
consideration, will be based on the estimated construction valuation of the project.
Knowledge-based jobs are defined as occupations which:
• Require specialized and theoretical knowledge, usually acquired through a college education
or through work experience or other training which provides comparable knowledge;
• Require some research, analysis, report writing and presentations;
• Require special licensing, certification, or registration to perform the job task;
A Business Park is defined as a multi -building, multi -tenant, master planned complex of approximately
one million square feet or more under roof, constructed to house manufacturing, distribution, assembly,
and office facilities.
Leadership in Energy and Environmental Design (LEED) certification is a voluntary
internationally recognized green building certification system, with verification by a third -party that a
building or community was designed and built using strategies aimed at improving performance
across the following metrics:
• energy savings
• water efficiency
• CO2 emissions reduction
• improved indoor environmental quality
• stewardship of resources.
The certification levels consist of the following: Basic, Silver, Gold and Platinum and are weighted
on a 100 point system. The LEED system measures: innovation in design; sustainable sites; water
efficiency; energy and atmosphere; materials and resources; indoor environmental quality; and
locations and linkages.
The manufacture of sustainable materials or products may include but is not limited to: biobased,
recyclable and reclaimed goods, Denton is located in an air quality nonattainnient region designated
by the Environmental Protection Agency for air- pollution levels that continually exceed national
standards. Products and equipment that support sustainable industries or clean technologies that
reduce environmental pollution are encouraged and may qualify for consideration under this section.
Community support and involvement may include but is not limited to monetary or active investment in
local non prodits, public institutions car c0111n1clnity orgalliZatiOns. Membership and participation in a
Denton Chamber of collinlerc;e is all example that play rlualil`y under this consideration. The IMP board
will consider criteria l.)roposed 1)), the 1lpplicant, review tend aialw a recommendation oil the: eligibilil;y of
the applicant's community support and recommend whether an additional five percent should be added
to the overall incentive percentage.
When the City determines that abandoned property may require addikonal incentives to promote
economic dcvelopl-nent that generally satisfies the requirements of this Policy, the City may waive the
minimum threshold and/or exceed fifty percent (50%) in tax abatement, or consider other tax incentives
for special Projects to redevelop abandoned buildings consistent with exi:,ting law, For the purpose of
this Policy, an abandoned building is defined as a building that has been identified as being suitable for
commercial or industrial development, has been vacant for a minimum of five -years or has substantially
declined in appraised value. Abatement would only be considered on the increased valuation of the
improvements in each year covered by the tax abatement agreenic sit over the value of the property for
Page 5 of 18
2014 Tax Abatement Policy
the year in which the tax abatement agreement is executed. The City may also consider other tax
incentives authorized by law.
Preliminail, Applivation
IV. PROCEDURAL GUIDELINES
Any person, organization or corporation desiring that the City consider providing incentives to
encourage location or expansion of facilities within the limits of the jurisdictions shall be required to
comply with the following procedural guidelines. Nothing within these guidelines shall imply or
suggest that the City is under any obligation to provide an incentive to any applicant.
A. Applicant shall complete the attached "Incentive Application."
B. Applicant shall prepare a map or other documents providing the following:
• precise location of the property and all roadways within 500 feet of the site
• existing uses and conditions of real property
• proposed improvements and uses
• any proposed changes in zoning
• compatibility with the Denton Comprehensive Plan and applicable building codes and
City ordinances.
• A complete legal description.
C. Applicant shall complete all forms and information detailed in the Application and submit
all inforl nation to the City Manager (or his/her designee), City of Denton, 215 E. McKinney,
Denton, TX 76201.
D. All information in the application package detailed above will be reviewed for completeness
and accuracy. Additional information may be requested as needed.
E. The application will be distributed to the appropriate City departments for internal review
and comments. Additional information may be requested as needed.
F. Copies of the complete application package and staff comments will be provided to the EDP
board.
G. Fiscal agents of the City will review the application for comments and recommendation.
Additional information may be requested as needed.
Cmisideration cit' the AEILI, ea�tion
H. The EDP board will consider the application at a regular or special -called meeting(s).
Additional information may be requested as needed.
Page 6 of 18
2014 Tax Abatement Policy
I. The recommendation of the EDP board will be forwarded, with all relevant materials, to the
City Council.
J. If the City Council decides to grant a tax abatement, it shall call a public hearing to consider
establishment of a tax reinvestment zone in accordance with Section 312.201 of the Tax
Code. The reinvestment zone must meet one or more of the criteria of Section 312.202 of
the Tax Code.
K. The City Council may consider adoption of an ordinance designating the area described in
the legal description of the proposed project as a commercial/industrial tax abatement zone.
L. The City Council may consider adoption of an ordinance or resolution approving the terms
and conditions of a contract between the City and the applicant governing the provision of
the tax abatement or incentive and the commitments of the applicant, including all the terms
required by Section 312.205 of the Tax Code and such other terms and conditions as the City
Council may require. Should the commitments subsequently not be satisfied, the tax
abatement or other incentive shall be null and void (unless the tax abatement agreement
provides for a recapture of the property tax revenue lost proportionate to a partial failure to
meet the minimum thresholds set forth in the agreement) and all abated taxes or other
incentive shall be paid immediately to the City of Denton. Provisions to this effect shall be
incorporated into the agreement.
N. The City reserves the authority to enter into tax abatement agreements at differing
percentages and/or terms as set forth in the guidelines of this Policy, consistent with the
requirements of the Tax Code. The City also reserves the authority to enter into incentive
agreements under Chapter 380 of the Texas Local Government Code.
Any incentive agreement will address various issues, including but not limited to, the following:
1. General description of the project
2. Amount of the tax abatement and percent of value to be abated each year
3. Method of calculating the value of the abatement
4. Duration of the abatement, including commencement date and termination date
5. Legal description of the property
6. Kind, number, location and timetable of planned improvements
7. Specific terms and conditions to be met by applicant
8. The proposed use of the facility and nature of construction
9. Contractual obligations in the event of default, violation of terms or conditions, delinquent
taxes, recapture, any decrease in valuation, administration and assignment
Annual Evaluation
Upon Completion of constratction and/or rather threshold criteria, the City Council shall receive from the
City Pilanaager (or his/lwr designee) an a rinmil evaaltlaation of each incentive to insure compliance with the
atgreenient and to report possible violations of the agreement to the appropriate taxing entities. After
new tax base numbcrs are received in Jttly ol`eateh year, the City Manager and his staff will have ninety
(90) days to review and prepare a breakdown of those figures.
Page 7 of 18
2014 Tax Abatement Policy
Locill BuNitiesses and Historivall , Underwilized 1311sinesses
Businesses receiving an incentive are asked to use diligent efforts to purchase all goods and services
from Denton businesses whenever such goods and services are comparable in availability, quality and
price.
The City of Denton also encourages the use, if applicable, of qualified contractors, subcontractors and
suppliers who are historically underutilized businesses based on information provided by the General
Services Commission pursuant to Chapter 2161 of the Government Code. In the selection of'
subcontractors, suppliers or other persons or organizations proposed for work on this Agreement, the
OWNERS agree to consider this Policy and to use their reasonable and best efforts to select and
employ such companies and persons for work on this Agreement.
O
Job ets
Businesses receiving incentives are asked to endeavor to make available, or endeavor to cause lessees
or assignees to nval<e av,,,tilable, full-time or part-time employment with on-the-job training 11or Mnion
citizens. In this ell'ort, the business, lessee or assignee is encouraged to recruit from the low-awderate
income Census tracts as further defined by the U.S. Department of Housing and Urban
Development's (HUD) Qualil ied Census Tracts (QCT) map shown in Figure I. I ILM defines QCTs
as "census tracts in which one-half or more of the households have incomes below 60 percent of' tile
area median income or the poverty rate is 25 percent of [or] higher.
Page 8 of 18
2014 Tax Abatement Policy
FIGURE 1: DENTON, TEXAS
2010-2011 Qualified Census Tracts
tt,ti tip t �ata�amrtt of liotsdug and WW- aa n vel6lrs mina
0111ra of 1416(y 66sre"1411vawt and 18,*nmrurs,ia
r-+ a:D a R
Page 9 of 18
777,7YIA
® Tract Outline
Qualified Census Tracts (2010-2011)
2014 Tax Abatement Policy
EXHIBIT A
The City of Denton
Incentive Al lalication
About the Application...
The Incentive Application provides the City with specific information on the project. The information requested
in the Application is designed to address the criteria developed within the City of Denton's Incentive Policy. The
information serves as the basis for fiscal analysis and overall project evaluation. This evaluation is provided to
the Economic Development Partnership (EDP) board and Council Members and serves as a source document
during EDP board and City Council deliberations.
The Application and the Agreement...
Specific information from the Application (such as value of new investment and employment commitments) is
incorporated into the Incentive Agreement. In fact, the Application is an attachment to the Agreement, Since the
Agreement is a binding contract, it is important that each question on the application be answered iilrfull and as
realistically as possible, Simply put, the application is part of the process from start to finish so you'll want to
make sure you're comfortable with the contents.
When Is The Application Final?
The answer to this question is very simple: When you tell us, "It's final," It is not uncommon for a business
entity to submit numerous Applications as drafts for informational and evaluative purposes only. As
conversations continuer, the business entity will submit a finalized version of the Application that includes all of
the commitments agreed to during the discussions.
What about C onfidentiuli(t7?
Section 312.003 of the Texas Tax Code makes confidential information provided to the City as a part of this
application that describes the specific processes or business tictivilics to be conducted or the equipment Or other
lar'calaet°ty to be loc<lierel on the property, "I'liis infornarrtitan is 1aol subject to public disclosure until the incenlive:
agreement is executed, Section 522.131 of the Texas Government Code (Texas Public Information Act) makes
confidential information which relates to economic development negotiations between the City and a bUsincSS
prospect that the City seeks to have locate, stay or expand in or near the territory of the City. The information
must relate to a trade secret of the business prospect, commercial or financial information which the business
prospect can demonstrate based on specific tactual evidence that disclosure would cause substantial competitive
harm to the person i'rrrin whore the information was obtained or information about a financial or other incentive
being offered to the business prospect by the City or by another person. Information about a financial or other
incentive: being offered to the business prospect is required to be disclosed when an agreement is made with a
business prospect. The City is subject to disclosing most records and documents upon request under the Public
Information Act. Accordingly, please clearly indicate and mark any information you consider proprietary.
This would include anything in your application which you consider a trade secret, commercial or
financial information which you can demonstrate by specific factual evidence that would cause substantial
competitive hewer if disclosed, information which describes the specific processes or business activities to
be conducted or the equipment or other property for which the incentive is sought, any financial or other
incentive you may be seeking from the City or any other information you deem to be c:oul'idential under
the law.
Who is Authorized To Sign the Application?
Because the Application itself is non-binding, the person sighing need not be the property owner or even an
individual duly authorized to sign on behalf of the property owner-. l lowever, if an Agreement is reached, tire.
Application will be an attachment to the Agreement and its contents will be binding through the authorized
signature required on the Agreement.
Page 10 of 18
2014 Tax Abatement Policy
rw_ +�` '`�
VS
City 0-f Denton
9
Incentive Ap%plication
City of Denton
Department of Development Services, Economic Development Division
215 E. McKinney St.
Denton, Texas 76201
(940) 349-7776
(940) 349_8596 FAX
Page 11 of 18
2014 Tax Abatement Policy
Property Owner
Company or Project Name
Mailing Address
INCENTIVE APPLICATION
CITY OF DENTON, TEXAS
Sally Beauty Holdings
Sally Beauty Holdings "World Headquarters
3001 Colorado Blvd
Denton, TX 76210
Telephone 940/898-7500 Fax No
Website
www.sallybeautyhold!ngs.com
Contact Name
Title
Mailing Address
Paul Myrick
VP Real Estate
same as above
Telephone 940/297-4499 Fax No. 840/381-9022
Email Address ornwick@sallybeauty.com
2. Provide a chronology of plant openings, closing and relocations over the past 15 years.
Developed and moved into the above stated HQ office facility in 2005, continued to own and now use former building at 3900 Morse Street,
The corporation operates approx 5,000 store locations world-wide as a leading speciality retailer and distributor of professional beauty
supplies with revenues of $3.8 billion annually. Open between 100-150 new stores annually and operate over ten (10) distribution centers.
3. Provide a record of mergers and financial restructuring during the past 15 years.
Continue to acquire smaller operations and companies to grow our overall presence and network, however, all corporate functions
are supported from the offices location in Denton.
4. Will the occupants of the project be owner or lessee? If lessee, are occupancy commitments already existing?
.M. — _- — _ .. _._
Sally BeautyHoldings will continue to own and occupy the building (3900 Morse Street) as well as 3001 Colorado Blvd both here
in Denton.
5. Is the project a relocation of existing facility or a new facility to expand operations? If relocation, give
current location,
The project Is a complete interior remodel of the existing facility at 3900 Morse Street to continue to Increase our employee base,
go
6. If an existing Denton business, will project result in abandonment of existing facility.? If so, the value of the
existing facility will be subtracted from the value of the new facility to arrive at total project value,
Page 12 of 18
2014 Tax Abatement Policy
No abandonment is a part of this remodel plan. We will only continue to grow our employee base here now totalling approx
1,000 employees In both facilities as well as managing 27,000 employees worldwide.
7. Property Description.
- Attach a copy of the legal description detailing property's metes and bounds. See attached
®.� __....._ .....— – --.-� — ---------------------------
Attach
- Attach map of project including all roadways, land use and zoning within 500 feet of site. See attached
8. Current Value. Attach copy of latest property tax statement from the Denton County Central Appraisal
District Include both real (land and improvements) and personal property). See attached
9. Increased Value/Estimated Total Cost of Project.
Structures $ 4,428,000.00 Site Development $ 94,000.00
Personal Property $ 00000.00 Other Improvements $ 368,000.00
10. Indicate percent of tax abatement and number of years requested.
Percent Requested Years Requested
List any other financial incentives this project will request/recerve None
Estimated Freeport Exemption
... .. ion $
_.......
Estimated Electric Utility Industrial Development Rider $
..,.m.. _ �......
Estimated Water/Wastewater Infrastructure Assistance $
-..p_
Chapter 380 Incentive
11. 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.
The project is a complete remodel of the Interior office portlon of the builidng at 3900 Morse Street. The scope of the project
includes, new windows, flooring, walls, ceiling, Interior lights cafe/dining area, breakrooms furinture data and phone cabling, lobby,
— ...
HVAC ducting system, roof repairs, HVAC unit repairs, electrical switch rep lacement/upgrade, restroom upgrades as well as
later Improvements to the parking lot, landscaping and over time will continue to convert the warehouse portion of the structure to
office use.
12, Describe any off-site infrastructure requirements:
• Water None
• Wastewater None
Page 13 of 18
2014'I'ax Abatement Policy
• Streets None
• Drainage None
• Other None
13, Project Operation Phase, Provide employment information for the number of years incentive is requested.
jobs (A.)
F, Types of jobs created. List the job titles and number of positions in each category that will be employed
at the facility. Provide average wage for each category.
�c.co�intsl�er�elvtabRc I �¢c��it h�o{it�cYr�rr�s 1 Cusfonaor Seryl 3arsiri% �aYu t �:cammerce J Vu'r:b iterit Lieptsrtct4nts with aclriFB6onat
-f 5 1,r. v..®,_.. _{�� — . a ..uwn ltartas ttx ul car+ri �crrs .
c s rJurltirt and flnancn de anrie��cnts adrfad In 2016 2t}17- 8� t;�rte�mr r services s 37 C'rc dlt C.ollectlo
fi tl')rilaif &anagens - 4 Army Directors with arfdlbonal roles t)a4ng added wrilhlsi 2016.2017�at i rr� Ott llorr afi tY�� rerrrtrdol proxy1 there
m,.
should be a 3s roxirr diol 40D fult Irma positions in the fir �Y T}re base salary esar� os for those
_positions is ��7k to $150k 1 a{tk tic �rr�rlBrrg on position
oa
(r _ C1t�fa�,�atc, pity€iultlla�p sritiltttt�t�tit���.ii3j�ct���ti�l�t-r��tr
Standard buslnes hours for most positions - 7am to 6pm generally
Page 14 of 18
At Project
Existing
Start Date
At Term of
Employment Information
Operation
(mo/yr)
Incentive
(if applicable)
/
A. Total number of permanent, full-time jobs
200
Feb 2016
150
B, Employees transferred from outside Denton
50
Feb 2017
250
C, Net permanent full-time jobs (A. minus B.)
150
350
E. Total annual payroll for all permanent, full-time
T$12.BM
$6.5M
jobs (A.)
F, Types of jobs created. List the job titles and number of positions in each category that will be employed
at the facility. Provide average wage for each category.
�c.co�intsl�er�elvtabRc I �¢c��it h�o{it�cYr�rr�s 1 Cusfonaor Seryl 3arsiri% �aYu t �:cammerce J Vu'r:b iterit Lieptsrtct4nts with aclriFB6onat
-f 5 1,r. v..®,_.. _{�� — . a ..uwn ltartas ttx ul car+ri �crrs .
c s rJurltirt and flnancn de anrie��cnts adrfad In 2016 2t}17- 8� t;�rte�mr r services s 37 C'rc dlt C.ollectlo
fi tl')rilaif &anagens - 4 Army Directors with arfdlbonal roles t)a4ng added wrilhlsi 2016.2017�at i rr� Ott llorr afi tY�� rerrrtrdol proxy1 there
m,.
should be a 3s roxirr diol 40D fult Irma positions in the fir �Y T}re base salary esar� os for those
_positions is ��7k to $150k 1 a{tk tic �rr�rlBrrg on position
oa
(r _ C1t�fa�,�atc, pity€iultlla�p sritiltttt�t�tit���.ii3j�ct���ti�l�t-r��tr
Standard buslnes hours for most positions - 7am to 6pm generally
Page 14 of 18
2014 Tax Abatement Policy
H. Estimate annual utility usage for project:
__ .....
Electric $173,673 kWh Water Sewer & Water $18,857 gp
Wastewater
gpd 1 Gas $17,873
mct
14. Describe any other direct benefits to the City of Denton as a result of this project (e.g., sa es tax revenue or
project elements identified in Tax Abatement Policy, Section III). NA
15. Is property zoned appropriately?
Current zonin11 g. EC -I (I
Zoning required for proposed project.
Antic ipatedvariances, none
es
4oyment Center Industrial)
current use remains
No
`.�`.
16, Is property platted? %/Yes No
Will replatting be necessary Yes N/No
17. Discuss any environmental impacts created by the project. None, use remains as Is
-
A. L1st any, permits for which applicant must apply. Applicant will be required to provide City with copies
of all applications for environmental permits upon completion of application(s).
Builidng permit and fire alarm / system permit,,,_,,_ w..
B. Provide record of compliance to all environmental regulations for the past five years.
N/A
18, Provide specific detail of any businesses/residents that will be displaced and assistance that will be available
from the requesting company..
N/A
19. Provide description of any historically significant area included within the project's area as determined by the
Historic preservation Officer. If any, give detail of how the historically significant area will be preserved
N/A
Page 15 of 18
2014 Tax Abatement Policy
..� _.
20, Justification for Incentive Request; Substantiate and more fully describe the justification for this request.
Include the amount of the incentive requested and show how it will contribute to the financial viability of the
project. Submit attachments if necessary.
Selly Beauty has been based In Denton since 1982 when we had 119 stores, today we have over 5,000 stores world-wide. We have approximately
1,000 full time employees based In Denton and are in the top 7 private employers in the City. We are supporters of The Children's Advocacy Center,
Am
erican Howl Association Cc Ret for Women, Adopt a Child through Hope, Denton Food Bank, naiional si prwrie of United Way and far the pass
5 yo am the plesenBing for the North TA SUFan G Kamen Race for the Cure. We are miallionally a h`oiji`usiag Member of UNT Glabal OL(JdaYl
r}s taailirig i�ra erir Tf Cot -& vrvacli Li Fio1Gi isea6 cs 't se—izrsnit`sri i l amhe5 o�C mrncr ca is w Il t4 tiro+ � rirrri r� ara7rr3c rr,.c inti iuf po^ly wtin t^+
owned business in Denton County.
21. List additional abatement factors to be considered for this project as outlined on pages 3 and 4 of the
Incentive Policy.
22, Financial Information; Attach a copy of the latest auottea nnanciai stateinern ur, in trio LAa%, VL a I-- 1—i—,
a business plan.
23. Does the project have an eligible environmentally sustainable or renewable energy component (if so, please
identify type and provide a brief description)?
installing LED lights throughout the office portion of the building
24. Applicants seeking LEED certification must complete the Green Building Application for Tax Abatement
(Exhibit B of the policy). N/A
Page 16 of 18
2014 Tax Abatement Policy
�M RAW3 DIULliggin DID) 1316J WIN W I al cer.4 1[way—om kill
I Property Owner
—60—mny or P
P roject Name
—
Mailing Address
Telephone �[ Fax No.
Website
Contact Name
Title
Mailing Address
Telephone Fax No,
Email Address
Project location address:
Provide documentation &::�cumentation that the project has been registered with the U.S. Green Building Council.
...... . .......... .
4. Provide a description of the project (please include the building size, number of occupants and estimated
budget).
Attach a preliminary Leadership in Energy and Environmental Design (LEED) Scorecard illustrating how
project will achieve the LEED certification,
Level of Certification:
Number of Points;
Page 17 of 18
2014 Tax Abatement Policy
This Incentive Application is submitted with the acknowledgement that additional information may be required.
Authorized Signature
Date:
Page 18 of 18
Exhibit C
CERTIFICATE OF COMPLIANCE
Page 12
sAeconomic development\incentives\incentive agreements\sally beauty\2016 incentive application\exhibit c certificate of compliance docx
CITY OF DENTON
CERTIFICATE OF COMPLIANCE
Company: Sally Beauty Supply, LLC Reporting Year: January I -December 31, 201
Contract Year No. of 3
1. Investment
1.1 Section I.A.1. of the Chapter 380 Agreement requires the capital investment to generate a
minimum of assessed real and business personal property valuation in the amount of
$22,000,000 in valuation for the 3900 Morse Street and 3001 Colorado
properties _....
a. The grantees tenants have invested $ _ in real and business
personal property associated with the project at the 3900 Morse Street location, as
reflected in the City of Denton Incentive Application, for the reporting year thereafter
ending December 31, 20
b. The grantee has supplied documentation of the investment, in the form of receipts,
invoices, checks or other documents deemed acceptable by the City of Denton, in real
and business personal property associated with the project at the 3900 Morse Street
location.
c. The increase in assessed valuation for the year ending December 31, 20 over the
valuation of the January 1, 2016 base year valuation 'is-.
II, Additional Covenants
2.1 Section G. of the Chapter 380 Agreement requires the Company to occupy the
Improvements and maintain their operations continuously for the Agreement's term. Did
the Company comply with the occupancy requirement of Section G. of the Agreement
during the year ending December 31, 20_,_?
❑ YES ❑ NO
2.3 Did the Company timely submit this Certificate of Compliance as required under Section
IVA. of the Chapter 380 Agreement during the year ending December 31, 20 ?
❑ YES ❑ NO
2.4 Did the Company comply with the other provisions of the Agreement during the year
ending December 31, 20 ?
sAeconomic development\incentives\incentive agreements\sally beauty\2016 incentive application\exbibit c certificate of compliance,docx
® YES o NO
III. Payment
3.1 The Chapter 380 Agreement provides annual payments for the 3900 Morse Street property for up
to 3 years based on conditions being met. For years one through three, the Agreement provides for annual
rebates equal to 50 percent of the increase above the base year of the City's ad valorem taxes received for
the previous year, excluding the value of land, inventory or vehicles.
3.2 The City property taxes paid for January 1, 20 valuation are:
3900 Morse
Real Property, _
Business Personal Propeily
3001 Colorado
Real Property y
Business Personal Property
3.3 Please attach the most recent Property Tax Notices.
I, the authorized representative for Sally Beauty Supply, LLC, hereby certify that the above
information is correct and accurate pursuant to the terms of the Agreement. I further certify that
the Company has fully complied with the Chapter 380 Agreement during the year ending December
31, 20 , including compliance with the City of Denton Code of Ordinances, Texas Department
of Public Safety Regulations, and other applicable federal, state, or local law.
SALLY BEAUTY SUPPLY, LLC
Signature: _
Printed Name:
Title:
Date:
Certificate of Compliance Page 2 of 2
Exhibit D
AUTHORIZATION
Page 13
SALLY BEAUTY SUPPLY LLC
UNAMIMOUS WRITTEN CONSENT
OF THE SOLE MEMBER
IN LIEU OF ANNUAL MEETING
as of August 2, 2016
Pursuant to the provisions of Section 18-302(d) of the Delaware Limited Liability Company
Act, the undersigned, being the sole member (the "Member") of Sally Beauty' Supply LLC, a Delaware
limited liability company (the "Company"), hereby waives notice of meeting and consents to the
taking of each action set forth below as if an actual meeting had been held on the date hereof and
instructs the Secretary of the Company to file this written consent in the minute book of the Company.
The following actions shall constitute the valid action of the Member and shall have the same force
and effect as if such actions had been authorized and taken at a formal meeting duly convened and held
on the above date.
WHEREAS, the Company owns the building and real property located at 3900 Morse Street,
Denton, Texas (the "Property"); and
WHEREAS, the Member considers it to be in the best interest of the Company to enter to into
an Economic Development Program Grant Agreement with the City of Denton, a Texas municipal
corporation (the "City of Denton"), effective as of August 2, 2016, for the purposes and consideration
stated therein with respect to the developinent of said 11ropeny, as detailed on the attached Exhibit A
(the "Agreement").
NOW, THEREFORE, BE IT RESOLVED, that the Agreement and any ancillary documents
related to the Agreement, hereby are, approved for all purposes; and be it further
RESOLVED, that the officers and Members be, and each of them hereby is, authorized to do
or cause to be done, any and all acts and to execute and deliver any and all agreements, undertakings,
consents, documents, and certificates as in their opinion, or in the opinion of counsel to the Company,
may be necessary, appropriate, or desirable to carry out the terms and intent of the foregoing
resolutions, including, but not limited to, the execution of the Agreement by Christian A. Brickman,
the Chief Executive Officer of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed his name on behalf of the
Members of the Company, as of the date first written above, in attestation to the accuracy of the
foregoing written consents and of his approval of all actions taken as recited therein.
SALLY HOLDINGS LLC,
a Delaware limited liability company
By:
Matthew O. Haltom, Senior Vice President, General
Counsel and Secretary
Oro 01 [W 11 DLTJ Of X13 WO I D1
This Economic Development Program Grant Agreement ("Agreement") is made and entered into
as of the effective date provided for below, by SALLY BEAUTY SUPPLY LLC (the
"Grantee"), a Delaware corporation, and the CITY OF DENTON (the ty"), 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, Grantee is contemplating the development of that certain real property
located at 3900 Morse Street, Denton, Texas and as more particularly described in Exhibit A
attached hereto and made a part hereof by reference (the "Property"); and
WHEREAS, Grantee desires to complete an interior remodel of the Property to improve
the existing facility within the City to employ at least 250 people, creating approximately 80 new
or relocated jobs on or before March 2017 with an average annual wage of $51,800 as described
herein and an estimated Capital Investment of approximately $7.5 Million ("Project"); and
WHEREAS, on the 8 1h day of December, 2015, Grantee 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 0 (the "Application for Economic Development Incentives"); and
WHEREAS, on the 9th day of March, 2016, the Economic Development Partnership
Board ("EDP board") reviewed the Grantee's Application for Economic Development Incentives
in accordance with the City of Denton's Tax Abatement and Incentive Policy, and the EDP board
found that the Project meets the qualifications for a tax incentive and recommended approval of
the incentive as outlined herein unanimously (8-0); 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, increase employment, retain existing
WiAss, zTd-wHl-s� �*Ae-,ievelon-uettzctivity withi-ii. the Citv of Denton for the benefit of the
181RIM11
NOW, THEREFORE, the City and Grantee for and in consideration of the Property and t
promises contained herein do hereby contract, covenant and agree as follows: I
I.
CONDITIONS OF THE GRANT
A. In consideration of this Agreement, the retention of the Grantee's ongoing busines
and investment within the City of Denton, the planned improvements of an interior remod9J
at the Property, the creation of new jobs within the City, and subject to the Grantee meeting all
the terms and conditions of the Grant as set forth herein, the City hereby grants the following:
I A Grant equal to 50% of City ad valorem taxes attributable to Improvements, as defined
herein, resulting in an increase of assessed value, above the base year of January 1, 2016,
solely from the Property located at 3900 Morse Street as determined by the Denton Central
Appraisal District, of real property improvements to (excluding land value) and tangible
personal property (excluding inventory, vehicles and supplies) located on the Property (the
"Grant").
2. A condition of the Grant is that the combined assessed valuation of the real property
Improvements (excluding land) and tangible personal property (excluding inventory,
vehicles and supplies) on both the Property and the Sally Beauty headquarters facility
located at 3001 Colorado, Denton, Texas (this does not include Sally Beauty retail stores)
("properties"), must be at least $28,600,000 in assessed valuation, as determined by the
Denton Central Appraisal District, of the properties, for a period of three years
commencing the first year following receipt by Grantee of the new certificate of
occupancy ("CO") for the Property, based on the Improvements completed after the base
year of January 1, 2016, If the assessed value of these properties, as determined by the
Denton Central Appraisal District, is less than $28,600,000, there will be no Grant
payment during that year.
2. A condition of the Grant is that throughout the Term of the Grant, beginning March 1,
2017, the Grantee shall employ a minimum threshold of 250 jobs before the end of 2017,
including 80 new or relocated jobs, with a straight average annual wage of $51,800 at the
Property, exclusive of benefits. Should the Grantee employ less than the minimum
threshold of 250 jobs before the end of 2017, or fail to provide a straight average annual
wage of $51,800, excluding benefits, the grant payment will be reduced by the percent
decrease of the actual employment or the actual wage bears to the threshold set within this
Agreement. For example, if the employment number equals 225, which is 10% less than
the 250 jobs threshold, the Grant payment will be reduced by 10%. Or, if the average wage
equals $46,620, which is 10% less than the average wage threshold, the Grant payment
will be reduced by 10%.
B. A condition of the Grant is that, by December 31, 2017 (subject to force majeure delays
not to exceed 180 days), Grantee shall have made Improvements on or to the Property, which
result in an increase in the assessed values, as determined by the Denton Central Appraisal District,
as contemplated by Section I.A. 1. However, prior to the expiration of the said 180 day period,
the City, in its sole reasonable discretion, shall review the cause of such failure to make such
improvements to determine whether an additional extension of the said time period should be
granted. In the event the City determines that an additional extension of the 180 day period is
appropriate, the City may grant such additional time for the making of improvements as it, in its
sole reasonable discretion, deems appropriate. For the purposes of this paragraph, the term
"force majeure" shall mean any circumstance or any condition beyond the control of Grantee, as
set forth in Section XIV "Force Majeure" which prevents the above-mentioned thresholds or
time restraints from being met.
C. The terms "Improvements" or "Contemplated Improvements" are defined as the
construction, renovation, remodeling and equipping of the Property including but not limited to
(1) costs related to the development and improvement of the real estate, including, without
limitation, construction costs and design and engineering costs; (2) tangible personal property
located on or at the Property owned or controlled by Grantee, excluding inventory and supplies.
The kind and location of the Contemplated Improvements is more particularly described in the
Application f•r Economic Development
D. A condition of the Grant is that the Contemplated Improvements be constructed and the
Property be used substantially in accordance with the description of the project set forth in the
Application for Economic Development Incentives.
E. A condition of the Grant is that throughout the term of the Grant, the
Contemplated Improvements shall be operated and maintained for the purposes set forth herein
so that the use of the Property shall be consistent with the general purpose of encouraging
development or redevelopment of the City except as otherwise authorized or modified by this
Agreement.
F. The City shall have the right to terminate the Grant if the Grantee does not occupy the
Contemplated Improvements continuously (subject to force majeure) for the term of the
Grant for the purposes set forth in the Application for Economic Development Incentives. In
the event of such termination, the Grantee shall refund to the City fifty percent of Grant
payments for the year in which Grantee ceases to occupy the Property, and Grant payments for
future years shall be terminated.
G. The City and Grantee agree to comply with all the terms and conditions set forth in
this Agreement.
II.
GENERAL PROVISION
A. 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 the Grantee under this
Agreement through ordinances or regulations (whether now or hereafter in effect).
III.
ADDITIONAL TERMS AND CONDITIONS OF GRANT
A. Subject to the terms and conditions of this Agreement, the City hereby agrees to pay
to Grantee, on an annual basis, after the first assessment following receipt by Grantee of the
new certificate of occupancy for the Property, an amount equal to 50% of the difference
between: (a) the then current City ad valorem taxes for the Property and the Improvements,
minus, (b) City ad valorem taxes payable for the Property and improvements as of January
1, 2016, (with the resulting payments known as the "Annual Payments"), such Annual
Payments to be subject to the terms and conditions provided in this Agreement.
B. Grantee 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 or controlled by Grantee 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 not to exceed three (3) 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 1st of the
year following the calendar year in which a certificate of occupancy is issued by the City
for the Property (the "Beginning Date"), and, unless sooner terminated as herein provided,
shall end after the third 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 I for the respective subsequent
years.
D. Grantee shall comply with local taxes, fees, and permits directly affecting the City of
Denton, such as local sales/use taxes, local permits, use of public easement, and their associated
fees, subject to reasonable dispute by Grantee.
IV.
RECORDS, AUDITS, AND EVALUATION OF PROJECT
A. Grantee shall provide access and authorize inspection of the Property by authorized
City employees and allow sufficient inspection of financial information to insure that the
Improvements are made and the threshold has been met according to the specifications and
conditions of this Agreement. Such inspections shall be done in a way that will not interfere
with Grantee's business operations or violate any laws, including any rules or regulations
promulgated by the Securities and Exchange Commission or the New York Stock Exchange.
The City shall, on an annual basis, evaluate the Project to ensure compliance with this
Agreement. Grantee shall provide information to the City on a Certificate of Compliance form
provided by the City as Exhibit C for the evaluation. The information shall include, without
limitation, an inventory listing the kind, number, and location of and the estimated total
investment value of all improvements to the property, including the value of all buildings and
other structures and permanent improvements installed, renovated, repaired or located on the
Property.
V.
FAILURE TO MEET CONDITIONS
In the event (i) Grantee or the owner of the Property allow their ad valorem real property taxes
owed to the City with respect to the Property or Building, or ad valorem taxes owed to the City
with respect to any tangible personal property owned or controlled by the Grantee and which
are located on the Property 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, 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 has not been met after
notice and reasonable opportunity for Grantee to cure such failure. In the event that a Condition
Failure occurs, the City shall give Grantee 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
Grantee has commenced and is pursuing the cure or satisfaction of same, then after first advising
the City of efforts to cure or satisfy same, Grantee may utilize such additional time as may be
reasonably required to cure such Condition Failure. 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 Payment shall be terminated
with respect to the year in which notice of the Condition Failure is given and for all future years.
Provided, however, that prior to the expiration of the said applicable notice and cure periods, the
City, in it its sole reasonable discretion, may review the cause of such failure and may determine
whether an extension of the said time period(s) shall be granted. In the event the City determines
that an extension of the said time period(s) is appropriate, the City may grant such additional
time as it, in its sole discretion, deems appropriate.
VI. ASSIGNMENT
This Agreement and Grantee's rights and obligations hereunder may not be assigned without prior
notice to the City, unless such notice is prohibited by contract or applicable law in which case
notice shall be provided as soon as allowable. In the event that Grantee ceases to operate its
business on the Property, this Agreement shall terminate and all future obligations of the City, as
set forth herein, shall terminate and be of no further force and effect.
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 prepaid
or by hand delivery:
SALLY BEAUTY HOLDINGS, INC.: Paul Myrick
Vice President, Real Estate
Sally Beauty Holdings
3001 Colorado Blvd. Denton, TX 76210
Matt Haltom
Senior Vice President, General Counsel and Secretary
Sally Beauty Holdings
3001 Colorado Blvd. Denton, TX 76210
CITY:
City Manager
City of Denton
215 E. McKinney
Denton, Texas 76201
VIII.
CITY COUNCIL AUTHORIZATION
rehotL
This Agreement is authorized by the City Council at its meeting on the day of, -,Z0+67'
authorizing the Mayor to execute this Agreement on behalf of the City.
IX. AUTHORIZATION
Grantee represents that it has the corporate right, power and authority necessary to execute,
deliver, and perform its obligations under this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated herein have been duly and validly authorized by
all necessary corporate and member action. Evidence of such right, power and authority shall
be attached as Fxhibit 1).
In the event any section, subsection, paragraph, sentence, or phrase is held invalid, illegal or
awiWilai Ai Wiwi 4,116 1111111 Ail it,4,-W, A Wm-- i ii I
X1.
Any party hereto may request an estoppel certificate from another party hereto so long as t
tj
certificate is requested in connection with a bona fide business purpose. The certificate sh
include, but not necessarily be limited to, statements that this Agreement is in full force a
effect without default (or if default exists the nature of default and curative action, which shou
be undertaken to cure same), the remaining term of this Agreement, the levels and remaim
term of the Annual Payments in effect, and such other matters reasonably requested by t
party(ies) to receive the certificates.
rNMOMMIM8
Grantee, as a party to this Agreement, shall be deemed a proper and necessary party in a
litigation questioning or challenging the validity of this Agreement or any of the underlyi
ordinances, resolutions, or City Council actions authorizing same and Grantee shall be entitled
intervene in said litigation. I
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.
FESIMMIMMM11111
If, because of flood, fire, explosions, civil disturbances, strikes, war, acts of God, or other
causes beyond the control of either party, either party is not able to perform any or all of its
obligations under this Agreement, then the respective party's obligations hereunder shall
be suspended during such period but for no longer than such period of time when the party is
unable to perform
XV.
NO JOINTNOTHING CONTAINED
INTENDED PARTIES TO CREATE A PARTNERSHIP 1. JOINT VENTURE
BETWEEN PARTIES, AND ANY IMPLICATIONTO THE CONTRARY
HEREBY EXPRESSLY DISAVOWED. IT IS UNDERSTOOD AND AGREED THAT
THIS AGREEMENT DO E S NOTR 1ENTERPRISE,
R "R 1' DOES IT
WHATSOEVER.APPOINT EITHER PARTY AS AN AGENT OF THE OTHER FOR ANY PURPOSE
OTHERWISE SPECIFICALLY PROVIDED HEREIN,
NEITHER PARTY SHALL IN ANY WAY ASSUME ANY OF OF
THE OTHER FOR ACTS OF THE OTHER OR OBLIGATIONS OF THE OTHER.
JOINTFURTHER, THIS AGREEMENT DOES NOT CAUSE OR SUPPORT ANY TYPE OF
! BETWEEN THE PARTIES.
PAST AND FUTURE OFFICERS, ELECTED OFFICIALS, EMPLOYEES,1
AGENTS EXPRESSLY DO NOT ASSUME ANY RESPONSIBILITIES OR
I BILITIES TO ANY THIRD PARTY IN CONNECTION"'!
OR THE DESIGN, CONSTRUCTION, OR OPERATION OF ANY PORTION OF THE
EMPROVEMENTS.
This Agreement is the entire agreement of the parties and may only be modified by a written
instrument executed by both parties.
XVII.
EFFECTIVE DATE
This Agi'ee.nient is effec(ive as of the � - day of � , 2017.
CITY OIC DEN`I'O , TEXAS
TODD l IILL.IVIl'1N, CITY MANAGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
& , t
BY: k - d, a t j
Page 7 of 8
APPROVED AS TO FORM;
ANITA BURGESS, CITY ATTORNEY
BY:,.'
SALLY BEAUTY SUPPLY LLC
SENIOR PRESIDENT,
COUNSEL R • R
1
•is) 9 1 MUM D M 0 •
The foregoing l conom Develop t �reenient was executed before me on the2 day
fs ecc
of f , 201,E by-. r itim-City Manager of the City of Denton,
11,exa.s, a "Texas indnicipal corporation, on behalf of said Municipal Corporation.
ONE �PN
pu
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N
` 3 ate° 8M EXP o6-27-20'17
1251214
NOTARY ID b
ha
N ne„
Notary Public in and for the
State of Texas
he fore oin Economic Development Program Agreement was executed before me on
the,x I day of_ ' , 2016 by Matthew Haltom, of Sally Beauty Supply, LLC,
on behalf of said limited liability company.
Name: l " � �—k*o
Notary .public in and for the
State of Texas
Page 8 of 8
P.-IM-1111
.�\
Lots 1 and 6, in BLOCK 3, of GOLDEN TRIANGLE INDUSTRIAL PARK, PHASE V, an Addition
to the City of Denton, Denton County, Texas, according to the Plot thereof recorded in
Cabinet C, Page 87, Plot Records, Denton County, Texas.
(Commonly known as 3900 MORSE STREET"
A
The plat hereon is a true and accurate representation of the property as determined -by survey roads
an the ground, the lines and dimensions of said property as being Indicated on the Plat. The size, location
and type of buildings and Improvements are as shown, all Improvements
being within. the boundaries of
the property except as shown, set back from the I properly lines Is as shown, and distance from the
nearest strief or road Is as shown on 'the Plat. There are nalble encro . sehme visible protrusions
"
orapparent easements, ex'
pt as shown on the Plat
OF
I further certify that only :lportran sfi6wn of subject
p,.M4
property -lies within a special flood hazard area
o' W,
according to the. FLOOD INSURANCE RATIfE MAP
for Denton County
unty and Incorporated Areas, Map
........... ..
Number 48121003130, Dated March 30, 1998. (Subject 'j-lei
Vk4LD
Property lies In Zone' A and Zone X approximat PRO
YOR
as shown.)
I
45' D—B (60' R� O� W.)
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0
A, Y -1-11L± - -R
24' B—E
_JCOA�I�C
Lots 1 and 6, in BLOCK 3, of GOLDEN TRIANGLE INDUSTRIAL PARK, PHASE V, an Addition
to the City of Denton, Denton County, Texas, according to the Plot thereof recorded in
Cabinet ■•• 87, Plat Records,os
known as 3900 MORSE STREET"
The plat hereon Is a true and accurate representation of the property as determined by survey made
an the ground, the lines and dimensions of'said property as being Indicated on the Plat. The size, location
Improvements(Commonly
and type of buildings and
the property
streel! or road Is as shown on 'the Plat. There are nq'Nisible
oncroachluen' -1 visible protrusions
Plat.nearest
apparent easements, exce'p't as shown on the
I further certify that •• . subjorect
property 1les within a special flood hazard area
FLOOD57,
according to the- INSURANCE .
for Denton CoUnty and Incorporated Areas, Map
r • u Dated ,•• (Subject•!!
Fi ,, v ED
'• • and Zone X approximate!
Y•
as shown.)
42381- 5 NORTH
ANDMARK
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94 82-4016
SURVEYORS
FAX 0 •
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EXHIBIT .
2014 Tax Abatement Policy
ill Ousi I IM
The City of Denton (City) is committed to the promotion of high quality development in all parts of
the city and to an ongoing improvement in the quality of life for its citizens. Insofar as these
objectives are generally served by the enhancement and expansion of the local economy, the City
will, on a case-by-case basis, give consideration to providing tax abatement or other incentive as a
stimulus for economic development in Denton. It is the policy of the City that said consideration will
be provided in accordance with the procedures and criteria outlined in this document. Nothing herein
shall imply or suggest that the City is under any obligation to provide an incentive to any applicant.
All applicants shall be considered on a case-by-case basis. Incentives will not be considered if
construction of a project already has begun.
Tax abatements, as described in this Policy, will be available for businesses wanting to locate, expand or
modernize, existing or new facilities and structures, including, without limitation, basic industries,
corporate office headquarters or distribution centers, except as this Policy may be limited for property
described in Section 312.211(a) of the Texas Property Tax Code (Vernons Texas Civil Statutes
Annotated, hereinafter referred to as "Tax Code.")
In addition to tax abatements, the City may provide alternative or additional incentives to businesses
utilizing its authority under Chapter 380 of the Texas Local Government Code (hereinafter referred to as
"Chapter 380.") Chapter 380 of the Texas Local Government Code states that a municipality may
establish and provide for the administration of one or more programs for making loans and grants of
public money and providing personnel and services of the municipality, to promote state or local
economic development and to stimulate business and commercial activity in the municipality.
The City of Denton will consider, on a case-by-case basis, the use of grants and loans as incentives to
accomplish one or more of the following economic development objectives:
• Development and diversification of the economy
• Elimination of unemployment or underemployment
• Expansion of transportation or commerce
• Attraction of major investment
• Expansion of primary employment
• Stimulation of agricultural innovation
The City of Denton may establish targeted incentive programs to accomplish one or more of the above
objectives. Such programs could include, but are not limited to:
• Targeted industry cluster or supply chain recruitment initiatives
• Capital grants or loans for start-up and small businesses to promote entrepreneurship
• Special incentive programs within certain boundaries of the City in order to promote infill
redevelopment and attract businesses that meet pre -determined desirable criteria
• Grants to offset costs associated with public infrastructure improvements and/or impact fees
• Cash incentives to gain a competitive position when in direct competition for a project
2014 Tax Abatement Policy
106,1171,11
Requests for tax abatement or other incentives shall be reviewed by the Economic Development
Partnership (EDP) board, on a case-by-case basis unless otherwise directed by City Council, the EDP
board being comprised of two City Council members, two Chamber of Commerce board members, two
representatives from the top twenty taxpayers, one representative from the University of North Texas,
one member with aviation experience, and one member at -large.
The EDP board serves as a recommending body to the City Council regarding whether economic
development incentives should be offered in each individual case. Its recommendation shall be based
upon an evaluation of information submitted in the incentive application and any additional information
requested by the EDP board or presented to the EDP board, The Incentive Application shall be
substantially in the form of Exhibit A of this Policy. All meetings of the EDP board shall be held in
compliance with the Texas Open Meetings Act, Chapter 551 of the Texas Government Code.
The criteria outlined in the Application will be used by the EDP board in determining whether or not it
is in the best interests of the City to recommend that incentives be offered to a particular project.
Specific considerations will include the degree to which the individual project furthers the goals and
objectives of the community as described in the Denton Comprehensive Plan, as well as the relative
impact on growth, employment, expansion of the tax base, economic development and human health
and the environment,
Tax Abatements
New, expanding and modernizing businesses may be considered for a tax abatement if the minimum
threshold, as described in Table I below, is met. Once a determination has been made that a project is
eligible for a tax abatement, the following table will serve as a basis for determining amount and term of
abatement:
TABLE 1: Establishes a framework for considering the length and percentage of abatement
according to assessed property value of improvements and of tangible personal property located on the
real property.
2014 Tax Abatement Policy
VALUE OF STRUCTURE
AND PERSONAL PROPERTY
YEARS OF
PERCENTAGE OF
IN MILLION DOLLARS
ABATEMENT
ABATEMENT
100
10
25%
80
9
25%
65
8
25%
50
7
25%
35
6
25%
20
5
25%
15
4
25%
10
3
25%
5
2
25%
To qualify, companies must meet the minimum threshold of the Policy in the first 24 months from the
execution of the agreement or as specified in the tax abatement agreement.
If upon initial application a project qualifies for tax abatement under the guidelines set forth in this
Policy, the City may consider granting an additional 5% abatement for each one of the following factors
provided, however, that the total tax abatement does not exceed 50% annually or continue for a period
of more than ten years. No applicant may receive credit for more than five of the following factors:
■ The project will occupy a building that has been vacant for at least two years;
• The project will create high -skilled, high -paying jobs as documented by the applicant; (A
breakdown of number of jobs per job classification and entry level wage per classification will
be used to determine eligibility);
■ The project will involve a significant relationship with one of the two universities in Denton;
• At least 25% of the new jobs created by the project will be filled by Denton residents;
• A minimum of 25% of local contractors and local subcontractors will be utilized during
construction of the project;
• The project will provide knowledge-based jobs (at least 25 percent of jobs require college
bachelors degree at entry level);
• The project will donate significant public art to the community. (To qualify, donation must be
approved by Greater Denton Arts Council and City Council);
• The project will donate significant materials/equipment to the public schools (to qualify,
donation must be approved by DISD and City Council);
■ The project will create improvements to the Denton Downtown Implementation Plan area;
® The project will result in the formation of a business park;
• The project is an international or national headquarters facility.
■ The project is a medical manufacturing or research facility.
• The project incorporates significant environmentally sustainable practices that includes:
Leadership in Energy and Environmental Design (LEED) certification, recycling initiatives, the
manufacture of sustainable materials or products that support sustainable industries, or the
incorporation of clean technology.
2014 Tax Abatement Policy
* Renewable Energy will be generated, stored or utilized for the project on an ongoing basis;
* The applicant is committed to actively supporting the Denton Community.
The total tax abatement may not exceed 50% annually for ten years. All abatements are subject to final
approval of the City Council. Even though a project may meet the criteria as set forth in this
Policy, an application may be denied at the discretion of the City. Tax abatement shall not apply to
any portion of the land value of the project. The thresholds as described in Table I are considered
guidelines for establishing the Tax Abatement Agreement terms. However, the City may determine that
a lower or higher percentage and/or a shorter or longer term of abatement may be more appropriate for
an individual project. If the abatement is approved, the City may consider applying all or a portion of
the abatement in the first year or during any shorter period within the term of the tax abatement
agreement. For example, an approved abatement of 25 percent for four years may be applied as 100
percent abatement for one year.
When the City of Denton determines that incentives are required to retain existing businesses, which
propose to improve or redevelop property within the City limits, the Denton City Council may consider
these "special projects" on a case-by-case basis and reserve the right to waive the minimum threshold
and/or exceed fifty percent (50%) in tax abatement. The City of Denton may also take into
consideration as "special projects" the expansion/redevelopment of existing businesses that create new
or additional professional jobs. New or existing businesses that incorporate environmentally sustainable
practices or have a renewable energy component may also be considered "special projects." Abatement
hereunder will only apply to the increased valuation of the improvements over the appraised value of the
property prior to such improvefinents as same is established by the Denton Central Appraisal District the
year in which the tax abatement agreement is executed. The City may also consider other tax incentives
authorized by law.
Chapter 380 Incentives
At times when alternative incentives may be preferable to a tax abatement, the City Council has the
authority under Chapter 380 to create a custom incentive in order to accomplish specific economic
development goals. Chapter 380 incentives will be considered on a case-by-case basis, and may be
considered for one or more of the following criteria:
• A certain number of net new jobs with wages above Denton's median household income
• The relocation of a company that promotes the growth of targeted industry clusters such as high-
tech companies, aviation/aerospace industry, or supply chain clusters that support Denton's
existing primary employers
• Incentives for businesses that cause infill redevelopment or other desirable development
objectives
Any other activity which the City Council determines meets a specific public purpose for
economic development
Local contractors and local sub -contractors refers to vendors that have their "principal office or place
of business," as reported to the Texas Secretary of State Office, located within Denton City Limits or
Page 4 of 18
2014 Tax Abatement Policy
Extraterritorial Jurisdiction (ETJ). The minimum requirement of 25%, to be eligible under this
consideration, will be based on the estimated construction valuation of the project.
Knowledge-based jobs are defined as occupations which:
• Require specialized and theoretical knowledge, usually acquired through a college education
or through work experience or other training which provides comparable knowledge;
• Require some research, analysis, report writing and presentations;
• Require special licensing, certification, or registration to perform the job task;
A Business Park is defined as a multi -building, multi -tenant, master planned complex of approximately
one million square feet or more under roof, constructed to house manufacturing, distribution, assembly,
and office facilities.
Leadership in Energy and Environmental Design (LEED) certification is a voluntary
internationally recognized green building certification system, with verification by a third -party that a
building or community was designed and built using strategies aimed at improving performance
across the following metrics:
• energy savings
• water efficiency
• CO2 emissions reduction
• improved indoor environmental quality
• stewardship of resources.
The certification levels consist of the following: Basic, Silver, Gold and Platinum and are weighted
on a 100 point system, The LEED system measures: innovation in design; sustainable sites; water
efficiency; energy and atmosphere; materials and resources; indoor environmental quality; and
locations and linkages.
The manufacture of sustainable materials or products may include but is not limited to: biobased,
recyclable and reclaimed goods. Denton is located in an air quality nonattainment region designated
by the Environmental Protection Agency for air pollution levels that continually exceed national
standards. Products and equipment that support sustainable industries or clean technologies that
reduce environmental pollution are encouraged and may qualify for consideration under this section.
Community support and involvement may include but is not limited to monetary or active investment in
local non profits, public institutions or community organizations. Membership and participation in a
Denton chamber of commerce is an example that may qualify under this consideration. The EDP board
will consider criteria proposed by the applicant, review and make a recommendation on the eligibility of
the applicant's community support and recommend whether an additional five percent should be added
to the overall incentive percentage.
When the City determines that abandoned property may require additional incentives to promote
economic development that generally satisfies the requirements of this Policy, the City may waive the
minimum threshold and/or exceed fifty percent (50%) in tax abatement, or consider other tax incentives
for special projects to redevelop abandoned buildings consistent with existing law. For the purpose of
this Policy, an abandoned building is defined as a building that has been identified as being suitable for
commercial or industrial development, has been vacant for a minimum of five -years or has substantially
declined in appraised value. Abatement would only be considered on the increased valuation of the
improvements in each year covered by the tax abatement agreement over the value of the property for
Page 5 of 18
2014 Tax Abatement Policy
the year in which the tax abatement agreement is executed. The City may also consider other tax
incentives authorized by law.
Preli'mirlaVAJ2L�
L lie-ation
L'.
Any person, organization or corporation desiring that the City consider providing incentives to
encourage location or expansion of facilities within the limits of the jurisdictions shall be required to
comply with the following procedural guidelines. Nothing within these guidelines shall imply or
suggest that the City is under any obligation to provide an incentive to any applicant.
A. Applicant shall complete the attached "Incentive Application."
B. Applicant shall prepare a map or other documents providing the following:
• precise location of the property and all roadways within 500 feet of the site
• existing uses and conditions of real property
• proposed improvements and uses
• any proposed changes in zoning
• compatibility with the Denton Comprehensive Plan and applicable building codes and
City ordinances.
• A complete legal description.
C. Applicant shall complete all forms and information detailed in the Application and submit
all information to the City Manager (or his/her designee), City of Denton, 215 E. McKinney,
Denton, TX 76201.
D. All information in the application package detailed above will be reviewed for completeness
and accuracy. Additional information may be requested as needed.
E. The application will be distributed to the appropriate City departments for internal review
and comments. Additional information may be requested as needed.
R Copies of the complete application package and staff comments will be provided to the EDP
board.
G. Fiscal agents of the City will review the application for comments and recommendation.
Additional information may be requested as needed.
Consideration of the Application
H. The EDP board will consider the application at a regular or special -called meeting(s),
Additional information may be requested as needed.
NUMCM
2014 Tax Abatement Policy
1, The recommendation of the EDP board will be forwarded, with all relevant materials, to the
City Council.
J. If the City Council decides to grant a tax abatement, it shall call a public hearing to consider
establishment of a tax reinvestment zone in accordance with Section 312.201 of the Tax
Code. The reinvestment zone must meet one or more of the criteria of Section 312,202 of
the Tax Code.
K. The City Council may consider adoption of an ordinance designating the area described in
the legal description of the proposed project as a commercial/industrial tax abatement zone.
L. The City Council may consider adoption of an ordinance or resolution approving the terms
and conditions of a contract between the City and the applicant governing the provision of
the tax abatement or incentive and the commitments of the applicant, including all the terms
required by Section 312.205 of the Tax Code and such other terms and conditions as the City
Council may require. Should the commitments subsequently not be satisfied, the tax
abatement or other incentive shall be null and void (unless the tax abatement agreement
provides for a recapture of the property tax revenue lost proportionate to a partial failure to
meet the minimum thresholds set forth in the agreement) and all abated taxes or other
incentive shall be paid immediately to the City of Denton. Provisions to this effect shall be
incorporated into the agreement.
N. The City reserves the authority to enter into tax abatement agreements at differing
percentages and/or terms as set forth in the guidelines of this Policy, consistent with the
requirements of the Tax Code. The City also reserves the authority to enter into incentive
agreements under Chapter 380 of the Texas Local Government Code.
Any incentive agreement will address various issues, including but not limited to, the following:
1. General description of the project
2. Amount of the tax abatement and percent of value to be abated each year
3. Method of calculating the value of the abatement
4. Duration of the abatement, including commencement date and termination date
5. Legal description of the property
6. Kind, number, location and timetable of planned improvements
7. Specific terms and conditions to be met by applicant
8. The proposed use of the facility and nature of construction
9. Contractual obligations in the event of default, violation of terms or conditions, delinquent
taxes, recapture, any decrease in valuation, administration and assignment
Annual Evaluation
Upon completion of construction and/or other threshold criteria, the City Council shall receive from the
City Manager (or his/her designee) an annual evaluation of each incentive to insure compliance with the
agreement and to report possible violations of the agreement to the appropriate taxing entities. After
new tax base numbers are received in July of each year, the City Manager and his staff will have ninety
(90) days to review and prepare a breakdown of those figures.
Page 7 of 18
2014 Tax Abatement Policy
Local Businesses and Historically Undei-titilized 13"sinesses
Businesses receiving an incentive are asked to use diligent efforts to purchase all goods and services
from Denton businesses whenever such goods and services are comparable in availability, quality and
price.
The City of Denton also encourages the use, if applicable, of qualified contractors, subcontractors and
suppliers who are historically underutilized businesses based on information provided by the General
Services Commission pursuant to Chapter 2161 of the Government Code. In the selection of
subcontractors, suppliers or other persons or organizations proposed for work on this Agreement, the
OWNERS agree to consider this Policy and to use their reasonable and best efforts to select and
employ such companies and persons for work on this Agreement.
Job Recruiting from Low -Moderate Income Census Tracts
Businesses receiving incentives are asked to endeavor to make available, or endeavor to cause lessees
or assignees to make available, full-time or part-time employment with on-the-job training for Denton
citizens. In this effort, the business, lessee or assignee is encouraged to recruit from the low -moderate
income Census tracts as further defined by the U.S. Department of Housing and Urban
Development's (HUD) Qualified Census Tracts (QCT) map shown in Figure 1. HUD defines QCTs
as "census tracts in which one-half or more of the households have incomes below 60 percent of the
area median income or the poverty rate is 25 percent of [or] higher.
Page 8 of 18
FIGURE 1: DENTON, TEXAS
2010-2011 Qualified Census Tracts
a malm ty"kie01 Poky neydommot and
a-LJZI UEER
Page 9 of 18
Tract Outline
Qualified census Tracts (2010-2011)
2014 Tax Abatement Policy
E-PTUBIT A
The City of Denton
F-rce-ftiye I I I
About the Application...
The Incentive Application provides the City with specific information on the project. The information requested
in the Application is designed to address the criteria developed within the City of Denton's Incentive Policy. The
information serves as the basis for fiscal analysis and overall project evaluation. This evaluation is provided to
the Economic Development Partnership (EDP) board and Council Members and serves as a source document
during EDP board and City Council deliberations.
The Application and the Agreement..
Specific information from the Application (such as value of new investment and employment commitments) is
incorporated into the Incentive Agreement. In fact, the Application is an attachment to the Agreement. Since the
Agreement is a binding contract, it is important that each question on the application be atis ' wered in full and as
realistically as possible. Simply put, the application is part of the process from start to finish so you'll want to
make sure you're comfortable with the contents.
When Is The Application Final?
The answer to this question is very simple: When you tell us, "It's final." It is not uncommon for a business
entity to submit numerous Applications as drafts for informational and evaluative purposes only. As
conversations continue, the business entity will submit a finalized version of the Application that includes all of
the commitments agreed to during the discussions.
What about Confidentiality?
Section 312.003 of the Texas Tax Code makes confidential information provided to the City as a part of this
application that describes the specific processes or business activities to be conducted or the equipment or other
property to be located on the property. This information is not subject to public disclosure until the incentive
agreement is executed. Section 522.131 of the Texas Government Code (Texas Public Information Act) makes
confidential information which relates to economic development negotiations between the City and a business
prospect that the City seeks to have locate, stay or expand in or near the territory of the City. The information
must relate to a trade secret of the business prospect, commercial or financial information which the business
prospect can demonstrate based on specific factual evidence that disclosure would cause substantial competitive
harm to the person from whom the information was obtained or information about a financial or other incentive
being offered to the business prospect by the City or by another person. Information about a financial or other
incentive being offered to the business prospect is required to be disclosed when an agreement is made with a
business prospect. The City is subject to disclosing most records and documents upon request under the Public
Information Act. Accordingly, please clearly indicate and mark any information you consider proprietary.
This would include anything in your application which you consider a trade secret, commercial or
financial information which you can demonstrate by specific factual evidence that would cause substantial
competitive harm if disclosed, information which describes the specific processes or business activities to
be conducted or the equipment or other property for which the incentive is sought, any financial or other
incentive you may be seeking from the City or any other information you deem to be confidential under
the law.
Who is Authorized To Sign the Application?
Because the Application itself is non-binding, the person signing need not be the property owner or even an
individual duly authorized to sign on behalf of the property owner. However, if an Agreement is reached, the
Application will be an attachment to the Agreement and its contents will be binding through the authorized
signature required on the Agreement.
2014 Tax Abatement Policy
NIII
City ol'Denton
0
Incentive Application
City of Denton
Department of Development Services, Economic Development Division
215 E. McKinney St.
Denton, Texas 76201
(940) 349-7776
(940) 349-8596 FAX
www.citvOrdentoll.colil
Caro I i n c, Bootlif ij(� Llyq LcIgnton.coni
Page 11 of 18
2014 Tax Abatement Policy
Company or Project Name
Mailing Address
Sally Beauty Holdings
Sally Beauty Holdings - World Headquarters
3001 Colorado Blvd
Denton, TX 76210
Telephone 940/898-7500 Fax No.
Website www.sallvbeautvholdings.com
Contact Name
Title
Mailing Address
Paul Myrick
VP Real Estate
same as above
Telephone 940/297-4499 Fax No. 940/381-9022
Email Address
pmyrlckCa�sallVbeauty.com
2. Provide a chronology of plant openings, closing and relocations over the past 15 years.
Developed and moved into the above stated HQ office facility in 2005, continued to own and now use former building at 3900 Morse Street.
The corporation operates approx 5,000 store locations world-wide as a leading speciality retailer and distributor of professional beauty
supplies with revenues of $3.8 billion annually. Open between 100-150 new stores annually and operate over ten (10) distribution centers.
3. Provide a record of mergers and financial restructuring during the past 15 years.
Continue to acquire smaller operations and companies to grow our overall presence and network, however, all corporate functions
are supported from the offices location in Denton.
4. Will the occupants of the project be owner or lessee? If lessee, are occupancy commitments already existing?
Sally Beauty Holdings will continue to own and occupy the building (3900 Morse Street) as well as 3001 Colorado Blvd both here
in Denton.
5. Is the project a relocation of existing facility or a new facility to expand operations? If relocation, give
current location.
The project is a complete interior remodel of the existing facility at 3900 Morse Street to continue to increase our employee base.
6, If an existing Denton business, will project result in abandonment of existing facility? If so, the value of the
existing facility will be subtracted from the value of the new facility to arrive at total project value.
Page 12 of 18
2014 Tax Abatement Policy
No abandonment is a part of this remodel plan. We will only continue to grow our employee base here now totalling approx
1,000 employees in both facilities as well as managing 27,000 employees worldwide,
7. Property Description.
- Attach a copy of the legal description detailing property's metes and bounds. See attached
- Attach map of project including all roadways, land use and zoning within 500 feet of site. See attached
8. Current Value, Attach copy of latest property tax statement from the Denton County Central Appraisal
District Include both real (land and improvements) and personal property). See attached
9. Increased Value/Estimated Total Cost of Project.
Structures $ 4,428,000.00 Site Development $ 94,000.00
. . ..... —
Personal Property $ 2,600,000.00 —Other Improvements $ 368,000.00
10, Indicate percent of tax abatement and number of years requested,
.............. —1
Percent Requested Years Requested
List any other financialincentivesthis project will request/receive None
Estimated Freeport Exemption $
Estimated Electric Utility Industrial Development Rider $
Estimated Water/Wastewater Infrastructure Assistance $
................
Chapter 380 Incentive
11, 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.
The project is a complete remodel of the interior office portion of the builidng at 3900 Morse Street. The scope of the project
includes, new windows, flooring, walls, ceiling, interior lights, cafe/dining area, breakrooms, furinture, data and phone cabling, lobby,
HVAC ducting system, roof repairs, HVAC unit repairs, electrical switch replacement/upgrade, restroom upgrades, as well as
later improvements to the parking lot, landscaping and over time will continue to convert the warehouse portion of the structure to
office use.
12. Describe any off-site infrastructure requirements:
• Water None
0 Wastewater None
2014 Tax Abatement Policy
0 Streets None
• Drainage None
• Other None
13. Project Operation Phase. Provide employment information for the number of years incentive is requested.
At Project
Existing Start Date At Term of
Employment Information Operation (mo/yr) Incentive
(if applicable)
A. Total number of permanent, full-time jobs i
200 1 Feb 2016 150
B. Employees transferred from outside Denton 50 Feb 2017 250
. ..............
C. Net permanent full-time jobs (A. minus B.) 150 350
E. Total annual payroll for all permanent, full-time $6.51M $12.81M
jobs (A.)
F. Types of jabs created. List the job titles and number of positions in each category that will be employed
at the facility. Provide average wage for each category.
Accounts Receivable Credit —&'C.' io-16—ctio—ns FCustomer Service Inside sales / Ecommerce J Web Content Deparlments with additional
acrounfing.jdfijjLaL)ce departments added in 2016-20,17- 85 customer service !ivp--, 32 Credit & Collection Reps - 8 Supervisors -
6 Depi"Managers
6bepi"Wariagers - 4 Area Directors with additional roles being added within 2016-2017 - at the'6ompletion of the remodel project there
should be approximately 400 full time positions in the facility. The base salary ranges for these positions is $27k to�1 riding on position
G Indicate the number ofshift's tile
pst�ieot rvl" cGlig—MIC
Standard busines hours for most positions - 7am to 6pm generally
00��
2014 Tax Abatement Policy
H. Estimate annual utility usage for project:
Electric $173.673 kWh � Water sewer & Water $18,857 gpd
Wastewater gpd I Gas$ -17,873 mcf
. ............. . ..................... —.—I
14, Describe any other direct benefits to the City of Denton as a result of this project (e.g., sales tax revenue or
project elements identified in Tax Abatement Policy, Section 111). NA
15. Is property zoned appropriately? VYes No
Current zoning, EC -I (Employment Center Industrial)
Zoning required for proposed project. current use remains
Anticipated variances. none
16. Is property platted? /Yes No
.......w . ........
Will replatting be necessary Yes VNo
17. Discuss any environmental impacts created by the project. None, use remains as is
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 of application(s).
. ............
Builidng permit and fire alarm / system permit
B. Provide record of compliance to all environmental regulations for the past five years.
-----------
N/A
18. Provide specific detail of any businesses/residents that will be displaced and assistance that will be available
from the requesting company,
N/A
M Provide description of any historically significant area included within the project's area as determined by the
Historic preservation Officer. If any, give detail of how the historically significant area will be preserved.
N/A
2014 Tax Abatement Policy
20, Justification for Incentive Request: Substantiate and more fully describe the justification for this request.
Include the amount of the incentive requested and show how it will contribute to the financial viability of the
project. Submit attachments if necessary.
Sally Beauty has been based in Denton since 1982 when we had 119 stores, today we have over 5,000 stores world-wide. We have approximately
1,000 full time employees based in Denton and are in the top 7 private employers in the City. We are supporters of The Children's Advocacy Center,
American Heart Association Go Red for Women. Adopt a Child through Hope, Denton Food Bank, national supporter of United Way and for the past
5 years the presenting partner for the North TX Susan G Kamen Race for the Cure. We are additionally a Founding Member of UNT Global Digital
Retailing Reseamn Uonter as we as hold a seat on the en on Chamlo6rZfV6-mmerce as well as the Women inCornme �celhdt!USports wdmen
owned business in Denton County.
Incentive Policy.
Occupies building vacant for at least 2 years Donation of materials to public schools
Project creates high -skilled, high -paying jobs Improvements to Downtown
___1--_-- . . ..............
V Significant relationship with universities Project forms business park
------ . .. . .... - —F . ......
V 25% of new jobs filled by Denton residents International or national headquarters
25% local contractors to be utilized Medical manufacturing or research facility
V 25% of jobs are knowledge-based Environmentally sustainable practices used
— - — - - ____ - - - ------- — -- — ------
Donation of significant public art Renewable Energy generated/stared/utilized
. .......... .... ___ ...........
V Community support and involvement: Attach description of community involvement
22, Attach a copy of the latest audited financial statement or, in the case of a new project,
a business plan.
IMMEM ........
identify type and provide a brief description)?
installing LED lights throughout the office portion of the building
24. Applicants seeking LEED certification must complete the Green Building Application for Tax Abatement
(Exhibit B of the policy). N/A
2014 Tax Abatement Policy
DID) IXQJ 31 Oki 9 13 EW1,74 V LOWIEW-0190 V k*411 I
Property Owner
Company or Project Name
MOTU=
Telephone Fax No,
Website
Contact Name
Title
Mailing Address
Telephone Fax No.
Email Address
Project location address:
. . .......... .... .
. ...........
Provide documentation that the project has been registered with the U.S. Green Building Council,
Provide a description of the project (please include the building size, number of occupants and estimated
budget).
Attach a preliminary Leadership in Energy and Environmental Design (LEED) Scorecard illustrating how
project will achieve the LEED certification.
Level of Certification:
. . ..................................... . .
Number of Points:
Nff!��
2014 Tax Abatement Policy
This Incentive Application is submitted with the acknowledgement that additional information may be required.
Authorized Signature
Date
CERTIFICATE OF COMPLIANCE
sAcconoinic development\incentives\incentive agree rn ents\sal ly beauty\2016 incentive application\380 agreement\exbibit c certificate of
compliance 10-24-16,docx
Company: Sally Beauty Supply LLC Reporting Year: January I - December 31, 201
Contract Year No. of 3
Investment
1.1 Section I.A. 1. of the Chapter 3 80 Agreement requires the capital investment to generate a
minimum of assessed real and business personal property valuation in the amount of
$28,600,00 in valuation for the 3900 Morse Street and 3001 Colorado properties.
a. The Grantee has invested $ -- --*-* in real and business personal
property associated with the project at the 3900 Morse Street location, as reflected in
the City of Denton Incentive Application, for the reporting year thereafter ending
December 31, 20
b. The grantee has supplied documentation of the investment, in the form of receipts,
invoices, checks or other documents deemed acceptable by the City of Denton, in real
and business personal property associated with the project at the 3900 Morse Street
location.
c. The increase in assessed valuation, at the 3900 Morse Street location, for the year
ending December 31, 20-11-111111-- over the valuation of the January 1, 2016 base year
valuation is:
2.1 Section I.A.2. of the Chapter 380 Agreement provides that the Company shall employ at
least 250 jobs at the 3900 Morse location.
2.2 Number of existing jobs retained as of December 31, 20_: . . . . . . . . ..................... . . .. . . .... . . ......... .
2.3 Number of new jobs created and filled as of December 31, 20 .................... - --.
2.4 As of December 31, 20_, did the number of jobs fall below the numbers required under
Sec. I.A.2. of the Agreement?
Ei YES o NO
2.5 Section I.A.2. of the Chapter 380 Agreement requires that the average annual wage,
excluding health insurance and retirement benefits, of the jobs at the 3900 Morse location t*
be at least $51,800. The average annual wage, excluding health insurance and retirement
benefits, of the jobs at the year ending December 31, 20 is:
sAeconornic development incentives\incentive agreements\sa I ly beau ty\2016 incentive app I icationMO agreement\exbi bit c certificate of
compliance 10-24-16,docx
2.6 Did the average annual wage, excluding health insurance and retirement benefits, of the
new jobs created during the year ending December 31, 20_ equal or exceed the
requirements in Section I.A.2. of the Agreement?
0 YES o NO
ll�
.•I• UIT F, H R 1007W 71 W
3.1 Section F. of the Chapter 380 Agreement requires the Company to occupy the
Improvements and maintain their operations continuously for the Agreement's term. Did
the Company comply with the occupancy requirement of Section G. of the Agreement
during the year ending December 31, 20_?
o YES o NO
3.2 Did the Company timely submit this Certificate of Compliance as required under Section
W.A. of the Chapter 380 Agreement during the year ending December 31, 20 ?
o YES o NO
3.3 Did the Company comply with the other provisions of the Agreement during the year
ending December 31, 20 ?
o YES o NO
4.1 The Chapter 380 Agreement provides annual payments for the 3900 Morse Street property for up
to 3 years based on conditions being met. For years one through three, the Agreement provides for annual
rebates equal to 50 percent of the increase above the base year of the City's ad valorem taxes received for
the previous year, excluding the value of land, inventory or vehicles.
4.2 The City property taxes paid for January 1, 20 valuation are:
3900 Morse
Real Property . . .. .... ..
Business Personal Property
3001 Colorado
Real Property
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Cerlificate of Compliance Page 2 of 3
sAeconomic development\incentives\incentive agreements\sally beauty\2016 incentive application\380 agreement\exbibit c certificate of
compliance 10-24-16,docx
I, the authorized representative for Sally Beauty Supply LLC, hereby certify that the above
information is correct and accurate pursuant to the terms of the Agreement. I further certify that
the Company has fully complied with the Chapter 380 Agreement during the year ending December
31, 20_, including compliance with the City of Denton Code of Ordinances, Texas Department
of Public Safety Regulations, and other applicable federal, state, or local law.
SALLY BEAUTY SUPPLY LLC
Signature:
Printed Name,
Title:
Date:
Certificate of Compliance Page 3 of 3
F.Alli Is" „o• FARM I MON
SALLY BEAUTY SUPPLY LLC
1 1
OF THE SOLE
MEMBER
IN LIEU OF ANNUAL MEETING
as of August 2, 2016
Pursuant to the provisions of Section 18-302(d) of the Delaware Limited Liability Company
Act, the undersigned, being the sole member (the "Member") of Sally Beauty' Supply LLC, a Delaware
limited liability company (the "Company"), hereby waives notice of meeting and consents to the
taking of each action set forth below as if an actual meeting had been held on the date hereof and
instructs the Secretary of the Company to file this written consent in the minute book of the Company.
The following actions shall constitute the valid action of the Member and shall have the same force
and effect as if such actions had been authorized and taken at a formal meeting duly convened and held
on the above date.
WHEREAS, the Company owns the building and real property located at 3900 Morse Street,
Denton, Texas (the "Property"); and
WHEREAS, the Member considers it to be in the best interest of the Company to enter to into
an Economic Development Program Grant Agreement with the City of Denton, a Texas municipal
corporation (the "City of Denton"), effective as of August 2, 2016, for the purposes and consideration
stated therein with respect to the development of said Property, as detailed on the attached Exhibit_A
(the "Agreement").
NOW, THEREFORE, BE IT RESOLVED, that the Agreement and any ancillary documents
related to the Agreement, hereby are, approved for all purposes; and be it further
SOLVED, that the officers and Members be, and each of them hereby is, authorized to do
or cause to be done, any and all acts and to execute and deliver any and all agreements, undertakings,
consents, documents, and certificates as in their opinion, or in the opinion of counsel to the Company,
may be necessary, appropriate, or desirable to carry out the terms and intent of the foregoing
resolutions, including, but not limited to, the execution of the Agreement by Christian A. Brickman,
the Chief Executive Officer of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed his name on behalf of the
Members of the Company, as of the date first written above, in attestation to the accuracy of the
foregoing written consents and of his approval of all actions taken as recited therein.
SALLY HOLDINGS LLC,
a Delaware limited liability company
By•
Matthew O. Haltom, Senior Vice President, General
Counsel and Secretary