2003-364S wu ~vga~pWTTIM 380 Ageensent,MC
ORDINANCENO.aOO3 3646
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 INCENTIVE AGREEMENT WITH TTHR LIMITED PARTNERSHIP
REGARDING THE PURCHASE OF TANGIBLE PERSONAL PROPERTY USING A TEXAS
DIRECT PAYMENT PERMIT TO GENERATE LOCAL USE TAX REVENUE TO THE
CITY, WHICH TANGIBLE PERSONAL PROPERTY WILL BE LOCATED AT AN
EXPANDED HOSPITAL FACILITY IN THE CITY OF DENTON GENERALLY LOCATED
AT 207 NORTH BONNIE BRAE; AUTHORIZING THE EXPENDITURE OF FUNDS
THEREFOR; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, TTHR Limited Partnership ("TTHR") 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, will encourage and
induce the generation of local use tax, and promote the public interest (the "Program");
WHEREAS, to effectuate the Program the City and TTHR have negotiated an Economic
Development Incentive 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, generate additional use tax and will
enhance the tax base and economic vitality of the City of Denton for the benefit of the public;
NOW, THEREFORE;
THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS:
SECTION 1. The recitals and findings contained in the preamble of this ordinance are
incorporated into the body of this ordinance.
SECTION 2. The City Manager or his designee, is hereby authorized to execute the
Agreement on behalf of the City of Denton and to carry out the City's responsibilities and rights
under the Agreement, including without limitation the authorization to make the expenditures set
forth in the Agreement.
SECTION 3. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of /L [lJi,Ia~ 2003.
&4n-t, Aw~
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY 04.~AWL-- /A )A a, 'd.2
BY:
APP VED S TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
BY:
Page 2
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT
This Economic Development Incentive Agreement ("Agreement") is made by and among
the City of Denton, Texas ("City"), a home rule city incorporated under the laws of the State of
Texas (City referred to as "Grantor") and TTHR Limited Partnership (the "Company"), acting by
and through their respective authorized officers and representatives.
WHEREAS, the Company will be engaged in the business of purchasing materials and
services for an expansion of its existing hospital facility within the City; and
WHEREAS, the Company has advised the City that a contributing factor that would
induce the Company to purchase items using a Texas Direct Payment Permit and generate local
use tax revenue for the City that would otherwise not be available to the City, would be an
agreement by the Grantor to provide an economic development grant to the Company; and
WHEREAS, the Company desires to situs new property and services to the City that will
generate additional use tax revenue for the City; and
WHEREAS, the City Council of the City finds that the attraction of new business activity
to the City will promote economic development, stimulate commercial activity, generate
additional use tax and will enhance the tax base and economic vitality of the City; and
WHEREAS, the City Council hereby approves the project and expenditures established
by the terms of this Agreement; and
WHEREAS, with the approval of this Agreement, the City Council hereby establishes a
program authorized by Section 380.001 of the Texas Local Government Code to encourage and
induce the generation of local use tax; and
WHEREAS, the Grantor is authorized by Article 52-a Texas Constitution, TEX. Loc.
Gov'T CODE §380.001 to provide economic development grants to promote local economic
development and to stimulate business and commercial activity in the City; and
WHEREAS, the Grantor has determined that making an economic development grant to
the Company in accordance with this Agreement will further the objectives of the Grantor, will
benefit the City and the City's inhabitants and will promote local economic development and
stimulate business and commercial activity in the City;
NOW THEREFORE, in consideration of the foregoing, and on the terms and conditions
hereinafter set forth, the parties agree as follows:
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT - Page 1 52584
ARTICLE I
DEFINITIONS
1. For purposes of this Agreement, each of the following terms shall have the
meaning set forth herein unless the context clearly indicates otherwise:
"City" shall mean the City of Denton, Texas.
"Company" shall mean TTHR Limited Partnership.
"Commencement Date" shall mean October 1, 2003.
"Effective Date" shall mean October 1, 2003.
"Event of Bankruptcy or Insolvency" shall mean the dissolution or termination (other than
a dissolution or termination by reason of a party merging with an affiliate) of a party's
existence as a going business, insolvency, appointment of receiver for any part of a
party's property and such appointment is not terminated within ninety (90) business days
after such appointment is initially made, any general assignment for the benefit of
creditors, or the commencement of any proceeding under any bankruptcy or insolvency
laws by or against a party and in the event such proceeding is not voluntarily commenced
by the party, such proceeding is not dismissed within ninety (90) business days after the
filing thereof.
"Force Majeure" shall mean any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental approvals, laws, regulations, or restrictions, or any
other cause of any kind whatsoever which is beyond the reasonable control of the party.
"Grant" shall mean periodic payments to Company from lawfully available funds.
"Grant Period" shall mean a full calendar month beginning October 1, 2003.
"Grantor" shall mean the City of Denton.
"Impositions" shall mean all taxes, assessments, use and occupancy taxes, charges,
excises, license and permit fees, and other charges by public or governmental authority,
general and special, ordinary and extraordinary, foreseen and unforeseen, which are or
may be assessed, charged, levied, or imposed by any public or governmental authority on
the Company or any property or any business owned by Company within the City.
"Program" means the economic development program established by the City pursuant to
this Agreement, as authorized by Section 380.001 of the Texas Local Government Code.
"Use Tax Receipts" shall mean the Grantor's receipts from the State of Texas from the
collection of. (i) one percent (1 use tax imposed by the City pursuant to Chapter 321 of
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT - Page 2 52584
the Texas Tax Code (it being expressly understood that the total use tax receipts for the
City are actually greater than 1%), attributed to the collection of use tax by Company
associated with the issuance of Company's Texas Direct Payment for Taxable Items used
or consumed in the City.
"Use Tax Certificate" shall mean a certificate or other statement in a form reasonably
acceptable to the Grantor setting forth the Company's collection of use tax imposed by
Grantor and received by the Grantor from the State of Texas, for the use of Taxable Items
by Company at its Denton, Texas hospital facility located at 207 North Bonnie Brae,
Denton, Texas (the "Hospital") for the applicable Grant Period which are to be used to
determine Company's eligibility for a Grant, together with such supporting
documentation required herein, and as Grantor may reasonably request.
"Taxable Items" shall have the same meaning assigned by Sections 151.010 and
151.0101, TEX. TAX CODE, as amended.
ARTICLE H
TERM
2. Term. The term of this Agreement shall begin on the Effective Date and continue
until the fifth-year anniversary date of the Commencement Date (the "Anniversary Date"), unless
sooner terminated as provided herein.
ARTICLE III
ECONOMIC DEVELOPMENT GRANT
3.01 Grant. Subject to the Company's continued satisfaction of all the terms and
conditions of this Agreement, the Grantor agrees to provide Company with an economic
development grant from lawful available funds payable as provided herein in an amount equal to
the Use Tax Receipts (the "Grant"). The Grant will never include any monies the Company pays
or owes to the State of Texas for any penalties for late payments, failures to report in a timely
manner, and the like, related to the Use Tax Receipts.
3.02 Grant Payment. The Grantor shall within thirty (30) calendar days after receipt of
the actual Use Tax Receipts for the Use Tax Receipt Certificate for the Grant Period covered by a
Use Tax Certificate submitted by Company pursuant to Section 4.01, pay the Grant for the
applicable calendar month to the Company, or as directed by the Company.
3.03 Amended Returns. In the event the Company files an amended use tax return, or
report, or if additional use tax is due and owing, as determined by or as approved by the State of
Texas affecting the Use Tax Receipts for a previous calendar month, the Grant Payment for the
calendar month immediately following such State approved amendment shall be adjusted
accordingly, provided the Grantor has received Use Tax Receipts attributed to such adjustment.
As a condition precedent to payment of such adjustment, Company shall provide Grantor with a
copy of such amended use tax report or return, and the approval thereof by the State of Texas.
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT - Page 3 52584
3.04 Refunds. In the event the State of Texas determines that the City erroneously
received Use Tax Receipts, or that the amount of Use Tax paid to the City exceeds the correct
amount of Use Tax for a previous Grant paid to the Company, the Company shall, within thirty
(30) days after receipt of notification thereof from the City specifying the amount by which such
Grant exceeded the amount to which the Company was entitled pursuant to such State of Texas
determination, pay such amount to the Grantor. The Grantor may at its option adjust the Grant
payment for the calendar month immediately following such State of Texas determination to
deduct there from the amount of the overpayment. As a condition precedent to payment of such
refund, the City shall provide Company with a copy of such determination by the State of Texas.
ARTICLE N
CONDITIONS TO THE ECONOMIC DEVELOPMENT GRANT
4.01 Use Tax Certificate. The Conditions contained in this Article IV are conditions
precedent to the Grantor's obligation to make any Grant payment. During the term of this
Agreement, the Company shall within thirty (30) days after the end of each calendar month,
provide the Grantor with a Use Tax Certificate. The Grantor shall have no duty to calculate the
Use Tax Receipts or determine Company's entitlement to any Grant, or pay any Grant during the
term of this Agreement until such time as Company has provided the Grantor a Use Tax
Certificate and the Grantor has received the actual Use Tax Receipts from the State of Texas. At
the request of the Grantor, Company shall provide such additional documentation as may be
reasonably requested by Grantor to evidence, support and establish the use tax paid directly to the
State of Texas pursuant to Company's Direct Payment Permit. The Use Tax Certificate shall at a
minimum contain, include or be accompanied by the following:
a. A copy of all Texas Direct Payment Permit and self-assessment use tax returns
and reports, use tax audit assessments, including amended use tax returns or
reports, filed by the Company for the Grant Period showing use tax paid directly
to the State of Texas related to Company's hospital operations for the Grant
Period;
b. Information concerning any refund or credit received by the Company of use tax
paid by the Company which has previously been reported by the Company as use
tax paid for a previous Grant Period;
Grantor agrees to the extent allowed by law to maintain the confidentiality of the Use Tax
Certificate.
4.02 As a condition to the payment of any Grant hereunder, Grantor shall have received
a Use Tax Certificate for the Grant Period for which payment of a Grant is requested and
received the actual Use Tax Receipts for the Grant Period.
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT - Page 4 52584
4.03 The Company shall issue its Texas Direct Payment Permit to vendors providing
building materials or other tangible personal property related to the expansion of
the Hospital.
4.04 The Company shall provide the Grantor with a true and correct copy of its Texas
Direct Payment Permit which permit shall be kept in full force and effect
throughout the term of the Agreement.
4.05 Company shall not have an uncured breach or default of this Agreement.
ARTICLE V
TERMINATION
This Agreement may be terminated upon any one of the following:
(a) by mutual written agreement of the parties;
(b) by Grantor or Company, respectively, if the other party defaults or
breaches any of the terms or conditions of this Agreement and such default
or breach is not cured within thirty (30) days after written notice thereof by
the Grantor or Company, as the case maybe;
(c) by Grantor, if any Impositions owed to the Grantor or the State of Texas
by Company shall have become delinquent (provided, however, Company
retains the right to timely and properly protest and contest any such taxes
or impositions);
(d) by Grantor, if Company suffers an Event of Bankruptcy or Insolvency;
(e) by Grantor or Company, respectively, if any subsequent Federal or State
legislation or any decision of a court of competent jurisdiction declares or
renders this Agreement invalid, illegal or unenforceable;
(f) expiration of the term;
The rights, responsibilities and liabilities of the Parties under this Agreement shall be
extinguished upon the termination of this Agreement except for any obligations that accrue prior
to such termination.
ARTICLE VI
MISCELLANEOUS
6.01 Binding Agreement. The terms and conditions of this Agreement are binding
upon the successors and permitted assigns of the parties hereto. This Agreement may not be
assigned without the express written consent of Grantor, which approval shall not be
unreasonably withheld or delayed.
6.02 Limitation on Liability. It is understood and agreed between the parties that the
Company and Grantor, in satisfying the conditions of this Agreement, have acted independently,
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT - Page 5 52584
and Grantor assumes no responsibilities or liabilities to third parties in connection with these
actions. The Company agrees to indemnify and hold harmless the Grantor from all such claims,
suits, and causes of actions, liabilities and expenses, including reasonable attorney's fees, of any
nature whatsoever by a third party arising out of the Company's performance of the conditions
under this Agreement.
6.03 No Joint Venture. It is acknowledged and agreed by the parties that the terms
hereof are not intended to and shall not be deemed to create a partnership or joint venture among
the parties.
6.04 Authorization. Each party represents that it has full capacity and authority to
grant all rights and assume all obligations that are granted and assumed under this Agreement.
6.05 Notice. Any notice required or permitted to be delivered hereunder shall be
deemed received three (3) days thereafter sent by United States Mail, postage prepaid, certified
mail, return receipt requested, addressed to the party at the address set forth below (or such other
address as such party may subsequently designate in writing) or on the day actually received if
sent by courier or otherwise hand delivered sent via fax.
If intended for City, to:
Attn: City Manager
City of Denton
215 E. McKinney
Denton, Texas 76201
Fax No. 940.349.8596
With a copy to:
Attn: City Attorney
City of Denton
215 E. McKinney
Denton, Texas 76201
Fax No. 940.382.7923
If intended for the Company:
Attn: Stan Morton
Chief Executive Officer
Triad-Denton Hospital GP, LLC
On behalf of TTHR Limited Partnership
207 N. Bonnie Brae
Denton, TX 76201
Fax No. 940.898.7071
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT - Page 6 52584
With a copy to:
Attn: Robert Frutiger
Vice President Tax
Triad Hospitals, Inc.
5800 Tennyson Parkway
Plano, TX 75024
Fax No. 214.473.9443
6.06 Entire Agreement. This Agreement is the entire Agreement between the parties
with respect to the subject matter covered in this Agreement. There is no other collateral oral or
written Agreement between the parties that in any manner relates to the subject matter of this
Agreement.
6.07 Governing Law. The laws of the State of Texas shall govern the Agreement; and
this Agreement is fully performable in Denton County, Texas with exclusive venue for any action
concerning this Agreement being in a court of competent jurisdiction in Denton, County, Texas.
6.08 Amendment. This Agreement may only be amended by the mutual written
agreement of the parties.
6.09 Legal Construction. In the event any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect other provisions, and it is the
intention of the parties to this Agreement that in lieu of each provision that is found to be illegal,
invalid, or unenforceable, a provision shall be added to this Agreement which is legal, valid and
enforceable and is as similar in terms as possible to the provision found to be illegal, invalid or
unenforceable.
6.10 Recitals. The recitals to this Agreement are incorporated herein.
6.11 Counterparts. This Agreement may be executed in counterparts. Each of the
counterparts shall be deemed an original instrument, but all of the counterparts shall constitute one
and the same instrument.
6.12 Survival of Covenants. Any of the representations, warranties, covenants, and
obligations of the parties, as well as any rights and benefits of the parties, pertaining to a period
of time following the termination of this Agreement shall survive termination.
6.13 Dispute Resolution. Any controversy or claim arising from or relating to this
Agreement, or a breach thereof shall be subject to non-binding mediation, as a condition
precedent to the institution of legal or equitable proceedings by any party unless the institution of
such legal or equitable proceeding is necessary to avoid the running of an applicable statute of
limitation. The parties shall endeavor to resolve their claims by mediation. Grantor and
Company shall share the costs of mediation equally. The mediation shall be held in Denton
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT - Page 7 52584
County, Texas, unless another location is mutually agreed upon. Agreements reached in
mediation shall be enforceable as settlement agreements in any Court having jurisdiction thereof.
EXECUTED as of the I day of 1 G~ / 2003.
CrFY OF
By:
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO FORM:
FIERBERT L. P n7 ORNEY
BY:
EXECUTED as of the c,,' ) day of t"~) L 6 Q, 2003.
Triad-Denton Hospital GP, LLC
On behalf of and as general partner of
TTHR Limited Partnership
By:
Name: Stan Morton
Title: Chief Executive Officer
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT - Page 8 52584
City Manager
ACKNOWLEDGMENTS
STATE OF TEXAS
COUNTY OF DENTON
This instrument was acknowledged before me on the `P day of Y 2 2003
by Michael A. Conduff, being City Manager of the City of Denton, Texas, a Texas municipality,
on behalf of said municipality.
.r"~~~,,, JENNIFER K. WpLTER6
°~~~'~O"" Notary Public, State of Texas
= - My Commission Expires
""o?~iFp~;t~',o' December 79, 200E
STATE OF TEXAS
COUNTY OF DENTON
N e:
Notary Public, State of Texas
My Commission expires: C)
This instrument was acknowledged before me on the a q day of DQ+L le2003
by Stan Morton, Chief Executive Officer of Triad-Denton Hospital GP, ILLC, the general partner
of TTHR Limited Partnership, on behalf of said limited partnership.
VV-esdAIn J ~l5UQfL.
Name:
Notary Public, State of Texas
My Commission expires: D Lo
WENDELYN SEBASTIAN
MY COMMISSION EXPIRES
pooontOr16,2006
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT - Page 9 52584