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2001-263AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE A TAX ABATEMENT AGREEMENT WITH SALLY BEAUTY COMPANY, INC SETTING FORTH ALL THE REQUIRED TERMS OF THE TAX ABATEMENT AGREEMENT IN ACCORDANCE WITH THE TERMS OF CHAPTER 312 OF THE TEXAS TAX CODE, SETTING FORTH THE VARIOUS CONDITIONS PRECEDENT TO SALLY BEAUTY COMPANY, INC RECEW- ING TH~ TAX ABATEMENT, PROVIDING FOR A SEVERABILITY CLAUSE, AND PROVIDING AN EFFECTIVE DATE WHEREAS, on the 31st day of July, 2001, after a public heanng duly held in accordance with Tex Tax Code §312 201 (the "Act"), the City Council passed Ordinance No 2001- (the "Ordinance") establishing Remvestment Zone No IV, City of Denton, Texas as a eommer- clal/mdu~tnal relnvestment zone for tax abatement (the "Zone"), as authorized by Title 3, Chap- ter 312, Subehapter B of the Act, and WHEREAS, on the 2n~l day of May, 2001 Sally Beauty Company, Inc submitted an ap- pheaUon Ifor tax abatement with various attachments to the City coneermng the contemplated use ofeertmn property located w~thm the Zone, and WHEREAS, the City Couned finds that the contemplated use of the premises and the contemplated improvements to the premises, as indicated by Sally Beauty Company, In¢ are eonslsterg wath encouraging the development of the Zone in accordance with the purposes for its creation and are in compliance with the Denton Tax Abatement Policy, and WHEREAS, the City Council deems it in the public interest to enter into a Tax Abate- ment Agreement with Sally Beauty Company, Inc, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS S~CTION 1 That the finchngs contained in the preamble to this orchnance are true and correct and are adopted as a part of the whole ordinance SECTION 2 That the City Council finds and determines the following 1 That the contemplated use of the premises and the contemplated Improvements of the prem- ises, as indicated by Sally Beauty Company, Inc are consistent with encouraging the devel- opmqnt of the Zone in accordance with the purposes of its creation and are in comphance with the Denton Tax Abatement Policy 2 That ithe Cxty Council finds that the improvements sought by Sally Beauty Company, Inc wltlun the Zone are feasible and practical and would be a benefit to the land to be included in the Zone and to the City after the expiration of the Tax Abatement Agreement to be entered into with Sally Beauty Company, Ine 3 That the City Council finds that the Tax Abatement Agreement contmns all the terms which are mandatorily reqmred to be ~ncluded m any tax abatement agreement under {}312 205 of the Act 4 That, m accordance w~th {}312 2041 of the Act, the Cxty Councd finds that not later than the date on winch the C~ty Council eonmdered tlus ordinance, and not later than the seventh day before the date the C~ty enters into a Tax Abatement Agreement wxth Sally Beauty Company, Inc, that the Cxty Manager, through the D~rector of Commumty Development, who are hereby designated and authorized by the C~ty Council to gxve such notme, dehvered to the presxd~ng officer of the Denton Independent School Dmtnct and Denton County a written no- t~ee that the C~ty intends to enter into thxs Tax Abatement Agreement wxth Sally Beauty Company, Ine, and that thxs notme xneluded a copy of the proposed Tax Abatement Agree- ment m substantmlly the form of the Tax Abatement Agreement attached to th~s ordinance 5 That before the passage of th~s ordinance, the C~ty Councd held a pubhc heanng m accor- dance w~th {}312 201 of the Act and created Remvestment Zone No IV 6 The C~ty Council finds that the project w~tinn Remvestment Zone No IV ~s a redevelopment of an emstmg busmass as defined m the Tax Abatement Pohcy and reqmres addatmnal incen- tives to promote economic development that generally satisfies the reqmremants of the pohcy and the Cxty Council hereby wtuvas the mxmmum threshold reqmrement w~thm the pohcy for tax abatement and authorizes a tax abatement of 100% on the mcreased valuatmn of the xm- provement m each year covered by the tax abatement agreement over the value of the prop- erty for the year m whmh the tax abatement agreement xs executed as set fourth xn the Agreement SECTION 3 That the Mayor, or m her absence, the Mayor Pro Tem, ~s hereby author- ~zed to execute a Tax Abatement Agreement wxth Sally Beauty Company, Inc, substantmlly m the form of the Tax Abatement Agreement which ~s attached to and made a part ofthxs ordmance for all purposes as ffwntten word for word hereto SECTION 4 That the C~ty Council hereby ~nstmcts and authorizes the City Manager to respect, autht, and evaluate the progress of Sally Beauty Company, Inc to determine flit has met all of the conditions of the attached Tax Abatement Agreement prior to the tax abatement gmng mto effect SECTION 5 That ~f any section, subsection, paragraph, sentence, clause, phrase, or word m ttus ordmance, or apphcataon thereof to any person or c~rcumstance ~s held ~nvahd by any court of competent jurisdiction, such holding shall not affect the validity of the remalmng portions of tins ordmance, the C~ty Cotmcd of the City of Denton hereby declares that they would have enacted such rema~mng portions despite any such validity Page 2 of 3 SECTION 6 That thxs orthnance shall become effective ~mmed~ately upon ~ts passage and approval PASSED AND APPROVED th, s the ,~//49-~ day of ~'~/~(~ ,2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY Page 3 of 3 STATE OF TEXAS § TAX ABATEMENT AGREEMENT BETWEEN COUNTY OF DENTON § THE CITY OF DENTON AND CITY OF DENTON § SALLY BEAUTY COMPANY, INC This Tax Abatement Agreement (the "Agreement") Is entered into by and between the City of Denton, Texas (the "City"), duly acting herein by and through its Mayor, and Sally Beauty Company, Inc, a Delaware corporation authorized to do business in the State of Texas, or its assignee as set out in Section 6, (the "Owner"), duly acting herein by and through its anthonzed officers WHEREAS, the City has adopted a resolution stating that it elects to be eligible to par- tmlpate in tax abatement and has adopted guidelines and criteria governing tax abatement agree- ments known as the Denton Tax Abatement Policy, and WHEREAS, on the 6th day of June, 2000, the City Council of Denton, Texas (the "City Council") adopted the Denton Tax Abatement Policy (the "Policy") through the passage of Resolution No 2000-028 which Policy was amended on the 1st day of May 2001, by Resolution No 2001-020, which states that the City elects to become eligible to partm~pate ~n tax abatement, whmh is attached hereto and incorporated herein as Exhibit "A" and made a part of th~s Agree- ment for all purposes, and WHEREAS, the Policy constitutes appmpnate "gmdehnes and cntena" governing tax abatement agreements to be entered into by the City as contemplated by Section 312 002 of the Texas Tax Code, as amended (the "Code"), and WHEREAS, on the 31st day of July 2001, the City Council passed Ordinance No f,t~9[-.Z.~ (the "Ordinance") estabhshlng Remvestment Zone No IV, City of Denton, Texas, as a commer- cial/industrial remvestment zone for tax abatement (the "Zone"), as anthonzed by Title 3, Chap- ter 312, Subchapter B of the Code (the "Act"), and WHEREAS, Owner owns certain real property being approximately 13 3742 acres at or near 3900 Morse Street w~thm the corporate limits of the C~ty of Denton, Texas as more par- tlcularly described m Exbablt "B" attached hereto and incorporated heroin by reference and made a part of this Agreement for all purposes (the "Premises") located entirely within the Zone, and WHEREAS, on the 2na day of May, 2001, Owner submitted an apphcation for tax abate- ment w~th various attachments to the City concerning the contemplated use of the Premises (the "Application for Tax Abatement"), attached hereto and incorporated herein as Exhibit "C" and made a part of this Agreement for all purposes, and WHEREAS, the City Council has found that the contemplated use of the Premises, the Improvements (as hereinafter defined) to the Premises as set forth in this Agreement, and the other terms hereof are consistent with encouraging development of said Zone ~n accordance with on January 1, 2001 - the year m which this Agreement 1s executed No abatement wall be given on any increase ~n the value of the land or personal property For example, ff Owner spends $$,000,000 on real property improvements on the Premises in 2002, but the apprmsed value of the improvements increases only $2,000,000 over the apprmsed value ~n the 2001 base year, the tax abatement shall be limited to the $2,000,000 increase m the apprmsed value of the improve- ments B A condmon of the abatement is that the Improvements be eonsmacted, the Owner or ars assignee under Section 6 shall maintain occupancy of the building for the full ten years of the Tax Abatement, and that the Owner or ars assignee mmntam the $$,000,000 investment on the Premises, mcludmg the tangible personal property ~nvestment, for the full ten years of the Tax Abatement, and the Premises, be used substantially in accordance with the description of the project set forth m the Apphcatmn for Tax Abatement C A condatmn of this abatement ~s that throughout the Term of the Abatement, the Improvements shall be operated and maintmned for the purposes set forth herein - for office and/or warehouse use - so that the uses of the Premises shall be consistent with the general pur- pose of encouraging development or redevelopment of the Zone, except as otherwise authorized or modified by this Agreement D If the total Improvements constructed on the project and tangible personal prop- erty mvestment do not meet the threshold value of $5,000,000 by December 31, 2003, th~s Agreement will be terminated and the Owner shall ammedmtely refund all tax abatements prew- ously g~ven by City with interest at 7% per annum from the date the Owner received the abate- ment Such threshold being a eondatmn precedent to recelwng a tax abatement If the Owner receives an abatement an error but does not meet the threshold investment level, the Owner shall immediately, upon receiving notice from the City, remit the amount by which the tax abatement should be reduced with interest at Seven percent (7%) per annum from the date the Owner re- ceived the abatement E In consideration of the abatement granted hereto Owner agrees to comply w~th all the terms and conditions set forth an this Agreement 2 GENERAL PROVISIONS A The City has concluded that at has adopted gmdelmes and criteria govermng tax abatement agreements for the City to allow at to enter into thas Agreement eonttumng the terms set forth herean B The C~ty has concluded that procedures followed by the City conform to the re- quirements of the Code and the Ordinance, and have been and will be undertaken in coordination wath Owner's corporate, employee, and bus~ness relations reqmrements C The Premases are not ~n an improvement project financed by tax mcrement bonds Page 3 of 12 paragraph 3B and C of this Agreement, in accordance with Section 312 206(c) of the Act, Chap- ter 312, Subchapter B, of the Act, and all other applicable laws 5 FAILURE TO MEET CONDITIONS A In the event that 0) any of the conditions m Section 1 - "Conditions of Abate- ment'' - are not met, or 0O Owner allows its ad valorem real property taxes with respect to the Premises or Improvements, or its ad valorem taxes with respect to any tangible personal prop- erty, if any, owned by the Owner which is included m the Improvements, owed the City to be- come 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 (iii) any other conditions of the Abatement Agreement are not met, then a "Condition Failure" shall be deemed to have occurred 0t being understood that a Condition Fmlure relating to any condition set forth m paragraph 1 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 definitively determined that such condition will not be met ) In the event that a Condition Fmlure occurs, the City shall give Owner written notice of such Condition Fmlure and if the Condition Fmlure has not been cured or satisfied within ninety (90) days of said written notice, the Abatement shall be terminated m accordance with paragraph lA and D and Owner shall re- mit the amount of the Abatement by wluch it was reduced plus interest from the time the Owner received the Abatement for each year the Owner is out ofcomphance Provided, however, that if such Condition Failure is not reasonably susceptible of cure or satisfaction within such ninety (90) day period and Owner has commenced and is pursuing the cure or satisfaction of same, then after first advising City Council of efforts to cure or satisfy same, Owner may utilize an addi- tional mnety (90) days Time m addition to the foregoing 180 days may be authorized by the City Council, and such authorization shall not be unreasonably withheld If a Condition Fmlure is not cured or satisfied after the expiration of the applicable notice and cure or satisfaction pen- ods, the Abatement shall be terminated with respect to the year in which notice of the Condition Fmlure ~s given and for all future years It being understood that the Abatement with respect to any year prior to the year in which notice of the Condition Failure is given shall not be forfeated or recaptured except as indicated under Section 5B and other applicable sections hereof Not- withstanding any provision in this Agreement to the contrary, Owner shall refund to the City all tax abatements previously received with interest for the year in which the notice of Condition Failure is given B If, however, the Owner fails to invest $5,000,000 in improvements by December 31, 2003, the amount of the Abatement will be reduced to zero in accordance w~th Sections lA and D, except as delayed by force majeure If the owner fails to malntmn its contractual obhga- tions, including Owners failure to maintain occupancy of the building and failure to mmntmn the $5,000,000 investment on the Premises, except as delayed by force majeure, for the full ten years of the Tax Abatement, then this Agreement may be terminated by the City and the amount of the Abatement will be reduced to zero in accordance with Section lA and D In this event, Owner shall refund to the C~ty all tax abatements previously granted and received under this Agreement with interest on the amount to be refunded at seven percent (7%) per annum Additionally, as set Page 6 of 12 forth m Section 1 A and D, failure to construct and place Improvements and tangible personal property on the Premises that have a cost of at least $5,000,000 by December 31, 2003, shall cause the agreement to be tenmnated and require Owner to refund all tax abatements previously granted w~th interest C That m the event of a Condition Failure by Owner which is not cured or satisfied as set forth hereto, m addition to a partial or total recapture of the tax abatement, the City may cancel or modify th~s Agreement 6 EFFECT OF SALE, ASSIGNMENT, OR LEASE OF PROPERTY A The Abatement wtth respect to the Project shall vest in Owner and shall be as- signable, w~th C~ty approval, which shall not be unreasonably withheld, to any individual, part- nershlp, joint venture, corporation, trust or other entity (~rrespect~ve of whether or not such as- signee as related to or affihated with Owner) which acquires title to the Project Any assignee of Owner or any assignee of a direct or indirect assignee of Owner shall be treated as "Owner" un- der this agreement 7 NOTICE All not,ecs called for or required by this Agreement shall be addressed to the followtng, or such other party or address as e~ther party designated in writing, by certified mail postage pre- paid or by hand dehvery OWNER CITY General Counsel M~chael A Conduff, C~ty Manager Sally Beauty Company, Inc City of Denton 3900 Morse Street 215 East McKlnney Denton, Texas 76208 Denton, Texas 76201 8 CITY COUNCIL AUTHORIZATION Th~s Agreement was authorized by the C~ty Council by passage of an enabhng ordinance at ~ts meeting on the 31st day of July, 2001, authorizing the Mayor to execute this Agreement on behalf of the C~ty, a copy of wbaeh ~s attached hereto and incorporated herein as ffwntten word for word hereto Page 7 of 12 9 BOARD OF DIRECTORS AUTHORIZATION This Agreement was entered into by Owner, pursuant to authority granted by the Sally Beauty Company, Ine Evidence, which must be satisfactory to the City, that the person signing this Agreement is authorized to band Owner to all the terms and conditions of the Agreement is attached hereto and incorporated hereto as Exhibit "D" as if written word for word herein 10 SEVERABILITY In the event any section, subsection, paragraph, sentence, phrase or word is held mvahd, illegal or unconstitutional, the balance of this Agreement shall stand, shall be enforceable and shall be read as ff the parties intended at all times to delete said invalid section, subsection, para- graph, sentence, phrase, or word In the event that 0) the term of the Abatement with respect to any property is longer than allowed by law, or (~a) the Abatement apphes to a broader classifica- tion of property than as allowed by law, then the Abatement shall be vahd with respect to the classification of property abated hereunder, and the portion of the term, that is allowed by law 11 ESTOPPEL CERTIFICATE Any party hereto may request an estoppel certificate from another party hereto so long as the certificate ~s requested m connection with a bona fide business purpose The certificate, which ff requested will be addressed to the Owner, shall include, but not necessarily be hmited to, statements that this Agreement as m 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 remain- lng term of th~s Agreement, the levels and remaming term of the Abatement in effect, and such other matters reasonably requested by the par~y0es) to receive the certificates 12 OWNER STANDING Owner, as a party to tins Agreement, shall be deemed a proper and necessary party in any litigation questaomng or challenging the vahdaty of this Agreement or any of the underlying or- dinances, resolutions, or City Council actions authorizing same and Owner shall be entitled to intervene m smd ht~gataon 13 APPLICABLE LAW T'ms Agreement shall be construed under the laws of the State of Texas Venue for any action under this Agreement shall be the State Dlstnet Court of Denton County, Texas This Agreement as performable m Denton County, Texas Page 8 of 12 15 MUTUAL ASSISTANCE C~ty and Owner agree to do all things necessary or appropriate to carry out the terms and provts~ons of th~s Agreement and to md and asstst each other tn carrying out such terms and pro- wstons Owner and C~ty agree at any t~me, and from t~me to t~me, to execute any and all docu- ments reasonably requested by the other party to carry out the ~ntent of th~s Agreement 16 ENTIRE AGREEMENT Th~s tnstnanent wtth the attached exhtb~ts contmns the enttre agreement between the par- ttes wtth respect to the transactton contemplated ~n thts Agreement 17 BIND1NG Ttus Agreement shall be btnd~ng on the parttes and the respecttve successors, assigns, hetrs, and legal representatives 18 COUNTERPARTS Th~s Agreement may be executed ~n counterparts, each of whtch shall be deemed an original, but all of whmh together shall constitute one and the same tnstrument 19 SECTION AND OTHER HEADINGS Section or other headings contmned tn thts Agreement are for reference purposes only and shall not affect ~n any way the meaning or tnterpretat~on ofthts Agreement 20 NO JO1NT VENTURE Nothing contmned ~n th~s Agreement is ~ntended by the part~es to create a partnership or jotnt venture between the parttes, and any ~mphcatton to the contrary ts hereby dtsavowed 21 AMENDMENT Th~s Agreement may be modffied by the parties hereto to tnclude other provts~ons which could have originally been mcluded ~n thts Agreement or to delete provtstons that were not Page 9 of 12 21 AMENDMENT This Agreement may be modified by the parties hereto to include other provisions which could have originally been included in this Agreement or to delete provisions that were not originally necessary to this Agreement pursuant to the procedures set forth in Title 3, Chapter 312 of the Code 22 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 obh- gatlons under flus Agreement, then the respective party's obligations hereunder shall be sus- pended dunng such period but for no longer than such period of time when the party is unable to perform 2001, by duly authorized officials of the City and by Sally Beauty Cf6/npany,,~e, corporation, being anthonzed and an good standing to do business in th"d State ot ~ exas CITY OF DENTON, TEXAS EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY Page 10of12 SALLY BEAUTY COMPANY, INC MICHAEL RENZUL'L-~, PRESIDENT ATTEST BY Page 11 of 12 STATE OF TEXAS § COUNTY OF DENTON § Before me, the undersigned anthonty, a Notary Pubhc in and for said State of Texas, on this day personally appeared Euhne Brock, Mayor for the City of Denton, known to me to be the person who s~gned and executed tho foregoing instrument, and acknowledged to me that this strument was executed for the purposes and cons~deratmn thereto express~. Glven under my hand and seal of office th~s the ~___dayof (/~z~,,~~t , 2001 - _ ..... . /~ {~,,%..?~Y~*ff ~ ~Y ~,~!0_~_, _~: { State of Texas My Commission Expires STATE OF TEXAS § COUNTY OF DENTON § Before me, the undersigned authority, a Notary Public in and for smd State of Texas, on this day personally appeared Michael Renzulh, on behalf of Sally Beauty Company, Ine, known to me to be the Premdent of Sally Beauty Company, Inc and to be the person who signed and executed the foregoing instrument, and acknowledged to me that this instrument was executed for the purposes and consideration therein expressed G~ven under my hand and seal of office th~s the i,~~ day of (-~¢:~a-.),.x~ , 2001 iqotary Public in and for ~he ~/~t'_.~_N'~.~ NOTAI~Iy~LIO ~ StateofTexas ~ My Commission Expires ~' ~' ~.:O~ Page 12 of 12 EXHIBIT "A" =SOL TIONNO A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, AMENDING THE POLICY FOR TAX ABATEMENT FOR THE CITY OF DENTON TO ESTABLISH GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT AGREEMENTS TO ALLOW WAIVER OF THE FIVE MILLION DOLLAR THRESHOLD AND THE MAXIMUM TAX ABATEMENT PERCENTAGE, TO DEFINE PROFESSIONAL POSITIONS, TO MAKE OTHER CHANGES AS SET FORTH IN THE AMENDED POLICY, AND DECLARING AN EFFECTIVE DATE WHEREAS, on June 6, 2000, the City Council adopted gmdchnes and criteria, known as the Denton Pohcy for Tax Abatement (sometimes referred to as "Tax Abatement Pohcy"), passing by Resolution No R2000-028, and WHEREAS, the C~ty Councal demrcs to promote economac development wxtlun Denton, and WHEREAS, providing tax abatement and other economic development ancentlves wathm the City and its extratemtonal junsdmtaon wall hkely contnbute to the economic development of Denton by encouraging major anvestment and the creation of jobs, and WHEREAS, the Property Development and Tax Abatement Act, Chapter 312 of the Tex Tax Code, allows the city to estabhsh its own criteria for tax abatement and the Caty has prewously adopted gmdehnes for tax abatement and resolutaons No R90-018, R98-004 and R2000-028, and WHEREAS, the Joint Committee on Tax Abatement, composed of representatives of the Caty of Denton, the Denton Independent School Dmtnct, and Denton County have recommended amendments to Section III "Value oflncentaves" of the Tax Abatement Pohcy to allow waiver of the five million dollar threshold and the maximum tax abatement percentage and to define professional pomt~ons, which is attached hereto as the amendment to the Tax Abatement Pohcy, and WHEREAS, any amendment to the Tax Abatement Policy reqmres an affirmative vote of three-fourths of the members of the City Council (six affirmative votes) in accordance wath Section 312 002(e) of the Tax Code, and WHEREAS, the City Council deems it ~n the pubhc interest to continue to be ellglble for partmapanon ~n tax abatement and to amend the new pollmes, guidelines and cntena govermng tax abatement agreements to be known as the Tax Abatement Pohcy, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES SECTION ! That the polices, gmdehnes and criteria found ~n the Denton Policy for Tax Abatement are hereby amended by amending Section III "Value of Incentives" to allow a wmver of the five mdhon dollar threshold and the maximum tax abatement percentage on a case-by-case basis, to define pmfesmonal pos~t~ons, and to make other changes set forth m the amended pohcy in accordance w~th the amendment that ~s attached to this Resolution as Exinint A and made a part of this Resolution for all purposes From and after the effective date of tlns ResoluUon, the amended Tax Abatement Policy shall constitute policy gmdehnes and criteria govermng tax abatement agreements for the C~ty of Denton ~n accordance w~th Chapter 312 of the Tax Code SECTION 2 That the City Council hereby reasserts its demsmn to become ehgnble to partm~pate m tax abatement The City Council provides certmn tax incentives apphcable to business enterpnses m vanous remvestment zones winch are estabhshed m the City, in accordance with the apphcable provlsmns of Chapter 312 of the Tex Tax Code and in accordance w~th the gmdehnes and criteria established in the attached Exinint A and m the amended Tax Abatement Pohcy SECTION 3 That save and except as amended hereby, all the remmmng sections, sentences, clauses, paragraphs and phrases of the Denton Policy for Tax Abatement shall remmn ~n full force and effect SECTION 4 That this resolution shall become effecUve ~mmedmtely upon its passage and approval at the regular meeting of the City Counml of the City of Denton, Texas, on the 1st day of May, 2001, at winch meeting a quorum was present and winch meeting was held m accordance wath the provmtons of Tex Gev 't Code §551 001, et seq PASSED AND APPROVED th~s the /~- dayof j;;7~ ,2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY ~1_~- ~_ APP~/OVED AS TO LEG/G., FORM HERBERT L PROUTY, CITY ATTORNEY Page 2 of 2 EXHIBIT A SECTION III DENTON POLICY FOR TAX ABATEMENT Ill VALUE OF INCENTIVES The criteria outhned in the Apphcatlon will be used by the Joint Committee on Tax Abatement ~n determ~mng whether or not ~t ~s ~n the best ~nterests of the affected taxing ent~t~es to recommend that tax abatement be offered to a particular project Specffic cons~deratmns will ~nclude the degree to which the ~nd~mdual project furthers the goals and objectives of the community as described in the Denton Comprehensive Plan, as well as the relative ~mpact of the project New, expanding and modermz~ng businesses may be considered for abatement ffthe m~mmum threshold, as described ~n Table 1 below, ~s met Once a determination has been made that tax abatement should be offered, the value and term of the abatement may be detenmned by referencing the following table TABLE 1 Estabhshes a framework for conmdenng the length of abatement according to assessed real property value of improvements and of tangible personal property located on the real property VALUE OF STRUCTURE AND PERSONAL PROPERTY YEARS OF PERCENTAGE OF IN MILLION DOLLARS ABATEMENT ABATEMENT 100 10 15-25% 80 9 15-25% 65 8 15-25% 50 7 15-25% 35 6 15-25% 20 5 15-25% 15 4 15-25% 10 3 15-25% 5 2 15-25% To quahfy, compames must meet the minimum threshold of the pohcy in the first 24 months from the executmn of the agreement or as specffied ~n the tax abatement agreement If upon ~mtml apphcat~on a project qualifies for tax abatement under the gmdehnes set forth ~n this pohcy, the taxing ent~t~es may consider granting an ad&t~onal 5% abatement for each one of the following factors prowded, however, that the total tax abatement does not exceed -1- 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 w~If occupy a bmldlng that has been vacant for at least two years, · The project w~ll 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 classlficatlonwlll be used to determine eligibility), · The project w~ll 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, · The project will provide knowledge-based jobs (at least 25 percent of jobs require college bachelors degree at entry level), · The project will donate slgmficant 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 ~mprovements to the Denton Central Business District, · The project will result in the formation of a business park, · The project is an international or national headquarters facthty The total tax abatement may not exceed 50% annually for ten years All abatements are subject to final approval of the City Council and DISD Board of Trustees, or the County Commissioner's Court Even though a project may meet the criteria as set forth in this policy, an apphcataon may be den~ed at the discretion of the Caty Councd and/or DISD Board of Trustees Tax abatement shall not apply to any portion of the land value of the project The thresholds as described m Table 1 are considered guidelines for establishing the Tax Abatement Agreement terms However, the City and DISD may determine that a lower or higher pementage and/or a shorter or longer term of abatement may be more appropriate for an individual project If abatement is approved, the C~ty and DISD may consider applying all or a portion of the abatement in the first year or dunng any shorter period within the term of the tax abatement agreement For example, an approved abatement of 25 percent for four years may be apphed as 100 percent abatement for one year When the City of Denton and Denton Independent School District determine that incentives are required to retmn existing businesses which propose to improve or redevelop property within the City limits, the Denton City Council and Denton Independent School District Board may consider these "special projects" on a case-by-case basis and reserve the right to waive the mlmmum threshold and/or exceed fiftY percent (50%) in tax abatement The C~ty of Denton and Denton Independent School District may also take into consideration as "special projects" the expansion/redevelopment of existing businesses that create new or additional professional jobs Abatement hereunder will only apply to the increased valuation of the improvements over the apprmsed value of the property prior to such improvements as same ~s established by the Denton Central Appraisal District the year in which the tax abatement agreement is executed The City of Denton and Denton Independent School District may also consider other tax incentives authorized by law -2- Professaonaljobs are defined as "occupations which require specialized and theoretical knowledge which is usually acqmred through college training or through work experience and other training which promdes comparable knowledge, a calling requmng speclahzed knowledge and often long and intensive academic preparation, requires some research, analysas, report writing and presentataons Special hcenslng, certfficatlon, or registration may be required to perform the job task, the work ofprofessaonal positions ~s creatave, analytical, evaluative, or interpretive, and as characterized by personal responsablhty to keep abreast of and exercise judgment and broad perspective in the apphcatmn of an organized body of knowledge that is constantly studaed to make new discoveries and lnterpretataons or to amprove the data, materials and methods, may revolve some supervlsmn and budgetlng/plarmlng" When the City of Denton and Denton Independent School District determine that abandoned property may reqmre addatlonal incentives to promote economic development that generally satisfies the reqmrements of this policy, the taxing ent~ties may wmve the mammum threshold and/or exceed fifty percent (50%) an tax abatement, or consider other tax incentives for specml projects to redevelop abandoned bmldmgs consistent with emstang law For the purpose of this pohcy, an abandoned building is defined as a budding that has been adentffied as being statable for commercml or industrial development, has been vacant for a mmamum of five years or has substantially dechned in apprmsed value Abatement would only be considered on the increased valuataon of the improvements in each year covered by the tax abatement agreement over the value of the property for the year in whmh the tax abatement agreement is executed The City of Denton and Denton Independent School D~stnct may also consider other tax lncentaves authorized by law -3- SO U IONNO A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, REPLACING A POLICY FOR TAX ABATEMENT FOR THE CITY OF DENTON TO ESTABLISH GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT AGREEMENTS, AND DECLARING AN EFFECTIVE DATE WHEREAS, on January 21, 1998, the City Council adopted gmdehnes and criteria, known as the Denton Policy for Tax Abatement, passing Resolution No R98-004, and WHEREAS, that Tax Abatement Policy has now expired, and WHEREAS, the City Council demres to promote economic development within Denton, and WHEREAS, promdmg tax abatement and other economic development incentives within the City and its extraterritorial juns&etlon will likely contribute to the economic development of Denton by encouraging major ~nvestment and the creation of jobs, and WHEREAS, the Property Development and Tax Abatement Act, Chapter 312 of the Tex Tax Code, allows the city to establish its own cntena for tax abatement and the C~ty has previously adopted guidelines for tax abatement and resolutions No Rg0-018 and R98-004, and WHEREAS, the Joint Committee on Tax Abatement, composed of representatives of the City of Denton, the Denton Independent School Dlstnct, and Denton County have recommended a new Tax Abatement Policy to replace the expired pohcy, which is attached hereto as the Denton Policy for Tax Abatement, and WHEREAS, the City Council deems it in the public interest to continue to be eligible for participation m tax abatement and to adopt the new policies, guidelines and cntena governing tax abatement agreements to be known as the Denton Policy for Tax Abatement, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES S T_S~ That the polices, gmdehnes and criteria found in the Denton Policy for Tax Abatement, attached hereto is Exhibit A and made a part of this Resolution and incorporated herein for all purposes, are m all things approved and adopted From and after the effective date of this Resolution, the attached Denton Policy for Tax Abatement shall constitute policy guidelines and criteria governing tax abatement agreements for the C~ty of Denton in accordance with Chapter 312 of the Tex Tax Code ~ That pursuant to Tex Tax Code Section 312 002(c) the gmdehnes and cntena adopted hereto shall be effective for two (2) years, dunng which time the gmdehnes may be emended or repealed by a vote of aA of the members of the Councd ~ That the C~ty Council hereby reasserts ~ts dems~on to become ehgible to partm~pate m tax abatement The City Council prowdes certain tax ~ncent~ves apphcable to bus~ness enterprises in various remvestment zones which are established m the City, in accordance w~th the apphcable provisions ~n Chapter 312 of the Tex Tax Code and ~n accordance with the gmdehnes and criteria established ~n the attached Exhibit A ~ That thru resolution shall become effective ~mmedmtely upon ~ts passage and approval at the regular meeting of the C~ty Council of the C~ty of Denton, Texas, on the 6th day of June, 2000, at whmh meeting a quorum was present and wh~gh meetmg was held ~n accordance w~th the prows~ons ofTex Gov 't Code §551 001, et(,~ ,~ PASSED AND APPROVED ttus the ff~'~/'~ day of ~_)--arA/~g-~- ' ,2000 EUL1NE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY ? Page 2 of 2 EXHIBIT A DENTON POLICY FOR TAX ABATEMENT I GENERAL PURPOSE AND OBJECTIVES The C~ty of Denton (City) and the Denton Independent School D~stnct (DISD) are committed to the promotion of h~gh quality development m all parts of the city and to an ungo~ng ~mprovement in the quahty ofhfe for its citizens Insofar as these objectaves are generally served by the enhancement and expanmon of the local economy, the C~ty and DISD w~ll, on a case-by-case barns, give consideration to providing tax abatement as a stimulus for economic development in Denton It is the pohcy ofthe C~ty and DISD that said constderatlon w~ll be provided in accordance w~th the procedures and criteria outhned in th~s document Nothing herein shall imply or suggest that the C~ty or DISD are under any obhgat~on to prowde tax abatement to any apphcant Denton County ad valorem taxes also may be abated, however, apphcanons w~ll be conmdered separately under the guldehnes of the Denton County tax abatement pohcy All apphcants shall be considered on a case-by-case barns Abatements will be considered only as inducements to generate development that otherwme would not occur Abatements w~ll not be considered ff construction of a proj eot already has begun Tax abatements, as described in th~s pohcy, will be avmlable for new and/or ex~st~ng fac~htles and structures and for businesses wanting to locate, expand or modermze bamc ~ndustnes, corporate office headquarters or d~s(rlbntlon centers, except as th~s policy may be hmlted for property described in Sectton 312 211 (a) of the Texas Property Tax Code (Vernons Texas C~wl Statutes Annotated, hereinafter referred to as "Tax Code ") 1 II JOINT TAX ABATEMENT COMMITTEE Requests for tax abatemem shall be reviewed by the Joint Commit-tee on Tax Abatement, smd Committee being comprised of two elected officials each from the City, the DISD and Denton County One additional staff person from each jurisdiction shall be appointed to serve as a nonvoting, ex officio member of the committee The Joint Committee on Tax Abatement serves as a recommending body to the taxing entities regarding whether economic development incentives should be offered ~n each md~wdual case Its recommendation shall be based upon an evaluation of information submitted in the tax abatement application and any additional information requested by the Committee or presented to the Committee The Tax Abatement Application ~s presented as Exhibit A of this policy All meetings of the Joint Committee shall be held m comphance with the Texas Open Meetings Act, Chapter 551 of the Texas Government Code IH VALUE OF INCENTIVES The criteria outhned in the Appheatlon will be used by the Joint Committee on Tax Abatement in determining whether or not ~t ~s m the best interests of the affected taxing entities to recommend that tax abatement 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 of the project New, expanding and modernizing businesses may be considered for abatement if the minimum threshold, as described in Table 1 below, is met Once a determination has been made that tax abatement should be offered, the value and term of the abatement may be determined by referencing the following table 2 TABLE 1 Establishes a framework for consldenng the length of abatement according to assessed real property value of improvements and of tangible personal property located on the real property VALUE OF STRUCTURE AND PERSONAL PROPERTY YEARS OF PERCENTAGE OF 1N MILLION DOLLARS ABATEMENT ABATEMENT I00 10 15- 25% 80 9 15- 25% 65 8 15- 25% 50 7 15- 25% 35 6 15- 25% 20 5 15- 25% 15 4 15- 25% 10 3 15- 25% 5 2 15-25% To qualify, companies must meet the minimum threshold of the policy in the first 24 months from the execution of the agreement or as specffied in the tax abatement agreement If upon mltml apphcat~on a pro,lect qualifies for tax abatement under the guidelines set forth in this policy, the taxing entlt~es 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 apphcant may receive credit for more than five ofthe 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.lobs per job classification and entry level wage per classification will be used to determine ehgiblhty), The pro,lect will involvea slgmficant relationship w~th one of the two universities in Denton, 3 · At least 25% of the new jobs areated by the project w~ll be filled by Denton residents, · The project w~ll provide knowledge-based jobs (at least 25 percent of jobs require college bachelors degree at enU'y level), · The project w~ll donate s~gmfieant public art to the commumty (To quahfy, donation must be approved by Greater Denton Arts Council and C~ Council), · The project w~ll donate sigmficant materials/equipment to the pubhc schools (To quahfy, donation must be approved by DISD and C~ty Council ), · The project w~ll create improvementsto the Denton Central Business D~stnct, · The project w~ll result in the formation of a bus~ness park, · The project is an international or national headquarters facthty The total tax abatement may not exceed 50% annually for ten years All abatements are subject to final approval of the City Council and DISD Board of Trustees, or the County Comm~ssI°ner's C°urt Even though a project may meet the criteria as set forth ~n this policy, an apphcatlon may be denied at the discretion of the C~ty Council and/or DISD Board of Trustees Tax abatement shall not apply to any portion of th~ ~1~ ~ of th~projeet The thresholds as described ~n Table 1 are considered gmdehnes for estabhshmg the Tax Abatement Agreement terms However, the C~ty and DISD may determine that a lower or h~gher percentage and/or a shorter or longer term of abatement may be more appropriate for an individual project If abatement is approved, the City and DISD may consider applying all or a portion of the abatement m the first year or during any shorter per~od w~thm the term of the tax abatement agreement For example, an approved abatement of 25 percent for four years may be apphed as 100 percent abatement for one year To receive tax abatement from the C~ty, the owner of the project must enter ~nto a contract with Denton Mtancipal Electric Utilities to provide electric service for a period of not less than five years and maintain performance of contractual obhgatlons for the full period of the contract, unless located m an area in which the Denton Mumclpal Electric Utthtles Is not certified to serve Upon recommendation of Denton Municipal Electric Utilities, this requirement may be waived ~When ~,~ify of Dant6n ~ D~ggfi~ndepend~nt School Distnct determine that abandoned property may requlre~0nltl ~i~ceil~Yg~ prorh\~'~ ~e6fli~mi~~ devalopment that generally satisfies the requirements of tl-as pol~dg~irflifieima~' ~.~,~he minlmum threshold andJor exceed fifty percent (50%) in tax abatement, Speci'al[projee ts m rea velop abandoned bmldingseonslstent ~th existing li~il F~:~r~rpbse?oft~ ~ol~Y~ ah abandoned building is defined as h building that has Been identtfie4~ ~ehi~[Stligble~tb~;eonl~ '~r~iai o/iMustrlal development, has been vacant for a mmnnmn of five years~h~; hfib~tari~all~de;i*~hefi~fi~ ap, pra/~i~el value, Abatemant would only be considered on the mcr eased, v~i~BiSO~ ~h~ itI~t~tO~melttS ~eaSh yeafgovered by the tax abatement agreement 6vet the value of the propert~;f61~ thi~ ~e~ ~Meh ttie!t~ax abatement agreement is executed The City of Denton and Denton Indep*~lldgn~$8hbrfl}D~s ~tt~'t Iiaay al~o c0nsldd~ other tax mcenuves authorized by law Prehmlnar~. Appbcat~on IV PROCEDURAL GUIDELINES Any person, organization or corporation desiring that the City or DISD consider providing tax abatement 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 e~ther the City or DISD is under any obligation to provide tax abatement to any applicant A Applicant shall complete the attached "Application for Tax Abatement" 5 $ \TAX ABATEMENT~TAX ABATE~NT POLICY 2000 FINAL DKJ~FT doe B Apphcant shall prepare a map or other documents providing the follovang · premse location of the property and all roadways watun 500 feet of the sate · ernst, rig uses and eondataons of real property · proposedlmprovements and uses · any proposed changes an zoning · compatabthty with the Denton Comprehensive Plan and applicable bmldlng codes and City ordmances C A complete legal description shall be provaded Applicant shall complete all forms and anformatlon detmled m the Apphcataon and submit all lnformatlonto the City Manager, City of Denton, 215 E McI(anney, Denton, TX 76201 D All anformatlon m the apphcataon 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 and DISD departments for internal revaew and comments Addat~onahnformatlon may be requested as needed F Copies of the complete apphcatmn package and staff comments will be provided to the Joint Commattee on Tax Abatement G Fiscal agents of the City, DISD and County will review the apphcaUon for comments and recommendation Additional reformation may be requested as needed Consideration of the Apphcat~on H The Joint Committee on Tax Abatement wtlI consider the application at a regular or called meetang(s) Addltlonahnformatlon may be requested as needed I The recommendation of the Joint Committee on Tax Abatement will be forwarded, with all 6 relevant materials, to the chief adm~mstrat~ve officer of each taxing entity J If the C~ty Council of Denton decxdes to grant a tax abatement, xt shall call a pubhc heanng to consxder estabhshmant of a tax remvestment zone xn accordance w~th Section 312 201 of the Tax Code The relnvestment zone must meet one or more of the criteria of Sectxon 312 202 of the Tax Code K The C~ty Councxl of Denton shall hold a pubhc heanng and determxne whether the project xs "feasible and practmal and would be of benefit to the land to be xncluded wxth~n the zone and C xty after the expiration of the tax abatement agreement ~n accordance wxth S ectxon 312 201" Specxal conslderataon shall be gxven to pohc~es noted ~n the Denton Comprehensive Plan when des~gnatang a tax re~nvestment zone L The C~ty Counml of Denton may consider adoption of an ordinance designating the area described m the legal description of the proposed project as a commercml/mdustnal tax abatement zone M The C~ty Council may consider adoptaon of an ordinance or resolution approving the terms and condltmns of a contract between the C~ty and the apphcant governing the provision of the tax abatement and the commitments of the apphcant, mcludmg all the terms reqmred by Section 312 205 of the Tax Code and such other terms and conditions as the C~ty Counc~l may require Should the commitments subsequently not be satisfied, the tax abatement shall be null and void (unless the tax abatement agreement prowdes for a recapture of the property tax revenue lost proportionate to a partml fadure to meet the mlmmum thresholds set forth in the agreement) and all abated taxes shall be paid lmmedmtely to the C~ty of Denton and all other taxmg junsdmt~ons participating ~n the tax abatement agreement Prowslons to th~s effect shall 7 be incorporated into the agreement N The govemmg bodies of Denton County and DISD may consider ratification of and partlc~pation an the tax abatement agreement between the City of Denton and the applicant 0 The City and DISD reserve the authority to enter into tax abatement agreements at differing percentages and/or terms as set forth an the gmdehnes of this policy, consistent with the requirements of the Tax Code Any tax abatement agreement will address various issues, including but not limited to, the followang General description of the project, 2 Amount of the tax abatement and percent of value to be abated each year, 3 Method of calculatlngthe 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 obhgat~ons ~n the event of default, violation of terms or conditions, delinquent taxes, recapture, administration and assignment Annual Evaluation Upon completion of construction, the Joint Committee on Tax Abatement shall receive from the City Manager an annual evaluation of each abatement to insure comphance with the agreement and to report possible violations of the agreement to the taxing entitles After new tax base numbers are received m July 8 of each year, the C~ty Manager and his staff will have mnety (90) days to review and prepare a breakdown of those figures Transfer or Assignment A contract for tax abatement may be transferred or assigned by the original applicant to a new owner upon approval by the various taxing junsd~ctlons after such a recommendation is made by the Joint Committee on Tax Abatement Local Businesses, and Mtnortty Busmess Enterpnse.s In performing thts Agreement, OWNERS agree to use thligent efforts to purchase all goods and services from Dantoil buslnesseS whenever such goods and services are comparable in av~illabil~ty, quality and price As a matter ofpotiey'wtth respect to CITY projects and procurements, CITY also encourages the use, if appheable, of qualified contractors, subcontractors and supphers where at least flf[y-o~ percent (51%) of the[Ownershlp of such eontraetor~ subcontractor or supplier is vested m racial or ethm¢ m~nont~es o~ women~ In the select, on of subcontractors, suppliers or other persons or organizat~ons proposed for work on this Agreement, the OWNERS agree to consider this policy and to use their reasonable al~d best efforts to select and employ such companies and persons for workon this Agreement Job Recruiting from Low-Moderate Income Census Tracts OWNER, lessee or assignee of OWNER agrees it will endeavor to make avmlable, or endeavor to cause lessees or assignees to make avmlable, full-time or part-time employment vath on-the-job training for Denton cmzens In ttus effort, OWNER, lessee or assignee agrees to recrmt from the low-moderate income Census tracts as further defined in the Concentration of Low/Mod Income by Block Groups shown below 9 EXI-IIBIT A The City of Denton Tax Abatement Application About the Apphcat~on The Tax Abatement Application promdes the Cnty with specific nnformatnon on the project The nnformanon requested nn the Apphcatton is designed to address the criteria developed w~tinn the C~ty of Denton's Tax Abatement Policy The mformatnon serves as the bas~s for fiscal analysis and overall project evaluatnon Tins evaluatnon ~s prowded to Council Members and serves as a source document durmg City Council delnberations The Apphcatwn And The Agreement Specffic ~nformat~on from the Apphcatlon (hke value of new investment and employment commitments) is ~ncorporated into the Abatement Agreement In fact, the Apphcauon ns an attachment to the Agreement S~nce the agreement ~s a bmdmg contract, it is nmportant that each quesnon on the apphcatnon be answered m full and as realnsncally as possible S~mply put, the apphcat~on is part of the process from start to fimsh so you'll want to make sure you're comfortable with the contents When Is The Apphcatwn Ftnal~ The answer to th~s question is very simple When you tell us, "It's final" It is not uncommon for a property owner(s) to submnt numerous Apphcat~ons as drafts for nnformatlonal and evaluative purposes only As conversaUons continue, the property owner wall submit a finalnzed versnon of the Appbcatlon that includes all of the commntments agreed to during the discussions What About Confidenttahty ~ Sectnon 312 003 of the Texas Tax Code makes confidential lnformatton prowded to the C~ty as a part of thus applmaUon that describes the specffic processes or business acuvmes to be conducted or the equipment or other property to be located on the property Tins reformation ~s not subject to pubhc disclosure until the tax abatement agreement ns executed Section 522 131 of the Texas Government Code (Texas Public Informatnon Act) makes confidential ~nformatlon winch relates to economic development negotiations between the City and a bus~ness prospect that the C~ty seeks to have locate, stay or expand ~n or near the temtory of the City The mformatnon must relate to a trade secret of the busnness prospect, commercnal or financial mformatnon whnch the busnness prospect can demonstrate based on specffic factual ewdence that d~sclosure would cause substantial competitive harm to the person from whom the mformat~on was obtained or mformatnon about a finanmal or other mcentnve being offered to the business prospect by the Cnty or by another person lnformatnon about a financnal or other mcenUve being offered to the bus~ness prospect ns reqmred to be dnsclosed when an agreement ns made with a business prospect The City ~s subject to thsclosmg most records and documents upon request under the Pubhc Information Act Accordingly, please clearly md~cate and raark any reformation you consider proprietary Tlus would mclude anything m your application winch you consider a trade secret, commercial or f'manc~al mformat~on winch you can demonstrate by specffic factual ewdence that would cause substantml competitive harm if d~sclosed, mformat~on winch descrthes the specffic processes or business activmes to be conducted or the equrpment or other property for winch the tax abatement ~s sought, any financial or other incentive you may be seelang from the Ctty or any other mformat~on you deem to be confidential under the law Who is Authorized To Sign the Apphcatton ~ Because the Applncatlon itself ~s non-binding, the person s~gmng need not be the property owner or even an ~ndnvndual duly authorized to sign on behalf of the property owner However, ff an Agreement ns reached, the Apphcatnon wall be an attachment to the Agreement and ~ts contents will be bnndnng through the authorized sngnamre reqmred on the Agreement 11 City of Denton Tax Abatement Application C~ty of Denton C~ty Manager's Office Denton, Texas 76201 (940) 349-8307 (940) 349-8596 FAX 12 APPLICATION FOR TAX ABATEMENT CITY OF DENTON, TEXAS Property Owner Company or ProJect Name Marling Address Telephone ] Fax No Contact Name Title Ma~hngAddress Telephone I Fax No 2 Provide a chronology of plant openings, closing and relocations over the past 15 years 3 Prowde a record of mergers and f'mancml restructunng during the past 15 years 4 Will the occupants of the project be owner or lessee? If lessee, are occupancy commitments already ex~stmg7 5 Is the project a relocation of ex~st~ng facthty or a new facthty to expand operations9 If relocation, g~ve current location 13 6 If an existing Denton business, will project result m abandonment of existing faclhty9 If so, the value of the existing facility will be subtracted from the value of the new facthty to arrive at total project value 7 Property Description - Attach a copy of the legal description detalhng property's metes and bounds - Attach map of project including all roadways, land use and zoning w:thin 500 feet of s~te 8 Current Value Attach copy of latest property tax statement from the Denton County Central Appraisal District (include both real and personal property) 9 Increased Value/EstImated Total Cost of ProJect Structures $ Site Development $ Personal Property $ Other Improvements $ 10 Indicate amount of tax abatement and number of years requested for each taxing entity C~ty of Denton % [ years Denton Independent School D~smct %I years Denton County % years List any other financial incentives th~s project will request/receive Esttmated Freeport Exemption I $ Estimated Electric Utthty Industrial Development Rider [ $ Estimated Water/Wastewater Infrastructure Assistance $ 11 Give a brief description of the activities to be performed at this location, including a description of products to be produced md/or services to be prowded 14 12 Project Constmctton Phase A Esttmate percentage of project development and construction dollars to be spent with Denton based contractors or sub-contractors $ I Percentage local contractors % Construction costs B Construct]on Employment Estimates Start Date (Mo/Yr) [ Completion Date (Mo/Yr) No of Construction Jobs [ Estimated Total Construction Payroll $ C Describe any off-site infrastructure roqmrements · Water · Wastewater · Streets · Drainage · Other 15 13 Project Operation Phase Provide employment mformation for the number of years tax abatement ns requested At Project Existing Start Date At Term of Employment Information Operation (mo/yr) Abatement 0f appbeable) /__ A Total number of permanent, full-time jobs B Employees transferred bom outside Denton C Net permanent flail-time jobs (A minus B ) E Total annual payroll for all permanent, flail-time 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 G Estimate annual utility usage for project Electric $ Water $ Wastewater $ Gas $ 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 m Tax Abatement Pohcy, Section lid 16 15 Is property zoned appropriately9 Yes No Current zoning Zoning reqmred for proposed project Antm~pated variances Is property platted? Yes No Will replattmg be necessary Yes No Discuss any envtronmental ~mpacts created by the project A List any permits for which apphcant must apply Applicant wall be requtred to prowde City w~th copies of all applications for environmental permits upon completion of apphcat~on(s) B Provide record of compliance to all environmental regulations for the past five years 18 Prowde specific detail of any businesses/residents that will be d~splaced and assistance that will be avadable from the requesting company 19 Provide description of any h~storlcally slgmficant area included w~thm the project's area as determined by the H~stonc preservation Officer if any, gwe detail of how the historically s~gnlficant area wdl be preserved 20 Justfficatlon for Tax Abatement Request Substantiate and more fully describe the jUStlficatmn for this request Include the amount of the abatement requested and show how it will contribute to the financial vlabthty of the project Submit attachments if necessary 17 21 List additional abatement factors to be considered for this project as outlined on pages 3 and 4 of the tax abatement pohcy 22 Financial Information Attach a copy of the latest audited financial statement or, In the case of a new pro3ect, a business plan This tax abatemant apphcatJon is submitted with the acknowledgement that additional certified financial information may be required Authorized Signature Date 18 EXHIBIT "B" Legal Description of Sally Beauty Company, Inc property BEING a tract of land s~tuated m the M E P and P R R Co Survey, Abstract No 927, Denton County, Texas, being a part of Lot 6, Block 3 of the Golden Triangle Industrial Park, Phase V, an addition to the City of Denton according to the plat recorded ~n Cabmet C, Page 87, Plat Records of Denton County, Texas, and being more partmularly descnbed as follows BEGINNING at a found ½-inch ~ron rod with cap stamped "A H HALFF ASSOC" (hereafter referred to as "with cap") at the mtersectmn of the South right-of-way hne of Morse Street (60 feet wide) with the East nght-of-way hne of Kamberly Drive (60 feet wide), THENCE South 88 degrees 50 minutes 50 seconds East, along said South line, a distance of 393 00 feet to a found ½-tach iron rod with cap for a comer, THENCE South 1 degree 09 minutes 10 seconds West, departing said South line, a distance of 529 70 feet to a point for a comer, said comer lying South 1 degree 09 manures 10 seconds West, a distance of 20 00 feet from a ½-tach tron rod with cap set for w~tness, which hes on the North line of a 40-foot wide Drainage and Utthty Easement as shown on smd recorded plat in Cabinet C, Page 87, THENCE North 88 degrees 50 minutes 50 seconds West, along the centerlme of smd easement, a distance of 411 80 feet to a point for a comer lying on the East line of said Kamberly Drive and being South 88 degrees 50 minutes 50 seconds East, a distance of 0 30 feet fi:om an 'x' found for witness in top ora headwall, THENCE North 3 degrees 11 minutes 09 seconds East, along smd East line, a distance of 20 00 feet passing a set ½-tach aron rod wtth cap, and contmmng on line, a total distance of 530,03 feet to the POINT OF BEGINNING AND CONTAI/qlNG 213,153 square feet or 4 893 acres of land BEING an 8 4812 acre tract of land m the M E P & P R R CO SURVEY, ABSTRACT NO 927, and being all of Lot 1, Block 3 and part of Lot 6, Block 3, Phase V of the Golden Triangle Industrial Park, an addition to the C~ty of Denton, Denton County, Texas, according to the plat thereof recorded ~n Cabinet C, Page 87, Plat Records of Denton County, Texas, and being more particularly described as follows BEGINNING at a ½-1neb ~ron rod with a yellow plastm cap stamped "A H HALFF ASSOC" (hereafter referred to as "with cap") found at the point of intersection of the south right-of-way line of Morse Street (60 feet w~de), and the west right-of-way line of Mayhill Road (60 feet wide), THENCE South 03 degrees 24 rmnutes 15 seconds West, along said west line, a distance of 530 11 feet to a ¼-tach iron rod with cap found for a comer, THENCE North 88 degrees 50 minutes 50 seconds West, departing smd west line and along the south hne of Lot 1, at 562 39 feet passing the southwest comer of Lot 1 and continuing along the south line of Lot 6, m all a distance of 687 04 feet to a ¼-tach iron rod with cap found on the south line of Lot 6, THENCE North 01 degree 09 nunutes I0 seconds East, departing smd south line of Lot 6, a distance of 529 70 feet to a ¼-tach iron rod wtth cap found for a comer, smd point lying on the south right-of-way line of Morse Street (60 feet wide), THENCE South 88 degrees 50 nnnutes 50 seconds East, along smd south right-of-way hne, at 158 16 feet passing the northeast comer of Lot 6 and continuing along the north line of Lot 1, m all a distance of 707 86 feet to the POINT OF BEGINNING AND CONTAINING 369,438 square feet or 8 4812 acres of land BOTH TRACTS TOTALING 13 3742 acres of land City of Denton Tax Abatement Application City of Denton C~ty Manager's Office Denton, Texas 76201 (940) 349-8307 (940) 349-8596 FAX -1- Tax Abatement Policy June 2000 APPLICATION FOR TAX ABATEMENT CITY OF DENTON, TEXAS 1 Property Owner Sally Beauty Company, Inc Company or ProJect Name Matlmg Address 3900 Morse Street Denton, Texas 76208 Telephone (940) 898-7500 I Fax No (940) 898-7501 Contact Name Gary Robinson Title Sr Vice Prestdent, CFO Mathng Address 3900 Morse Street Denton, Texas 76208 Telephone (940) 898-7500 [ Fax No (940) 484-6114 2 Provide a chronology of plant openings, closing and relocations over the past 1:5 years In excess of 2,600 stores opened and closed in the last 15 years Will make available to City's Financial Advtsor if requtred 3 Provtde a record of mergers and financial restructurtng during the past 15 years There have been tn excess of 30 acquisitions in the last 15 years that have contributed to the Gompany's growth These have been throughout the US, Canada, Umted Kingdom and Germany Will make available to City's Financial Advisor if requtred 4 Wtll the occupants of the project be owner or lessee9 If lessee, are occupancy commttments already existing9 Owner 5 Is the project a relocation of extstmg facility or a new facdtty to expand operattons9 If relocatton, gtve current location Expand operations wtthin existing facility Conversion from warehouse to office space Tax Abatement Policy June 2000 - 2 - 6 If an existing Denton business, wtll project result tn abandonment of existing facthty'~ If so, the value of the existing facthty will be subtracted from the value of the new facthty to arrive at total project value No 7 Property Description - Attach a copy of the legal descrtptton detalhng property's metes and bounds See Exhibit 1 & 2 - Attach map of project mcludtng all roadways, land use and zomng wlthtn 500 feet of stte See Exhibit 3 8 Current Value Attach copy of latest property tax statement from the Denton County Central Appratsal Dtstnct (include both real and personal property) See Exhtbtt 4 9 Increased Value/Esttmated Total Cost of Project $5 M Phase I -- Proposed Phase 11 Addtttonal $5 M Structures $4,300,000 Site Development $200,000 Personal Property $500,000 Other Improvements $ 10 Indtcate amount of tax abatement and number of years requested for each taxing entity C tty of Denton 100% of Increased Value 10 years Denton Independent School Dlstrtet 100% of Increased Value 10 years Denton County 100% of Increased Value 10 years List any other financtal incentives thts project wtll request/recetve Esttmated Freeport Exemption ] $36,650 Emmated Electrtc Uttltty Industrtal Development Rtder] $0 Estimated Water/Wastewater Infrastructure Asststance $0 11 Gtve a brief descnptton of the activities to be performed at thts location, mcludmg a description of products to be produced and/or servtces to be provided This location is the corporate headquarters m support of the Worldwide operatt°ns °f 2,350 st°res Support provided at thts locatmn encompasses Fmance, Legal, Marketmg, Real Estate, Merchandtstng, Human Resources, Informatton Systems, Advertising, and Logtsttcs Support T~x Abatement Pohey June 2000 - 3 - 12 Project Constructton Phase A Estimate percentage of project development and construction dollars to be spent with Denton based contractors or sub-contractors Will be based on low Nd through the archaect and contractor when selected Constructton costs So, 3 Mflhon I Percentage local contractors Unknown % B Construction Employment EsUmates Start Date (Mo/Yr) Projected Spnng 2002 Completmn Date (Mo/Yr) Unknown No of Construction Jobs Unknown Emmated Total Constmctmn Payroll Unknown C Describe any off-site infrastructure reqmrements · Water None · Wastewater None · Streets None · Drainage None · Other None Tax Abatement Pohey June 2000 - 4 - 13 Project Operation Phase Provide employment information for the number of years tax abatement ts requested At Project Exlstmg Start Date At Term of Employment Information Operation (mo/yr) Abatement 0f applicable) / A Total number of permanent, full-ttme jobs 345 450 B Employees transferred from outside Denton 0 0 C Net permanent full-ttme jobs (A mtnus B ) 345 450 E Total annual payroll for all permanent, full-time $16,640,000 $21,704,000 jobs (A) F Types of jobs created L~st the job titles and number of positions in each category that will be employed at the faethty Provide average wage for each category The proposed office expansion is expected to provide the capability to expand the corporate staff as tt grows to support the increasing international sales and stores Curcent profile of positions are approxtmately 57% professional average salary of $60,000 43% clertcal average salary of $24,000 Job positrons encompass the full range from clerical administration to vice president Positions will be in accounting, marketing, human resources, MIS, finance, advertising, real estate, and training Salaries will be from $20,000 to $150,000 G Estimate annual utility usage for project Current Usage Electric $200,000 Water Included Wastewater Included Gas $10,800 Increase wtll be in proportion to increased office and occupancy utlhzation 14 Describe any other dtrect benefits to the Ctty of Denton as a result of this project (e g, sales tax revenue or project elements identified in Tax Abatement Pohcy, Section III) The Company increases the sales tax base not only through employee growth in local spending but through the number of travelers (other business partners and manufacturers) who meet regularly with Company professionals The Company performs on-site training for retail store management from across the nation, with mdtvtduals generating commerce for Denton's hotels and restaurants Tax Abatement Policy June 2000 - 5 - 15 Is property zoned appropriately9 Yes Current zoning Light Industrial Zoning required for proposed project Light Industrial Antmlpated variances None 16 Is property platted? Yes Will replatting be necessary No 17 Discuss anY environmental impacts created by the project A List any permits for which applicant must apply Applicant will be reqmred to prowde City with copies of all applications for environmental permits upon completion of appheation(s) None B Provide record of compliance to all environmental regulations for the past five years Sally Beauty Company, Inc has not been notified of any non-comphance w~th enwronmental regulations 18 Provide specific detail of any busmesses/residents that will be displaced and assistance that will be available from the requesting company Not applicable 19 Prowde description of any historically significant area included within the project's area as determined by the Historic preservation Officer If any, g~ve detail of how the historically s~gmficant area will be preserved Not applicable 20 Justification for Tax Abatement Request Substantiate and more fully describe the justtficatmn for this request Include the amount of the abatement requested and show how a wdl contribute t° the financial vlabihty of the project Submit attachments if necessary See ~mpact study Tax Abatement Policy .lune 2000 - 6 - 21 List additional abatement factors to be considered for this project as outlined on pages 3 and 4 of the tax abatement pohcy Retain Denton's only International headquarters Recruit high-paying professional .lobs 22 Financial Information Attach a copy of the latest audIted financial statement or, m the case of a new project, a business plan Wdl make available to City's Financial Advisor This tax abatement apphcat~on is submlited with the acknowledgement that additional certtfied financial reformation may be required Tax Abatement Policy June 2000 - 7 - EXHIBIT 1 EXHIBIT A ATTACHED TO GENERAL WARRANTY DEED FROM CROW--~ENTON NO 1 , GRANTOR, TO SALLY BEAUTY COMPANY, INC , G~ANTEE DATED DECEMBER 7~ ¢ 1986 BEING a tract of land s=tuated im ~e M.E.P. & P.R.R. Co. Survey, Abstract 927, Dentoo County, Texas, bemmg a part of Lot 6, Block 3 of the Golden to the plat =e~rdM in C~in~ C, Page 87, Plat Recor~ of Denton T~xam~ a~ ~ing ~re ~artz~larly descrm~ as foll~s: B~I~I~ at a f~ 1/2-inch 1rom r~ with cad st~ "A.M. ~ (hereafter ref~rr~ to as "wl~ cap") at the intersection of the South right-or.ay line uf Morae St.mt (60 f~t wide} with ~e East right--of~ay degr~ 09 ml~utes 10 m~o~s West, a distance of 20.00 feet fr~ a 1/2-i~ch a he.wall; ~ CONTAINI~ 213,1~3 s~are f~t or 4.893 acres of la~. EXHIBIT 2 voL2993 1 0318 Exhlb zt A BEING an 8 4812 acre tract of land in tbs M E P & P R R CO SURVEY, ABSTRACT NO 927, and being all of Lot 1, Block 3 and part of Lot 6, Block 3, Phase V of the Golden Trzangle Industrial Park, an addition to the Cmty of Denton, Denton County, Texas, according to the plat thereof recorded mn Cabinet C, Page 87, Plat Records of Denton County, Texas, and being more particularly described as follows BEGINNING at a 1/2-inch mron rod wmth a yellow plastic cap stamped "A H HALFF ASSOG" (hereafter referred to as "with cap") found at the poznt of mntersectmon of the south right-of-way line of Morse Street (60 feet wide), and the west right-of-way line of Mayhill Road (60 feet wide), THENCE South 03 degrees 24 minutes 15 seconds West, along sald west line, a distance of 530 11 feet to a 1/2-inch iron rod with cap found for a corner, THENCE North 88 degrees 50 minutes 50 seconds West, departing samd west lzne and along the south line of Lot 1, at 562 39 feet passing the southwest corner of Lot 1 and continuing along the south line of Lot 6, in all a distance of 687 04 feet to a 1/2-much iron rod with cap found on the south line of Lot 6, THENCE North 01 degree 09 minutes 10 seconds East, departing said south llne of Lot 6, a distance of 529 70 feet to a 1/2-inch iron rod with cap found for a corner, sald point lyzng on the south right-of-way linc of Morse Street (60 feet wide), THENCE South 88 degrees 50 minutes 50 seconds East, along said south right-of-way lmne, at 158 16 feet passing the northeast corner of Lot 6 and continuing along the north lmne of Lot l, mn all a distance of 707 86 feet to the POINT OF BEGINNING AND CONTAINING 369,438 square feat or 8 4812 acles of land EXHIBIT 3 EXHIBIT 4 -- CITY OF DENTON TAX OFFICE ~ 601 E HICKORY SUITE F DENTON TX 76205 0 0 0 (940)349-8319 TAX STATEMENT FOR YEAR 2000 Ad valorem taxes ere due upon recmpt of th~s statement and become dehnquent February 1st Note See mformatmn below and an the back p KEEP THIS PORTION FOR of Ibis statement for additional important information PROPERTY PERSONAL PROPERTY- CORP OFFIC ......... DESCRIPTION E & WAREHOUSE LOCATION 3900 M 03900 MORSE ST APPRAISED ,555,718 RECEIVED VA,UE 13 PROPERTY I1,,,I,I1,,,,I,II1,,,,,I,II1,,,,I,,11,1,,11,,,11,,,I r,, J ~) ;.~000 EXEMPTIONS OWNER SALLY BEAUTY COMPANY HOMESTEAD (-) PO BOX 490 ~C~.) ARTHUR ANDERS~ DISABLED VETERAN (-) 0 SENIOR CITIZEN (-) 0 DENTON TX 76202-0490 DISABLED PERSON {-) ~ Total Taxable Value I?~1 0 528 15 AP~"~JC'~(')X./tC'~,~ Tax Rate per $100 , ~" ARTHu ?SEN LLP TOTAL TAX TAXES ARE DUE UPON RECEIPT Total due if paid in FEB 67,471 80 Total due if paid in MAR 68,732 96 Amount shown above Is due 69,994 1 before January 31st and be- Total due if pamd In APR comas dalmnquent on February Total due if paid mn MAY 71,255 27 1st If paid after January 31st, Total due if paid mn JUN 72,516 42 86,569 38 please see chart on the right Total due If paid In JUL SAVE TIME & MONEY ... BY CAREFULLY CHECKING THE FOLLOWING: ] If you awn several properties, you will recewe 8 separate statement for each property If any statement is m~ssLng, notify this office ~mmedmtel¥ ] We cannot accept post=dated checks Enter the correct date an your check ] Wrtte your check for the exact amount due on your statement(s} The C~ty of Denton does not offer a spilt-payment option ] Enclose the lower portmn of this statement w~th your check The upper portion and your cancelled check wd[ be your rece~pt ] [f you desire a validated receppt, enclose a stamped, self-addressed envelope w~th your remittance 1/2% Sales Tax reduced your city taxes by $ 2119367 Vm~t the City of Denton's Webs~te at wwwc~tyofdenton corn DETACH AND RETURN LOWER PORTION WITH YOUR PAYMENT 900732000000063057763 T.A)( YEAR 2000 ACCOUNT NO 90073200000 PROP O~I/NER SALLY BEAUTY COMPANY MAKE CHECKS PA¥'AI~LE TO II,,,hll,.,,ll,lh.,,llll,,,Ih.l.l,,,Ihl,,I,I CITY OF DENTON TAX OFFICE PO BOX 961083 000 FT WO.T., T× [] IF OVER 65 OR DISABLED. CHECK HERE FOR 1/4 PAYMEI~ .... ~... -SEE BACK OF .~TATI=MI=NT FoR CITY OF DENTON TAX OFFICE 6ol E HICKORY, SUITE F (940)349 - 83 '1 TAX STATEMENT FOR YEAR 2000 dellnquen! February 1st Note See reformation below and on the bock [ KEEP THIS PORTION FOR YOUR RECORDS~ PROPERTY GOLDEN TRIANGLE INDUSTRIAL PAR DESCRIPTION K PH 5, BLOCK 3, LOT 6A, ACRES 03900 MORSE ST RECEIVED APPRAISED VALUE 3,168,827 PROPER~ II,,.hll,,,,hllh,,.I,IIh.,,I,,Ihl..ll,,,Ih,,I ~b~ ~ ~ /000 EXEMPTIONS HOMESTEAD (-) 0 OWNER SALLY BEAUTY CO [NC ARTHUR ANDERSE~ DISABLED VETERAN (-) 0 P 0 BOX 490 ~ ~ SENIOR CITIZEN (-) 0 DENTON TX 76202-0490 DISABLED PERSON (-) 0 t~ , T0~l Taxable Value 3,168,827 TOTAL TAX [E~, 6f;~6',~15 TAXES ARE DUE UPON RECEIPT Total due Total due ff pad m MAR 18,242 40 Amount sho~ above IS due before January 31st and be- Total due ff pad in APR 18,577 13 comes delinquent on February Total due tf pad ~n MAY 18,911 85 1st If pad after Janua~ 31st, Total due ff pad In JUN 19,246 57 please see chart on the r~ght Total due ff pad in JUL 22,7t0 96 SAVE TIME & MONEY BY C~F~Y CHECKING ~ FOLLOWING ~ Wrmte your chock for the exact amount due on your stotemont{s) The C~ty of Denton does not offer a splat-payment optmn Enclose the lower portton of th~s stotement with your check The upper portmn and your cancelled chec~ wdl be your receipt 1/2% Sales Tax reduced your cl~ taxes by $ 5,624 g8 Vm=t the C~ty of Denton's Webs~te at www c~tyofdenton corn DETACH AND RETURN LOWER PORTION WITH YOUR PAYMENT 139812000000016736151 TAX YEAR 2000 ACCOUNT NO 13981200000 MAKE CHECKS PAYABLE TO PROP OWNER SALLY BEAUTY CO INC CITY OF DENTON Ih,,hlh,,,,ll,lh,.,llll,,,ll,.I,,h,,ll,l,.I,I CITY OF DENTON TAX OFFICE PO BOX ~61083 000 FT WORTH, TX 76161'0083 [] IF OVER 65 OR DISABLED, PLEASE CHECK HERE FOR 1/4 PAYMENT PLAN -SEE BACK OF STATEMENT FOR DETAILS- "~"' / CITY OF DENTON TAX OFFICE · / 601 E HICKORY, SUITE F DENTON TX 76208 ($40)349- 8319 0 0 0 " TAX STATEMENT FOR YEAR 2000 ~,d valorem taxes are due upon receipt of this statement and became lehnquent February 1st Note See mformatmn below and on the back I KEEP THIS PORTION FOR YOUR RECORDS~ If this statement for additional important information PROPERTY GOLDEN TRIANGLE INDUSTRIAL PAR ,~ ~' '~"'~W~;~ ~..,,,,~¢, .,~ :. DESCRIPTION K PH 5, BLOCK 3, LOT 1 ~*~.~¢..~*~[*)~;~g:[ '~.'.'.,,,,,,,'~ 99999 MORSE ST APPRAISED VALUE 147,268 PROPERTY I1,,,I,I1,,,,I,II1,,,,,I,II1,,,,I,,11,1,,11,,,11,,,I RECEIVED EXEMPTIONS OWNER SALLY BEAUTY C0 INC HOMESTEAD (-) 0 ATTN PRESIDENT _,~f~/~ .f~) 0C t /J ~ ~Ii00 DISABLED VETERAN (-) 0 PO BOX 490 SENIOR CITIZEN (-) 0 DENTON TX 7620eLRT0U~l~ ANDERSEN DISABLED PERSON (-) 0 Total Taxable Value 147,268 __ ARTHUR ANr Fpq N LLP Tax Rate per ~lOO 0 52815 TOTAL TAX TAXES ARE DUE UPON RECEIPT Total due If paid in FEB 832 24 Total due if paid m MAR 847 79 Amount shown above Is due Total due If paid In APR 863 35 before January 31st and be- comes delinquent on February Total due if paid in MAY 878 90 1st If paid after January 31at, Total due if paid in JUN 894 46 please See chart on the right Total due if paid in JUL 1,055 46 SAVE TIME & MONEY BY CAREFULLY CHECKING THE FOLLOWING' ] We cannot accept post-dated checks Enter the correct date on your check ] Wr~te your check for the exact amount due on your statement(s} The C~W of Denton does not offer a spht-payment option ] Enclose the lower portion of this statement with your check The upper portion and your cancelled check will be your recetpr 1/2% Sales Tax reduced your city taxes by $ 26141 V~s[t the C~ty of Denton's Webs~te at wwwc~tyofdenton cpm DETACH AND RETURN LOWER PORTION WITH YOUR PAYMENT 082152000000000777797 TAX YEAR 2000 ACCOUNT NO' 08215200000 PROP OWNER SALLY BEAUTY C0 INC MAKE CHECKS PAYABLE TO CITY OF DENTON I1,,,I,I1,,,,,11,11,,,,,1111,,,11,,,I,,I,,,11,1,,I,I CITY OF DENTON TAX OFFICE PO BO~ 961083 000 FT WORTH, TX 76161-0083 [] IF OVER 65 OR DISABLED, PLEASE CHECK HERE FOR 1/4 PAYMENT PLAN -~l::~ rtAPk' t"~l= ctTATt:Ral::MT FOR DETAILS- ~'" // CITY OF DENTON TAX OFFICE 601 E HICKORY SUITE F DENTON TX 7620S ,, (940)349- 83 q9 000 TAX STATEMENT FOR YEAR 2000 ,.j/.tlcalorem taxes are due upon receipt of this statement and beobmn nquent February 1st Note See information below and on the back I KEEP THIS PORTION FOR YOUR RECORDS7 of thio Statement for additional important Information PROPERTY GOLDEN TRIANGLE INDUSTRIAL PAR ~,~,)~'~?~}~i~ DESCRIPTION K PH 5, BLOCK 3, LOT 8 (PT), A ~.... ~.~i~g[:0ff0.~:.]~l~,~l ~ I ~ I 039J00 MORSE ST APPRAISED VALUE EXEMPTIONS PROPERTY Ih,,hlh,,,hllh,,,,hllh,,,h,ll,l,,Ih,,Ih,,I R E C E I VE O HOMESTEAD (-) OWNER SALLY BEAUTY CO INC 0 ATTN PRESZDENT ~ ;~ DISABLED VETERAN (-) 0 L% F ~ ~) ~000 S~NmOR CITIZEN (-> P0 BOX 49O 0 DISABLED PERSON (-) 0 DENTON TX 76202-~URANDERSE mt0., Taxable Value 56,186 / TAX , TOTAL / TAXES ARE DUE UPON RECEIPT Total due if pard in FEB 317 51 Total due If prod In MAR 323 45 Amount shown above Is due before Janua~ 31st and be- Total due If paid In APR 329 38 comes delinquent on February Total due ;f paid m MAY 335 32 1st If pald~ after January 31st, Total due ~f prod ~n JUN 341 25 please see =ha~ on the right Total due if prod ~n JUL 402 67 SA~ TIME & MONEY BY C~F~LY CHEWING ~ FOLLOWING ~/2% Sa[aa Tax reduczd yeur c~y ~axaz by $ 99 7~ Vm~ ~ CtW o( Demon'a Webmte a~ wwwmtyofdemoncom DETACH AND RETURN LOWER PORTION WmTH YOUR PAYMENT 082161000000000296740 TAX YEAR 2000 ACCOUNT NO 08216100000 PROP OWNER SALLY BEAUTY CO INC MAKE CHECKS PAYABLE TO CITY OF DENTON CITY OF DENTON TAX OFFICE PO BOX 961083 000 FT WORTH, TX 76161-0083 ~-'~ IF OVER 65 OR DISABLED, PLEASE CHECK HERE FOR 114 PAYMENT PLAN -SEE BACK OF STATEMENT FOR DETAILS- Apphcabon for Tax Abatement SALLY BEAUTY COMPANY Sally Beauty Company ~s the world's largest beauty supply company Th~s $1 bdhon company has over 2,300 company owned stores in 47 states, Puerto R~co, Japan, Germany, Canada and theUmted K~ngdom The company began in New Orleans m 1964 (w~th one store) and moved to Denton in 1982 The Denton facd~ty was originally built as the corporate office w~th warehouse space included Sally no longer uses the warehouse space and has outgrown the ex~st~ng ofhce space Sally proposes a redevelopment of exmt~ng warehouse ~nto offme space to accommodate their rapid growth The first phase would convert approximately 30,000 square feet of warehouse into approximately 60,000 square feet of new office space, leaving another 30,000 of warehouse to be converted into office in phase two Investment for each phase ~s estimated at $5 mdhon each Employee and Payroll Before I After I Project Project Increase Eshmates Total Number of Permanent Employees 345~ 105 Annual!Pa~/roll $16,640,000~ 5,064,000 IAverage Annual for New Jobs $48,231 I Salary Before After Utd~t~es Project Project Increase (Calendar 1996) (Projected) Total Annual Ubhtles $200,000 $400,000 $200,000 Estimated Wage Impact per Year $1,731,888~ (Ca cu ated on 105 New Jobs @ $48,231/year) 10 YEAR COST/BEN EFIT ANALYSIS DISD C~ty County TOTAL (10 Year Abatement) Estimated Wage Impact $17,318,880 New Taxes $690,427 $197,749 $86,839 $975,015 Abatement $445,837 $127,705 $56,080 $629,622 EXHJB ! ! V®BEAUTY L I COMPAiUY, c July 26, 2001 Honorable Euhne Brock Mayor C~ty of Denton, Texas 215 East McK~nney Denton, Texas Dear Mayor Brock The C~ty of Denton has asked that I render an opinion as to the authority of M~chael Renzulll, President, to b~nd Sally Beauty Company, Inc ("Sally") to the terms and conditions of the Tax Abatement Agreement Between The C~ty Of Denton And Sally Beauty Company, Inc, expected to be dated ~n August, 2001 (the "Agreement") I am familiar w~th the provlsmns of the Agreement and have examined cop~es of the Certfficates of Incorporatmn and By-Laws of Sally, resolutmns adopted by the Board of D~rectors of Sally and such other documents and data as I deemed relevant Based on the foregoing, and ~n rehance thereon, subject to the hm~tat~ons set forth below, ~t ~s my op~mon that M~ehael Renzulh, President, is authorized to bind Sally to all the terms of the Agreement 1 am admitted to practice m the State of Texas The op~mon expressed hereto ~s hmlted to the laws of the State of Texas and the Umted States of America, and I express no op~mon as to the laws of any other jurlsfl~ct~on Th~s opinion is rendered solely for the C~ty of Denton's use ~n connection w~th the transactmns contemplated by the Agreement, and may not be relied upon by other persons or for any other purposes Th~s opinion may not be quoted or used, ~n whole or ~n part, for any other purpose or dehvered to any other person, except w~th my pnor written consent V~ce President and General Counsel PO Box 490 (76202) 3900 Morse St (76208) Denton, Texas (940) 898 7500