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Home My WebLink About2007.07.17_OPWA AgendaPUBLIC NOTICE OF THE MEETING OF THE OWASSO PUBLIC WORKS AUTHORITY TYPE OF MEETING: Regular DATE: July 17, 2007 TIME: 6:30 p.m. PLACE: Council Chambers, Old Central Buildin; 109 N. Birch Notice and agenda filed in the office of the City Clerk and posted at City Hall at 5:00 p.m. on Friday, July 13, 2007. Sherry Bishop, City Clerk AGENDA 1. Call to Order Chairman Stephen Cataudella 2. Flag Salute 3. Roll Call 4. Consideration and appropriate action relating to a request for approval of the Consent Agenda. All matters listed under "Consent" are considered by the Trustees to be routine and will be enacted by one motion. Any Trustee may, however, remove an item from the Consent Agenda by request. A motion to adopt the Consent Agenda is non - debatable. A. Approval of the Minutes of the July 3, 2007 Regular Meeting. Attachment #4 -A B. Approval of Claims. Attachment #4 -B C. Acknowledgement of receiving the monthly FY 2006 -2007 budget status report. Attachment # 4 -C M: \Agendas \OP WA \2007 \0717.doc Owasso Public Works Authority July 17, 2007 Page 2 5. Consideration and appropriate action relating to a request for Council approval of a Development Agreement among the OPWA, the OEDA, and SF Shops Investors, L.P. and for limited purposes set forth in the Agreement, the City of Owasso. Mr. Ray Attachment #5 Staff will recommend approval of an Agreement wherein the OPWA provides incentives and reimbursements for the development of a retail center by SF Shops Investors, L.P. 6. Report from OPWA Manager. 7. Report from OPWA Attorney. 8. New Business. (New Business is any item of business which could not have been foreseen at the time of posting of the agenda.) 9. Adjournment. %I Agendas \OPWA \3007 \0717. doc OWASSO PUBLIC WORKS AUTHORITY MINUTES OF REGULAR MEETING Tuesday, July 3, 2007 The Owasso Public Works Authority met in regular session on Tuesday, July 3, 2007 in the Council Chambers at Old Central per the Notice of Public Meeting and Agenda posted on the City Hall bulletin board at 5:30 p.m. on Friday, June 29, 2007. ITEM 1. CALL TO ORDER The meeting was called to order at 6:52 p.m. ITEM 2. ROLL CALL PRESENT ABSENT Steve Cataudella, Chair D.J. Gall, Vice Chair Doug Bonebrake, Trustee Susan Kimball, Trustee A quorum was declared present. STAFF Rodney J. Ray, Authority Manager Julie Lombardi, Authority Attorney ITEM 3. CONSIDERATION AND APPROPRIATE ACTION RELATING TO A REQUEST FOR TRUSTEE APPROVAL OF THE CONSENT AGENDA A. Approval of Minutes of the June 19, 2007 Regular Meeting. B. Approval of Claims. Mr. Bonebrake moved, seconded by Mr. Gall, to approve the OPWA Consent Agenda with claims totaling $800,264.55 and payroll claims for two pay periods totaling $128,808.34. YEA: Bonebrake, Cataudella, Gall, Kimball NAY: None Motion carried 4 -0. Owasso Public Works Authority July 3, 2007 ITEM 4. CONSIDERATION AND APPROPRIATE ACTION RELATING TO A REQUEST FOR TRUSTEE APPROVAL OF AN AGREEMENT FOR ENGINEERING SERVICES FOR THE WASTEWATER TREATMENT PLANT EXPANSION AND 117TH STREET PUMP STATION UPGRADE AND AUTHORIZATION FOR THE CHAIRMAN TO EXECUTE ALL RELATED DOCUMENTS Ms. Stagg presented the item. Mr. Bonebrake moved, seconded by Ms. Kimball, for Trustee approval of an Agreement for Engineering Services for the Wastewater Treatment Plant Expansion and 117th Street Pump Station Upgrade with Greeley and Hansen, LLC of Chicago, Illinois in the amount of $545,000.00 and authorization for the Chairman to execute all related documents. YEA: Bonebrake, Cataudella, Gall, Kimball NAY: None Motion carried 4 -0. ITEM 5. CONSIDERATION AND APPROPRIATE ACTION RELATING TO A REQUEST FOR TRUSTEE APPROVAL OF RESOLUTION NO. 2007 -06, A RESOLUTION DECLARING THE INTENT OF THE OWASSO PUBLIC WORKS AUTHORITY TO EXPEND CERTAIN FUNDS IN CONNECTION WITH WASTEWATER SYSTEM IMPROVEMENTS, AND SAID EXPENDITURES TO BE REIMBURSED FROM THE PROCEEDS OF DEBT TO BE INCURRED BY THE AUTHORITY; AND, CONTAINING OTHER PROVISIONS RELATING THERETO Ms. Bishop presented the item. Ms. Kimball moved, seconded by Mr. Bonebrake, for Trustee approval of Resolution No. 2007 -06, as stated above. YEA: Bonebrake, Cataudella, Gall, Kimball NAY: None Motion carried 4 -0. ITEM 6. REPORT FROM OPWA MANAGER No report ITEM 7. REPORT FROM OPWA ATTORNEY No report PA Owasso Public Works Authority ITEM 8. NEW BUSINESS None ITEM 9. ADJOURNMENT Mr. Bonebrake moved, seconded by Ms. Kimball, to adjourn. YEA: Bonebrake, Cataudella, Gall, Kimball NAY: None Motion carried 4 -0 and the meeting was adjourned at 7:00 p.m. Pat Fry, Minute Clerk July 3, 2007 Steve Cataudella, Chairman OPWA CLAIMS TO BE PAID 07/17/07 VENDOR DESCRIPTION AMOUNT AMANDA L. SLONE TUITION REIMB 153.45 JANDERSON INC. DBA CARTRIDGE WORLD INKJET REFILLS 34.38 UNIFIRST HOLDINGS LP UNIFORM RENTAL /CLEANING 31.40 WAL -MART CORP SAMS CLUB OPERATING SUPPLIES 45.38 WAL -MART COMMUNITY OPERATING SUPPLIES 255.85 TERMINIX PEST CONTROL 46.00 TRIAD PRINTING, INC. PRINTING /BINDING 910.55 AT &T PHONE USAGE 282.84 JPMORGAN CHASE COMMERCIAL CARD AMAZON -BOOKS 53.20 ADMINISTRATION DEPT TOTAL 1,813.05 OFFICE DEPOT INC OFFICE SUPPLIES 74.25 TOMMY G ARRINGTON METER READER 127.80 MARK MEYER METER READER 558.90 TYRONE EUGENE DINKINS METER READER 358.20 DAVID R. OLINGHOUSE METER READER 447.30 KATHLEEN A BALSIGER METER READER 305.55 MARK MEYER METER READER 375.30 NOLAN RAY LANE METER READER 76.50 KATHLEEN A BALSIGER METER READER 161.10 DAVID R. OLINGHOUSE METER READER 270.00 TYRONE EUGENE DINKINS METER READER 232.05 TECHNICAL PROGRAMMING SERVICES INC BILLING SERVICE 1,081.84 UTILITY BILLING DEPT TOTAL 4,068.79 ATWOODS DISTRIBUTING, LP ATTN: ACCTS PAYABLE RAIN JACKET 23.98 WATER PRODUCTS OF OKLAHOMA, INC. REPAIR/MAINT SUPPLIES 43.72 GEORGE & GEORGE SAFETY AND GLOVE UNIFORM GEAR 29.16 UNIFIRST HOLDINGS LP UNIFORM RENTAL/CLEANING 50.76 WATER PRODUCTS OF OKLAHOMA, INC. REPAIR /MAINT SUPPLIES 1,303.90 CITY GARAGE CITY OF OWASSO VEHICLE MAINT -PARTS 127.52 FLEETCOR TECHNOLOGIES DBA FUELMAN FUEL 1,092.52 WATER PRODUCTS OF OKLAHOMA, REPAIR /MAINT SUPPLIES 68.00 CITY GARAGE CITY OF OWASSO VEHICLE MAINT- SERVICE 1,226.67 WATER DEPT TOTAL 3,966.23 OFFICE DEPOT INC OFFICE SUPPLIES 36.99 OWASSO FENCE CO MULIT -CODE TRANSMITTER 66.00 WAL -MART CORP SAMS CLUB OPERATING SUPPLIES 27.50 NCL OF WISCONSIN, INC. NORTH CENTRAL LABS LAB SUPPLIES 245.30 CONTINENTAL RESEARCH CORPORATION CHEMICALS 892.51 GEORGE & GEORGE SAFETY AND GLOVE UNIFORM GEAR 29.16 UNIFIRST HOLDINGS LP UNIFORM RENTAL /CLEANING 38.69 FLEETCOR TECHNOLOGIES DBA FUELMAN FUEL 582.56 CITY GARAGE CITY OF OWASSO VEHICLE MAINT- SERVICE 230.00 AT &T PHONE USAGE 166.86 OPWA CLAIMS TO BE PAID 07/17/07 VENDOR DESCRIPTION AMOUNT WW TREATMENT PLANT DEPT TOTAL 2,315.57 GEORGE & GEORGE SAFETY AND GLOVE UNIFORM GEAR 29.16 UNIFIRST HOLDINGS LP UNIFORM RENTAL /CLEANING 30.08 LOWES HOME IMPROVEMENT WAREHOUSE SUPPLIES -LIFT STATION 32.48 ATWOODS DISTRIBUTING, LP ATTN: ACCTS PAYABLE MAINT SUPPLIES 16.77 WATER PRODUCTS OF OKLAHOMA, INC. REPAIR /MAINT SUPPLIES 170.00 MCCABE DOMINIQUE CORP DBA PGS COMPANIES MECHANICAL SEAL -PUMP STATION 475.51 CITY GARAGE CITY OF OWASSO VEHICLE MAINT -PARTS 600.20 FLEETCOR TECHNOLOGIES DBA FUELMAN FUEL 983.65 CROW BURLINGAME COMPANY SMALL TOOLS 4.50 W.W. GRAINGER, INC. DBA GRAINGER CHAIN HOIST /SLING 363.08 WATER PRODUCTS OF OKLAHOMA, INC. REPAIR /MAINT SUPPLIES 23.56 MIKE OZBUN ENTERPRISE INC INDUSTRIAL MOTOR SERVICE PUMP /MOTOR REPAIRS 6,958.00 GRAYBAR ELECTRIC CO, INC REPAIRS - RELIEF PUMP STATION 233.20 CITY GARAGE CITY OF OWASSO VEHICLE MAINT- SERVICE 613.33 AT &T PHONE USAGE 195.02 WASTEWATER DEPT TOTAL 10,728.54 O'REILLY AUTOMOTIVE INC MAINT SUPPLIES 11.98 GEORGE & GEORGE SAFETY AND GLOVE UNIFORM GEAR 29.16 UNIFIRST HOLDINGS LP UNIFORM RENTAL /CLEANING 33.38 T & W TIRE, LP TIRES -TRASH TRUCK 1,935.78 CITY GARAGE CITY OF OWASSO VEHICLE MAINT -PARTS 3,166.45 JERRY WOODS WOODS WELDING WELDING -TRASH TRUCK 1,540.00 FLEETCOR TECHNOLOGIES DBA FUELMAN FUEL 5,125.36 O'REILLY AUTOMOTIVE INC AIR TOOL OIL 2.99 CITY GARAGE CITY OF OWASSO VEHICLE MAINT- SERVICE 3,066.67 AT &T PHONE USAGE 18.86 REFUSE DEPT TOTAL 14,930.63 LOWES HOME IMPROVEMENT WAREHOUSE FLOOR /DOOR REPAIRS 45.80 AT &T PHONE USAGE 18.87 ANCHOR STONE CO CRUSHED STONE 181.95 Al FENCE COMPANY LLC EAST FENCE EXTENSION PROJECT 2,570.00 RECYCLE DEPT TOTAL 2,816.62 OPWA GRAND TOTAL 40,639.43 MCGUIRE BROTHERS CONSTRUCTION INC TRANSMISSION MAIN /BOOSTER P 239,602.62 CAPITAL PROJECTS WATER SYSTEM 239,602.62 OPWA GRAND TOTAL 280,242.05 OWASSO PUBLIC WORKS AUTHORITY PAYROLL PAYMENT REPORT PAY PERIOD ENDING DATE 7/7/2007 OVERTIME TOTAL DEPARTMENT EXPENSES EXPENSES FUND TOTAL 976.62 70,241.05 CITY OF OWASSO OWASSO PUBLIC WORKS AUTHORITY - OPERATING FUND FISCAL YEAR 2006 -2007 Statement of Revenues & Expenses As of June 30, 2007 — OPERATING REVENUES: Water Wastewater Refuse & recycle Other fees Interest & other _ TOTAL OPERATING REVENUES OPERATING EXPENSES: Personal services Materials & supplies Other services Capital outlay Debt service _ TOTAL OPERATING EXPENSES MONTH YEAR TO -DATE TO -DATE BUDGET 259,812 3,209,385 3,200,000 107,319 1,262,198 1,260,000 119,063 1,112,473 1,073,000 33,648 403,854 545,500 2,578 25,624 25,500 522,419 6,013,534 6,104,000 129,371 226,056 75,519 218,050 REVENUES OVER EXPENSES (126,576) TRANSFERS OUT (27,083) NET INCOME (LOSS) (153,660) WORKING CAPITAL - Beginning Balance WORKING CAPITAL - Ending Balance 1,797,469 2,649,307 1,013,014 293,780 (325,000) (65,035) 1,924,165 2,813,430 938,595 352,672 (325,000) 991,070 1,000,000 926,035 750,138 "Note: Report is not final for fiscal year end. Accounts payable are still in process. PERCENT 100.29% 100.17% 103.68% 74.03% 98.52% 93.42% 94.17% 107.93% 83.30% 100.00% MEMORANDUM TO: HONORABLE CHAIR AND TRUSTEES OWASSO PUBLIC WORKS AUTHORITY FROM: RODNEY J RAY AUTHORITY MANAGER SUBJECT: DEVELOPMENT AGREEMENT HUNT PROPERTIES (SF SHOPS INVESTORS) DATE: JULY 13, 2007 BACKGROUND: For the past several months, the city staff has participated in discussions that were initiated to determine the possibility of converting the Owasso Oklahoma Natural Gas Facility (located on 96`h Street east of US 169) from its light industrial use as a field maintenance facility to a commercial use that would create jobs, increase investment in the community and produce sales tax for city operations. On June 19, the City Council authorized negotiations to be conducted with both Hunt Properties (SF Shops Investors, L.P.) of Dallas, TX and ONG for the purpose of developing an agreement that was based on a development concept presented to the City Council at that meeting (and previously presented to the Owasso Economic Development Authority). Those negotiations have now been finalized and memorialized in an agreement (attached for your review). Previous actions relating to this matter include: enabling decisions by the OEDA to waive certain portions of the existing ONG lease, the execution of a contract for the purchase of property by Hunt at the Cherokee Industrial Park for the future home of ONG's Owasso facility, the execution of a contract for the sale of property to Hunt properties by Betty Smith (for a parcel located adjacent to the existing ONG site), a lease agreement between the City of Owasso and ONG for temporary administrative offices during the construction of the new facility and the final approval of plans for the new ONG Facility by the ONG administration. Studies and research were required by both the City of Owasso and Hunt as due diligence on the part of each participant. Those issues included projections for sales tax revenue, impact of the commercial development on traffic, utilities, and detention, traffic studies, area retail sales history, and impact on city services. THE DEVELOPMENT AGREEMENT CONCEPT: As previously presented to both the City Council and the OEDA, the basis for the proposed agreement is a "payback" of a portion of the sales tax generated by the Development Agreement July 13, 2007 Page 2 of 3 development to the developer over time. The final payback proposal is $4,600,000 over a period estimated to be 8 % years. The negotiated source of payback funds is a combination of one cent of the sales tax from the newly developed ONG property and a one -half cent contribution from the existing Smith Farm Market that would be effective upon the payoff of the original $2,200,000 payback pledged to Hunt Properties. Additionally, Hunt Properties agrees to the construction of an initial 144,000 sq feet of retail space, including a 30,000 sq ft. bookstore, a 10,000 sq ft cosmetics sales store, and a 7,800 sq ft out - parcel restaurant. Hunt Properties also will reconstruct the primary entrance to the entire Smith Farm Market and must "link" the traffic signals that control traffic into the Owasso Market and Smith Farm Market. Under the agreed -to concept, the staff has further developed the plan and secured approval of the parties. ONG has agreed to move its operations to Cherokee Industrial Park. Betty Smith has agreed to the sale of 1.78 acres to Hunt. Hunt Properties has agreed to purchase land for ONG's new facility. ONG has agreed to provide interim "Gap" collateral for the OEDA's ONG Facility loan that will allow the loan to continue by using the Gap Collateral until the Cherokee site is completed. The two banks involved in the existing OEDA/ONG loan have agreed to continue ONG's loan contingent upon the required "gap collateral" being posted and the eventual use of the Cherokee facility as the sole collateral. Owasso 20 Properties has agreed to the sale of eleven acres for use as a regional detention facility. FUNDING THE AGREEMENT: The key component to this agreement is the use of future revenue generated by the sales taxes from the development area as a payback. The proposal is for the OPWA to pay to Hunt Properties one cent of all of the sales taxes generated by the property. Additionally, the proposal includes one -half of one cent of all sales tax from the Smith Farm development area to be paid to Hunt Properties (after the original payback is completed). The TOTAL amount to be paid to Hunt Properties is $4,600,000. There are no interest charges on this payback and Hunt must "front" all of the cost associated with the development. The OPWA is under no obligation to pay Hunt from any other revenues and there is no requirement if revenues produced by the development do not meet annual or long -term estimates. Based on current projections the $4,600,000 would be paid off in approximately seven and one -half to nine years. REVENUE: The staff estimates the sales taxes generated by the development will be $900,000 annually, a ten -year collection of $9,000,000. During that time, the payback will be $4,600,000 leaving the City with about $4,400,000 in new revenue to be applied to Development Agreement July 13, 2007 Page 3 of 3 operations ($1,400,000) and Capital Improvements ($3,000,000). Annually, beginning in the next fiscal year the city should gain $600,000 in additional sales tax. RECOMMENDATION: The staff recommends City Council and Owasso Public Works Authority approval of the proposed Development Agreement and authorizes the Mayor and Chair to execute the Agreement. Additionally staff recommends City Council approval of the incurrence of indebtedness by the OPWA as included in the Development Agreement. Note: The OPWA is included in this agreement because the sales tax payback is made through the OPWA. The OEDA is included in the agreement because it has ownership of the ONG existing property and will own the Cherokee ONG Property until the ONG loan is fully paid. ATTACHMENT: Proposed Development Agreement DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT (this "Agreement ") is made and entered into as of the Effective Date by and among the OWASSO PUBLIC WORKS AUTHORITY, an Oklahoma public trust (the "Authority "), the OWASSO ECONOMIC DEVELOPMENT AUTHORITY, an Oklahoma public trust (the "OEDA ") SF SHOPS INVESTORS, L.P., a Texas limited partnership and/or its assigns ( "SFSI "), and for the limited purposes set forth in this Agreement, the CITY OF OWASSO, OKLAHOMA, an Oklahoma municipality ( "City "). The Authority, the OEDA and SFSI may be referred to herein from time to time as a "Party" and together as the 'Parties" and, unless otherwise specifically set forth in this Agreement, the term "Party" and 'Parties" shall not include the City. Capitalized terms undefined within the context of a particular sentence shall bear the meanings given to such terms in Article I of this Agreement. RVCTTAT.0 A. SFSI will acquire the Oak Tree Property, currently owned by the OEDA, upon the satisfaction of certain conditions set forth in this Agreement and in the Oak Tree PSA, for the development of a retail shopping center. B. SFSI will acquire, for the benefit of the OEDA, the Cherokee Property, upon the satisfaction and/or waiver of certain conditions set forth in the Cherokee PSA, for the development of the ONG Facility upon the Cherokee Property. C. As a result of the transactions described in this Agreement, SFSI shall become the owner of the Oak Tree Property free and clear of the existing OneOK Lease and SFSI shall develop, or cause to be developed, a proposed retail center that initially includes JC Penney as the anchor tenant and an additional approximately 30,000 square feet of retail space and at least one out - parcel on the Oak Tree Property. Additionally, SFSI shall construct and develop, or cause be constructed and developed, the ONG Facility on the Cherokee Property. D. This Agreement is being entered into with the expectation that the Project proposed to be undertaken (or being undertaken) by, or facilitated by, SFSI, will generate substantial new sales tax revenues and other benefits for the City. E. Prior to the date hereof, the City and SFM entered into the Smith Farm Marketplace Development Agreement for the development, funding and improvements related to the Smith Farm Development. F. Pursuant to Title 62, Chapter 9 of the Oklahoma Statutes (the "Local Development Act "), the City is granted the authority to provide certain 1 576522 v5 (01560.00030.001) incentives and reimbursements to SFSI based on the sales tax revenue anticipated to be created by the Project. G. Pursuant to a separate agreement between the City and the Authority, the City has granted all of its rights, title and interest in and to any sales tax revenues relevant to this Agreement to the Authority. H. The Authority has agreed to provide such incentives and reimbursements to SFSI at a certain rate prior to the SFM Payoff Date and at a certain rate after the SFM Payoff Date, all as more fully set forth in this Agreement. I. The Authority has determined that investment, development and growth in the Oak Tree Property would be difficult and that this Agreement and the Project is necessary or convenient for such investment, development and growth in and near the Oak Tree Property. J. The expenditure of funds pursuant to the Project and to this Agreement, made at the discretion of the Authority, is consistent with the goals and resolutions of the City, the Authority and the OEDA and such expenditure of funds, together with the Project and this Agreement, have been approved by all necessary Parties. NOW, THEREFORE, in consideration of their respective covenants and conditions herein expressed, the Parties hereby agree as follows: ARTICLE I DEFINITIONS Terms not otherwise defined in this Agreement shall bear the following meanings: 1.1. Best Buy Apportionment Area. The term "Best Buy Apportionment Area" means an "apportionment area," or "increment district," as such terms are defined in the Local Development Act, containing the same boundaries as that certain property more particularly described on Exhibit "A -3" attached hereto and incorporated herein. 1.2. Best Buy Tax Account. The term "Best Buy Tax Account" means, at the discretion of the City, a separate account, not commingled with the City's general or other funds, consisting of a sum to be determined pursuant to the terms of Section 2.2 of this Agreement. 1.3. Business Days. The term "Business Days" means the individual week days of Monday through and including Friday, except for when any such week day is a holiday recognized by the State of Oklahoma in which event such week day shall not be deemed a Business Day. 1.4. Cherokee Property. The term "Cherokee Property" means that certain real property consisting of approximately ten (10) acres in the Cherokee Expressway 576522 v5 (01560.00030.001) Industrial District, located in the City of Owasso, Tulsa County, Oklahoma, more particularly described on Exhibit "A -2" attached hereto and incorporated herein. 1.5. Cherokee PSA. The term "Cherokee PSA" means that certain Contract for Sale of Real Estate by and between Industries for Tulsa, Inc., an Oklahoma corporation ( "IFT ") and Hunt Properties, Inc., a Texas corporation ( "HPI "), dated November 14, 2006, together with any amendments or modifications thereof. 1.6. Effective Date. The term "Effective Date" means the date upon which the last of the Parties executes this Agreement; provided, however, in the event a Party or the City fails to enter such date below its signature, the Effective Date shall be the last of the dates so entered. 1.7. Oak Tree Apportionment Area. The term "Oak Tree Apportiomment Area" means an "apportionment area," or "increment district," as such terms are defined in the Local Development Act, containing the same boundaries as the Oak Tree Property. 1.8. Oak Tree Propert y. The term "Oak Tree Property" means that certain real property located in the City of Owasso, Tulsa County, Oklahoma, more particularly described on Exhibit "A -1" attached hereto and incorporated herein. 1.9. Oak Tree PSA. The term "Oak Tree PSA" means that certain Purchase and Sale Agreement by and between the OEDA and SFSI dated , 2007 for the purchase and sale of the Oak Tree Property. 1.10. Oak Tree Tax Account. The term "Oak Tree Tax Account" means a separate account, not commingled with the City's or the Authority's general or other accounts, consisting of the aggregate total of one cent ($0.01) of all sales tax revenue generated from retail or other commerce from the Oak Tree Apportionment Area. 1.11. OneOK. The term "OneOK" means OneOK, Inc., a Delaware corporation. 1.12. OneOK Lease. The term "OneOK Lease" means that certain Commercial Lease Agreement between the OEDA and OneOK dated October 29, 1996. 1.13. ONG Facility. The term "ONG Facility" means that certain facility to be constructed by or on behalf of SFSI on the Cherokee Property for the benefit of OneOK, its successors or assigns, pursuant to that certain Acquisition and Construction Management Agreement dated , 2007 by and among the OEDA, SFSI and OneOK. 1.14. Project. The term "Project" means the acquisition of the Cherokee Property and the construction of the ONG Facility. 1.15. Reimbursement Amount. The term "Reimbursement Amount" means a fixed sum in the amount of Four Million Six Hundred Thousand and No /100 Dollars ($4,600,000.00). 576522 v5 (01560.00030.001) 1.16. SFM. The term "SFM" means, collectively, SF Marketplace Investors, Ltd., a Texas limited partnership and SF Crossing Investors, Ltd., a Texas limited partnership. 1.17. SFM Payoff Date. The term "SFM Payoff Date" means the date upon which all obligations of the Authority under the Smith Farm Marketplace Agreement have been paid and satisfied. 1.18. Smith Farm Marketplace Agreement. The term "Smith Farm Marketplace Agreement" means that certain Development Agreement dated October _, 2004 by and among the Authority and SFM. 1.19. Smith Farm Development. The term "Smith Farm Development" means that certain project and those certain mutual agreements and covenants set forth in the Smith Farm Marketplace Agreement, as more specifically described therein. 1.20. Smith Farm Marketplace Apportionment Area. The term "Smith Farm (Marketplace Apportionment Area" means an "apportionment area," or "increment 'district," as such terms are defined in the Local Development Act, containing the same boundaries as the "Property" as such term is defined in the Smith Farm Marketplace ,Agreement. 1.21. Smith Farm Marketplace Tax Account. The term "Smith Farm ,Marketplace Tax Account" means a separate account, not commingled with the City's or the Authority's general or other accounts, consisting of the aggregate total of one -half of one cent ($0.005) of all sales tax revenue generated from retail or other commerce from (the Smith Farm Marketplace Apportionment Area. ARTICLE II ESTABLISHMENT OF APPORTIONMENT AREAS 2.1. Establishment of Oak Tree Apportionment Area. The Authority, acting by and through its powers pursuant to the Local Development Act, hereby establishes the ,Oak Tree Apportionment Area for the purposes of administering the Oak Tree Tax Account in accordance with the terms of this Agreement. 2.2. Establishment of Best Buy Apportionment Area. The Authority, acting by and through its powers pursuant to the Local Development Act, will consider establishing the Best Buy Apportionment Area in Fiscal Year 2008 -2009 for the purposes of creating �a Best Buy Tax Account in accordance with the terms of this Agreement. Nothing within the terms of this Agreement currently permits or compels any sales tax generated by Best Buy to be included in the remittance amount paid to SFSI. ARTICLE III TERMINATION OF ONEOK LEASE: TITLE AND DEEDS 4 576522 v5 (01560.00030.001) 3.1. Termination of OneOK Lease. The OneOK Lease shall be terminated and of no further force and effect as of the closing pursuant to the Oak Tree PSA, without any further action by SFSI, OneOK and/or the OEDA. As of the date of closing under the Oak Tree PSA, the Parties agree that SFSI shall be automatically granted the right, power and authority, without the need for any further action by any of the Parties, to use, own, develop, demolish and/or destroy any and all buildings, improvements and appurtenances located on the Oak Tree Property at its sole and absolute discretion. 3.2. Title to Oak Tree Propert y. Within five (5) Business Days of the closing pursuant to the Oak Tree PSA, the OEDA shall execute and record a general warranty deed vesting title in the Oak Tree Property to SFSI free and clear of any liens or encumbrances, including without limitation, the OneOK Lease, except those liens created by or consented to by SFSI. 3.3. Title to Cherokee Propert y. Within five (5) Business Days of the closing pursuant to the Cherokee PSA, SFSI shall cause a special warranty deed to be recorded vesting title in the Cherokee Property to the OEDA free and clear of any liens or encumbrances, except those liens created by the OEDA (including, at OEDA's discretion, the existing debt owed by OneOK to the OEDA pursuant to a separate agreement between OneOK and the OEDA) or consented to by the OEDA. ARTICLE IV REIMBURSEMENT 4.1. Authority Participation. In consideration for SFSI's development of the Project, the Authority agrees, subject to the terms of this Agreement, to pay SFSI the Reimbursement Amount. The Parties and the City agree that the Reimbursement Amount is a fixed sum. 4.2. Segregation of Tax Accounts. The Authority covenants and agrees to separately maintain the Oak Tree Tax Account and the Smith Farm Marketplace Tax Account from each other and from the City's and the Authority's general or other accounts. 4.3. Monthly Sales Tax Reports. Within five (5) Business Days of the end of each month, the Authority shall submit a report in writing to SFSI detailing the current balance and the method of calculation of the Oak Tree Tax Account and the Smith Farm Marketplace Tax Account. 4.4. Sources and Limits of Funds. Prior to the SFM Payoff Date, the Reimbursement Amount shall be paid to SFSI from the Oak Tree Tax Account, if and when such sales tax increments are received and available for such purpose. After the SFM Payoff Date, the Reimbursement Amount shall be paid to SFSI from the Oak Tree Tax Account and the Smith Farm Marketplace Tax Account, if and when such sales tax increments are received and available for such purpose. 4.5. Method of Payment. Prior to the SFM Payoff Date, SFSI may request payment from the Authority in an amount not to exceed the lesser of the then - current 5 576522 v5 (01560.00030.001) total of the Oak Tree Tax Account or the unpaid Reimbursement Amount. After the SFM Payoff Date, SFSI may request payment from the Authority in an amount not to exceed the lesser of. (a) the then - current aggregate total of. (i) the Oak Tree Tax Account and (ii) the Smith Farm Marketplace Tax Account or (b) the unpaid Reimbursement Amount. The Authority shall make reimbursement payments to SFSI in good funds within five (5) Business Days of any such request. 4.6. Additional Economic Incentives. In addition to the Oak Tree Tax Account and the Smith Farm Marketplace Tax Account, the City and the Authority agree, to the extent allowed by law, to (a) expedite the process for hearings, reviews, inspections and contacts within the City's and Authority's staff in order to ensure timely completion of the Project; (b) consider, and at the City's and the Authority's sole discretion, to use, any other source of funds in order to pay the Reimbursement Amount; (c) to promptly approve and authorize payment to SFSI of the funds in accordance with and pursuant to this Agreement; and (d) consider any other reasonable requests made by SFSI in order to complete the Project. ARTICLE V REMEDIES In the event of any default in or breach of any terms or conditions of this Agreement by any Party, or any successor, the defaulting or breaching Party shall, upon written notice from the other Party, proceed immediately to cure or remedy such default or breach, and shall in any event, within thirty (30) days after receipt of notice, commence to cure or remedy such default. In case such cure or remedy is not taken or not diligently pursued, or the default or breach shall not be cured or remedied within a reasonable time, the aggrieved Party may institute such proceedings as may be necessary or desirable in its opinion to cure and remedy such default or breach, including but not limited to proceedings to compel specific performance by the defaulting or breaching Party. The parties, their successors and assigns, further agree that the other Party shall have the right and power to institute and prosecute proceedings to enjoin the threatened or attempted violation of any clauses contained herein. Notwithstanding the foregoing or anything to the contrary contained in this Agreement, in the event of a breach or termination of this Agreement, such breach or termination shall have no effect upon the Smith Farm Marketplace Agreement. ARTICLE VI MISCELLANEOUS. 6.1. Choice of Law. This Agreement shall be taken and deemed to have been fully executed and made by the Parties herein and governed by the laws of the State of Oklahoma for all purposes and intents. 6.2. Recitals. All recitals are incorporated into this Agreement as material terms of this Agreement. 6 576522 v5 (01 560.00030.001) 6.3. Assignment; Successors and Assigns. SFSI may assign, without the prior written consent of the City, the Authority or the OEDA, this Agreement, the Project or any interest in this Agreement, including, without limitation, the right to receive payments, and upon any such assignment, the assignee or successor shall be deemed to have assumed the duties and obligations of SFSI hereunder; provided, however, SFSI agrees to deliver written notice to the Authority of any such assignment within thirty (30) days of such assignment. Neither the Authority nor the OEDA shall have the right to assign its duties or obligations under this Agreement without the prior written consent of SFSI. All rights, obligations and liabilities herein given to or imposed upon any Party hereto shall extend to the permitted successors and assigns of such Party. In the event SFSI sells, assigns or transfers its interest in the Project, SFSI shall be relieved of all liability under this Agreement as of the date of such sale, assignment or transfer and the assignee shall assume all obligations and liability under this Agreement as of the date of such sale or assignment. 6.4. Entire Agreement. The Parties agree that this Agreement constitutes the entire agreement between the Parties and that no other agreements or representations concerning completion of the Project, other than those contained in this Agreement, have been made by the Parties. This Agreement shall be amended only in writing, and effective when signed by the authorized agents of the Parties. 6.5. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall constitute one and the same instrument. 6.6. Severability. In the event that any term or provision or this Agreement is held to be unenforceable by a court of competent jurisdiction, the remainder shall continue in full force and effect to the extent the remainder can be given effect without the invalid provision. 6.7. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs and assigns. 6.8. Costs. In the event of a dispute relating to the matters set forth herein, the prevailing Party shall be entitled to reimbursements for all reasonable attorneys' fees and expenses incurred in connection therewith. 6.9. Notices. Any notice, request or demand provided for in this Agreement shall be deemed to have been sent when the notice has been delivered by personal delivery, overnight mail or delivery service, facsimile or deposited in the United States mail, registered or certified, with postage thereon prepaid to the addresses as set forth below. Notice shall be deemed received upon the earlier o£ (1) if personally delivered (whether by courier or overnight private mail or delivery services), the date of delivery; (ii) if mailed, three (3) Business Days after the date of posting by the United States post office; or (iii) if given by facsimile when sent. The parties' addresses are as follows: To the Authority: Rodney Ray, OWPA Manager City of Owasso 7 576522 v5 (01560.00030.001) 111 North Main Street Owasso, Oklahoma 74055 Fax No. 918.376.1599 With a Copy to: Julie Lombardi, OPWA General Counsel City of Owasso 111 N. Main Street Tulsa, OK 74055 Fax No. 918.376.1599 To SFSI: SF Shops Investors, L.P. c/o Hunt Properties, Inc. 8235 Douglas Avenue Dallas, Texas 75225 Attn: Jim Shindler, Sr. Vice President Fax No. 214.706.3251 With a Copy to: Kane Russell Coleman & Logan PC 1601 Elm Street, Suite 3700 Dallas, Texas 75201 Attn: Raymond J. Kane Fax No. 214.777.4299 6.10. Authority & City. This Agreement shall become a binding obligation upon execution by all parties hereto. The Authority warrants and represents that the individual executing this Agreement on behalf of the Authority has full authority to execute this Agreement and bind the Authority to the same. The Authority further warrants and represents that this Agreement is valid and enforceable under applicable law and the City's charter, and that the City has taken all requisite action necessary to approve this Agreement. The OEDA warrants and represents that the individual executing this Agreement on behalf of the OEDA has full authority to execute this Agreement and bind the OEDA to the same. The OEDA further warrants and represents that this Agreement is valid and enforceable under applicable law and the City's charter, and that the City and the OEDA have each taken all requisite action necessary to approve this Agreement. By its signature below, the City acknowledges and agrees that the City has transferred and assigned to the Authority all of the City's rights, title and interest in and to the sales tax revenues for the purposes of disbursing the Reimbursement Amount from the Oak Tree Tax Account and the Smith Farm Marketplace Tax Account. SFSI warrants and represents that the individual executing this Agreement on its behalf has full authority to execute this Agreement and bind SFSI to the same. SFSI further warrants and represents that this Agreement is valid and enforceable under applicable law and SFSI's corporate documents, and that SFSI has taken all requisite action necessary to approve this Agreement. IN WITNESS WHEREOF the parties have executed this instrument to be effective as of the day and year first above written. 8 576522 v5 (01560.00030.001) SEPARATE SIGNATURE PAGE OF THE AUTHORITY OWASSO PUBLIC WORKS AUTHORITY, an Oklahoma public trust By: Stephen Cataudella, Chairman Date: July , 2007. ATTEST: By: Sherry Bishop, Secretary Date: July , 2007. APPROVED AS TO FORM: By: , Jul' Lombar i, Authority Attorney Date: July , 2007. 576522 v5 (01560.00030.001) SEPARATE SIGNATURE PAGE OF THE OEDA OWASSO ECONOMIC DEVELOPMENT AUTHORITY, an Oklahoma public trust By: Name: Its: Date: July , 2007. ATTEST: By: Name: Secretary Date: July_, 2007. APPROVED AS TO FORM: By: Name: Counsel for Owasso Economic Development Authority Date: July , 2007. 576522 v5 (01560.00030.001) ACKNOWLEDGEMENT AND AGREEMENT OF THE CITY For the limited purposes set forth in Sections 4.1, 4.2, 4.6 and 6.10 of this Agreement, the City acknowledges, consents and agrees to the terms and conditions of this Agreement. CITY OF OWASSO, a municipality of the State of Oklahoma U-In Stephen Cataudella, Mayor Date: July , 2007. ATTEST: wo Sherry Bishop, Clerk Date: July , 2007. APPROVED AS TO FORM: By: 6jj-� Julie ambardi, City Attorney Date: July , 2007. 576522 v5 (01560.00030.001) SEPARATE SIGNATURE PAGE OF SFSI SF SHOPS INVESTORS, L.P., a Texas limited partnership By: SFM GP, LLC, a Texas limited liability company its general partner By: Hunt Properties, Inc., a Texas corporation, its Sole Manager By: Name: Title: Date: July , 2007. 576522 v5 (01560.00030.001) EXHIBIT "A -1" LEGAL DESCRIPTION OF THE OAK TREE PROPERTY Lot One (1), Block (1) of Oak Tree Business Park, an Addition to the City of Owasso, County of Tulsa, State of Oklahoma, according to that certain plat recorded in Volume Page of the plat records of Tulsa County, Oklahoma. 576522 v5 (01560.00030.001) EXHIBIT "A -2" LEGAL DESCRIPTION OF THE CHEROKEE PROPERTY 576522 v5 (01560.00030.00 1 ) EXHIBIT "A -3" LEGAL DESCRIPTION OF THE BEST BUY APPORTIONMENT AREA Parcel One: A tract of land situated in the Northeast Quarter of the Northwest Quarter (NE /4 NW /4) of Section Twenty (20), Township Twenty -one (21) North, Range Fourteen (14) East of the Indian Base and Meridian, Tulsa County, State of Oklahoma, according to the U. S. Government Survey thereof, being more particularly described as follows, to -wit: COMMENCING from the Northeast Comer of the NE /4 NW /4; THENCE South along the East line of said NE /4 NW /4 a distance of 290.00 feet to the Point of Beginning; THENCE South 1 °14'12" East and along the East line of said N E/4 NW /4 a distance of 708.20 feet to a point on the Northerly right of way line of U. S. Highway 169; THENCE South 48 °54'01" West and along said Northerly right of way line a distance of 273.98 feet; THENCE North 22 °15'20" West a distance of 492.84 feet to a point on the Easterly boundary line of OAK TREE BUSINESS PARK, an Addition to the City of Owasso, Tulsa County, State of Oklahoma, according to the recorded Plat No. 5154; THENCE along said Easterly boundary line North 72 °45'33" East a distance of 90.00 feet; THENCE along said Easterly boundary line along a curve to the left having a radius of 415.00 feet a distance of 535.99 feet to a point which has a chord North 35 °45'33" East a distance of 499.51 feet to a point; said point being the POINT OF BEGINNING. Parcel Two_ A tract of land situated in the Northwest Quarter of the Northeast Quarter (NW /4 NE /4) of Section Twenty (20), Township Twenty -one (21) North, Range Fourteen (14) East of the Indian Base and Meridian, Tulsa County, State of Oklahoma, according to the U. S. Government Survey thereof; being more particularly described as follows, to -wit: COMMENCING from the Northeast Corner of the NE /4 NW /4; THENCE South along the East line of said NE /4 NW /4 a distance of 50 feet to the Point of Beginning; THENCE South 86 °02'32" East and along the South Right of Way line of U. S. Highway 169 a distance of 20.08 feet; THENCE South 1'14'12" East and parallel with the East line of said NE /4 NW /4 a distance of 929.68 feet to a point on the Northerly Right of Way line of U. S. Highway 169; THENCE South 48 °54'01" West and along said Northerly Right of Way line a distance of 26.06 feet; THENCE North 1'14'12" West and along the East line of said NE /4 NW /4 a distance of 948.20 feet to the POINT OF BEGINNING. 576522 v5 (01560.00030.001)