AGENDA CALL TO ORDER AND ANNOUNCEMENT OF QUORUM

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1 CITY OF BAYTOWN NOTICE OF MEETING BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT (MDD) MEETING THURSDAY, MAY 2, :30 P.M. HULLUM CONFERENCE ROOM, CITY HALL 2401 MARKET STREET BAYTOWN, TEXAS AGENDA CALL TO ORDER AND ANNOUNCEMENT OF QUORUM 1. MINUTES a. Consider approving the minutes of the Baytown Municipal Development District (MDD) Board Regular Meeting held on March 07, PROPOSED RESOLUTIONS a. Consider a resolution authorizing the First Amendment to the Development Project Contract with The Baytown Little Theater Incorporated. 3. REPORTS a. Receive the Baytown Municipal Development District's Revenues and Expenditures Report for the Quarter Ending March 31, b. Receive the Baytown Municipal Development District's Quarterly Investment Report for the Quarter Ending March 31, LAND ACQUISITION a. Recess into and conduct an executive session pursuant to Texas Government Code, Section to deliberate the potential purchase of real property for an economic development project. b. Consider a resolution authorizing an interlocal agreement with the City of Baytown for funding land acquisition for a development project.

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3 BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT 1. a. Meeting Date: 05/02/2013 Subject: Consider Approving the Minutes of the Baytown Municipal Development District Board Regular Meeting for March 07, Assistant Secretary. Prepared for: Leticia Brysch Prepared by: Omega Jones, City Clerk's Office Information ITEM Consider approving the minutes of the Baytown Municipal Development District (MDD) Board Regular Meeting held on March 07, PREFACE Consider approving the minutes of the Baytown Municipal Development District (MDD) Board Regular Meeting held on March 07, Fiscal Year: Acct Code: Source of Funds (Operating/Capital/Bonds): Funds Budgeted Y/N: Amount Needed: Fiscal Impact Fiscal Impact (Additional Information): There is no fiscal impact associated with this item. March 7, 2013 Draft MDD Minutes Attachments

4 D R A F T MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT March 07, 2013 The Board of Directors of the Baytown Municipal Development District (MDD) met in a Regular Meeting on Thursday, March 07, 2013, at 4:43 P.M., in the Council Chamber of the Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance: Stephen DonCarlos Scott Sheley Robert Hoskins Dave Jirrels David McCartney Terry Sain Robert D. Leiper Ignacio Ramirez, Sr. Jason Cozza President Vice President Director Director Director Director General Manager General Counsel Deputy Assistant Secretary President DonCarlos convened the March 07, 2013, Municipal Development District (MDD) Board Regular Meeting with a quorum present at 4:43 P.M., all members were present with the exception of Directors Brewer, Capetillo, Hernandez, and Renteria who were all absent. 1. MINUTES a. Consider approving the minutes of the Baytown Municipal Development District (MDD) Board Regular Meeting held on February 07, A motion was made by Vice President Scott Sheley and seconded by Director David McCartney approving the February 07, 2013, MDD Board Regular Meeting minutes. The vote was as follows: Ayes: President Stephen H. DonCarlos, Director Robert C. Hoskins, Director David P. Jirrels, Director David McCartney, Director Terry Sain, Vice President Scott Sheley Nays: None Other: Secretary Reggie Brewer (Absent), Director Brandon Capetillo (Absent), Director Mary Hernandez (Absent), Director Mercedes Renteria III (Absent) Approved

5 MDD Board Regular Meeting Minutes March 07, 2013 Page 2 of 6 2. REPORTS General Manager Leiper recommended that the agenda be taken out of order to consider agenda item 2.b. b. Present the Economic Development Foundation Annual Report for Mr. B.J. Simon presented the 2012 Baytown Economic overview report and stated that the mission and purpose of the Economic Development Foundation (EDF) is to foster economic growth through programs of work from the following: Stimulate & Encourage Business, Workforce Development and Analysis, Facilitate Tax Incentive Programs, Conduct Educational & Informational Seminars, Support Foreign Trade Zones, Economic Data Clearinghouse, Collaborate with Public Officials & ED Allies, and Promote Regional Tourism. He stated that in 2012, the EDF responded to 168 requests for information and had 25 site visits. Mr. Simon stated that the following projects were announced in 2012: Chevron Phillips On-Purpose 1-Hexene; ExxonMobil Ethane Cracker / Downstream Projects; Enterprise Products; NEOK Frac #3; and Lone Star NGL Frac #2. He stated that the following retail established in 2012: Texas Roadhouse, Pipeline Grill / WashaBeeria, Firehouse Subs, Carl s Jr., Vitamin Shoppe, Fish Place, Baskins, and Chambers Town Center. Mr. Simon stated that the EDF facilitated incentive programs for the following: Chambers County Tax Abatements, Harris County Tax Abatement, City of Baytown IDA, Texas Enterprise Zone Program, Texas Enterprise Fund Program, Economic Development Diversification Program, Chapter 380 Agreements, CH. 313 Tax Incentive GCCISD, and the FTZ - alternative site field (ASF). Further in the report overview, Mr. Simon stated that in 2004, the economic development strategic plan was to focus on growing the following industry sectors: advanced manufacturing, energy, logistics & distribution, and retail/restaurants with recommendation in 2010 to include healthcare. He stated that in 2010 some key recommendations of the workforce development were to: align the efforts with P-16 initiatives (pre-k - 4 year college completion); support Lee College and the local school districts in marketing efforts for vocational training optimizing dual-credit; to serve as a catalyst to leverage work force development resources, and to promote the use of Texas Workforce Commission (TWC) training programs. Mr. Simon stated that the quality of life recommendations were to market the Baytown/Chambers County area as Stay- Cation destinations, develop plan(s) to attract day tourism to the area, to develop and implement plans to integrate and optimize programming of Community Amenities and Assets, and to formalize image and branding efforts. Mayor DonCarlos inquired about the efforts being made in Austin to change the education system regarding the vocational education and apprenticeship program. In response to Mayor DonCarlos s inquiry, Mr. Simon stated that there's been positive feedback and that the Senate Bill 2, which gears toward increasing the number of course exams and allow for reciprocity for career and technical education courses to qualify for the end of the course examinations, has strong support of being passed.

6 a. Present the 2012 Baytown Economic Overview Report. MDD Board Regular Meeting Minutes March 07, 2013 Page 3 of 6 Mr. Steve Spillette, President of Community Development Strategies (CDS) presented the 2012 Baytown economic overview report and stated that the data from the report reflected information up to the month of December. Mr. Spillette stated that Baytown s population grew fastest from 1960 to 1970 and its growth rate decelerated considerably from 1980 to 2000, well below that of Harris and Chambers counties and the overall region. He stated that Baytown s growth rate began to increase again after year 2000, but because Baytown s relatively slower rate of growth compared to other cities in the region meant that its total population rank dropped from 3rd in 2000 to 6th in Mr. Spillette stated that in the 10 years between the decennial census reports, Baytown s population has not changed dramatically by age group. He stated that the older working age population of increased 27% by almost 3,500 persons and the Baytown median age increased from 30.8 to 32.1 in that 10-year period. Mr. Spillette stated that when comparing Baytown s population by age to the metro area it has a slightly lower proportion of working age adults (50.2%) than the region (53.8%), as well as, a slightly higher proportion of children and older adults but has, overall, a younger population. He stated that the median age of the region s population in 2010 was 33.2 compared to Baytown with In regards to school district demographics, Mr. Spillette stated that the most prominent trend for Baytown in terms of ethnicity has been the rapidly increasing share of the Hispanic population and has primarily displaced the Non-Hispanic White population. He stated that Baytown s and Goose Creek ISD s Hispanic shares are similar to the region overall. He stated that Barbers Hill and Chambers County have much smaller Hispanic population shares and much larger Non- Hispanic White shares than the City of Baytown or the region. He stated that both Goose Creek ISD and Barbers Hill ISD have experienced strong enrollment growth with a noticeable uptick after Mr. Spillette stated that the share of economically disadvantaged students has remained relatively constant in Goose Creek ISD over the last several years and it has been slowly rising in Barbers Hill ISD though it remains at a much lower proportion of students. He stated that in terms of students meeting state testing standards the gap is much closer between the two districts. Mr. Spillette stated that Goose Creek ISD s student body is becoming predominately Hispanic, the African American population is relatively stable, and the Non- Hispanic White students is lower than that in the district s residential population. He stated that Barbers Hill ISD s student population is also trending more Hispanics, though it is still approximately ¾ Non-Hispanic White. Mr. Spillette stated that in terms of the adult population of 25 and older, Baytown s educational attainment profile is improving. He stated that from 2000 to 2010, a majority of the working age adults had a high school education and the proportion who was college graduates increased from 18.9% to 21.1% of the working age population. He stated that the share of college graduates is considerably lower in Baytown than in the region and that 21.1% of the Baytown adult population has achieved at least an Associate s degree or higher as compared with 33.2% in Harris County and 34.4% in the region. He stated that a large percentage (27.5%) of Baytown adult residents are near-completers, and have completed some college courses.

7 MDD Board Regular Meeting Minutes March 07, 2013 Page 4 of 6 Mr. Spillette stated that the City of Baytown has been adding households at a much slower rate than other entities tracked, including Goose Creek ISD. He stated that the proportion of family households as a share of City of Baytown total households is similar to that of Harris County. He stated that entities in Chambers County, including the portion of the City in Chambers County, have a higher proportion of houses labeled as family households. He stated that Baytown is dominated by middle-income households making between $35,000 and $99,999 accounted for roughly half of all households in He stated that the share of higher-income households has increased since 2000, and the share of the lowest-income households dropped significantly from 2000 to Mr. Spillette stated that Baytown household income is slightly lower than Harris County or the region as a whole. He stated that 27.5% of the Baytown households have income in excess of $75,000 as compared with 33.5% and 34.7% in Harris County and the region. Mr. Spillette stated that Baytown s labor force (the resident population working or seeking work) has increased since 2005 and by August of 2012, the labor force had risen to roughly 35,000 from the 2000 Census estimate of approximately 29,000. He stated that the Texas Workforce Commission estimated Baytown unemployment rate at 11.6%, having risen significantly since 2008 which was substantially higher than the statewide unemployment rate of 7.0% in August There was inquiry as to what method was used to determine the unemployment rate. Mr. Spillette stated that he wasn't sure of how the workforce calculates the estimate on municipal level, but that they normally publish their data at the county level and some of the data comes from surveys of people. Mr. Spillette stated that the labor force and unemployment data is population based and not job based. Mr. Spillette stated that Baytown s businesses and jobs (the businesses in the City of Baytown and employees working in those establishments) are estimated at roughly 37,000 in 2013 and is expected that both the number and share of jobs in the construction sector would increase over the next several years to manufacturing facility development. Mayor DonCarlos inquired if this reflected jobs in Baytown or Baytown residents that have jobs in Baytown and where the Exxon employees are classified. Mr. Spillette stated that the data reflects jobs in Baytown. During further discussion, it was made aware that many of the industrial jobs, such as Exxon, are not in the city limits of Baytown and would not reflect in this data. Mr. Spillette stated that the workforce doesn't tract the ETJ. General Manager Leiper requested that Mr. Simon verify if data could be tracked by zip codes to include the industrial jobs. Mr. Simon stated that a customized survey could be done. Mr. Spillette stated that according Nielsen Business Facts and the Census, estimates less total jobs than what the workforce commission estimate for the city although the number of establishments has increased. He stated that the Texas Workforce Commission showed strong job growth in Baytown from 2011 to 2012 after a long period of stagnation, but that since 2005, Baytown has experienced a much slower rate of job growth than its local counties. Mr. Spillette stated that retail sales in Baytown after often lagging the county and region in terms of annual retail sales growth rate before 2008, is now experiencing change and is similar to those of larger areas. He stated that information provided by the state comptroller office states shows that Baytown used to exceed Harris County and the region overall in gross retail sales per capita

8 MDD Board Regular Meeting Minutes March 07, 2013 Page 5 of 6 but fell behind after He stated that Chambers County s retail sales per capita were very high after 2005, indicating additional retail activity without much population growth. In regards to development related statistics, Mr. Spillette stated that building permit data received from the City of Baytown, shows that the recession, starting in the latter part of 2008, had a pronounced effect on new construction activity in Baytown, especially residential which activity declined to less than half of its typical pace prior to He stated that commercial permitting was slow from 2009 to 2011, but picked up in Mr. Spillette stated that in this report there was no comparison for permit activity for the overall regions. Mr. Spillette stated that according to Census, the City of Baytown and Goose Creek ISD have lagged the overall regions in terms of the rate of housing growth. He stated that the City of Baytown and Goose Creek ISD also have much lower housing occupancy rates than the neighboring jurisdictions. He stated that in 2010, the housing occupancy rate for Barbers Hill ISD and Chambers County were at 90% while Baytown s declined to the mid 80%, dropping the occupancy rate. Mr. Spillette stated that the neighboring jurisdiction and Chambers County share of vacant units increased. Mr. Spillette stated that Baytown s single family / multifamily housing unit split is very similar to that of the region and that Harris County has a higher proportion of multifamily housing than the City of Baytown. He stated that in all geographies except Chambers County, the share of single family housing increased from 2000 to He stated that Baytown s proportion of renters is slightly higher than the region, and much higher than that in Chambers County. Mr. Spillette stated that the average home prices in Baytown and Goose Creek ISD declined significantly after 2007, in contrast to prices in Barbers Hill ISD, Chambers County, Harris County and the total region area. In further overview of the report, Mr. Spillette stated that Baytown s hotel room inventory has increased dramatically since 2003, at a faster pace than the metropolitan area; however its room revenue has increased slower, which could mean that there is lower rental rates or there is no increase in rates. He stated that 60-65% is generally considered the healthy occupancy and Baytown is a little lower than that point. He stated that Revenue per Available Room (RevPAR), which estimates on a nightly per room basis how much revenue is being earned by the entity in Baytown, has remained constant for a decade and is at levels far below region overall and considered to be under performing. Mr. Spillette stated that Baytown s taxable assessed value has grown substantially since 2002, but did have some drops. He stated that these trends have roughly mirrored that of Harris County, but recent growth and decline swings have been more dramatic in Baytown. General Manager Leiper stated, in regards to the assessed values, that the City received rating call reports from Moody's and Standard Poor s and what s not shown in the $3 billion in assessed value, is the $5.4 billion of the IDA plants (facilities) and stated that the city receives 45% of the general fund revenue from those plants.

9 MDD Board Regular Meeting Minutes March 07, 2013 Page 6 of 6 Mr. Spillette stated that the information that they are retrieving may also be requested from others looking to invest in the Baytown community and if there are any suspected discrepancies they should be addressed. 3. ADJOURN A motion was made by Director David McCartney and seconded by Director Terry Sain adjourning the March 07, 2013, MDD Board Meeting. The vote was as follows: Ayes: President Stephen H. DonCarlos, Director Robert C. Hoskins, Director David P. Jirrels, Director David McCartney, Director Terry Sain, Vice President Scott Sheley Nays: None Other: Secretary Reggie Brewer (Absent), Director Brandon Capetillo (Absent), Director Mary Hernandez (Absent), Director Mercedes Renteria III (Absent) Approved With there being no further business to discuss, President DonCarlos adjourned the March 07, 2013, Municipal Development District (MDD) Board Regular Meeting at 6:02 P.M. Leticia Brysch, Assistant Secretary City of Baytown

10 BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT 2. a. Meeting Date: 05/02/2013 Subject: First Amendment to the Development Project Contract with The Baytown Little Theater Incorporated Prepared for: Ignacio Ramirez Prepared by: Karen Horner, Legal Information ITEM Consider a resolution authorizing the First Amendment to the Development Project Contract with The Baytown Little Theater Incorporated. PREFACE This proposed resolution authorizes the First Amendment to the Development Project Contract with The Baytown Little Theater Incorporated ("BLT"). In 2012 the District and BLT entered into a Development Project Contract for a development project consisting of the construction of a new 37,000 square foot theater within the District s boundaries and near the intersection of N. Main Street and Texas Avenue (the "2012 Property"). Since such time, the BLT has acquired by donation additional property and the improvements thereon, which is located within the District s boundaries, near the intersection of S. Main Street and Texas Avenue (the "2013 Property"). Instead of constructing a theater on the 2012 Property, the BLT desires to renovate the building on the 2013 Property. The building at that location is approximately 28,466 square feet, and the intent is to convert it into a theater and construct and maintain a parking facility for the theater on the 2012 Property. This proposed amendment authorizes such change and authorizes a lien on the 2013 property for the monies granted to BLT for the theater. Under the Agreement as amended the $500,000 contribution for the new facility will be made by the District quarterly based upon the following formula: ($500,000 x (Percentage of Completion of the Theater x 2)) Amount Previously Paid by MDD The percentage of completion shall be certified by BLT's design professionals. For a period of ten years commencing from the issuance of the certificate of occupancy for the theater, BLT is required to operate in such facility on the 2013 Property a community theater with a minimum of six theatrical productions per year along with educational/youth programming. Additionally, BLT is required to construct and maintain a parking facility on the 2012 Property for the same ten-year period. Should the BLT fail to do so, the entire amount paid by the MDD shall become immediately due and payable. Such repayment obligation will be secured by a lien, which will be forgiven once the ten-year period has expired.

11 Fiscal Year: Acct Code: Source of Funds (Operating/Capital/Bonds): Funds Budgeted Y/N: Amount Needed: Fiscal Impact Fiscal Impact (Additional Information): There is no fiscal impact associated with this item. Resolution - First Amendment Exhibit A - First Amendment Attachments

12 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT AUTHORIZING THE GENERAL MANAGER TO EXECUTE AND THE ASSISTANT SECRETARY TO ATTEST TO THE FIRST AMENDMENT TO THE DEVELOPMENT PROJECT CONTRACT BETWEEN THE BAYTOWN LITTLE THEATRE INCORPORATED AND THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT REGARDING FUNDING OF A THEATRE TO BE LOCATED ON PROPERTY AT THE INTERSECTION OF S. MAIN STREET AND TEXAS AVENUE TO PROMOTE NEW OR EXPANDED BUSINESS DEVELOPMENT WITHIN THE AREA; MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ******************************************************************************************** BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT: Section 1: That the Board of Directors of the Baytown Municipal Development District hereby finds that the expenditures authorized herein are for improvements, which satisfy the purposes for which the funds can be expended pursuant to Chapter 377 of the Texas Local Government Code and/or Section of the Special District Local Laws Code. All required findings pursuant thereto are hereby declared to have been made and adopted as findings of the Board of Directors. Section 2: That the Board of Directors of the Baytown Municipal Development District hereby authorizes the General Manager to execute and the Assistant Secretary to attest to the First Amendment to the Development Project Contract between the Baytown Little Theatre Incorporated (the BLT ) and the Baytown Municipal Development District (the District ) regarding funding for the renovation of a building which is approximately 28,466 square feet to be used as a theatre by BLT within the District s boundaries to be located on property at the intersection of S. Main Street and Texas Avenue. Such new theatre will be at the opposite end of Texas Avenue from the Lee College Performing Arts Center and will anchor the area, thereby promoting new or expanded business within the area. A copy of said contract is attached hereto as Exhibit A and incorporated herein for all intents and purposes. Section 3: This resolution shall take effect immediately from and after its passage by the Board of Directors of the Baytown Municipal Development District. INTRODUCED, READ and PASSED by the affirmative vote of the Board of Directors of the Baytown Municipal Development District, this the 2 nd day of May, ATTEST: STEPHEN H. DONCARLOS, President LETICIA BRYSCH, Assistant Secretary APPROVED AS TO FORM: IGNACIO RAMIREZ, SR., General Counsel R:\Karen\Files\City Council\Municipal Development District\Resolutions\2013\May\AuthorizeFirstAmendmentWithBLTforTheatreConstruction.doc

13 Exhibit "A" STATE OF TEXAS COUNTY OF HARRIS FIRST AMENDMENT TO THE DEVELOPMENT PROJECT CONTRACT THIS First Amendment ( First Amendment ) to that certain Development Project Contract the Agreement ) dated June 14, 2012, by and between the BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT, a political subdivision of the State of Texas, hereinafter called District, and THE BAYTOWN LITTLE THEATER INCORPORATED, a Texas Nonprofit Corporation, hereinafter called BLT, is made by and between the same parties on the date hereinafter last specified. W I T N E S S E T H: WHEREAS, the District desires to promote new or expanded business development within its boundaries; and WHEREAS, the District and BLT entered into a Development Project Contract for a development project consisting of the construction of a new 37,000 square foot theater within the District s boundaries and near the intersection of N. Main Street and Texas Avenue and more particularly described as follows: HCAD Account No. Property Description LTS 9, 10, 11 & 12, BLK 60 (016 & 051*THOMAS WRIGHT), GOOSE CREEK LT 1, VILLAS AT GOOSE CREEK (the 2012 Property ); and WHEREAS, since such time, the BLT has acquired by donation additional property and the improvements thereon, which is located within the District s boundaries, near the intersection of S. Main Street and Texas Avenue, and more particularly described as follows: HCAD Account No Property Description LTS 13, 14, 15, & 16, BLK 53 & LTS 9, 10, 11, & 12, BLK 4, GOOSE CREEK LT 4 & W 8 FT OF LT 3 BLK 60 (016 & 051*THOMAS WRIGHT) GOOSE CREEK Property Address 2 S. MAIN ST BAYTOWN TX E TEXAS AVE BAYTOWN TX (the 2013 Property ); and WHEREAS, instead of constructing a theater on the 2012 Property, the BLT desires to renovate the building on the 2013 Property, which building is approximately 28,466 square feet, and to convert it into a theater; and WHEREAS, the new theater on the 2013 Property will be at the opposite end of Texas Avenue and will complement the Lee College Performing Arts Center and will anchor the area thereby promoting new or expanded business within the District s boundaries; and WHEREAS, the District is agreeable to amending the Agreement on subject to the terms and conditions stated herein; First Amendment to the Development Project Contract, Page 1

14 NOW THEREFORE, for and in consideration of the premises and mutual covenants herein contained, it is agreed as follows: 1. Definitions. Unless a different meaning clearly appears from the context, words and phrases as used in this First Amendment shall have the same meanings as in the Agreement, except Property in the Agreement shall mean and refer to the 2013 Property, not the 2012 Property. 2. Amendments. (a) Section 1 Representations, Subsection (c) of the Agreement is hereby amended as follows: (c) The District hereby finds that BLT s development of a theater on the 2013 Property and related parking facilities on the 2012 Property constitute a development project in that it will promote new or expanded business development in the District. (b) Section 2 Services to be Provided, Subsection (a) Construction of the Agreement is hereby amended as follows: (a) Construction. BLT shall construct or cause to be constructed a -space parking lot on the 2012 Property and shall renovate or cause to be renovated the building on the 2013 Property, which building is approximately 28,466 square feet, and to convert it into a theater with both performance and rehearsal spaces; provided such construction is designed to promote new or expanded business development in the District consistent with Section of the Texas Special Districts Code. The parking lot on the 2012 Property and the theater on the 2013 Property shall hereinafter be collectively referred to as the Development Project. (c) Section 2 Services to be Provided, Subsection (b) Construction of the Agreement is hereby amended as follows: (b) Operation. On the 2013 Property, BLT shall operate a community theater for at least ten (10) years commencing on the date of the issuance of the certificate of occupancy of the Development Project. Operation for purposes of this paragraph shall mean providing a minimum of six (6) theatrical productions per year along with educational/youth programming. On the 2012 Property, BLT shall provide parking facilities and maintain the same for the productions required herein throughout the ten-year period. (d) Section 4 Payment of the Agreement is hereby amended as follows: First Amendment to the Development Project Contract, Page 2

15 Section 4. Payment. (a) For and in consideration of the services to be performed by BLT and compliance with the terms of this Agreement and subject to the other provisions of this section, the District agrees to pay to BLT the total sum of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00) based upon the following formula: ($500,000 x (Percentage of Completion of the Theater x 2)) Amount Previously Paid by MDD The percentage of completion of that portion of the Development Project consisting solely of the theater shall be certified by BLT s design professional and included in the quarterly reports submitted to the Board. Payment will be made not more often than quarterly and only after receipt of the quarterly report and approval of such payment by the Board. (b) (c) BLT agrees to use the monies paid by the District hereunder solely for construction costs of the theater and shall not use such fees for any other purpose. BLT agrees to demonstrate strict compliance with this subsection through its recordkeeping and audits required herein. Any ineligible expenditures shall be forfeited to the District upon expiration or termination of the Agreement. The entire amount paid by the MDD pursuant to Section 4(a) shall be immediately due and payable to the MDD if BLT: fails to meet the operational standards specified in Section 2(b) or sells, assigns, transfers or divests itself of title to the property on which any portion of the Development Project is located. BLT s obligation hereunder will be secured by a lien on the 2012 Property and 2013 Property subordinate to any mortgage lien. Should BLT comply with the terms and conditions hereof, the lien shall be forgiven ten years after the date of the certificate of occupancy issued for that portion of the Development Project consisting of the theater. BLT agrees to execute the lien for the 2012 Property on the effective date of the Agreement and a lien on the 2103 Property on the effective date of this First Amendment, which liens shall be prior to any construction of the Development Project. A copy of such lien on the 2012 Property is attached hereto as Exhibit A, and incorporated herein for all intents and purposes. A copy of such lien on the 2013 Property is attached hereto as Exhibit B, and incorporated herein for all intents and purposes. 3. Entire Agreement. The provisions of this First Amendment and the provisions of the Agreement should be read together and construed as one agreement provided that, in the event of any conflict or inconsistency between the provisions of this First Amendment and the provisions of the Agreement, the provisions of this First Amendment shall control. First Amendment to the Development Project Contract, Page 3

16 Nothing contained in this First Amendment shall be construed in any way to limit or to waive OWNER s sovereign immunity. IN WITNESS WHEREOF, the parties hereto have executed this First Amendment in multiple copies, each of which shall be deemed to be an original, but all of which shall constitute but one and the same amendment, this day of, 2013, the date of execution by the General Manager. BAYTOWN MUNICIPAL DEVELOPMENT THE BAYTOWN LITTLE THEATER INCORPORATED ROBERT D. LEIPER, General Manager (Signature) (Printed Name) (Title) ATTEST: ATTEST: LETICIA BRYSCH, Assistant Secretary (Signature) (Printed Name) (Title) APPROVED AS TO FORM: IGNACIO RAMIREZ, SR., General Counsel APPROVED AS TO FUNDING AVAILABILITY: LOUISE RICHMAN, Director of Finance R:\Karen\Files\City Council\Municipal Development District\Contracts\Contracts 2013\First Amendment to the BLT Construction Agreement (Repaired).doc First Amendment to the Development Project Contract, Page 4

17 Exhibit "A" THE STATE OF TEXAS DEVELOPMENT PROJECT LIEN COUNTY OF HARRIS WHEREAS, pursuant to that certain Development Project Contract (the Contract ) dated the day of, 20, by and between The Baytown Little Theater Incorporated (the Owner ) and the Baytown Municipal Development District, a political subdivision of the City of Baytown and the State of Texas located in Harris County, Texas (the MDD ), the MDD agreed to reimburse the Owner for certain improvements determined to be eligible for reimbursement; and WHEREAS, the aforementioned improvements are to be constructed on the property more particularly as follows, to-wit: LTS 9, 10, 11 & 12 BLK 60 (016 & 051*THOMAS WRIGHT), GOOSE CREEK, HARRIS COUNTY, TEXAS (Also known as 2 N. Main Street, Baytown, Texas) and LT 1 VILLAS AT GOOSE CREEK, HARRIS COUNTY TEXAS (Also known as 0 N. Main Street, Baytown, Texas) (the Property ); and WHEREAS, in exchange for such reimbursement for the improvements in accordance with the Contract, the Owner has agreed that a lien be placed upon the Property, which lien is conditioned on the Owner s compliance with all of the terms and conditions of the Contract, which is incorporated herein by this reference for all intents and purposes. Such responsibilities include, but are not limited to, those detailed in Section 2 of the Contract; and WHEREAS, should the Owner fail to comply with the Contract at any time within ten (10) years from the date of the issuance of the certificate of occupancy for the improvements, the Owner after the expiration of any cure period specified in the Contract shall reimburse the MDD the entire Lien Amount; and. WHEREAS, failure to remit the appropriate amount owed to the MDD in a timely manner shall result not only in interest calculated in accordance with Chapter 2251 of the Texas Government Code, but also in the Owner being obligated to pay court costs and all attorneys fees expended by the MDD in order to collect the amount owed to the MDD; NOW THEREFORE, KNOW ALL MEN BY THESE PRESENTS: That the sum of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00) (the Lien Amount ) is due and owing to the Baytown Municipal Development District, for the expense incurred by the MDD for the improvements made on the Property and that a lien exists on the Property to secure payment of the Lien Amount to the MDD. The Owner hereby warrants and represents to the MDD that this Lien is being executed and delivered before the labor or materials for the erection and construction of improvements have been furnished or delivered. Development Project Lien, Page 1

18 WITNESS MY HAND this the day of, 20. OWNER: The Baytown Little Theater Incorporated Signature Printed Name STATE OF TEXAS COUNTY OF HARRIS Title Before me, the undersigned notary public, on this day personally appeared, the of The Baytown Little Theater Incorporated, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he/she executed the same for the purposes and consideration therein expressed and in the capacity therein stated. SUBSCRIBED AND SWORN before me this day of, 20. Notary Public in and for the State of Texas RETURN TO: BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT OFFICE OF THE CITY CLERK P. O. BOX 424 BAYTOWN, TEXAS \\Cobfs01\legal\Karen\Files\City Council\Municipal Development District\Contracts\Contracts 2012\BLT Lien.doc Development Project Lien, Page 2

19 Exhibit "B" THE STATE OF TEXAS DEVELOPMENT PROJECT LIEN COUNTY OF HARRIS WHEREAS, pursuant to that certain First Amendment to the Development Project Contract (the First Amendment ), dated May, 2013, as well as the Development Project Contract (the Contract ) dated June 14, 2012, by and between The Baytown Little Theater Incorporated (the Owner ) and the Baytown Municipal Development District, a political subdivision of the City of Baytown and the State of Texas located in Harris County, Texas (the MDD ), the MDD agreed to reimburse the Owner for certain improvements and redevelopment activities determined to be eligible for reimbursement; and WHEREAS, the aforementioned development activities are to be constructed on the property more particularly as follows, to-wit: LTS 13, 14, 15, & 16, BLK 53 & LTS 9, 10, 11, & 12, BLK 4, GOOSE CREEK, HARRIS COUNTY, TEXAS (Also known as 2 S. Main Street, Baytown, Texas) (the Property ); and LT 4 & W 8 FT OF LT 3 BLK 60 (016 & 051*THOMAS WRIGHT) GOOSE CREEK, HARRIS COUNTY, TEXAS (Also known as 16 E. Texas Ave., Baytown, Texas) WHEREAS, in exchange for such reimbursement for the redevelopment activities in accordance with the First Amendment and the Contract, the Owner has agreed that a lien be placed upon the Property, which lien is conditioned on the Owner s compliance with all of the terms and conditions of the First Amendment and the Contract, which is incorporated herein by this reference for all intents and purposes. Such responsibilities include, but are not limited to, those detailed in Section 2 of the Contract; and WHEREAS, should the Owner fail to comply with the First Amendment or the Contract at any time within ten (10) years from the date of the issuance of the certificate of occupancy for the renovations, the Owner after the expiration of any cure period specified in the Contract shall reimburse the MDD the entire Lien Amount; and. WHEREAS, failure to remit the appropriate amount owed to the MDD in a timely manner shall result not only in interest calculated in accordance with Chapter 2251 of the Texas Government Code, but also in the Owner being obligated to pay court costs and all attorneys fees expended by the MDD in order to collect the amount owed to the MDD; NOW THEREFORE, KNOW ALL MEN BY THESE PRESENTS: That the sum of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00) (the Lien Amount ) is due and owing to the Baytown Municipal Development District, for the expense incurred by the MDD for the improvements made on the Property and that a lien exists on the Property to secure payment of the Lien Amount to the MDD. The Owner hereby warrants and represents to the MDD that this Lien is being executed and delivered before the labor or materials for the erection and construction of improvements have been furnished or delivered. Development Project Lien, Page 1

20 WITNESS MY HAND this the day of, 20. OWNER: The Baytown Little Theater Incorporated Signature Printed Name STATE OF TEXAS COUNTY OF HARRIS Title Before me, the undersigned notary public, on this day personally appeared, the of The Baytown Little Theater Incorporated, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he/she executed the same for the purposes and consideration therein expressed and in the capacity therein stated. SUBSCRIBED AND SWORN before me this day of, 20. Notary Public in and for the State of Texas RETURN TO: BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT OFFICE OF THE CITY CLERK P. O. BOX 424 BAYTOWN, TEXAS R:\Karen\Files\City Council\Municipal Development District\Contracts\Contracts 2013\1st Amendment BLT Lien.doc Development Project Lien, Page 2

21 BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT 3. a. Meeting Date: 05/02/2013 Receive the Baytown Municipal Development District's Revenues and Expenditures Report for the Quarter Ending March 31, 2013 Prepared For: Louise Richman Prepared By: Meghan Reed, Finance Information ITEM Receive the Baytown Municipal Development District's Revenues and Expenditures Report for the Quarter Ending March 31, PREFACE Receive the Baytown Municipal Development District's Revenues and Expenditures Report for the Quarter Ending March 31, RECOMMENDATION Fiscal Year: Acct Code: Source of Funds (Operating/Capital/Bonds): Funds Budgeted Y/N: Amount Needed: Fiscal Impact Fiscal Impact (Additional Information): There is no fiscal impact associated with this item. Q2 MDD Financial Report Attachments

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27 BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT 3. b. Meeting Date: 05/02/2013 Receive MDD Quarterly Investment Report for Quarter Ending March 31,2013. Prepared For: Louise Richman Prepared By: Renee Savage, Finance Information ITEM Receive the Baytown Municipal Development District's Quarterly Investment Report for the Quarter Ending March 31, PREFACE The Baytown Municipal Development District's Quarterly Investment Report for the Quarter Ending March 31,2013, is submitted for review in accordance with the Public Funds Investment Act Section (a) and (b). RECOMMENDATION Fiscal Year: Acct Code: Source of Funds (Operating/Capital/Bonds): Funds Budgeted Y/N: Amount Needed: Fiscal Impact Fiscal Impact (Additional Information): There is no fiscal impact associated with this item. Q2 MDD Investment Report Attachments

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30 BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT 4. a. Meeting Date: 05/02/2013 Subject: Executive Session: Possible Purchase of Real Property. Prepared for: Ignacio Ramirez Prepared by: Leticia Brysch, City Clerk's Office Department: Legal Information ITEM Recess into and conduct an executive session pursuant to Texas Government Code, Section to deliberate the potential purchase of real property for an economic development project. PREFACE Recess into and conduct an executive session pursuant to Texas Government Code, Section to deliberate the potential purchase of real property for an economic development project. RECOMMENDATION Fiscal Year: Acct Code: Source of Funds (Operating/Capital/Bonds): Funds Budgeted Y/N: Amount Needed: Fiscal Impact Fiscal Impact (Additional Information): There is no fiscal impact associated with this item at this time.

31 BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT 4. b. Meeting Date: 05/02/2013 Subject: Interlocal Agreement with City for Land Acquisition for Economic Development Prepared for: Ignacio Ramirez Prepared by: Karen Horner, Legal Information ITEM Consider a resolution authorizing an interlocal agreement with the City of Baytown for funding land acquisition for a development project. PREFACE This proposed resolution authorizes an interlocal agreement with the City of Baytown for land acquisition for a development project. Under this interlocal agreement, the MDD will provide funding of up to $200,000 to the City for land acquisition. The City Council will consider this item at its special meeting to be held on May 2, Fiscal Impact Fiscal Year: Acct Code: ECMD1203 Source of Funds (Operating/Capital/Bonds): Sales Tax Funds Budgeted Y/N: Amount Needed: $200,000. Fiscal Impact (Additional Information): Resolution - Land Acquisition Exhibit A - Land Acquisition Attachments

32 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT AUTHORIZING THE PRESIDENT TO EXECUTE AN INTERLOCAL AGREEMENT WITH THE CITY OF BAYTOWN FOR FUNDING LAND ACQUISITION FOR A DEVELOPMENT PROJECT; AUTHORIZING PAYMENT OF AN AMOUNT NOT TO EXCEED TWO HUNDRED THOUSAND AND NO/100 DOLLARS ($200,000.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ************************************************************************************* BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT: Section 1: That the Board of Directors of the Baytown Municipal Development District hereby finds that the expenditures authorized herein are for improvements, which satisfy the purposes for which the funds can be expended pursuant to Chapter 377 of the Texas Local Government Code and/or Section of the Special District Local Laws Code. All required findings pursuant thereto are hereby declared to have been made and adopted as findings of the Board of Directors. Section 2: That the Board of Directors of the Baytown Municipal Development District hereby authorizes the President to execute the Interlocal Agreement with the City of Baytown for funding property acquisition for a development project. A copy of said agreement is attached hereto as Exhibit A, and incorporated herein for all intents and purposes. Section 3: That the Board of Directors of the Baytown Municipal Development District hereby authorizes the payment of an amount not to exceed TWO HUNDRED THOUSAND AND NO/100 DOLLARS ($200,000.00) to the City of Baytown in accordance with the agreement referenced in Section 2 hereof. Section 4: This resolution shall take effect immediately from and after its passage by the Board of Directors of the Baytown Municipal Development District. INTRODUCED, READ and PASSED by the affirmative vote of the Board of Directors of the Baytown Municipal Development District, this the 2 nd day of May, ATTEST: STEPHEN H. DONCARLOS, President LETICIA BRYSCH, Assistant Secretary APPROVED AS TO FORM: IGNACIO RAMIREZ, SR., General Counsel R:\Karen\Files\City Council\Municipal Development District\Resolutions\2013\May\LandAcquisition4DevelopmentProjectInterlocalResolution.doc

33 Exhibit "A" AGREEMENT FOR FUNDING LAND ACQUSITION FOR A DEVELOPMENT PROJECT STATE OF TEXAS COUNTY OF HARRIS This Agreement for Funding of Land Acquisition for a Development Project (the Agreement ) is made by and between the CITY OF BAYTOWN, a municipal corporation located in Harris and Chambers Counties, Texas, (the City ) and the BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT, created under Chapter 377 of the Texas Local Government Code, as amended, (the Act ) and located in Harris County, Texas, (the District ). For and in consideration of the mutual covenants herein contained, it is agreed as follows: Section 1. Representations and Warranties of District. a) The District is engaged in an on-going effort to provide new resources to plan, acquire, establish, develop, construct and/or renovate one or more development projects beneficial to the District, which includes the incorporated limits of the City lying within Harris County. b) The District covenants that it shall actively work to productively coordinate its activities with the City in an effort to reduce duplication of services. c) The District represents and warrants that it has been properly created and is duly authorized pursuant to the Act to enter into this Agreement. Section 2. Description of Program. The City, with the assistance of the District as herein specified, agrees to endeavor to acquire certain property for a development project to promote economic development and stimulate business and commercial activity (the Project ). Section 3. Reports. The City shall prepare and submit to the District within 120 days after the end of each fiscal year during the term of this Agreement a verbal or brief written report describing the services performed by the City pursuant to this contract during the previous year along with a summary of expenditures for the previous fiscal year. Section 4. Approvals. The District understands, hereby directs and authorizes the City to make any Project clarifications and/or modifications as may be necessary as determined by the City in its sole discretion. Section 5. Funds to be provided by the District. For and in consideration of the services to be provided by the City in furtherance of this Agreement, the District shall tender funds to the City in an amount not to exceed TWO HUNDRED THOUSAND AND NO/100 DOLLARS ($200,000.00). All payments required to be made herein shall be payable on or before 30 days after the District receives an invoice therefor from the City. Section 6. Term. This Agreement shall be effective on the date of execution of this Agreement by the City Manager, and shall expire thirty (30) days after final completion and acceptance of the Project by the City, unless sooner terminated by either party hereto pursuant to the terms hereof. Agreement for Funding of Land Acquisition for a Development Project, Page 1

34 Section 7. Termination for Cause. A party may terminate its performance under this contract only upon default by the other party. Default by a party shall occur if the party fails to perform or observe any of the terms and conditions of this Agreement required to be performed or observed by that party. Should such a default occur, the party against whom the default has occurred shall have the right to terminate all or part of its obligations under this contract as of the 30 th day following the receipt by the defaulting party of a notice describing such default and intended termination, provided: (1) such termination shall be ineffective if within said 30-day period the defaulting party cures or has commenced the cure of the default, or (2) such termination may be stayed, at the sole option of the party against whom the default has occurred, pending cure of the default. Upon the termination of this Agreement, both parties shall be relieved of their respective obligations herein stated, except for those referenced in Section 9 hereinbelow. This Agreement shall not be subject to termination for convenience. Section 8. Force Majeure. Any prevention, delay, nonperformance, or stoppage due to any of the following causes shall excuse nonperformance for the period of any such prevention, delay, nonperformance, or stoppage, except the obligations imposed by this Agreement for the payment of funds allocated for the District s programs. The causes referred to above are strikes, lockouts, labor disputes, failure of power, acts of God, acts of public enemies of this State or of the United States, riots, insurrections, civil commotion, inability to obtain labor or materials or reasonable substitutes for either, governmental restrictions or regulations or controls, casualties or other causes beyond the reasonable control of the party obligated to perform. Section 9. Refund and Payment upon Termination. Upon termination of this Agreement pursuant to Section 7 hereof due to an uncured default by the City, the City hereby agrees to refund all unexpended, unappropriated monies previously paid by the District to the City pursuant to this Agreement. If at the time of termination the District owes the City monies, the District shall remit to the City the appropriate amount computed as of the effective date of the termination. Upon termination of this Agreement pursuant to Section 7 hereof due to an uncured default by the District, the District hereby agrees to pay the total amount committed in Section 5 hereof on or before the effective date of the termination. Section 10. Parties in Interest. This contract shall bind and benefit the City and the District and shall not bestow any rights upon any third parties. Section 11. Non-waiver. Failure of either party hereto to insist on the strict performance of any of the agreements herein or to exercise any rights or remedies accruing thereunder upon default or failure of performance shall not be considered a waiver of the right to insist on and to enforce, by an appropriate remedy, strict compliance with any other obligation hereunder or to exercise any right or remedy occurring as a result of any future default or failure of performance. Section 12. Compliance with Applicable Laws. The parties hereto shall comply with all rules, regulations, and laws of the United States of America, the State of Texas, and all laws, regulations, and ordinances of the City of Baytown as they now exist or may hereafter be enacted or amended. Agreement for Funding of Land Acquisition for a Development Project, Page 2