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ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC DEVELOPMENT AGREEMENT ("Agreement") is made by and between the CITY OF HOUSTON, TEXAS, a municipal corporation and home-rule city ("City"), and FINGER DEVELOPMENT COMPANY, a Texas corporation ("Developer"). The City and the Developer may be referred to singularly as "Party" and collectively as the "Parties." RECITALS WHEREAS, the Developer has entered into Purchase and Sale Agreements, and amendments thereto to purchase certain tracts of land totaling approximately 20,157 square feet within the corporate limits of the City ("Property") on which it intends to construct a seven story apartment building containing approximately 380 residential units thereon with appropriate amenities thereto, and approximately 10,000 square feet of retail and an attached parking garage with approximately 650 parking spaces on 6 !4 levels, on the north and south sides of the fifteen hundred block of Prairie Avenue, from La Branch Street to Crawford Street (the "Project"); and WHEREAS, the current owners of the Property have submitted an application to the Joint Referral Committee for the abandonment of that portion of Prairie Avenue adjacent to the Property and within the boundaries of the proposed Project, without which abandonment the Developer will not be able to construct the Project; and WHEREAS, recent studies of and plans for development within the eastern area of downtown Houston (the "Area") have demonstrated a need and demand for multi- family residential development with active uses at street level within the Area, but have concluded that the public investments made in the Area have increased the price of land to an extent that desired multi-family residential development is not economically feasible without some form of public incentive: and WHEREAS, the Developer proposes to construct the Project which is in the Area and has requested an economic incentive from the City in the form of a grant to help offset the value difference of the street rights-of-way that the Developer would otherwise be required to pay upon the City's abandonment of these rights-of-way; and WHEREAS, the City recognizes the positive economic impact that the Project will bring to the City through the timely development and diversification of the economy, elimination of unemployment and underemployment through the creation and retention of new jobs, the attraction of new businesses, and the retention and growth of the ad

ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

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Page 1: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

ECONOMIC DEVELOPMENT AGREEMENT

This ECONOMIC DEVELOPMENT AGREEMENT ("Agreement") is made by andbetween the CITY OF HOUSTON, TEXAS, a municipal corporation and home-rule city("City"), and FINGER DEVELOPMENT COMPANY, a Texas corporation ("Developer").The City and the Developer may be referred to singularly as "Party" and collectively asthe "Parties."

RECITALS

WHEREAS, the Developer has entered into Purchase and Sale Agreements, andamendments thereto to purchase certain tracts of land totaling approximately 20,157square feet within the corporate limits of the City ("Property") on which it intends toconstruct a seven story apartment building containing approximately 380 residentialunits thereon with appropriate amenities thereto, and approximately 10,000 square feetof retail and an attached parking garage with approximately 650 parking spaces on 6 !4levels, on the north and south sides of the fifteen hundred block of Prairie Avenue, fromLa Branch Street to Crawford Street (the "Project"); and

WHEREAS, the current owners of the Property have submitted an application tothe Joint Referral Committee for the abandonment of that portion of Prairie Avenueadjacent to the Property and within the boundaries of the proposed Project, withoutwhich abandonment the Developer will not be able to construct the Project; and

WHEREAS, recent studies of and plans for development within the eastern areaof downtown Houston (the "Area") have demonstrated a need and demand for multi-family residential development with active uses at street level within the Area, but haveconcluded that the public investments made in the Area have increased the price ofland to an extent that desired multi-family residential development is not economicallyfeasible without some form of public incentive: and

WHEREAS, the Developer proposes to construct the Project which is in the Areaand has requested an economic incentive from the City in the form of a grant to helpoffset the value difference of the street rights-of-way that the Developer would otherwisebe required to pay upon the City's abandonment of these rights-of-way; and

WHEREAS, the City recognizes the positive economic impact that the Project willbring to the City through the timely development and diversification of the economy,elimination of unemployment and underemployment through the creation and retentionof new jobs, the attraction of new businesses, and the retention and growth of the ad

Page 2: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

valorem and personal property tax revenues generated by the Developer's operationson the Property; and

WHEREAS, the City has established a program in accordance with Article III,Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas LocalGovernment Code ("Chapter 380") pursuant to which the City has the authority to makegrants or loans of public funds for the public purposes of promoting local economicdevelopment and stimulating business and commercial activity within the City; and

WHEREAS, in consideration of Developer's commitment to design, construct,and develop the Project, the City desires to enter into this Agreement pursuant toChapter 380 and other laws and to grant to Developer the value of the street rights-of-way that Developer would otherwise be required to pay upon the City's abandonment ofthese rights-of-way; and

WHEREAS, to ensure that the benefits the City provides under this Agreementare utilized in a manner consistent with Chapter 380 and other applicable laws, theDeveloper has agreed to comply with certain conditions for receiving those benefits,including criteria relating to the design and construction of the Project (the "DesignGuidelines" attached hereto as Exhibit A and as generally illustrated in (i) the drawing ofthe Crawford Street elevation of the Project attached hereto as Exhibit B; (ii) the siteplan and typical ground floor unit plan attached hereto as Exhibit C; and (iii) the drawingshowing how the ground floor units relate to the sidewalk attached hereto as Exhibit D);and

WHEREAS, for all purposes of this Agreement, the City acknowledges thatconstruction of the Project consistent with Exhibits B, C and D shall be construction ofthe Project in accordance with the Design Guidelines;

NOW, THEREFORE, for and in consideration of the premises and mutualagreements and covenants set forth herein, the City and the Developer agree asfollows:

ARTICLE IGENERAL TERMS

A. Incorporation of Recitals. The recitals to this Agreement are hereby incorporatedfor all purposes.

B. Definitions and Terms. The terms "Agreement," "Chapter 380," "City,""Developer," "Project," "Property," shall have the meanings given to such terms in theRecitals, and the following capitalized terms have the following meanings:

Page 3: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

"Effective Date" means the date that the City Controller countersigns thisAgreement.

"Parties" or "Party" shall mean the City and the Developer, the parties to thisAgreement and the Developer's assigns.

"Right-of-Way" means the portion of the right-of-way of Prairie Avenue betweenLa Branch Street and Crawford Street that the current owners of the Property and theDeveloper have requested the City to abandon.

C. Singular and Plural. Words used herein in the singular, where the context sopermits, also include the plural and vice versa. The definitions of words in the singularalso apply to such words when used in the plural where the context so permits and viceversa.

ARTICLE IIREPRESENTATIONS AND WARRANTIES

A. Representations of the City. The City hereby represents to the Developer that asof the date hereof:

The City is a duly created and existing municipal corporation and home rulemunicipality of the State of Texas under the laws of the State of Texas and is dulyqualified and authorized to carry on the governmental functions and operations ascontemplated by this Agreement.

The City has the power, authority and legal right under the laws of the State ofTexas and the City Charter to enter into and perform this Agreement and the execution,delivery and performance hereof (i) will not, to the best of its knowledge, violate anyapplicable judgment, order, law or regulation, and (ii) do not constitute a default under,or result in the creation of, any lien, charge, encumbrance or security interest upon anyassets of the City under any agreement or instrument to which the City is a party or bywhich the City or its assets may be bound or affected.

This Agreement has been duly authorized, executed and delivered by the Cityand constitutes a legal, valid and binding obligation of the City, enforceable inaccordance with its terms except to the extent that the enforceability of suchinstruments may be limited by bankruptcy, reorganization, insolvency, moratorium orother similar laws of general application in effect from time to time relating to or affectingthe enforcement of creditors' rights.

Page 4: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

The execution, delivery and performance of this Agreement by the City do notrequire the consent or approval of any person that has not been obtained.

B. Representations and Warranties of the Developer. The Developer herebyrepresents and warrants to the City that:

The Developer is duly authorized and existing and in good standing under thelaws of the State of Texas, and is qualified to do business in the State of Texas.

The Developer has, or will have upon purchase of the Property, the power,authority and legal right to enter into and perform its obligations set forth in thisAgreement, and the execution, delivery and performance hereof, (i) have been dulyauthorized, and will not, to the best of its knowledge, violate any judgment, order, law orregulation applicable to the Developer, and (ii) do not and will not constitute a defaultunder or result in the creation of, any lien, charge, encumbrance or security interestupon any assets of the Developer under any agreement or instrument to which theDeveloper is a party or by which the Developer or its assets may be bound or affected.

This Agreement has been duly authorized, executed and delivered andconstitutes a legal, valid and binding obligation of the Developer, enforceable inaccordance with its terms except to the extent that the enforceability of suchinstruments may be limited by bankruptcy, reorganization, insolvency, moratorium orother similar laws of general application in effect from time to time relating to or affectingthe enforcement of creditors' rights.

The Project will be constructed substantially in accordance with the DesignGuidelines. The Project will be substantially constructed and have a certificate ofoccupancy issued by the City no later than June 30, 2015, subject to subparagraph D.of Article V below.

ARTICLE IIIECONOMIC INCENTIVES

To develop and construct the Project, the Developer must acquire the Right-of-Way which will become part of the Project. Subject to adherence to standard right-of-way abandonment procedures and ordinances, the City agrees to support and bringforth for City Council approval, upon the City's Joint Referral Committee's review of theDeveloper's Right-of-Way abandonment application, an ordinance or other appropriateform of agreement for the abandonment of the Right-of-Way to facilitate thedevelopment of the Project. As an incentive for the Developer to construct the Project,the City hereby agrees to make a Chapter 380 grant to the Developer of the amount the

Page 5: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

Developer would otherwise be required to pay the City for abandoning the Right-of-Way.

ARTICLE IVOBLIGATIONS OF THE DEVELOPER

The Developer shall construct the Project in compliance with all applicableordinances, rules, and regulations of the City and all other entities having jurisdictionover the Project. The Project shall be constructed substantially in accordance with theDesign Guidelinesand the facade shall have substantially the appearance shown inExhibit A. The Developer may modify the facade from the drawing shown in Exhibit Aonly upon approval by the Chief Development Officer of the City, and only if the changeis substantially consistent with the Design Guidelines. Approval of a change by theChief Development Officer shall be prima facie evidence that the approved change isconsistent with the Design Guidelines. Failure to construct the Project substantially inaccordance with the Design Guidelines shall constitute an incurable event of defaultunder this Agreement.

The Developer shall complete the Project and make it available for occupancy,as evidenced by a certificate of occupancy issued by the City, no later than June 30,2015, subject to subparagraph D. of Article V below. Subject to subparagraph D. ofArticle V below, failure to complete the Project by this date shall constitute an incurableevent of default under this Agreement.

ARTICLE VDEFAULT AND REMEDY

A. General Events of Default. A Party shall be deemed in default under thisAgreement (which shall be deemed a breach hereunder) if such Party fails tosubstantially perform, observe or comply with any of its material commitments,covenants, agreements or obligations hereunder or if any of its representationscontained in this Agreement are false in any material respect.

Before the failure of any Party to perform its obligations under this Agreement isdeemed to be a breach of this Agreement, the Party claiming such failure shall notify, inwriting, the Party alleged to have failed to perform of the alleged failure and shalldemand performance. No breach of this Agreement may be found to have occurred ifperformance has commenced to the reasonable satisfaction of the complaining Partywithin thirty (30) days of the receipt by the defaulting Party of such notice.

Page 6: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

B. Project Completion Default. The Developer and its successors and assigns shallbe in default under this Agreement if construction of the Project is (i) not constructedsubstantially in accordance with the Design Guidelines, or (ii) not substantially completeand does not have a certificate of occupancy issued by the City by June 30, 2015,subject to subparagraph D. of Article V (a "Project Completion Default"). A ProjectCompletion Default shall be an incurable event of default. Upon the occurrence of aProject Completion Default, the Developer shall, within thirty (30) days of receipt ofwritten notice of default from the City, pay the City the amount of money the Developerotherwise would have had to pay the City for the abandonment of the Right-of-Way asthe City's sole and exclusive remedy for a Project Completion Default, all otherremedies for a Project Completion Default being waived by the City, such amount beingagreed upon as liquidated damages because of the difficulty of ascertaining the actualdamages for any such Project Completion Default. In lieu of declaring a ProjectCompletion Default, the Chief Development Officer of the City, if he or she believesreasonable progress is being made toward completion of the Project and that theProject can and will be completed, may recommend that the City Council approve anamendment to this Agreement extending the Project completion deadline, subject toreceipt of adequate consideration from the Developer.

C. Upon a breach of this Agreement, the non-defaulting Party, in any court ofcompetent jurisdiction, by an action or proceeding at law or in equity, may secure thespecific performance of the covenants and agreements herein contained, may beawarded damages for failure of performance, or both, subject to the liquidated damagesprovision of subparagraph B above. Except as otherwise set forth herein, no actiontaken by a Party pursuant to the provisions of this Section or pursuant to the provisionsof any other Section of this Agreement shall be deemed to constitute an election ofremedies; and all remedies set forth in this Agreement shall be cumulative and non-exclusive of any other remedy either set forth herein or available to any Party at law orin equity. Each of the Parties shall have the affirmative obligation to mitigate itsdamages in the event of a default by the other Party.

D. Notwithstanding anything in this Agreement which is or may appear to be to thecontrary, if the performance of any covenant or obligation to be performed hereunder byany party is delayed as a result of circumstances which are beyond the reasonablecontrol of such Party (which circumstances may include, without limitation, pending orthreatened litigation, acts of God, war, acts of civil disobedience, fire or other casualty,shortage of materials, adverse weather conditions [such as, by way of illustration andnot limitation, severe rain storms or below freezing temperatures, hurricanes ortornadoes], labor action, strikes or similar acts) the time for such performance shall beextended by the amount of time of such delay ("Force Majeure").

Page 7: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

In addition to any other right or remedy available to the Parties pursuant to thisAgreement, subject to the liquidated damages provision of subparagraph B. above, inthe event of a default or a breach by either Party under this Agreement which continuesfor thirty (30) days after written notice to the Party alleged to have defaulted or breachedand the failure of the Party alleged to have defaulted or breached to cure or diligentlyproceed to cure such breach to the complaining Party's reasonable satisfaction, thecomplaining Party shall have the right (but not the obligation), in its sole discretion, toexercise its rights with regards to mandamus, specific performance or mandatory orpermanent injunction to require the Party alleged to have defaulted or breached toperform.

ARTICLE VIGENERAL PROVISIONS

A. Time of the essence. Time is of the essence in the performance of thisAgreement. The Parties will make every commercially reasonable effort to expedite thesubject matters hereof and acknowledge that the successful performance of thisAgreement requires their continued cooperation, including, without limitation, subject tothe Developer's compliance with all applicable laws, expeditiously processing permitsand approvals to facilitate the Developer's timely procurement of all entitlementsrequired for the Project.

B. Notices. Any notice sent under this Agreement (except as otherwise expresslyrequired) shall be written and mailed or sent by rapid transmission confirmed by mailingwritten confirmation at substantially the same time as such rapid transmission, orpersonally delivered to an officer of the receiving Party at the following addresses:

If to the Developer:

Finger Development Company99 Detering, Suite 200Houston, TX 77007Attention: Mr. Marvy Finger

With a copy to:

Schlanger Silver Barg & Paine, LLP109 North Post Oak LaneSuite 300Houston, TX 77024Attention: Mr. Lee D. Schlanger

Page 8: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

If to the City:

Chief Development OfficerCity of Houston, TexasP.O. Box 1562Houston, Texas 77251-1562

With a copy to:

City AttorneyCity of Houston, Texas900 Bagby, 4th FloorCity Hall AnnexHouston, Texas 77002

Notice shall be deemed to have been received on the date such notice is personallydelivered or three days from the date such notice is mailed or sent by rapidtransmission. Either Party may change its address by written notice in accordance withthis Section. Any communication addressed and mailed in accordance with this Sectionshall be deemed to be given when so mailed, any notice so sent by rapid transmissionshall be deemed to be given when receipt of such transmission is acknowledged, andany communication so delivered in person shall be deemed to be given when receivedfor by, or actually received by, an authorized officer of the Developer or the City, as thecase may be.

C. Amendments and waivers. Any provision of this Agreement may be amended orwaived if such amendment or waiver is in writing and is approved by the Developer andthe City. No course of dealing on the part of the Developer or the City nor any failure ordelay by the Developer or the City with respect to exercising any right, power orprivilege pursuant to this Agreement shall operate as a waiver thereof, except asotherwise provided in this Section.

D. Invalidity. In the event that any of the provisions contained in this Agreementshall be held unenforceable in any respect, such unenforceability shall not affect anyother provisions of this Agreement and, to that end, all provisions, covenants,agreements or portions of this Agreement are declared to be severable.

E. Successors and assigns. Neither Party shall have the right to assign its rightsunder this Agreement or any interest herein, without the prior written consent of theother Party, except that the Developer may assign its rights and responsibilities

Page 9: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

hereunder without the prior written consent of the City to (i) a lending institution of all ora portion of the Developer's rights hereunder as security for repayment of one or moreloans to finance the construction or ownership of the Project, or (ii) any related, affiliatedor subsidiary entity to which substantially all of its assets, liabilities or its rights toproceed with development of the Project are transferred, provided that any assigneeunder (ii) agrees in writing to assume the Developer's obligations under this Agreement.The Developer shall promptly provide the City with a copy of the assignment instrumentand the notice information for the assignee. For all other assignments, the City shall notunreasonably withhold its written consent. The City's Chief Development Officer, or hisor her designee, may consent to a qualifying assignment under this Section on behalf ofthe City.

F. Exhibits, titles of articles, sections and subsections. The exhibits attached to thisAgreement are incorporated herein and shall be considered a part of this Agreement forthe purposes stated herein, except that in the event of any conflict between any of theprovisions of such exhibits and the provisions of this Agreement, the provisions of thisAgreement shall prevail. All titles or headings are only for the convenience of the Partiesand shall not be construed to have any effect or meaning as to the agreement betweenthe Parties hereto. Any reference herein to a section or subsection shall be considereda reference to such section or subsection of this Agreement unless otherwise stated.Any reference herein to an exhibit shall be considered a reference to the applicableexhibit attached hereto unless otherwise stated.

G. Applicable law. This Agreement is a contract made under and shall, beconstrued in accordance with and governed by the laws of the United States of Americaand the State of Texas, and any actions concerning this Agreement shall be brought ineither the State Courts of Harris County, Texas, or the United States District Court forthe Southern District of Texas.

H. Entire agreement. This Agreement represents the final agreement between theParties and may not be contradicted by evidence of prior, contemporaneous, orsubsequent oral agreements of the Parties. There are no unwritten oral agreementsbetween the Parties.

I. Approval by the Parties. Whenever this Agreement requires or permits approvalor consent to be hereafter given by any of the Parties, the Parties agree that suchapproval or consent shall not be unreasonably withheld or delayed.

J. Counterparts. This Agreement may be executed in several counterparts, each ofwhich shall be an original and all of which shall constitute but one and the sameagreement.

Page 10: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

K, Interpretation. This Agreement has been jointly negotiated by the Parties andshall not be construed against a Party because that Party may have primarily assumedresponsibility for the drafting of this Agreement.

L. Conflicts with Ordinances. The City and the Developer agree that, in the event ofa conflict between the provisions of this Agreement and any City ordinance, orregulation by any other agency over which the City has control, whether heretofore orhereafter adopted, the provisions of this Agreement shall govern matters addressed bythis Agreement. Without limited the foregoing, the terms and conditions of thisAgreement specifically control over any conflicting provisions of City Ordinance No. 99-674.

[Execution page follows]

10

Page 11: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

IN WITNESS WHEREOF, the Parties have executed this Amended and RestatedEconomic Development Agreement in multiple originals, each of equal force and effect,as of the date of approval by the Mayor and City Council of the City.

FINGER DEVELOPMENT COMPANY, CITY OF HOUSTON, TEXASa Texas corporation

By:Name: Gordon PtlmerTitle: Vice President

City Secretary

DATE COUNTERSIGNED:

AP

Chief Development Officer, Office of the Mayor

APPROVED AS TO FORM:

Assistant City AttorneyL.D. File No. 042120093001

g:\land\chap 380 econ dev\380 Finger\6nalagreement8132012AM.doc

11

Page 12: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

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Page 17: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

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Page 18: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

EXHIBIT B

CRAWFORD STREET ELEVATION OF THE PROJECT

7

Page 19: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

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Page 20: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

EXHIBIT C

SITE PLAN AND TYPICAL GROUND FLOOR UNIT PLAN

Page 21: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

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Page 22: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

EXHIBIT D

RELATIONSHIP OF GROUND FLOOR UNITS TO SIDEWALK

Page 23: ECONOMIC DEVELOPMENT AGREEMENT This ECONOMIC …Chapter 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code ("Chapter 380") pursuant to which the City

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