Dallas City Council Agenda: February 27, 2013 Part II by buildingcommunityWORKSHOP

ADDENDUM CITY COUNCIL MEETING FEBRUARY 27, 2013 CITY OF DALLAS 1500 MARILLA COUNCIL CHAMBERS, CITY HALL DALLAS, TEXAS 75201 9:00 A. M. ADDITIONS: Briefing Trinity East Gas Lease

6ES

CONSENT ADDENDUM Economic Development 1.

Authorize a master agreement with DFM Developer, Ltd. to outline recommended public financial incentives and developer obligations related to the development of an approximately 12 acre site located southeast of the intersection of Harwood Street and Marilla Street known as Dallas Farmers Market - Financing: No cost consideration to the City

Authorize a public hearing to be held on March 27, 2013 to receive comments on amendments to the Project and Reinvestment Zone Financing Plan for Tax Increment Financing Reinvestment Zone Number Six (the Farmers Market TIF District) to: (1) increase the geographic area of the Farmers Market TIF District to include properties located south and east of the existing boundary; (2) extend the term of the Farmers Market TIF District from September 30, 2013 to December 31, 2028; (3) increase the total Farmers Market TIF budget from $11,645,918 NPV ($22,733,724 total dollars) to $19,238,514 NPV ($33,955,605 total dollars), including the adjustment of various budget categories/line items; (4) decrease the percentage of tax increment contributed by the City of Dallas during the extended term of the TIF District and establish other taxing jurisdictions participation percentages; and (5) allow direct land sale to implement the plan and, at the close of the public hearing, consideration of an ordinance amending Ordinance No. 23521, previously approved on May 27, 1998, and Ordinance No. 24001, previously approved on August 25, 1999, to reflect these amendments Financing: No cost consideration to the City

Sanitation Services 3.

Authorize acceptance of the City’s Local Solid Waste Management Plan, with amended timelines - Financing: No cost consideration to the City

ADDENDUM CITY COUNCIL MEETING FEBRUARY 27, 2013 ADDITIONS: (Continued) CONSENT ADDENDUM (Continued) Sustainable Development and Construction 4.

An ordinance granting a Planned Development District for mixed uses on property zoned Planned Development Subdistrict No. 73 in Planned Development District No. 193, the Oak Lawn Special Purpose District, and a Historic Transition Subdistrict within Planned Development District No. 225, the State-Thomas Special Purpose District with Historic Overlay District No. 25, the State Thomas Historic District - Z123-129 Financing: No cost consideration to the City

An ordinance granting a new subdistrict, a resolution accepting deed restrictions volunteered by the applicant, and a resolution accepting the termination of existing deed restrictions on property zoned a Historic Transition Subdistrict within Planned Development District No. 225, the State-Thomas Special Purpose District with Historic Overlay District No. 25, the State Thomas Historic District on the northwest side of State Street, between Routh Street and Fairmount Street - Z123-130 - Financing: No cost consideration to the City

An ordinance abandoning a portion of Neely Street to Dallas County Schools, the abutting owner, containing approximately 17,005 square feet of land located near its intersection with Zang Boulevard - Revenue: $170,000 plus the $20 ordinance publication fee

ITEMS FOR INDIVIDUAL CONSIDERATION City Secretary’s Office 8.

An ordinance amending Ordinance No. 20231, as amended, to adopt new, renumbered and revised city election precincts - Financing: No cost consideration to the City

An ordinance ordering a general election to be held in the City of Dallas on Saturday, May 11, 2013, for the purpose of electing 14 members of the City Council to represent Districts 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 for the term beginning June 24, 2013 - Financing: No cost consideration to the City

ADDENDUM CITY COUNCIL MEETING FEBRUARY 27, 2013 ADDITIONS: (Continued) ITEMS FOR INDIVIDUAL CONSIDERATION (Continued) Park & Recreation 10.

An ordinance ordering a special election to be held in the City of Dallas on Saturday, May 11, 2013, for the purpose of submitting to the qualified voters propositions on the question of conveying, by sale or exchange, of: (1) up to approximately 25 acres of land, being part of Joey Georgusis Park; and (2) up to approximately 257 acres of land, being all of Elgin B. Robertson Park - Financing: No cost consideration to the City

DESIGNATED PUBLIC SUBSIDY MATTERS Housing/Community Services 11.

Authorize (1) a resolution in support of the Texas Department of Housing and Community Affair’s (TDHCA) 9% low-income housing tax credit (LIHTC) allocation for Flora Street Lofts, located at 2121 Flora Street, for the acquisition and new construction of the proposed 47-unit multifamily residential development for mixed income families; and (2) a loan in an amount of $1,100,000 to La Reunion TX for the development at 2121 Flora Street - Not to exceed $1,100,000 - Financing: 2010-11 HOME Investment Partnership Program Grant Funds ($915,235) and 2012-13 HOME Investment Partnership Program Grant Funds ($184,765) Recommendation of Staff: Approval

12.

Authorize (1) a resolution in support of the Texas Department of Housing and Community Affair’s (TDHCA) 9% low-income housing tax credit (LIHTC) allocation for the proposed project to be located at 4623 South Lancaster Road, for the acquisition and new construction of the proposed 150-unit multifamily residential development for low income families; and (2) a loan in an amount of $1,350,000 to Sapphire Road Development Patriots Crossing South, LLC for the development at 4623 South Lancaster Road - Financing: 2011-12 HOME Investment Partnership Program Grant Funds ($984,442) and 2012-13 HOME Investment Partnership Program Grant Funds ($365,558) Recommendation of Staff: Approval

ADDENDUM CITY COUNCIL MEETING FEBRUARY 27, 2013 ADDITIONS: (Continued) ITEMS FOR INDIVIDUAL CONSIDERATION (Continued) DESIGNATED PUBLIC SUBSIDY MATTERS (Continued) Housing/Community Services (Continued) 13.

Authorize (1) a resolution in support of the Texas Department of Housing and Community Affair’s (TDHCA) 9% low-income housing tax credit (LIHTC) allocation for Serenity Place Apartments, located at 3124 South Denley Drive, for the acquisition and new construction of the proposed 45-unit multifamily residential supportive housing development for low income families; (2) a loan in the amount of $1,997,913 to City Wide Community Development Corporation for the development at 3124 South Denley Drive; and (3) a land-lease agreement for City of Dallas owned property related to this project development - Not to exceed $1,997,913 - Financing: 2006 Bond Funds ($997,913); 2011-12 Community Development Block Grant Reprogramming Funds ($500,000) and 2012-13 Community Development Block Grant Funds ($500,000) Recommendation of Staff: Approval

14.

Authorize a resolution in support of the Texas Department of Housing and Community Affair’s (TDHCA) 9% low-income housing tax credit (LIHTC) allocation for Summit Place, located at the SWC of Merit Drive & Interstate Highway 635, for the acquisition and new construction of the proposed 100-unit multifamily residential development for mixed income families - Financing: No cost consideration to the City Recommendation of Staff: Approval

15.

Authorize (1) a resolution in support of the Texas Department of Housing and Community Affair’s (TDHCA) 9% low-income housing tax credit (LIHTC) allocation for Wynnewood Family Housing, located at 2048 South Zang Boulevard, for the acquisition and new construction of the proposed 160-unit multifamily residential development for low income families; and (2) an amendment to the terms of a housing redevelopment loan provided for The Parks at Wynnewood located at 1910 Argentia Drive to forgive $425,000 of the current balance of the loan conditioned on the award of 2013 9% Low Income Housing Tax Credit - Financing: No cost consideration to the City Recommendation of Staff: Approval

ADDENDUM CITY COUNCIL MEETING FEBRUARY 27, 2013 CORRECTION: Sustainable Development and Construction 56.

Authorize the quitclaim of 97 98 99 properties acquired by the taxing authorities from the Sheriff's Sale to the highest bidders (list attached) - Revenue: $514,487 $518,586 $525,736

ADDENDUM DATE February 27, 2013 ITEM IND # OK DEF DISTRICT TYPE

2 3

2, 14

2, 14 All

DEPT.

ECO

DOLLARS

NC NC

LOCAL

NA NA

MWBE

DESCRIPTION

Authorize a master agreement with DFM Developer, Ltd., to outline recommended public financial incentives and developer obligations related to the development of an approximately 12 acre site located southeast of the intersection of Harwood Street and Marilla Street known as Dallas Farmers Market

NA NA

Authorize a public hearing to be held on March 27, 2013, to receive comments on amendments to the Project and Reinvestment Zone Financing Plan for Tax Increment Financing Reinvestment Zone Number Six (the Farmers Market TIF District) to: increase the geographic area of the Farmers Market TIF District to include properties located south and east of the existing boundary; extend the term of the Farmers Market TIF District from September 30, 2013 to December 31, 2028; increase the total Farmers Market TIF budget from $11,645,918 NPV ($22,733,724 total dollars) to $19,238,514 NPV ($33,955,605 total dollars), including the adjustment of various budget categories/line items; decrease the percentage of tax increment contributed by the City of Dallas during the extended term of the TIF District and establish other taxing jurisdictions participation percentages; and allow direct land sale to implement the plan and, at the close of the public hearing, consideration of an ordinance amending Ordinance No. 23521, previously approved on May 27, 1998, and Ordinance No. 24001, previously approved on August 25, 1999, to reflect these amendments Authorize acceptance of the City’s Local Solid Waste Management Plan, with amended timelines

C C

ECO SAN

$98,498.40

DEV, POL

DEV

REV $170,000

All

SEC

All

SEC

3, 9

PKR

HOU

Authorize a two-year lease agreement with Dallas Children’s Advocacy Center for approximately 2,500 square feet of office space and five parking spaces located at 5351 Samuel Boulevard for the Police Department’s Youth and Family Crimes Division for the period March 1, 2013 through February 28, 2015 An ordinance granting a Planned Development District for mixed uses on property zoned Planned Development Subdistrict No. 73 in Planned Development District No. 193, the Oak Lawn Special Purpose District, and a Historic Transition Subdistrict within Planned Development District No. 225, the StateThomas Special Purpose District with Historic Overlay District No. 25, the State Thomas Historic District (Z123-129) An ordinance granting a new subdistrict, a resolution accepting deed restrictions volunteered by the applicant, and a resolution accepting the termination of existing deed restrictions on property zoned a Historic Transition Subdistrict within Planned Development District No. 225, the State-Thomas Special Purpose District with Historic Overlay District No. 25, the State Thomas Historic District on the northwest side of State Street, between Routh Street and Fairmount Street (Z123-130) An ordinance abandoning a portion of Neely Street to Dallas County Schools, the abutting owner, containing approximately 17,005 square feet of land, located near its intersection with Zang Boulevard An ordinance amending Ordinance No. 20231, as amended, to adopt new, renumbered and revised city election precincts An ordinance ordering a general election to be held in the City of Dallas on Saturday, May 11, 2013, for the purpose of electing 14 members of the City Council to represent Districts 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 for the term beginning June 24, 2013 An ordinance ordering a special election to be held in the City of Dallas on Saturday, May 11, 2013, for the purpose of submitting to the qualified voters propositions on the question of conveying, by sale or exchange, of: up to approximately 25 acres of land, being part of Joey Georgusis Park; and up to approximately 257 acres of land, being all of Elgin B. Robertson Park Authorize a resolution in support of the Texas Department of Housing and Community Affair’s (TDHCA) 9% low-income housing tax credit (LIHTC) allocation for Flora Street Lofts, located at 2121 Flora Street, for the acquisition and new construction of the proposed 47-unit multifamily residential development for mixed income families; and a loan in an amount of $1,100,000 to La Reunion TX for the development at 2121 Flora Street Page 1

ADDENDUM DATE February 27, 2013 ITEM IND # OK DEF DISTRICT TYPE

DEPT.

HOU

DOLLARS

LOCAL

MWBE

DESCRIPTION

Authorize a resolution in support of the Texas Department of Housing and Community Affair’s (TDHCA) 9% low-income housing tax credit (LIHTC) allocation for the proposed project to be located at 4623 South Lancaster Road, for the acquisition and new construction of the proposed 150-unit multifamily residential development for low income families; and a loan in an amount of $1,350,000 to Sapphire Road Development Patriots Crossing South, LLC for the development at 4623 South Lancaster Road

HOU

$997,913.00

HOU

Authorize a resolution in support of the Texas Department of Housing and Community Affair’s (TDHCA) 9% low-income housing tax credit (LIHTC) allocation for Serenity Place Apartments, located at 3124 South Denley Drive, for the acquisition and new construction of the proposed 45-unit multifamily residential supportive housing development for low income families; a loan in the amount of $1,997,913 to City Wide Community Development Corporation for the development at 3124 South Denley Drive; and a land-lease agreement for City of Dallas owned property related to this project development Authorize a resolution in support of the Texas Department of Housing and Community Affair’s (TDHCA) 9% low-income housing tax credit (LIHTC) allocation for Summit Place, located at the SWC of Merit Drive & Interstate Highway 635, for the acquisition and new construction of the proposed 100-unit multifamily residential development for mixed income families

Authorize a resolution in support of the Texas Department of Housing and Community Affair’s (TDHCA) 9% low-income housing tax credit (LIHTC) allocation for Wynnewood Family Housing, located at 2048 South Zang Boulevard, for the acquisition and new construction of the proposed 160-unit multifamily residential development for low income families; and an amendment to the terms of a housing redevelopment loan provided for The Parks at Wynnewood located at 1910 Argentia Drive to forgive $425,000 of the current balance of the loan conditioned on the award of 2013 9% Low Income Housing Tax Credit

TOTAL

HOU

$1,096,411.40

Page 2

KEY FOCUS AREA:

Economic Vibrancy

AGENDA DATE:

February 27, 2013

COUNCIL DISTRICT(S):

2, 14

DEPARTMENT:

Office of Economic Development

CMO:

Ryan S. Evans, 670-3314

MAPSCO:

ADDENDUM ITEM # 1

45 Q and R ________________________________________________________________

SUBJECT Authorize a master agreement with DFM Developer, Ltd., to outline recommended public financial incentives and developer obligations related to the development of an approximately 12 acre site located southeast of the intersection of Harwood Street and Marilla Street known as Dallas Farmers Market â&#x20AC;&#x201C; Financing: No cost consideration to the City BACKGROUND In response to operating deficits for the Dallas Farmers Market, the City issued two requests for proposal (RFPs) seeking new solutions for operation of the market. The initial RFP, issued in the fall of 2010, mandated continuing operations in a similar fashion as the market is operated currently. The only proposal submitted produced no additional revenues for the City and required a similar level of annual financial assistance to cover projected operational losses. This proposal was rejected. A second RFP was developed as part of a collaborative process. City staff assembled a committee comprised of vendors, property owners and other individuals interested in the long term success of the Dallas Farmers Market. This RFP issued in spring of 2012. It looked for a proposal that (1) minimized the annual public operating subsidy for the market, (2) maintained and improved farmers market operations, (3) promoted the Dallas Farmers Market as a destination for downtown residents and visitors and (4) maximized additional City revenue through new taxes generated. Two proposals were submitted in response to this RFP. The recommended proposal was submitted by Dallas Farmers Market, Group. The lead developer is Brian Bergersen (Spectrum Properties). The City previously worked successfully with Mr. Bergersen on the development of the Third Rail Lofts project in downtown (a mixed-use project including the conversion of two vacant historic buildings for residential use; ground floor retail development; public and private parking and new residential construction on top of the garage structure).

BACKGROUND (Continued) The Dallas Farmers Market Group team includes experts in the fields of Farmers Market management, retail/restaurant development, community gardens, futsal, urban design/placemaking and branding. Among the others involved in this team are: Dallas Farmers Market Trust (Janet Cobb, Blair Black, Lucian LaBarba, Ruthie Pack) – Farmers Market Operations and Events/Programming; Barton Ramage, Kent Rathbun – Farm Coordinators; Tatum Evans – Operations; UCR (Mickey Ashmore & Jack Gosnell) – Retail Leasing; Richards Group – Advertising/Branding; Good Fulton and Farrell/Paul Chapel – Design; Manuel, Federico & Esteban Mariel – City Futsal; Dan Rizzie – Art Coordination; Ann Yonkers – Farmers Market consulting (experience in Washington DC); and Angus Wynne III – Events/Entertainment. Under the redevelopment proposal the developer proposes to: Shed 1 – Create a pedestrian-focused, market place for farmers. The development will renovate the existing shed (approximately 32,000 square feet) to accommodate 60 vendor stalls for local farmers and farm merchants. Sanitary facilities for the vendors will be modernized and the space will be re-oriented for pedestrian use only. The re-oriented space more than doubles the amount of farmer space in this shed, improves public sale areas, and eliminates the drive-through lane of vehicular traffic and associated parking area. Shed 2 – Renovate the enclosed space in Shed 2 for sales by specialty food vendors and a variety of Dallas based restaurants. The existing shed contains approximately 28,000 square feet with the renovation possibly increasing leasable space by around 25%. Plans include construction of a ‘beer garden’ area located north of the existing building. Sheds 3-4 - While Shed 1 & 2 are being renovated, Shed 3 and Shed 4 will house ongoing farmers market vendors. Upon completion of the renovation of Shed 1 & 2, these structures will be demolished to make room for a mixed use development containing over 17,000 square feet of retail/restaurant space, 240+ apartments and structured parking facility that serves all public parking needs in the Farmer Market and provides separated parking to serve the residential units. The parking facility will contain over 600 spaces, out of which over 350 spaces will be made available public parking. An additional 300 at grade parking spaces will also be made available for public parking. Auxiliary Building (Farmers Market Administration Building) – Use this building for a Culinary Learning Center, administrative office space, and a Production Studio. Kiosk (located on Pearl Street) – Plans call for demolition of this structure and utilization of Pearl Street for vehicular and pedestrian access to the site.

Agenda Date 02/27/2013 - page 2

BACKGROUND (Continued) Remote Parking Area â&#x20AC;&#x201C; This area (approximately 74,038 square feet) is intended to be used for outdoor activities: Futsal fields and a community garden. 2101 and 2111 Taylor Street â&#x20AC;&#x201C; These buildings have been purchased by an entity controlled/owned by Brian Bergersen from a private owner and are included in the final redevelopment plan (approximately 42,000 square feet). The developer intends to demolish the western-most building. The remaining structures will be redeveloped for use as restaurant/retail space, an open band shell, and a roof top deck. The redevelopment plan is expected to leverage potentially over $100,000,000 in investment in the area and improve on the attractiveness of the Farmers Market as a destination. The Master Agreement outlines recommended City financial incentives for the project and required investment and ongoing operational restrictions for the developer. Incentives include: use of 2006 General Obligation (GO) Bond Funds for public improvements within the Farmers Market (minimum $5.5 million); potential TIF funding in an amount not to exceed $15 million - any specific obligation of TIF funds will require separate Council action; and use of sale proceeds from surplus property to decease outstanding GO debt related to the Dallas Farmers Market and if, there are surplus funds, to fund public improvements in the Farmers Market. The redevelopment project will also be eligible for participation in the City of Dallas Regional Center program (EB-5) and pending an additional award of funds, Public Private Partnership Grants, and New Market Tax Credits. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On May 27, 1998, City Council authorized the establishment of Tax Increment Financing Reinvestment Zone Number Six, the Farmers Market TIF District by Ordinance No. 23521. On August 25, 1999, City Council authorized the Project Plan and Reinvestment Zone Financing Plan for the Farmers Market TIF District, as amended, by Ordinance No. 24001. On February 20, 2013, City Council was briefed on the Master Agreement. FISCAL INFORMATION No cost consideration to the City

Agenda Date 02/27/2013 - page 3

COUNCIL CHAMBER

February 27, 2013 WHEREAS, the City recognizes the importance of its role in local economic development initiatives and programs; and WHEREAS, the City wishes to encourage the development of a 12 acre tract of land located southeast of the corner of Harwood Street and Marilla Street in downtown Dallas, known as the Dallas Farmers Market; and WHEREAS, the Dallas Farmers Market has sustained operating losses for the last several years and the City desires to allow market operations to be managed privately without ongoing financial support from the City; and WHEREAS, on February 20, 2013, City Council was briefed on this project; and WHEREAS, the City of Dallas issued an RFP to find a developer to manage market operations and maximize City revenues from the site and selected the proposal submitted by the Dallas Farmers Market; and WHEREAS, the redevelopment of the Dallas Farmers Market, under the proposal submitted, will maintain and improve farmers market operations, create new annual property tax and sales tax revenue and create a downtown destination attractive to visitors, downtown residents and the greater community. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DALLAS: Section 1. That the City Manager, upon approval as to form by the City Attorney, is hereby authorized to execute a master agreement, in substantially the form attached hereto as Exhibit A, with DFM Developer, Ltd., outlining the future steps and conditions relating to the redevelopment of the 12-acre Dallas Farmers Market. Section 2. That the facts and recitations contained in the preamble of this Resolution are hereby found and declared to be true and correct. Section 3. That nothing in the resolution shall be construed to require the City to approve payment from any source of City funds and that any specific request to create a special financing district or for individual funding requests shall require separate City Council actions. Section 4. That this resolution shall take effect immediately from and after its passage in accordance with the provisions of the Charter of the City of Dallas, and it is accordingly so resolved.

EXHIBIT A MASTER AGREEMENT FOR THE REDEVELOPMENT OF THE DALLAS FARMERS MARKET THIS MASTER AGREEMENT FOR THE REDEVELOPMENT OF THE DALLAS FARMERS MARKET (“Agreement”) is entered into by and between the City of Dallas, a Texas municipal corporation, located in Dallas County, Texas (“City”), and DFM Developer, Ltd., a Texas limited partnership, with its principal place of business located at 1414 Elm Street, Suite 200, Dallas, TX 75202 (“Developer”). RECITALS WHEREAS, City owns and operates a municipal produce market, the Dallas Farmers Market (“Market”) and adjoining land and improvements (collectively, the “Market Property”), in downtown Dallas; and WHEREAS, in 2012, City requested proposals from qualified private developers to redevelop and re-brand the Market so as to reduce the ongoing level of City financial support for the Market, encourage private investment in the Market and the surrounding area, and support the goals of City’s Downtown 360 Plan; and WHEREAS, City has selected Developer’s proposed redevelopment plan for (i) the Market and (ii) certain adjacent Developer-owned property (“Developer Property”), all of which is more fully described in Section 3 (“Project”); and WHEREAS, the Project will require City’s sale or lease of the Market Property to Developer, as described in Section 4, and various City financial incentives be provided to Developer to make the Project feasible, as described in Section 5; and WHEREAS, the purpose of this Agreement is to provide a framework for the Project and the anticipated board and City Council approvals, agreements, and general terms of such agreements that will be necessary to realize the Project; and WHEREAS, on February 27, 2013, by Resolution No. 13-________, the City Council authorized this Agreement; and NOW THEREFORE, in consideration of the mutual covenants and obligations herein, City and Developer agree as follows: SECTION 1. AGREEMENT ADMINISTRATION This Agreement shall be administered by City’s Director of the Office of Economic Development (“Director”) or his or her designee.

SECTION 2. PROJECT SITE DESCRIPTION The Project site is approximately 12 acres, which includes the Market Property and the Developer Property, and which is located within the area bounded by Marilla Street to the north, northbound Cesar Chavez Boulevard to the east, I-30 to the south, and Harwood Street to the west, in downtown Dallas. The existing Project site is depicted in the attached Exhibit A. The Market Property portion of the site is approximately 8.5 acres, comprised of rights-of-way and five tracts for redevelopment. City intends to sell four of the redevelopment tracts and lease the remaining one tract to Developer pursuant to agreements to be entered into with Developer. The general terms of the sale agreements and the lease are described in more detail in Section 4.B and 4.C, respectively. SECTION 3. PROJECT DEVELOPMENT PLAN; DEVELOPER COMMITMENTS A. Project Development Plan Generally and Project Design. Developer agrees to cause the properties to be redeveloped in accordance with the general development or redevelopment requirements set forth set forth in this Section 3. A depiction of the Project site after redevelopment is shown in the attached Exhibit B. More detailed Project development requirements will be set forth in agreements between Developer and City for specific financial incentives for the Project. The potential City and non-City funding sources available to Developer to complete the Project are described in more detail in Section 5. The Project must conform to the standard design-review process required for projects that receive City tax increment financing (“TIF”) subsidies; therefore, Developer will be required to seek ongoing review and approval of the conceptual plans and site plans for all components of the Project from the City Design Studio and/or the City Peer Review Panel prior to commencing construction of any Project component. A key Project design consideration for Developer should be to create a pedestrian friendly environment and encourage activity on streets. B. Developer’s Required Investment in the Project. As consideration for the financial incentives City intends to provide to Developer for the Project, Developer, Dallas Farmers Market Trust LLC, a _________ limited liability company (“DFMT”) and affiliates of Developer shall “invest” a minimum of $40 million into the Project before Developer is eligible for reimbursement under any TIF agreements. “Invest”, and variations of invest, means the sum of the costs of land and building acquisition, site preparation, public and private improvements, and hard and soft construction costs paid, payable, or actually incurred with respect to the Project and shall include all such amounts incurred or paid with respect to the Project before the date of this Agreement. City shall conduct audits in order to ensure that the minimum investment requirement has been met by Developer, DFMT, and/or affiliates of Developer. Specific audit requirements will be contained in the TIF agreements. C. 2101 and 2111 Taylor Street Redevelopment. An affiliate of Developer (“2111 Taylor Street, Ltd.”) purchased the property located at 2101 and 2111 Taylor Street (and the three buildings thereon), which is to be included in the Project. The western-most building is to be demolished by 2111 Taylor Street, Ltd. The remaining structure is to be redeveloped for use as (1) restaurant and/or retail space and/or (2) a new boutique hotel, in either case with 2

an open band shell, and a roof-top deck. A building permit for the redevelopment of 2101 and 2111 Taylor Street shall be applied for, and construction shall commence, no later than April 1, 2014. D. Shed 1 Renovation. City intends to enter into a lease agreement (“Shed 1 Lease”) with Developer. Developer intends to assign the Shed 1 Lease (and the rights and obligations thereunder) to DFMT, as provided in Section 25.A below. The Shed 1 Lease shall provide that the existing structure shall be renovated and operated as a marketplace for “local farmers” and “farm merchants and vendors”. “Local farmer” means a person who makes or intends to make a substantial portion of his or her income from farming. A local farmer must have ownership or leasehold rights to the land being farmed during the entire growing season, from April 19th through October 14th, or must have use rights pursuant to a governmentsponsored or non-profit program whose purpose is to aid farmers in full-time farming endeavors. A local farmer must also possess all required permits and/or licenses. “Farm merchants and vendors” means those, other than local farmers, who grow, produce or resell farm products or who prepare, make or fabricate homemade or locally produced foods, beer, wine, clothing, art, sculpture, jewelry, knick knacks and similar products. The completed renovation of Shed 1 shall include (1) a minimum of 60 stalls/booths for local farmers and farm merchants and vendors to sell produce and other farm related products, (2) improved sanitary facilities for local farmers and farm merchants and vendors, (3) improved public sales areas, and (4) re-oriented space for pedestrian use. A building permit for Shed 1 renovations shall be applied for, and construction shall commence, no later than October 1, 2013. E. Shed 2 Renovation. City intends to enter into an agreement (“Shed 2 Sale Agreement”) to sell the Shed 2 tract and building to Developer. Developer intends to assign the Shed 2 Sale Agreement (and the rights and obligations thereunder) to DFMT, as provided in Section 25.A below. The existing Shed 2 building shall be renovated (1) to permit use by restaurants, specialty food vendors, and other retail vendors, and (2) to include a beer garden on the north side of the existing building. A building permit for Shed 2 renovations shall be applied for, and construction shall commence, no later than April 1, 2014. F. Retail/Parking/Residential Development. City intends to enter into an agreement (“Shed 3/4 Sale Agreement”) to sell the Shed 3 and Shed 4 tracts and structures to Developer. Developer intends to assign the Shed 3/4 Sale Agreement (and the rights and obligations thereunder) to an affiliate of Developer (“Shed 3/4 Owner”), as provided in Section 25.B below. Shed 3/4 Owner shall demolish the existing Shed 3 and Shed 4 structures and parking and shall construct a new building containing (1) ground level retail space, (2) a parking structure with approximately 622 total parking spaces to support the Project, and (3) a minimum of 200,000 square feet of residential space (with approximately 245 residential units) located above the parking structure. The buildings and structures constructed by the Shed 3/4 Owner must have predominantly brick façades. Construction of this retail/parking/residential development will require that Shed 3/4 Owner relocate the large stormwater pipe that currently bisects the Shed 3 and Shed 4 tracts to a public right-of-way. A building permit for the

new retail/parking/residential structure to be constructed on the Shed 3 and Shed 4 tracts shall be applied for, and construction shall commence, no later than July 1, 2014. G. Community Garden and Athletic/Futsal Fields. City intends to enter into an agreement (“Garden/Fields Sale Agreement”) to sell the tract of property located east of southbound Cesar Chavez Boulevard to Developer. The tract is currently used for remote parking for the Market. Developer intends to assign the Garden/Fields Sale Agreement (and the rights and obligations thereunder) to an affiliate of Developer (“Garden/Fields Owner”), as provided in Section 25.B below. Garden/Fields Owner shall redevelop the tracts for use for outdoor activities, specifically a community garden and athletic/futsal fields; coverings will be provided for some of the fields to allow for play in inclement weather. The necessary permit(s) to develop the community garden and athletic/futsal fields shall be applied for, and construction shall commence, no later than April 1, 2014. H. Auxiliary/Administration Building Renovation. City intends to enter into an agreement (“Auxiliary Building Sale Agreement”) to sell the current Market administration building to Developer. Developer intends to assign the Auxiliary Building Sale Agreement (and the rights and obligations thereunder) to DFMT, as provided in Section 25.A below. DFMT shall renovate the existing building for use as a culinary learning center, production studio, administration office, retail leasing/retail vendors and potential Dallas Police Department assistance or staging center. A building permit for the auxiliary/administration building renovation shall be applied for, and construction shall commence, no later than October 1, 2014. I. Public Infrastructure Improvements and Related Demolition. Developer agrees to complete the following public infrastructure improvements as part of the Project: (1) Kiosk Demolition. Developer shall demolish the kiosk located on Pearl Street (a) to allow for pedestrian and vehicular access to the Project site and (b) to permit construction of the streetscape improvements described in Section 3.I(3) below. A demolition permit for the kiosk shall be applied for no later than September 1, 2013. (2) Public Parking. Developer shall construct a minimum of 176 parking spaces on Level 1 (at grade) in the parking structure, which is to be built as part of the retail/parking/residential development on the Shed 3 and Shed 4 tracts, and which spaces shall be dedicated solely to serve the Market’s renovated Shed 1 (“Public Market Parking”). The Public Market Parking shall be separated from the other required public and private parking in the retail/parking/residential development and shall at all times be available for public use. City intends to purchase the portion of the parking structure dedicated to the Public Market Parking from Developer or the Shed 3/4 Owner pursuant to a purchase agreement (“Public Market Parking Purchase Agreement”), the general terms of which are set forth in Section 4.D. A building permit(s) for the Public Market Parking shall be applied for no later than July 1, 2014.

(3) Streetscape Improvements. Developer shall construct or install streetscape and pedestrian improvements, including demolition work and burial of utilities, along Pearl Street, Farmers Way, and Taylor Street. Developer shall begin construction of streetscape improvements by July 1, 2014. J. Project Completion Dates. The dates by which Developer, DFMT, or affiliates of Developer are required to complete the various Project components will be specified in the TIF development agreements entered into with Developer. Such completion dates will be agreed by Developer, DFMT, or affiliates of Developer, as applicable, based on information available at the time and may be extended by the Director upon approval of the Farmers Market TIF District board of directors, or the City Council, as applicable based on further site analysis, preparation of engineering and construction plans and approval of construction bids. SECTION 4. SALE AND LEASE OF MARKET PROPERTY A. Sales and Lease Contingency Related to Defeasance of Outstanding Bonds. In order to sell and to lease the Market Property for the development of the Project and operation of the Market in the manner described in this Agreement, City must be able to defease bond funds that have already been expended on the Market. The amount necessary to defease the bonds is slightly more than $2.3 million. City intends to use the proceeds of the sale of the Market Property for defeasance. It is currently estimated (i) that there will be approximately $3,230,000 in sales proceeds available to defease the City bonds and (ii) that approximately $1,600,000 is needed (a) to remove and relocate the stormwater pipe currently located on Shed 3 and Shed 4, (b) to demolish the sheds and to remove all improvements, including the concrete walls, foundations and footings and the paved areas on Shed 3 and Shed 4 and (c) to clear the Shed 3 and Shed 4 site for development. City agrees to be solely responsible to perform the work and to pay for the items in clauses (a), (b) and (c) above and to use (x) the approximately $930,000 remaining from the sales proceeds after defeasing the bonds and (y) approximately $670,000 from a public/private partnership grant (“PPP Grant”, as described in Section 5.D.) to do so. If the sales proceeds of the Market Property are insufficient to defease the bonds, and, along with the funds from the PPP Grant, are insufficient to perform the work in clauses (a), (b) and (c), the proposed financial incentives and legal instruments contemplated in this Agreement may require restructuring, with input from City’s in-house and outside financial advisors, bond counsel, and the City Attorney’s Office; provided, however, no such restructuring occurring after the Market Property has been conveyed to Developer shall (1) increase Developer’s required investment in the Project, (2) decrease the amount of City financial incentives committed to the Project pursuant to City Council approval and executed agreements between City and Developer for such incentives, or (3) increase Developer’s liability under this Agreement. If there are sales proceeds remaining after defeasance of the bonds, such proceeds may be used for public improvements relating to the development of the Project. B. Directed Sale to Developer. By action separate from the approval of this Agreement, the City Council will be asked to approve a directed sale of the Market Property, 5

except for Shed 1 and the rights-of-way through and adjacent to the Market Property, to Developer, pursuant to Section 272.001(b)(6) of the Texas Local Government Code, which provides for an exception to the requirement to seek public bids for the sale of City-owned property, if: (i) the sale is made to allow for the development of land pursuant to a TIF Reinvestment Zone Project and Financing Plan and (ii) the sale price is no less than the fair market value of the property as established by an appraisal. (1) Sale Approvals, Contingencies, and Timeline. On January 28, 2013, the Farmers Market TIF District Board of Directors approved an amendment to the Farmers Market TIF District Project and Financing Plan (“Project Plan”) to (a) expand the geographic boundaries of the TIF district to include the Market Property, (b) extend the term of the TIF district to December 31, 2028, (c) redefine the goals of the TIF district to include the Project, and (d) increase the budget amount and scope. Prior to the consideration of the directed sale of the Market Property to Developer, the City Council will be asked to call a public hearing to consider the amendment to the Project Plan on February 27, 2013, and to hold the public hearing and approve the amendment on March 27, 2013. A directed sale of the Market Property to Developer cannot go forward without the City Council’s approval of the amendment to the Project Plan. If the City Council approves the amendment, the City Council will then be asked to consider approval of the sale of Market Property on March 27, 2013. If the City Council approves the sale, it is intended that the sale of the Market Property will be closed on or about July1, 2013. (2) Form of Sale Agreement. If the sale of the Market Property is approved by the City Council, City and Developer will enter into a sale agreement (“Sale Agreement”) for each tract (other than Shed 1), in form and substance satisfactory to City and Developer, as provided below. Each Sale Agreement will include, among other things, the following: (a) the sales price for the tract, in the amount set forth in Section 4.B.(4); (b)

the description of the property being transferred;

(c)

the permitted title exceptions;

(d) a description of the obligations relating to the tract which are being assumed by Developer at closing and the obligations relating to the tract for which City shall continue to be responsible; (e) at closing;

an agreement to assign any and all leases and service agreements

(f) an allocation of closing expenses, including, but not limited to, survey, title commitment and policy and other expenses required to clear title; 6

(g) standard representations and warranties regarding authority to convey, absence of violations of applicable ordinances, statutes and regulations and absence of pending or threatened litigation, including condemnation actions; (h)

a list of required closing documents; and

(i) an agreement to deliver to Developer all title commitments, surveys, environmental reports and other relevant documents and agreements which are in the possession or control of City. (3) Form of Deeds, Rights of Reverter, Personal Completion Guarantees, and Operating Covenants. If the sale of the Market Property is approved by the City Council, each tract will be conveyed by separate deed, without warranty as to title. Because (i) City-approved sale of the Market Property to Developer will be made pursuant to Chapter 272.001(b)(6) of the Texas Local Government Code, requiring the development of property so sold to be redeveloped in accordance with the Project Plan, and (ii) City plans to expend Proposition 9, Farmers Market, 2006 general obligation bond funds to support the Project, all deeds will include operating covenants (“Operating Covenants”) and limited reversionary rights in favor of City, as provided below. (a) Shed 2 Operating Covenants, Reverter, and Personal Completion Guarantee. City’s deed for the Shed 2 tract and the improvements thereon will include Operating Covenants under which Shed 2 will be maintained and operated for restaurants, specialty food vendors, and other retail vendors. The Shed 2 Operating Covenants will be included in the conveyance deed, along with a right of reverter in favor of City which may be enforced if DFMT fails to comply with the Shed 2 Operating Covenants. Notwithstanding the foregoing, the right of reverter as to the Shed 2 tract shall be immediately released by City upon the earlier of (i) a building permit being issued for the Shed 2 improvements or (ii) the recording of a first deed of trust against the Shed 2 tract which secures a loan by an institutional lender, and the delivery of a personal guarantee of completion of the Shed 2 component of the Project, in a form acceptable to City, which shall be from Blair Black (or other person acceptable to City) if the Shed 2 tract is conveyed to DFMT (or other entity which is an affiliate or assignee of DFMT) or from Brian Bergersen if it is not conveyed to DFMT (or an affiliate or assignee of DFMT). The personal guarantee shall terminate upon issuance of a certificate of occupancy for Shed 2. (b) Shed 3/4 Property Operating Covenants, Reverter, and Personal Completion Guarantee. City’s deed for the Shed 3/4 property will include Operating Covenants under which the Shed 3/4 Property is to be maintained and operated as a retail/parking/residential development that complements the Market as is contemplated under Section 3.F of this Agreement and as will be further defined in future TIF development agreements. The Shed 3/4 Property 7

Operating Covenants will be included in the conveyance deed, along with a right of reverter in favor of City, which may be enforced if Developer fails to comply with the Shed 3/4 Property Operating Covenants. Notwithstanding the foregoing, the right of reverter shall be immediately released by City upon the earlier of (i) a building permit being issued for the Public Market Parking, or (ii) the recording of a first deed of trust against the Shed 3/4 tract which secures a loan by an institutional lender, and the delivery of a personal guarantee of completion of the Shed 3/4 Property component of the Project from Brian Bergersen, in a form acceptable to City. The personal guarantee shall terminate upon issuance of a certificate of occupancy for the Shed 3/4 Property. (c) Community Gardens and Athletic/Futsal Fields Property Operating Covenants, Reverter, and Personal Completion Guarantee. Cityâ&#x20AC;&#x2122;s deed for the Community Gardens and Athletic/Futsal Fields Property will include Operating Covenants under which such property is to be maintained and operated as a community garden and athletic/futsal fields open to the public. The Community Gardens and Athletic/Futsal Fields Property Operating Covenants will be included in the conveyance deed, along with a right of reverter in favor of City, which may be enforced if Developer fails to comply with the Community Gardens and Athletic/Futsal Fields Property Operating Covenants. Notwithstanding the foregoing, the right of reverter shall be immediately released by City upon the earlier of (i) a permit being issued for to develop the community garden and athletic/futsal fields, or (ii) the recording of a first deed of trust against the Community Gardens and Athletic/Futsal Fields Property which secures a loan by an institutional lender, and the delivery of a personal guarantee of completion of the Community Gardens and Athletic/Futsal Fields Property component of the Project from Brian Bergersen, in a form acceptable to City. The personal guarantee shall terminate upon issuance of a certificate of occupancy for the Community Gardens and Athletic/Futsal Fields Property. (d) Auxiliary/Administration Building Property Operating Covenants, Reverter, and Personal Completion Guarantee. Cityâ&#x20AC;&#x2122;s deed for the Auxiliary/Administration Building Property will include Operating Covenants under which such property is to be maintained and operated as a culinary learning center, production studio, administration office, retail leasing/retail vendors and potential Dallas Police Department assistance or staging center. The Auxiliary/Administration Building Property Operating Covenants will be included in the conveyance deed, along with a right of reverter in favor of City, which may be enforced if Developer fails to comply with the Auxiliary/Administration Building Property Operating Covenants. Notwithstanding the foregoing, the right of reverter shall be immediately released by City upon the earlier of (i) a building permit being issued for the Auxiliary/Administration Building Property renovation, or (ii) the recording of a first deed of trust against the Auxiliary/Administration Building Property which 8

secures a loan by an institutional lender, and the delivery of a personal guarantee of completion of the Auxiliary/Administration Building Property component of the Project, in a form acceptable to City, which shall be from Blair Black (or other person acceptable to City) if the Auxiliary/Administration Building Property is conveyed to DFMT or other entity which is an affiliate or assignee of DFMT or from Brian Bergersen if it is not conveyed to DFMT (or an affiliate or assignee of DFMT). The personal guarantee shall terminate upon issuance of a certificate of occupancy for the Auxiliary/Administration Building Property. (4) Sales Prices. As required under Chapter 272.001(b)(6) of the Texas Local Government Code, the sales prices of the Market Property shall be the fair market value for the property as established by an appraisal. Therefore, based on appraisals, the sales prices for the various tracts of the Market Property are as follows: (a) Shed 2 Tract. building) is $280,000.

The sales price for the Shed 2 tract (land and

(b) Shed 3 and Shed 4 Tracts. The sales price for the Shed 3 and Shed 4 tracts (land and structures) is $1,675,000. In addition, City shall retain the obligation to perform the work described in Section 4.A. and shall have the obligation to purchase the Public Market Parking described in Section 4.D. (c) is $75,000.

Remote Parking Area. The sales price for the remote parking area

(d) Auxiliary Building and Related Property. The sales price for the auxiliary building and related property is $1,200,000. C. Shed 1 Lease. By action separate from the approval of this Agreement, the City Council will be asked to approve the Shed 1 Lease with Developer, which will provide for the renovation and operation of Shed 1 as a marketplace for local farmers and farm merchants and vendors. Developer intends to assign the lesseeâ&#x20AC;&#x2122;s interest in the Shed 1 Lease to DFMT, as provided in Section 25.A below. The City Council will consider the approval of the Shed 1 Lease on March 27, 2013; and, if approved, it is anticipated that the Shed 1 Lease would be executed in May or June 2013. If approved by the City Council, the Shed 1 Lease will be in a form satisfactory to City and Developer, and will include the following general terms: (1) The primary term of the Shed 1 Lease will be for thirty (30) years and the Lease will allow for two (2), five (5)-year renewal options. (2) The rental rate paid to City under the Shed 1 Lease will be $30,000 per year, plus 4% of annual gross revenues generated from the local farmers and farm merchants and vendors in Shed 1, over a break point to be determined by Developer and City. The rental rate shall not change during the term. The Shed 1 Lease shall be on

a full net basis, with the lessee responsible for all real estate taxes, insurance, repairs and maintenance. (3) The Shed 1 Lease shall require the lessee to operate Shed 1 as a marketplace for local farmers and farm merchants and vendors to engage in the activities set forth in Section 3.D., at least three (3) days per week all year round, subject to availability of crops and force majeure. During the other four (4) days per week, Shed 1 may be used by other vendors and for other activities and events. City will have a right to terminate the Shed 1 Lease thirty (30) days after notice to the lessee, if for any reason the lessee fails to comply with the operating requirements of this paragraph or the Shed 1 Lease, unless such failure is due to force majeure or other events beyond the reasonable control of the lessee in which the lessee shall have up to one hundred eighty (180) days to comply, or to provide alternatives acceptable to City. (4) The Shed 1 Lease shall grant the Shed 1 Owner a right of first offer to purchase Shed 1 and its improvements in the event that City elects to seek offers for the purchase of Shed 1. D. City Purchase of Public Market Parking. At the time of execution of the Shed 3/4 Sale Agreement, City and Developer will enter into the Public Market Parking Purchase Agreement, under which City will agree to purchase the Public Market Parking for a purchase price which is to be determined by appraisal being prepared for City by Bryan Humphreys. The Public Market Purchase Agreement shall be in a form satisfactory to City and Developer, and will include the following terms and conditions: (1)

purchase price;

(2)

legal description;

(3)

description of the improvements;

(4)

permitted title exceptions;

(5)

allocation of closing expenses between City and Developer;

(6)

provisions regarding management of the Public Market Parking; and

(7)

obligations being transferred to City at closing.

E. Supplemental Agreements. The Sale Agreements, the Shed 1 Lease, the TIF development agreements and the Public Market Parking Purchase Agreement are hereinafter collectively referred to as the â&#x20AC;&#x153;Supplemental Agreements.â&#x20AC;?

SECTION 5. CITY FINANCIAL INCENTIVES FOR PROJECT A. Financial Incentives Generally. Developer’s proposal for the Project indicates that approximately $26.4 million in public financial incentives will be needed to realize the Project. City financial incentives shall be primarily directed toward the construction of public improvements and other items eligible for reimbursement under Chapter 311 of the Texas Tax Code and City and Farmers Market TIF District policies. B. 2006 General Obligation Bond Funds. The City Council will be asked to consider use of 2006 general obligation bond funds to fund public infrastructure improvements associated with the Project, including, but not limited to, the purchase of the Public Market Parking and streetscape and pedestrian improvements in the public rights-of-way, including demolition work and burial of utilities, along Pearl Street, Farmers Way, and Taylor Street; however, such funds cannot be used to fund relocation of the stormwater pipe that bisects the Shed 3 and Shed 4 tracts (which work is to be performed and paid for by City as provided in Section 4.A.). The minimum amount of 2006 general obligation bond funding that will be available for the Project is $5.5 million. Commitment and expenditure of bond funds is subject to the review of City’s in-house and outside financial advisors, bond counsel, and the City Attorney’s Office. For those portions of the Project funded with City’s general obligation bonds, Developer will be required to follow the procurement process set forth in Section 6 below. C. TIF Funds. The amendment to the Project Plan approved by the Farmers Market TIF District Board of Directors on January 28, 2013, authorized an increase to the amount and scope of the Farmers Market TIF budget and extension of the term of the TIF district to December 31, 2028. The City Council will be asked to call a public hearing to consider the amendment to the Project Plan on February 27, 2013 and to hold the public hearing and approve the amendment on March 27, 2013. If the amendment is approved by the City Council, TIF funds would be a potential source of funding for the Project. The amount of TIF funds dedicated to the Project will be based on the anticipated taxable value to be created by the Project upon completion and the size of Developer’s funding gap as determined by City’s Office of Economic Development staff. The anticipated amount of TIF funding that will be available for the Project is approximately $15.0 million. Dedication of TIF funds to the Project is subject to Farmers Market TIF District Board of Directors approval, City Council approval separate from the approval of this Agreement, and execution of a TIF development agreement between Developer and City. TIF funds will only be available on a reimbursable basis and only if TIF increment is collected and available in the Farmers Market TIF District TIF fund, after payment of administrative expenses for the Farmers Market TIF District and the TIF subsidy due the developer of the Farmers Market Square project. City agrees that, after the TIF subsidy due the developer of the Farmers Market Square Project has been paid, all TIF funds (other than those required to pay administrative expenses) that become available from (1) the Project and (2) those properties located within the boundaries of the Farmers Market TIF District as of the date of this Agreement, as shown on the attached Exhibit C, shall be paid to Developer until Developer has received the full amount that it is due under the TIF development agreements between Developer and City and that no other person shall be entitled to receive any of the TIF 11

funds available from such sources unless and until Developer has received the full amount that it is due under the TIF development agreements between Developer and City. Notwithstanding the foregoing, Developer understands that (1) it will not be entitled to receive any of the TIF funds which may become available from any future development in the Farmers Market TIF District, other than from (a) the Project and (b) those properties located within the boundaries of the Farmers Market TIF District as of the date of this Agreement, and (2) any future developments in the Farmers Market TIF District will be eligible to receive only the TIF increment generated by such future developments. City will only consider expanding the boundaries of the Farmers Market TIF District beyond the expansion contemplated as of the date of this Agreement, such expansion shown on the attached Exhibit C, (to be considered by the City Council at its March 27, 2013 meeting) if the expansion is related to a specific redevelopment project(s) that requires TIF financial assistance to be viable, in which case the developer(s) of said project(s) would be only be entitled to the increment generated by their development until such time as Developer has received the full amount that it is due under the TIF development agreements between Developer and City. D. Public/Private Partnership Grant Funds. If the sales proceeds for the Market Property received by City exceed the amount of funds needed to defease the bond funds that have already been expended on the Market, City may opt to use such excess proceeds to fund components of the Project through a PPP Grant, as provided in Section 4.A. A PPP Grant could fund public improvements at the Market for which another City funding source has not been identified, including public parking that is separate from the Public Market Parking described in Section 3.I.(2). The amount of PPP Grant shall not exceed the balance of the sales proceeds from the sale of the Market Property after the defeasance of the outstanding bonds. Dedication of a PPP Grant to the Project requires (i) proposed expenditures meet City’s PPP Grant Program Guidelines and Criteria, (ii) City Council approval separate from the approval of this Agreement, and (iii) execution of a PPP Grant agreement between Developer and City. PPP Grants are only available on a reimbursable basis. E. New Markets Tax Credits (“NMTCs”). Developer’s proposal for the Project identified NMTCs as a potential source of funding for the Project. The Dallas Development Fund (“DDF”), a City-created non-profit entity, and its subsidiaries are City’s vehicles to support economic development in City through the use of NMTCs. All of DDF’s current allocation of NMTCs has been committed; however, DDF has applied to the United States Department of the Treasury for another allocation of NMTCs and expects to learn if it has received a new allocation in spring 2013. If DDF receives a new allocation of NMTCs, Developer may apply to DDF for NMTCs for the Project. Approval of an award of NMTCs is subject to DDF board approval and the approval of the City Council separate from the approval of this Agreement. F. City of Dallas Regional Center (“CDRC”). Developer’s proposal for the Project anticipates financial benefits from the use of the CDRC EB-5 Program to reduce the cost of debt and/or equity related to Project financing.

G. End of Subsidies to Market. Upon (1) the close of the sale of the last of the Market Property which is to be sold, or (2) the execution of the Shed 1 Lease, whichever occurs later, City shall cease subsidization of Market. H. Failure to Provide Financial Incentives. Prior to the first conveyance of any of the Market Property to Developer, if Developer reasonably believes that financial incentives of approximately $26.4 million will not be available for the Project, then upon thirty (30) daysâ&#x20AC;&#x2122; written notice to City, Developer may terminate this Agreement, in which case all rights and obligations of the parties shall terminate. SECTION 6. REQUIRED PROCUREMENT PROCESS FOR BOND-FUNDED IMPROVEMENTS A. Public Procurement Required. For those Project improvements to be funded with City general obligation bond funds, Developer must comply with Texas municipal public procurement procedures. Texas municipal procurement law requires that no particular contractor be favored or given an undue advantage over other contractors at the commencement of the procurement process. Accordingly, Developer agrees that, while performing any design or engineering work for bond-funded improvements, no construction contractors who may wish to bid on the improvements are involved with the design, scheduling, or preliminary estimating of the Project, in any way. Developer further agrees and understands that any construction contractor who participates in the design, scheduling, or preliminary estimating of the Project, in any way, will not be eligible to submit a bid or proposal on the portion of improvements to be funded with City bond funds. B. Plans and Specifications. Developer may choose to fund design and engineering of the bond-financed public improvements, including the removal and relocation of the stormwater pipe and the other work described in Section 4.A., and, if Developer so chooses, Developer shall provide City with construction plans and specifications for the separate components of the Project to be constructed using City bond funds so that City may prepare and procure public bids for said improvements. To the extent Developer is to provide such construction plans and specifications for City bond-funded Project improvements, said plans and specification shall be in a form acceptable to City and delivered as soon as possible after execution of this Agreement. Developer will cause its architectural or engineering firm to make its design development decisions consistent with a scope for bond-funded Project improvements agreed to by City and Developer. Subject to the approval of the Farmers Market TIF District Board of Directors and the City Council, TIF funds will be used to reimburse Developer for the design and engineering costs described in this paragraph. C. Requests for Competitive Sealed Proposals. During the procurement process, competitive sealed proposals will be solicited by City for the Projectâ&#x20AC;&#x2122;s bond-financed improvements. The offeror who offers the best value to City, based upon published selection criteria and a ranking evaluation will be selected. Developer shall assist City in establishing the detail, weight, or order of importance of evaluation factors that will be considered in the best value procurement of the improvements. Proposals will not be advertised until Developer has reviewed and approved the proposed specifications with Cityâ&#x20AC;&#x2122;s Public Works Department and 13

Department of Business Development and Procurement Services for adequacy of content and form for the procurement of such improvements. Developer shall also assist City in evaluating and offering comments regarding proposals received; however, City’s Public Works Department will make the final best value evaluation and recommendation for purposes of the award of the construction contract by the City Council. D. Developer as City’s Construction Manager. For the components of the Project to be publicly bid and bond-funded, City shall award the construction contract to the best value bidder and assign same to Developer, as City’s construction manager, for all purposes including inspection, supervision, testing, quality control, approval of shop drawings, utility coordination, obtaining utility clearances from all utility companies, staging and coordinating all utility-related work with the construction contractor, general coordination, and completion of all construction work. City shall be solely responsible for the general contractor fees. City shall look to Developer in its capacity as construction manager to confirm that the improvements are completed in a timely manner, and in accordance with the contract documents, including all final plans and specifications approved by City. Developer shall review and certify as correct, following the project engineer’s review and approval, all monthly and final payment requests and forward same to City for review and subsequent processing through City’s Public Works Department, with such supporting documentation as City may reasonably require. All payments for work performed under the construction contract shall be made by City to the construction contractor from the funds appropriated for that purpose. City shall not make any payment under a monthly or final estimate, unless Developer has certified, by affidavit sworn to by its authorized agent, that the estimate of work completed for the period in question is true and correct to the best of his information and belief, that the work has been verified in accordance with the contract documents, and that all contract preconditions to payment have been met. City reserves the right to perform inspections, measurements, or verifications of the estimates or work quantities as are necessary. Final payment to the construction contractor shall not be made until all preconditions to final payment set forth in the construction contract have been performed, and all improvements have been finally completed as verified by Developer, the project engineer, and City in accordance with the approved contract documents, including the plans and specifications, and acceptance by City. SECTION 7. OTHER PROJECT REQUIREMENTS A. Market Events. After the issuance of the certificate of occupancy for the Shed 1 renovation, DFMT will be required to schedule one major event every calendar quarter and at least four smaller events per month to generate traffic to the Market. Developer shall provide to Director a quarterly report on the events, including attendance, or assign such responsibility to DFMT pursuant to Section 25.A. below. B. Branding. Developer will be required to implement an integrated branding program for the Market. The branding program must include strategic messaging, visual identity, logo development, brand standards, templates, signage, public relations, digital marketing, and advertising strategies. Developer shall make a presentation of the marketing 14

plan to Director by December 31, 2013. Developer may assign its obligations under this Section 7.B. to DFMT pursuant to Section 25.A. below. C. Zoning and Replatting. Developer shall secure any necessary changes in zoning and platting to complete the Project by following the required City processes to obtain approvals to make such changes, including, receiving zoning board(s) approvals and City Council approval, if necessary. Developer shall ensure that zoning for the Project site that meets City TIF district design standards. There are currently seven (7) subdistricts in PD 357. Developer shall be requesting creation of an eighth (8th) subdistrict for the Project, which will include all of the modifications necessary for the redevelopment and operation of the Market and the Project, including signage. Prior to the first conveyance of any of the Market Property to Developer, if Developer reasonably believes that it will not obtain the required zoning for the Project as required in this Section 7.C., then, upon thirty (30) days’ written notice to City, Developer may terminate this Agreement, in which case all rights and obligations of the parties shall terminate. D. Permissions. Developer shall obtain all necessary permits, applications, easements, licenses, and other approvals necessary to complete the Project, from the relevant federal, state and local entities. Prior to the first conveyance of any of the Market Property to Developer, if Developer reasonably believes that it will not obtain all permits, applications, easements, licenses and other approvals required for the Project, then upon thirty (30) days’ written notice to City, Developer may terminate this Agreement, in which case all rights and obligations of the parties shall terminate. E. Third Party Government Approvals. City shall cooperate with Developer in obtaining approvals from third party agencies having jurisdiction over the construction or installation of improvements in the Project. F. No Other Obligations. Except as required hereunder or under applicable ordinances and regulations of City, Developer shall not be required to install or construct, or to contribute financially to the installation or construction of, any public improvements. G. Performance Security. Developer shall not be required to deposit any security in connection with the installation of public improvements required under this Agreement unless required by the codes or ordinances of City. H. Declaration. Developer shall prepare and record against the Project site a Declaration of Covenants, Conditions, Restrictions, and Easements (“Project CCRs”). The Project CCRs shall define the rights and obligations of the owners, lessees, and users of the various tracts in the Project. The form and substance of the Project CCRs shall be mutually satisfactory to City and Developer. I. Construction Phasing Plan. Prior to commencing construction on the Project, Developer shall develop, and submit to Director for approval, a phasing plan for all construction

activities to ensure that the Market continues its operation throughout development of the Project. Director’s approval will not be unreasonably withheld, delayed, or conditioned. J. Private Bidding Process for Non-Bond Funded Portions of Project and BID Plan Requirements. Non-bond funded portions of the Project may be privately bid by Developer. Developer shall award the contract for the construction of the Project to the lowest responsible bidder as determined by Developer through a process established and administered by Developer, which must include a good faith effort to comply with the minority/women business enterprises (“M/WBE”) process and goals established by City in its Business Inclusion and Development Plan (“BID Plan”). Before bid solicitation, City’s Department of Business Development and Procurement Services and Developer will solicit involvement by M/WBEs. Developer’s goals shall be 25% participation by M/WBE firms for all publically reimbursable construction work related to the Project and 10% participation by M/WBE firms for remainder of the Project construction, not including land acquisition or soft costs. K. Maintenance of Non-Standard Public Improvements. Prior to the completion of the installation of the first “non-standard public improvements” to be constructed as part of the Project, Developer shall execute an operating and maintenance agreement for such improvements, and if necessary, obtain a license from City for the purpose of maintaining any improvements in the public right-of-way. For purposes of this Agreement, “non-standard public improvements” means improvements which exceed City’s standard design requirements as determined by City’s Department of Public Works and as agreed by Developer but does not include any paved roadways or below grade improvements, such as water, stormwater, sanitary sewer or other utility systems. The obligations under the operating and maintenance agreement may be assigned to DFMT or to a property owners’ association with the written consent of the Director, which consent will not be unreasonably withheld or conditioned. L. Mixed Income Housing. In order to secure Dallas County financial participation in the Farmers Market TIF District, a minimum of 20% of the residential units in the Shed 3 and Shed 4 tracts shall be set aside to meet the affordability requirements of the Project Plan and City’s TIF Districts’ Mixed Income Housing Guidelines, attached as Exhibit D, for a period of fifteen (15) years from the date the final certificate of occupancy (“CO”) for the residential portion of the Shed 3 and Shed 4 tracts is received (“Affordability Period”). After the date the CO for the Shed 3 and Shed 4 tracts is obtained and throughout the Affordability Period, Developer shall monitor and report to City on a semi-annual basis on the status of its compliance with the requirements of this Section 7.L. If the total number of affordable units in the Shed 3 and Shed 4 tracts drops below ten percent (10%) during the Affordability Period, Developer will be given a ninety (90) day period to cure such deficiency, after which any obligation of City to pay the Developer TIF increment pursuant to a TIF development agreement will terminate. If the Shed 3 and Shed 4 residential property is sold to another entity prior to the end of the Affordability Period, the affordability requirement shall be conveyed with such residential property by a deed restriction, for the benefit of City. The requirements of this paragraph will be included in any TIF development agreement between Developer and City.

Developer may assign its obligations under this Section 7.L. to the Shed 3/4 Owner pursuant to Section 25.B. below. M. Affirmative Fair Housing Marketing. Developer agrees to market the residential portion of the Shed 3 and Shed 4 tracts pursuant to Cityâ&#x20AC;&#x2122;s Affirmative Fair Housing Marketing Plan, attached as Exhibit E. Developer shall report on a monthly or semi-annual basis as required by Cityâ&#x20AC;&#x2122;s Office of Fair Housing for a period of fifteen (15) years. Should City request amendments from time to time to the marketing plan to improve its effectiveness, Developer shall cooperate in good faith to accommodate reasonable modifications to the plan. In case the residential property is sold to another entity prior to the end of the reporting period, the Affirmative Fair Housing Marketing requirement shall be conveyed with the property by a deed restriction for the benefit of City. The requirements of this Section 7.M. will be included in any TIF development agreement between Developer and City. Developer may assign its obligations under this Section 7.M. to the Shed 3/4 Owner pursuant to Section 25.B. below. N. Quarterly Project Status Reports. At the end of each calendar quarter, starting September 30, 2013, and until such time as the final CO for the Project or the final certificate of acceptance for public infrastructure improvements has been received, whichever occurs later, Developer shall submit to Director a status report for ongoing work on the Project, including the status of both the public and the private improvements to the Property in the form shown in the attached Exhibit F. O. Market Security Plan. Developer shall submit a security plan for the Market to Director for review and approval, which shall not be unreasonably withheld, delayed or conditioned by September 1, 2013. SECTION 8. OPERATIONAL CONSIDERATIONS A. City Code Amendments. City staff will work to modify or terminate Chapter 29 of the City Code, and (2) modify other relevant portions of the City Code or create new Code procedures in order to support the development of the Project and the operation of the Market as outlined in this Agreement. It is anticipated that the proposed amendments will encompass the transition of control of Market operations from City to Developer and requirements for special events, festivals, and street closures. Any proposed amendments to the City Code will require City Council approval separate from its approval of this Agreement. Prior to the first conveyance of any of the Market Property to Developer, if Developer reasonably believes that such approvals will not be available for the Project, then upon thirty (30) daysâ&#x20AC;&#x2122; written notice to City, Developer may terminate this Agreement, in which case the rights and obligations of the parties shall terminate. B. Planning for Existing Tenant Relocations. Developer agrees to meet with City Office of Economic Development staff to review operational needs of vendors currently operating at the Market. For vendors that Developer does not intend to retain as tenants, Developer will prepare a plan to assist such vendors in finding alternate locations for their businesses; provided, however, Developer shall not be required incur any cost or any liability in 17

the event a vendor cannot find an alternate location. For vendors Developer does plan to retain as tenants, Developer shall make a good faith effort to find temporary accommodations for their businesses during construction; provided, however, Developer shall not be required to incur any cost or any liability in the event a vendor cannot find temporary accommodations. Assistance provided by Developer to vendors to find alternate or temporary accommodations may be a reimbursable expense under a TIF agreement. C. Community Engagement. Developer agrees to meet with the Farmers Market Friends organization to investigate the possibility of how that volunteer group might work with the new operating conditions of the Market. Notwithstanding the foregoing, Developer is not obligated in any way to institute any changes requested or suggested by such organization, and shall not incur any cost or any liability as a result of meeting or failure to meet such group or failure to institute any changes requested or suggested. SECTION 9. ADDITIONAL APPROVALS REQUIRED Throughout this Agreement, when possible, the necessary additional approvals, separate from the approval of this Agreement, of the City Council, City boards, or other entities for commitments of funding, property transactions, or City Code amendments have been noted. Developer understands that such separate approvals cannot be guaranteed and such bodies cannot be bound to make additional, future approvals by the terms of this Agreement. SECTION 10. PROJECT DEADLINES AND EXTENSIONS Developer agrees and understands that adherence to Project deadlines detailed in this Agreement is a vital term of this Agreement, and time is of the essence. The Director shall have the authority (a) to allow minor modifications to the Project, including, but not limited to, changes in the mix of uses within the Project, and (b) to extend deadlines contained in this Agreement for up to one (1) year, in each case without increasing Developerâ&#x20AC;&#x2122;s liability under this Agreement or the Supplemental Agreements or imposing any new or additional conditions for Developer to satisfy. SECTION 11. TERM AND TERMINATION Unless earlier terminated in accordance with the applicable provisions of this Agreement, the term of this Agreement shall begin on the date of full execution and end upon the complete performance of all obligations of the parties to this Agreement. Prior to the first conveyance of any Market Property to Developer, Developer or City may terminate this Agreement for any reason whatsoever by giving thirty (30) days prior written notice to the other party. SECTION 12. EVENTS OF DEFAULT A. In the event Developer defaults in its performance of any of its obligations under this Agreement, City shall give Developer written notice of such default. Any such default shall 18

not be deemed to be an Event of Default hereunder unless Developer fails to cure such default within thirty (30) days after said written notice (unless, due to force majeure, it cannot be cured within such thirty (30) day period, in which case Developer shall have the amount of time to cure the default as provided in Section 13 below, which time period shall not exceed one hundred eighty days). Notice shall be provided in accordance with the Notice provision hereof. B. After the Shed 1 tract, the Shed 2 tract and the Auxiliary Building and related property have been leased and/or conveyed to Developer (or to DFMT), then, as a result of any Event of Default relating to those properties, City shall have the right to terminate this Agreement, but only with respect to City’s obligations and the property owner’s rights with respect to Shed 1, Shed 2 and/or the Auxiliary Building and related property. No Event of Default relating to those properties shall be deemed to be an Event of Default with respect to the remaining tracts in the Project nor shall it give City the right to terminate this Agreement with respect to the rights of Developer or the obligations of City with respect to the remaining tracts of the Project. C. After the Shed 3 and Shed 4 tracts and the Gardens/Fields tracts have been conveyed to Developer, then as a result of any Event of Default relating to those properties, City shall have the right to terminate this Agreement, but only with respect to City’s obligations and Developer’s rights with respect to the Shed 3 and Shed 4 tracts and the Gardens/Fields tract. No Event of Default relating to those properties shall be deemed to be an Event of Default with respect to the remaining tracts in the Project nor shall it give City the right to terminate this Agreement with respect to the rights of Developer (or DFMT) or the obligations of City with respect to the remaining tracts of the Project. SECTION 13. FORCE MAJEURE It is expressly understood and agreed by the parties to this Agreement that Developer (a) shall proceed with due diligence to perform its obligations hereunder, (b) shall commence each phase of the Project by the dates specified in this Agreement and (c) shall proceed with due diligence to complete each phase; provided however, that Developer shall have such additional time to commence and to complete each phase of the Project as may be required in the event of force majeure (as defined herein), if Developer is diligently and faithfully pursuing commencement and completion of each such phase of the Project. For this purpose, “force majeure” shall mean any contingency or cause beyond the reasonable control of Developer, including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, state, federal or municipal government, or de facto governmental action (unless caused by acts or omissions of Developer), fires, explosions, floods, and strikes. In an event of force majeure, Developer shall be excused from doing or performing the same during such period of delay so that the commencement and completion dates applicable to such performance, or to the construction requirement, shall be extended for a period of time equal to the period Developer was delayed. Developer agrees to inform City, in writing, within a reasonable time of the existence of such force majeure.

SECTION 14. NOTICES Any notice, payment, statement, or demand required or permitted to be given under this Agreement, by either party to the other, may be effected by personal delivery in writing or deposited in the U.S. mail by certified letter, return receipt requested. Mailed notices shall be addressed to the parties at the addresses appearing below, but each party may change its address by written notice in accordance with this Section. Mailed notices shall be deemed communicated as of three days after mailing. If intended for City, to: Director City of Dallas Office of Economic Development Dallas City Hall 1500 Marilla Street, Room 5CS Dallas, Texas 75201

If intended for Developer, to: 1414 Elm Street, Suite 200 Dallas, Texas 75202 Attn: Brian Bergersen

SECTION 15. NOTICE OF CONTRACT CLAIM This Agreement is subject to the provisions of Section 2-86 of the Dallas City Code, as amended, relating to requirements for filing a notice of breach of contract claim against City. Section 2-86 of the Dallas City Code, as amended, is expressly incorporated by reference and made a part of this Agreement as if written word for word in this Agreement. Developer shall fully comply with the requirements of this ordinance as a precondition of any claim relating to this Agreement, in addition to all other requirements in this Agreement related to claims and notice of claims. SECTION 16. INDEMNITY Developer agrees to defend, indemnify and hold City, its officers, agents, and employees harmless against any and all claims, lawsuits, judgments, costs, and expenses for personal injury (including death), property damage, or other harm for which recovery of damages is sought, suffered by any person or persons, that may arise out of or be occasioned by Developerâ&#x20AC;&#x2122;s breach of any of the terms or provisions of this Agreement, or by any negligent or strictly liable act or omission of Developer, its officers, agents, associates, employees, affiliates, contractors, or subcontractors, in the performance of this Agreement; except that the indemnity provided for in this paragraph shall not apply to any liability resulting from the sole negligence or fault of City, its officers, agents, employees, or separate contractors, and in the event of joint and concurrent negligence/breach of both Developer and City, responsibility and indemnity, if any, shall be apportioned in accordance with the law of the State of Texas, without waiving any governmental immunity available to City under Texas law and without waiving any defenses of the parties under Texas law. The provisions of this paragraph are solely for the benefit of the parties to this Agreement and are not intended to create or grant any rights, contractual or otherwise, to any other person or entity.

SECTION 17. CONFLICT OF INTEREST OF CITY EMPLOYEES The following section of the Charter of City of Dallas shall be one of the conditions, and a part of, the consideration of this Contract, to wit: “CHAPTER XXII. Sec. 11. FINANCIAL INTEREST OF EMPLOYEE OR OFFICER PROHIBITED -(a) No officer or employee shall have any financial interest, direct or indirect, in any contract with City or be financially interested, directly or indirectly, in the sale to City of any land, materials, supplies or services, except on behalf of City as an officer or employee. Any violation of this section shall constitute malfeasance in office, and any officer or employee guilty thereof shall thereby forfeit the officer’s or employee’s office or position with City. Any violation of this section, with knowledge, express or implied, of the person or corporation contracting with City shall render the contract involved voidable by City Manager or The City Council. (b) The alleged violations of this section shall be matters to be determined either by the Trial Board in the case of employees who have the right to appeal to the Trial Board, and by The City Council in the case of other employees. (c) The prohibitions of this section shall not apply to the participation by City employees in federally-funded housing programs, to the extent permitted by applicable federal or state law.” SECTION 18. GIFT TO PUBLIC SERVANT A. City may terminate this Agreement immediately if Developer has offered, agreed to confer, or conferred any benefit upon a City employee or official that such City employee or official is prohibited by law from accepting. City has been advised by the prosecuting authorities that Section 36.10(b) and (c) exceptions to Section 36.08 and 36.09, respectively, of the Texas Penal Code are not available to public servants who have no legal reporting requirements. B. For purposes of this section, “benefit” means anything reasonably regarded as pecuniary gain or pecuniary advantage, including benefit to any other person in whose welfare the beneficiary has a direct or substantial interest, but does not include a contribution or expenditure made and reported in accordance with the law. C. Notwithstanding any other legal remedies, City may require Developer to remove any employee of Developer from the development who has violated the restrictions of this section or any similar state or federal law and City may obtain reimbursement for any expenditures made to Developer as a result of the improper offer, agreement to confer, or conferring of a benefit to a City employee or official.

SECTION 19. GOVERNING LAW This Agreement is made subject to the provisions of the Charter and ordinances of City, as amended, and all applicable state and federal laws. This Agreement shall be governed by and construed in accordance with the laws and court decisions of the State of Texas, without regard to conflicts of law or choice of law principles of Texas or of any other state. SECTION 20. VENUE The obligations of the parties to this Agreement shall be performable in Dallas County, Texas. And, if legal action is necessary in connection with or to enforce rights under this Agreement, exclusive venue shall lie in Dallas County, Texas. SECTION 21. LEGAL CONSTRUCTION In the case that any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be considered as if such invalid, illegal, or unenforceable provision had never been contained in this Agreement. SECTION 22. CAPTIONS The captions to the various clauses of this Agreement are for informational purposes only and shall not alter the substance of the terms and conditions of this Agreement. SECTION 23. WAIVERS Any waiver of default by either party of any term, covenant, and/or condition of this Agreement shall not be construed or operate as a waiver of any subsequent default of any other terms, covenants, and/or condition of this Agreement. SECTION 24. COUNTERPARTS This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and constitute one and the same instrument. If this Agreement is executed in counterparts, then it shall become fully executed only as of the execution of the last such counterpart called for by the terms of this Agreement to be executed. SECTION 25. ASSIGNMENT Except as provided herein, this Agreement shall not be assigned by Developer, in whole or in part, without the prior written approval from Director, which approval shall not be unreasonably withheld, delayed or conditioned. Notwithstanding the foregoing, Developer may assign:

A. to DFMT (or its affiliate), the agreement to lease the Shed 1 tract, and the agreements to purchase the Shed 2 tract, and the auxiliary building and related property. Through such assignments, DFMT shall assume all obligations under this Agreement and the Supplemental Agreements with respect to the redevelopment, lease, operation, and maintenance of each property assigned to it, and upon such assumption, Developer shall be released by City from all such obligations with respect to the assigned properties (but not its other obligations under this Agreement or the Supplemental Agreements with respect to the remaining properties); and B. to affiliates of Developer, the agreements to purchase (i) the Shed 3 and Shed 4 tracts, and (ii) the remote parking area. Through such assignments, each such affiliate of Developer shall assume all obligations under this Agreement and the Supplemental Agreements with respect to the redevelopment, operation, and maintenance of the property assigned to it, and upon such assumption, Developer shall be released by City from all such obligations with respect to the assigned properties (but not its other obligations under this Agreement or the Supplemental Agreements with respect to the remaining properties). SECTION 26. SIGNATORY AUTHORIZATION City and Developer warrant that each has the authority to enter into this Agreement on behalf of the party it represents. SECTION 27. AMENDMENTS; ENTIRE AGREEMENT This Agreement (with all referenced exhibits, attachments, and provisions incorporated by reference) embodies the entire agreement of the parties, superseding all oral or written, previous and contemporary agreements between the parties relating to matters set forth in this Agreement. This Agreement may be modified or amended only by written agreement of the parties, to be attached to and made a part of this Agreement. [SIGNATURES APPEAR ON THE FOLLOWING PAGE]

EXECUTED AND EFFECTIVE as of the ________ day of ____________________, 2013, by City, signing by and through its City Manager, duly authorized to execute same by Resolution No. 13________, approved by the City Council on February 27, 2013, and by Developer, acting through its duly authorized officials. CITY OF DALLAS: MARY K. SUHM, City Manager

APPROVED AS TO FORM: THOMAS P. PERKINS, JR., City Attorney

By: _________________________ Ryan S. Evans Assistant City Manager

By: _________________________ Sarah F. Hasib Assistant City Attorney

RECOMMENDED BY DIRECTOR: _____________________________ Frank Karl Zavitkovsky Office of Economic Development DFM DEVELOPER, LTD a Texas limited partnership By:

DFM GP, LLC, a Texas limited liability company By: _________________________ Brian Bergersen President

ATTACHMENTS & EXHIBITS Resolution No. 13-________, approved by the Dallas City Council on February 27, 2013 Exhibit A

Depiction of Existing Project Site

Exhibit B

Depiction of Project Site after Redevelopment

Exhibit C

Map of Farmers Market TIF District Original Boundary and Expanded Boundary

Exhibit D

City’s TIF Districts’ Mixed Income Housing Guidelines

Exhibit E

City’s Affirmative Fair Housing Marketing Plan

Exhibit F

Project Quarterly Status Report Form

Exhibit A Project Site IC

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Exhibit D City of Dallas Tax Increment Finance Districts Mixed Income Housing Guidelines TIF Program Purpose The purpose of the City of Dallasâ&#x20AC;&#x2122; TIF program is to promote development in underutilized and vacant areas through the use of public investment to attract private investment. The goals for the districts include improving the infrastructure within the districts and adding market rate apartments, single family homes, retail and commercial space, and office and professional space. Promoting housing for individuals and families at a variety of income levels is one of many policy considerations for the districts. General definitions Mixed income housing requires a minimum of 20% of all units to meet affordable housing standards. Affordable housing units are those which are affordable to a household earning 80% or less of the median family income for the Dallas Area. The 20% affordability requirement applies to both rental units and to units that are for sale. Requirements for for-sale units will be handled on a case-by-case basis. These guidelines primarily pertain to rental housing. Affordability period and rent rates Rental units must be affordable for a period of at least fifteen years, beginning from the date the project is complete per the development agreement. Income levels and maximum rent will vary each year and are based on HUDâ&#x20AC;&#x2122;s calculations for Area Median Income (AMI), utility expenses, and Market Rent for the Dallas Area. Maximum rents are set each year at 30% of 80% of AMI, including a utility allowance. Information pertaining to the maximum affordable rent and income levels that are currently in effect can be obtained from the Office of Economic Development. Affordable units A minimum of 20% of all occupied units shall be rented to qualifying households. The developer may choose to offer any available unit to qualifying households. The TIF program does not require that specific units or unit types be set aside for qualifying households. The 20% total requirement thus may be satisfied by any combination of units and need not apply to units of all sizes. 1

Affordable units shall be comparable in size and finish quality to market rate units and shall be dispersed throughout the development. Affordable units shall not be segregated into a particular section of the development and shall be a minimum of 500 square feet. Qualifying households A qualifying household is defined as a household making 80% or less of the Area Median Income. Developers may include wages, salaries, tips, commissions, social security income, etc. to certify a household’s income. The method used to determine income should be the same for qualifying and market rate households. Lease terms Households that qualify at the beginning of a lease will be assumed to qualify for the entirety of the term of that lease. Recertification is therefore only necessary during lease renewal. At the end of the lease, the new lease rates will be set based on the household’s current income at the time of renewal. Once a household qualifies as an affordable household, subsequent increases in the household income will not disqualify the household until the household’s income exceeds 140% of the allowed maximum qualifying income. If the household no longer qualifies for an affordable unit, the lease may be renewed at market rate and another unit made available for a qualifying household in order to maintain the 20% affordability requirement. Fees and leasing requirements In general, all leasing requirements and all fees, utility charges, assessments, fines, etc. charged by the apartment community must be applied uniformly to qualifying households and market rate households, with the exception that the developer may choose to waive or reduce fees for qualifying households and the developer may choose to set specific lease lengths for affordable units. Reporting Requirements Adequate reporting by developer, owner, or property manager shall be required to ensure that the City can appropriately monitor compliance with the policy. Projects receiving affordable housing funding under federal or state programs may choose to submit copies of compliance reports specific to the federal or state program in lieu of the TIF program report. Specific reporting requirements will be updated as necessary. Compliance The developer assumes all liability for compliance with these requirements and with all applicable laws. By participating in the City’s TIF program, the developer agrees to report all information

accurately and on time. At the City’s request, the developer agrees to produce necessary documentation for determining full compliance with this program. The affordability period shall be extended by six months for any number of units by which the affordable housing provided during a semi-annual period falls short of the number of units required to meet the affordable housing requirements. Noncompliance may result in termination of the development agreement, a reduction in TIF reimbursement, or other action as determined by the Office o f Economic Development. Request for waiver or minor modification of these requirements shall be submitted to the Office of Economic Development and will be negotiated on a project by project basis with the City and the County. The City may consider retainage of a percentage of TIF funding to ensure that in the event that the property is sold prior to the end of the 15 year compliance period, all successors and assigns will be required to provide affordable housing for the remainder of the affordability period. Alternative Methods A developer may propose alternative methods of meeting the requirements which provide affordable housing in a comparable location within or adjacent to the TIF district. Examples include a Low Income Housing Tax Credit (LIHTC) project that provides a significant amount of affordable housing in a single time period, a land trust that provides for for-sale affordable units, a partnership with a non-profit provider of affordable housing, or provision of special needs housing. All proposed alternative methods will be considered on a case by case basis and must be approved by both the City and Dallas County. AFHMP An affirmative fair housing marketing plan is required for all housing projects supported with TIF funding. This requirement is detailed in each project’s development agreement. Each project will be evaluated individually to ensure that it furthers affirmative fair housing goals. Effective Date This policy is effective in each district as of the date it is approved by that district’s TIF board. The policy applies to developments with first occupancy on October 1, 2011 or later. Policy Modifications As needed, the City may make modifications or corrections to this policy to increase its effectiveness. Where these guidelines conflict with a district’s Final Plan, the Final Plan shall rule, as determined by the Director of the Office of Economic Development.

Exhibit E

CITY OF DALLAS AFFIRMATIVE FAIR HOUSING MARKETING PLAN COMPLETE FORM AND SUBMIT TO: FAIR HOUSING OFFICE CITY HALL • 1500 MARILLA ST., RM 1BN • DALLAS, TEXAS 75201 Ph. (214) 670-3247 • Fax (214) 670-0665 1. INTRODUCTION The Affirmative Fair Housing Marketing Program requires that each City Assisted Housing Provider carry out an affirmative program to attract prospective buyers or tenants of all minority and non-minority groups to the housing that the applicant is providing. These groups include Whites (Non-Hispanic) and members of minority groups: African-American, Hispanics and others in the Dallas, Texas area who may be subject to housing discrimination on the basis of race, color, religion, sex, national origin, handicap or familial status. 2. APPLICATION AND PROJECT IDENTIFICATION A. APPLICANTS:

PROJECT OR APPLICATION NUMBER

NAME:

NUMBER OF UNITS AVAILABLE:

ADDRESS (include city, state and zip code):

NUMBER OF UNITS LEASED OR SOLD: PRICE OR RENTAL RANGE OF UNITS:

TELEPHONE NUMBER:

FROM $

C. PROJECT NAME:

D. FOR MULTIFAMILY HOUSING ONLY: ELDERLY NON-ELDERLY

PROJECT ADDRESS:

TO: $

APPROXIMATE STARTING DATE: ADVERTISING: OCCUPANCY:

NAME OF MANAGING AGENT:

ADDRESS (include city, state and zip code):

CENSUS TRACT:

3. TYPE OF AFFIRMATIVE MARKETING PLAN Project Plan

Annual Plan (For single family scattered site units)

NOTE: a separate Annual Plan must be developed for each type of census tract in which the house is to be built.

Minority Area

White (non-minority area)

Mixed Area (with

% minority residents)

4. DIRECTION OF MARKETING ACTIVITY Indicate below which group(s) in the housing market area are least likely to apply for the housing because of its location and other factors without special outreach efforts. White African-American Hispanic Other 5. MARKETING PROGRAM A. COMMERCIAL MEDIA Check the media to be used to advertise the availability of the housing. Newspaper(s)/Publication(s) Radio TV Billboard(s) NAME OF NEWSPAPER RADIO OR TV STATION (1)

RACIAL/ETHNIC IDENTIFICATION OF READERS/AUDIENCE (2)

Other (Specify) SIZE/DURATION OF ADVERTISING (3)

B. BROCHURES, SIGNS AND HUD’S FAIR HOUSING POSTER (1) Will brochures, leaflets or handouts be used to advertise? Yes No If yes, attach a copy or submit when available. (2) For project site sign; indicate sign size x ; Logotype size x . Attach a photograph or project sign or submit when available. (3) HUD’s Fair Housing Poster must be conspicuously displayed wherever sales/rentals and showings take place. Fair Housing Posters will be displayed in the Sales/Rental Office(s); Real Estate Office(s); Model Units; Other Rev. by Fair Housing Office 6/29/2004

C. COMMUNITY CONTACTS To further inform the group(s) least likely to apply about the availability of the housing, the applicant agrees to establish and maintain contact with the groups/organization listed below that are located in the housing market area or SMSA. If more space is need attach an additional sheet. Notify FHO of any changes in this list. Attach a copy of correspondence to be mailed to these group/organizations. (Provide all requested information) NAME OF GROUP/ RACIAL/ETHNIC APPROXIMATE DATE OF PERSON CONTACTED OR ORGANINZATION IDENTIFICATION CONTACT PROPOSED TO BE CONTACTED CONTACT (1) (2) (3) (4)

ADDRESS AND TELEPHONE NUMBER

METHOD OF CONTACTS

(5)

(6)

INDICATE THE SPECIFIC FUNCTION GROUP/ORGANIZATION WILL UNDERTAKE IN IMPLEMENTING THE MARKETING PROGRAM (7)

6. FUTURE MARKETING ACTIVITIES (Rental Units Only) Check the block(s) that best describe future marketing activities to fill vacancies as they occur after the project has been initially occupied. Newspapers/Publications Radio TV Brochures/Leaflets/Handouts Site Signs Others (Specify) D. OCCUPANCY GOALS GOALS African-American Hispanic White Other

Race/Ethnic Origin:

% % % %

Race/Ethnic Origin:

CURRENT STATUS African-American Hispanic White Other

% % % %

7. EXPERIENCE AND STAFF INSTRUCTIONS (Attach description on separate sheet) A. Indicate any experience in marketing housing to the group(s) identified as least likely to apply Yes No B. Indicate training to be provided to staff on federal, state and local fair housing laws and regulations, as well as this AFHM Plan. Attach a copy of the instructions to staff regarding fair housing. 8. ADDITIONAL CONSIDERATIONS:

9. By signing this form, the applicant agrees, after appropriate consultation with FHO, to change any part of the plan covering a multifamily protest to assure continued compliance with the City of Dallas Affirmative Fair Housing Marketing Program. FOR FHOâ&#x20AC;&#x2122;S USE ONLY APPROVAL BY:

SIGNATURE OF PERSON SUBMITTING PLAN

DISAPPROVAL BY:

SIGNATURE:

NAME (Type or print):

TITLE:

COMPANY:

DATE:

Rev. by Fair Housing Office 6/29/2004

Exhibit F Quarterly Project Status Report Prepared by DFM GP, LLC Project Name: Report Period: From: Project Start Date: Required Completion Date: Current Completion Date: Number of units completed:

To:

Briefly describe Project progress during this period:

Which documents did you submit to the City of Dallas Business Development & Procurement Services? When? Which documents did you submit to the City of Dallas Fair Housing Department? When? Describe any issues of concern with the City of Dallas (Office of Economic Development/Business Development & Procurement Services/ Fair Housing Department/Public Work and Transportation etc.)?

Attach 4-8 current construction progress pictures from four sides of the Project. By: DFM GP, LLC

Brian Bergersen

KEY FOCUS AREA:

Economic Vibrancy

AGENDA DATE:

February 27, 2013

COUNCIL DISTRICT(S):

2, 14

DEPARTMENT:

Office of Economic Development

CMO:

Ryan S. Evans, 670-3314

MAPSCO:

ADDENDUM ITEM # 2

45 L M Q and R ________________________________________________________________

SUBJECT Authorize a public hearing to be held on March 27, 2013 to receive comments on amendments to the Project and Reinvestment Zone Financing Plan for Tax Increment Financing Reinvestment Zone Number Six (the Farmers Market TIF District) to: (1) increase the geographic area of the Farmers Market TIF District to include properties located south and east of the existing boundary; (2) extend the term of the Farmers Market TIF District from September 30, 2013 to December 31, 2028; (3) increase the total Farmers Market TIF budget from $11,645,918 NPV ($22,733,724 total dollars) to $19,238,514 NPV ($33,955,605 total dollars), including the adjustment of various budget categories/line items; (4) decrease the percentage of tax increment contributed by the City of Dallas during the extended term of the TIF District and establish other taxing jurisdictions participation percentages; and (5) allow direct land sale to implement the plan and, at the close of the public hearing, consideration of an ordinance amending Ordinance No. 23521, previously approved on May 27, 1998, and Ordinance No. 24001, previously approved on August 25, 1999, to reflect these amendments Financing: No cost consideration to the City BACKGROUND A public hearing is required any time the boundaries or budget of an existing TIF District is expanded. In 2009, state law was amended to allow the extension of a reinvestment zoneâ&#x20AC;&#x2122;s termination date. As a result of the change in state law, the City amended its TIF Policy to establish standard criteria for extending a TIF districtâ&#x20AC;&#x2122;s term. This action authorizes a public hearing to be held on March 27, 2013, to hear comments on the following proposed amendments to Farmers Market TIF District (the District) and its Project and Reinvestment Zone Financing Plans: A.

Increase the geographic area of the Farmers Market TIF District to include properties located south and east of the existing boundary;

BACKGROUND (Continued) B.

Extend the term of the Farmers Market TIF District from September 30, 2013 to December 31, 2028;

Increase the total Farmers Market TIF budget from $11,645,918 NPV ($22,733,724 total dollars) to $19,238,514 NPV ($33,955,605 total dollars);

Increase the TIF Administration budget line item from $570,000 NPV ($1,112,684 total dollars) to $765,000 NPV ($1,700,000 total dollars);

Decrease Deep Ellum Connector budget line item from $788,555 NPV ($1,539,320 total dollars) to $197,138 NPV ($672,970 total dollars);

Decrease Phase IB budget line item from $1,345,734 NPV ($2,626,976 total dollars) to $336,434 NPV ($742,031 total dollars);

Decrease Phase II budget line item from $4,129,284 NPV ($8,060,679 total dollars) to $1,666,033 NPV ($3,252,225 total dollars);

Decrease Harlan Building budget line item from $646,900 NPV ($1,268,655 total dollars) to $162,475 NPV ($701,142 total dollars);

Include a new TIF budget line item the Farmers Market Area Improvements in the amount of $11,948,989 NPV ($18,761,827 total dollars);

Decrease the percentage of tax increment contributed by the City of Dallas during the extended term of the TIF District from 100% to 90% and establish other taxing jurisdictions participation percentages; and

Allow direct land sale to implement the plan

The Farmers Market TIF District was created in 1998 to promote the development of an infill neighborhood near the Dallas Farmers Market. When the District was created, the majority of property within the District was controlled by Camden Property Trust (â&#x20AC;&#x153;Camdenâ&#x20AC;?). Camden developed 904 apartments and 17 townhomes. Later, other developers developed an additional 72 town homes (to date) with another 108 currently under construction. The Dallas Farmers Market area was not part of the District as it was non-taxable. In the thirteen years since the inception of the District, the property values have grown by over 303 percent. Changing trends in grocery stores and neighborhood farmer markets have changed the role of the Dallas Farmers Market. City management of the existing facility, coupled with these changing market conditions, led to large operating losses between 2005 and 2012. The City decided to investigate private management of the Dallas Farmers Market and the potential sale of surplus property.

Agenda Date 02/27/2013 - page 2

BACKGROUND (Continued) In 2012, the City of Dallas initiated an effort to promote the redevelopment of the Dallas Farmers Market, including the potential sale of much of the land to a qualified private developer. The City circulated an RFP and reviewed the two proposals submitted. The selected redevelopment proposal calls for the lease of the existing Shed 1 for the permanent farmers market and sale of the remaining property, excluding public rights-of-way. Public financial incentives are needed to facilitate this needed repurposing of the Dallas Farmers Market. One of the necessary financial incentives to redevelop the Farmers Market is TIF funds, which requires various amendments to the Farmers Market TIF District Project and Financing Plan. The purpose of this Amended Plan is to: (1) increase the boundaries of the Farmers Market TIF District to include the property currently known as the Dallas Farmers Market; (2) extend the term of the Farmers Market for an additional 15 years beyond its current expiration date from September 30, 3013 to December 31, 2028; (3) increase the budget of the Farmers Market TIF District to provide development incentives related to the redevelopment of the Dallas Farmers Market property; (4) to encourage the redevelopment and rebranding of the Dallas Farmers Market; (5) improve public infrastructure within the Dallas Farmers Market; and (6) allow for a directed sale of a portion of the Dallas Farmers Market to a developer whose redevelopment plan for the site matches the Cityâ&#x20AC;&#x2122;s goals for the site. The total current dollar budget is proposed to increase by $11,221,881 (from $22,733,724 to $33,955,605) and reducing other line items to create a new line item called the Farmers Market Area Improvements to: redevelop Shed 1 to retain and reconfigure for the farmers market operations; redevelop Shed 2 for restaurant and specialty food vendors; redevelop Shed 3 and Shed 4 for mixed-use development and parking for residential and restaurant uses; reconfigure the operations of the auxiliary building; redevelop area across southbound Cesar Chavez Boulevard for outdoor activities like futsal fields and community garden; improvements to Peal Street and Taylor Street for outdoor public festivals/activities. The anticipated effect of these redevelopment activities in the Farmers Market area are projected to stimulate redevelopment in the remaining vacant lands in the Farmers Market TIF District. It is projected that an additional 1,700 housing units and 100,000 square feet of commercial, restaurant and farmers market space will be developed within the TIF district.

Agenda Date 02/27/2013 - page 3

BACKGROUND (Continued) Financially, the proposed amendments will cause the tax base of the City to increase by approximately $2,270,778 in new private investment as a result of development projects within the Farmers Market TIF District by 2028. More importantly, when the Farmers Market TIF expires, the amount of funds flowing to the General fund will be approximately $28.2 million starting in 2029 as compared to $5.7 million in 2012 if the term is not extended. On March 27, 2013, following the public hearing, the requested amendments will be considered by City Council. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On May 27, 1998, City Council authorized the establishment of Tax Increment Financing Reinvestment Zone Number Six, the Farmers Market TIF District by Ordinance No. 23521. On August 25, 1999, City Council authorized the Project Plan and Reinvestment Zone Financing Plan for the Farmers Market TIF District, as amended, by Ordinance No. 24001. On January 28, 2013, the Farmers Market TIF District Board of Directors recommended approval of the amendments to the Farmers Market TIF District Project and Financing Plan. On February 20, 2013, City Council was briefed on the Farmers Market TIF Project Plan Amendment and Master Agreement. FISCAL INFORMATION No cost consideration to the City MAP Attached.

Agenda Date 02/27/2013 - page 4

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City of Dallas Office of Economic Development http://www.Dallas-EcoDev.org Created 1/2013

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COUNCIL CHAMBER

February 27, 2013 WHEREAS, the City recognizes the importance of its role in local economic development initiatives and programs; and WHEREAS, the City has established Tax Increment Financing Reinvestment Zone Number Six, (“Farmers Market TIF District” or “District”) and established a Board of Directors for the District to promote development or redevelopment in the Farmers Market area pursuant to Ordinance No. 23521, authorized by the City Council on May 27, 1998, as authorized by the Tax Increment Financing Act, Chapter 311 of the Texas Tax Code (“Act”), as amended; and WHEREAS, on August 25, 1999, City Council authorized the Project Plan and Reinvestment Zone Financing Plan for the Farmers Market TIF District by Ordinance No. 24001, as amended; and WHEREAS, the Act requires that if an amendment reduces or increases the geographic area of the zone, increases the amount of bonded indebtedness to be incurred, increases or decreases the percentage of a tax increment to be contributed by a taxing unit, increases the total estimated project costs, or designates additional property in the zone to be acquired by the municipality, the approval must be by ordinance after the City holds a public hearing on such amendments and provide interested persons the opportunity to speak and present evidence for or against such amendments; and WHEREAS, the City desires, by the calling and holding of such public hearing, to provide a reasonable opportunity for any owner of property located within the Farmers Market TIF District, any other taxing districts, and any other interested persons to speak for or against the amendments; and WHEREAS, on January 28, 2013, the Farmers Market TIF District Board of Directors recommended approval of amendments to the Project and Reinvestment Zone Financing Plan for the Farmers Market TIF District to: (1) increase the geographic area of the Farmers Market TIF District to include properties located south and east of the existing boundary; (2) extend the term of the Farmers Market TIF District from September 30, 2013 to December 31, 2028; (3) increase the total Farmers Market TIF budget from $11,645,918 NPV ($22,733,724 total dollars) to $19,238,514 NPV ($33,955,605 total dollars), including the adjustment of various budget categories/line items; (4) decrease the percentage of tax increment contributed by the City of Dallas during the extended term of the TIF District and establish other taxing jurisdictions participation percentages; and (5) allow direct land sale to implement the plan. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DALLAS:

COUNCIL CHAMBER

February 27, 2013 Section 1. That a public hearing shall be held at 1:00 p.m. on March 27, 2013, in the City Council Chambers, Dallas City Hall, 6th Floor, 1500 Marilla Street, Dallas, Texas, at which time any interested person may appear and speak for or against any of the following proposed amendments to the Project and Reinvestment Zone Financing Plan for Tax Increment Financing Reinvestment Zone Number Six (the Farmers Market TIF District): A.