2007-150R / August 21, 2007 (PDF)

RESOLUTION NO. 2007- 150 R

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF I TEXAS, APPROVING A CHAPTER 380 SAN MARCOS, ECONOMIC DEVELOPMENT AGREEMENT BETWEEN THE CITY AND CREEKSIDE SQUARE, LTO; AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT; AND DECLARING AN EFFECTIVE DATE.

RECITALS:

I. The City Council has adopted an Economic Development Incentives Policy by Resolution 2006- 91 R.

2. Creekside Square, LTO is going to develop a 119. 165 acre tract of land, more or less, located along IH-35 South, as a retail development. This land is being purchased from the General Land Office; therefore the development will take land that is presently not on the tax roll and turn it into a productive development that will benefit the City.

3. The City and to enter into a chapter 380 economic development agreement pertaining to this project.

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SAN MARCOS, TEXAS:

I the " between the PART 1. The attached development incentive agreement ( Agreement") City and Creekside Square, LTO is found to satisfy the requirements of the Policy.

PART 2. The terms and conditions of the Agreement are approved and adopted.

PART 3. The City Manager, Dan O' Leary, is authorized to execute this Agreement.

PART 4. This Resolution is in full force and effect immediately upon its passage.

ADOPTED on the 21st day of August 2007 vig , Susan Narvaiz ~ Mayor Attest: 71\-- ~~ r, , r,;' /)', ct,:rC;' f ~,;; r - /' ~_'><..._',j't'/ L / '"/ J Shel Good in . - I Interim City Clerk CHAPTER 380 I ECONOMIC DEVELOPMENT AGREEMENT BETWEEN THE CITY OF SAN MARCOS, TEXAS AND CREEKSIDE SQUARE, LTD

This Chapter 380 Economic Development Agreement ( this " Af!Yeement") is entered into between Creekside Square Ltd., 301 Congress Ave. Suite 200, Austin, Tx. 78701, its successors and assigns ( the " Owner "), and The City of San Marcos, Texas, a home rule city the "~ The Owner and the City may be referred to jointly herein as " the Parties" and individually as a " Party."

RECITALS

WHEREAS, the City Council of the City has adopted Resolution No. 2006- 91R attached as Exhibit " A" (" Resolution "), authorizing the City to make certain economic development grants to the Owner in recognition of the positive economic benefits which will accrue to the City through the Owner' s efforts to develop approximately 119. 165 acres of land, which is located in the City limits, as more particularly described on the attached Exhibit " I"; and

WHEREAS, the City desires to offer incentives to the Owner over a period of time which will enable the Owner to develop the Property as an integrated, planned project I Pro;ect"); and

WHEREAS, the City believes that the Project will contribute to the economic development of the City by generating employment and other economic and social benefits to the City.

NOW, THEREFORE, in consideration of the mutual benefits described in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and the Owner agree as follows:

1. Authoritv

The City' s execution of this Agreement is authorized by Chapter 380, Texas Local Government Code, and by the Resolution and constitutes a valid and binding obligation of the City, subject to the conditions precedent as stated herrein. The Owner' s execution and performance of this Agreement constitutes a valid and binding obligation of Owner. The City acknowledges that the Owner is acting in reliance upon the City' s performance of its obligations under this Agreement in making its decision to commit substantial resources and money to acquire and develop the Property and Owner acknowledges that City is acting in reliance upon Owner' s full and complete performance of its obligations under this Agreement in making its I decision to commit substantial resources to this Project.

G'\ Chent\Durhman BassettSCM\ San Marcos\Ch, 380 Agreement\ 380 Agreement~ lldoc 2. Definitions I

As used in this Agreement, the following words or phrases shall have the following meanmgs:

2. 1 " Act of Default or Default" means failure to timely, fully, and completely comply with one or more requirements, obligations, duties, terms, conditions or warranties, as stated in this Agreement. City may accept substantial compliance in lieu of full compliance by waiving such act of default.

2. 2 " Ad Valorem Tax Base Line Year" means the year 2007.

st 2. 3 " Ad Valorem Tax Effective Date" means January I of the first calendar year following the date of Initial Completion.

2. 4 " Ad Valorem Tax Revenues" means the amount of property taxes collected by the City on the Property, including any improvements, a portion of which will be repaid to Owner in the form of Chapter 380 Payments, as defined below.

2.5 " Assessed Taxable Value" means ad valorem tax values set annually by the Hays County I Appraisal District for real property and improvements on the Property and does not include on- site business personal property. I 2. 6 " Certificate of Occupancy" shall mean that final document issued by the City of San Marcos, Texas, entitled " Certificate of Occupancy", indicating that all applicable codes, regulations, and ordinances enforced by the City of San Marcos have been unconditionally, fully and completely complied with in all respects. A Certificate of Occupancy shall not include a certificate issued in error, mistake or misrepresentation of facts, nor any temporary or conditional document authorizing temporary or conditional occupancy.

2. 7 " Chapter 380 Payment( s)" means the amount( s) paid by the City to the Owner under this Agreement.

2. 8 " City of San Marcos or City" means the governing municipal corporation, and the area that is within the city limits ofthe City of San Marcos.

2. 9 " Code" means the San Marcos Code of Ordinances in effect as of the Effective Date.

2. 10 " Designated Successors and Assigns" shall mean ( i) an entity to which Owner assigns ( in writing) its rights and obligations contained in this Agreement pursuant to Section 12.4.. Except as provided below, the Owner may not assign all or part of its rights and obligations under this Agreement to a third party without prior written approval of the City, which approval will not be unreasonably withheld or delayed. The City agrees, however, that the I

2 Owner may assign all or part of its rights and obligations under this Agreement to any entity affiliated with the Owner by reason of controlling, being controlled by, or being under common I control with the Owner.

2. 11 " Effective Date" means the date this Agreement has been signed by all Parties.

2. 12 " Force Majeure" means any event in which any Party shall be delayed, hindered in or prevented from the performance of any act required under this Agreement by reason of strikes, lockouts, labor troubles, inability to procure materials, failure of power, unavailability of any utility service, restrictive governmental laws or regulations, riots, insurrections, the act, the failure to act, or default of another Party or a material worsening of current conditions caused by acts of terrorism or war ( whether or not declared), or severe weather occurring after the execution of this Agreement, which materially impair the Party' s ability to perform any act required under this Agreement.

2. 13 " Gross Leasable Space" means that space under roof and air conditioned and heated and ready for finish-out work for a selected occupant.

2. 14 " Hard Costs" means actual costs of construction and materials ( including land acquisition costs for the Roadway Improvements and any offsite easements needed for construction ofthe Public Improvements) incurred by Owner for the Public Improvements.

2. 15 " Increased Ad Valorem Tax Revenues" means for any given calendar year the difference between ( x) the Ad Valorem Tax Revenue minus ( y) the ad valorem taxes that would I have been collected by the City for that year based on the Assessed Taxable Value on January I, 2007.

2. 17 " Initial Completion" means the date by which each of the following has occurred: ( i) Substantial Completion of the Public Improvements, and ( ii) Completion of the Gross Leaseable Space to the Target, ther Project's anchor tenant which shall be accomplished upon the granting of either a Temporary or Permanent Certificate( s) of Occupancy for such space, whichever first occurs. Further, Initial Completion shall occur on or before the end of the thirty-sixth (36th) full month following the Effective Date.

2. 18 " Insolvent" means failure to timely pay debts in the ordinary course of business or can not pay all debts when and as they become due, or is insolvent within the meaning of the federal bankruptcy law.

2. 19 " Maximum Reimbursement Amount" means the actual Hard Costs and Soft Costs incurred by the Owner for construction of the Public Improvements; provided, however the sum of Hard Costs and Soft Costs shall not exceed a combinded total of $2, 000,000.00. The Parties hereby acknowledge and agree that the dollar amounts allocated to each line item and category shown on Exhibit " C" attached hereto are estimates only and Owner shall have the right to re- allocate the dollar amounts between the line items and categories, so long as the I Maximum Reimbursement Amount is not exceeded.

3 2. 20 " Owner" means Creekside Square, LTD.

2. 21 " Program" means the economic development program established by the City I under the Resolution, as authorized by Chapter 380, Texas Local Government Code, to promote local economic development and stimulate business and commercial activity within the City.

2. 22 " Project" means Owner' s planned development of approximately 119. 165 acres, more particularly described on Exhibit " 1" attached hereto. The Project is identified as the Stone Creek Crossing" Project.

2. 23 " Public Improvements" means collectively the ( i) the Public Roadway Improvements; ( ii) the Public Drainage Improvements; ( iii) the Landscaping and Irrigation Improvements; and ( iv) Upgraded Street Lighting, as listed in Exhibit " C", attached hereto.

2. 24 " Soft Costs" mean costs incurred by Owner for engmeenng, design, fiscal security, insurance, permits, and all other costs associated with construction of the Public Improvements which are not included in the Hard Costs.

2. 25 " Substantial Completion" means that: (1) the Public Improvements are open for use by the public and/ or ( 2) the City has accepted dedication of the Public Improvements.

2. 26 " Term of Years" means a five ( 5) year period starting with year one ( 1) immediately after the Ad Valorem Tax Effective Date and continuing for each consecutive year through the end of 5th year. I 3. Term

This Agreement will become enforceable upon the Effective Date and will terminate on the first to occur of (a) 5 years after the Ad Valorem Tax Effective Date; ( b) upon receipt by the Owner of payments made by the City of the Maximum Reimbursement Amount; or ( c) upon termination as provided for herein, whichever occurs first. In recognition of the fact that Chapter 380 Payments are, by necessity, calculated and paid after taxes have been levied by and paid to the City and, therefore, will always be paid in arrears, the Term of this Agreement will be deemed extended until any Chapter 380 Payments relating to Ad Valorem Tax Revenues attributable to the specified Term of the Agreement have been paid by the City to the Owner. Notwithstanding the above, all other conditions standards set forth in this Agreement shall be perpetual and shall not terminate pursuant to the provisions set forth above.

7. Owner' s Covenants. Warranties. Oblieations and Duties I 7. 1 Owner makes the following covenants and warranties to City, and agrees to timely and fully perform the following obligations and duties. Any false or substantially misleading statement contained herein or failure to timely and fully perform as required in this Agreement shall be an Act of Default by Owner. Failure to comply with anyone covenant or warranty shall constitute an Act of Default by Owner.

7.2 Owner is authorized to do business and is in good standing in the State of Texas and shall remain in good standing in the State of Texas during the Term of this Agreement.

7. 3 The execution of this Agreement has been duly authorized by Owner' s general partner, and the individual signing this Agreement is the manager of the general partner, empowered to execute such Agreement and bind the partnership, said authorization, signing and binding effect is not in contravention of any law, rule or regulation, or of the provisions of Owner' s partnership agreement, or by-laws, or of any agreement or instrument to which Owner is a party or by which it may be bound, such authority to be evidenced by a partnership resolution, attached hereto at the time of execution.

7. 4 No litigation or governmental proceeding is pending or, to the knowledge of Owner or Owner' s officers, threatened against or affecting Owner that may result in any material adverse change in Owner' s business, properties or operation. No consent, approval or authorization of or registration or declaration within any governmental authority is required in connection with the execution of this Agreement or the transactions contemplated hereby. I

7. 5 There are no bankruptcy proceedings or other proceedings currently pending or contemplated, and Owner has not been informed of any potential involuntary bankruptcy proceedings.

7. 6 To its current, actual knowledge, Owner has acquired and maintained all necessary rights, licenses, permits and authority to carryon its business in San Marcos, Texas, and will continue to use its best efforts to maintain all necessary rights, licenses, permits and authority.

7. 7 The funds herein granted shall be utilized solely for the purpose of offsetting the cost of Project as described herein.

7. 8 Owner shall timely and fully comply with all of the terms and conditions of this Agreement.

7. 9 Owner shall timely acquire and provide evidence of same to the City, fiscal assurance instruments and/ or performance bonds in a total amount required to cover all Public Improvements set forth on Exhibit " C". I

6 7. 10 Owner shall timely acquire and provide evidence of same to the City, maintenance bonds, in a form in compliance with the City' s Code and Regulations, that will ensure maintenance of the Public Improvements for a period of two ( 2) years following their I Substantial Completion.

8. Phasine of Proiect

8. 1 The Property shall be developed as a single project, but construction may be phased as more particularly described herein. Owner agrees that it will obtain all required City permits for the construction of the items set forth in the definition of " Initial Completion" set forth above (" Initial Completion Items") and will diligently pursue such construction until fully completed; provided, however that the Owner will Substantiall Complete construction of the Initial Completion Items on or before the date which is thirty-six ( 36) months from the Effective Date. Owner acknowledges that Owner will not receive Chapter 380 Payments until such time as the Initial Completion Items have been completed and have been accepted by the City. Owner shall post maintenance bonds on all Public Improvements shown in Exhibit " C", in compliance with the City Code.

8. 2 Failure by Owner to timely and fully and continuously comply with any maintenance, warranty and/ or performance bond or other fiscal assurance requirements at any time throughout the Term of this Agreement shall be an Act of Default.

I 9. Suspension of Payments

9. 1 City, under the following circumstances, and at its sole discretion, may suspend its obligations under this Agreement and all future payment obligations shall automatically cease upon anyone of the following events, which are an Act of Default:

9.2 The appointment of a receiver of Owner, or of all or any substantial part of its property, and the failure of such receiver to be discharged within sixty (60) days thereafter.

9. 3 The adjudication of Owner as bankrupt.

9.4 The filing by Owner of a petition or an answer seeking bankruptcy, receivership, reorganization, or admitting the material allegations of a petition filed against it in any bankruptcy or reorganization proceeding.

7 10.

Owner' s Liability

10. 1 Should Owner fail to or or more I timely substantially comply with anyone of the requirements, obligations, duties, terms, conditions or warranties of this Agreement such failure shall be an Act of Default by Owner and, if not cured and corrected within ninety ( 90) days after written notice to do so, City as its sole remedies, may cease making any further economic payments pursuant to this Agreement and/ or shall have the right to draw down on any fiscal posted by Owner for the Public Improvements through any agreement with the City ( e. g. plat, site development permit, etc.).

10.2 In the event of unforeseeable third party delays or Force Majeure and upon a reasonable showing by Owner that it has immediately and in good faith commenced and is diligently and continuously pursuing the correction, removal or abatement of such delays by using its diligent, good faith efforts, City may consent to and excuse any such delays, which consent and excuse shall not be unreasonably withheld.

10.3 Any delay for any amount of time by City in providing notice of Default to Owner shall in no event be deemed or constitute a waiver of such Default by City of any of its rights and remedies available in law or in equity.

10.4 Any waiver granted by City to Owner of an Act of Default shall not be deemed or constitute a waiver of any other

11. I City' s Liability Limitations

Should City fail to timely or substantially comply with anyone or more of the requirements, obligations, duties, terms, conditions or warranties ofthis Agreement, such failures shall be an Act of Default by City and City shall have ninety ( 90) days to cure and remove the Default upon receipt of written notice to do so from Owner. Owner specifically agrees that City shall only be liable to Owner for the amount of the money grants it is required to convey to Owner and shall not be liable to Owner for any alleged or actual consequential damages. It is further specifically agreed that City shall only be required to pay the grant amounts solely out of the increased Ad Valorem Tax Revenues on this Project.

12. Miscellaneous Provisions

12. 1 Chanees in Law. If, during the Term of this Agreement, State law applicable to ad valorem taxes changes and, as a result, the Chapter 380 Payments differ from the amount which would have been paid to Owner under the laws in effect as of the Effective Date, then the City, in its sole discretion, may adjust the Chapter 380 Payments utilizing whatever discretionary taxes and revenues are legally available to the City to be allocated to the Chapter 380 Payments. The foregoing does not require the City to use funds from sources which are not within the I

8 City' s discretion to allocate to the Project in order to achieve the same economic benefits to both Parties, which would have resulted if the law had not changed.

I a 12. 2 Complete Aereement/Amendment. This Agreement represents complete agreement of the parties and supersedes all prior written and oral matters related to this Agreement. This Agreement may be canceled, changed, modified or amended, in whole or in part, only by the written and recorded agreement by the City and the then current owner of the Property. In the event that the Property shall be owned by more than one owner, then this Agreement may be canceled, changed, modified or amended, in whole or in part, only by the written and recorded agreement by the City and the owners of sixty percent ( 60%) of the land area of the Property; provided, however, that so long as Owner or its Designated Successors and Assigns have at least a ten percent (10%) ownership interest in the Property, it shall be required to join in any cancellation, change, amendment or modification of this Agreement.

12. 3 Mutual Assistance/ Good Faith. The City and the Owner each agree to act in Good Faith and to do all things reasonably necessary or appropriate to carry out the terms and provisions of this Agreement, and to aid and assist the other in carrying out such terms and provisions in order to put the other in the same economic condition contemplated by this Agreement, regardless of any changes in public policy, the law or taxes or assessments attributable to the Property.

12. 4 Representations and Warranties. The Parties represent and warrant to one another that the Program and this Agreement are within their authority, and that they are duly authorized and empowered to enter into this Agreement, unless otherwise ordered by a court of I competent jurisdiction.

12. 5 Attorney' s Fees. If any legal action or proceeding is commenced between the City and the owner to enforce the provisions of this Agreement or to recover damages for its breach, the prevailing Party in the legal action will be entitled to recover its reasonable attorney' s fees and expenses incurred by reason of such action, to the extent allowed by law.

12. 6 Bindine Effect. This Agreement will be binding on and inure to the benefit of the Parties and their respective successors and assigns.

12. 7 Termination. If the Owner elects not to proceed with the acquisition of the Property or the development of the Project as contemplated by this Agreement, the Owner will notify the City in writing, and this Agreement and the obligations of all Parties will be deemed terminated and of no further force or effect as of the date of such notice.

12. 8 Notice. Any notice or other communication (" Notice") given under this Agreement must be in writing, and may be given: ( i) by depositing the Notice in the United States Mail, postage paid, certified, and addressed to the Party to be notified with return receipt requested; (ii) by personal delivery of the Notice to the Party, or an agent of the Party; or ( iii) by confirmed facsimile, provided that a copy of the Notice is also given in one of the manners specified in ( i) or ( ii). Notice deposited in the mail in the manner specified will be effective two I 2) days after deposit. Notice given in any other manner will be effective only if and when

9 received by theP arty to be notified. For the purposes of Notice, the addresses of the Parties will, until changed as provided below, be as follows: I Owner: Creekside Square, LTO 301 Congress Ave. Suite 200 Austin, Tx. 78701 Phone: ( 512) Fax: ( 512)

City: City of San Marcos Attn: City Manager 630 E. Hopkins St. San Marcos, Texas 78666 Ph: ( 512) 393- 8100 Fax: ( 512) 396- 4656

With a copy to: City Attorney 630 E. Hopkins St. San Marcos, Texas 78666 Ph: ( 512) 393- 8150 Fax: ( 512) 393- 3983 I All Partiesmay designate a different address at any time by giving written Notice to the other Parties.

12. 9 Interpretation. Each of the Parties have been represented by counsel of their choosing in the negotiation and preparation of this Agreement. In the event of any dispute regarding the interpretation of this Agreement, this Agreement will be interpreted fairly and reasonably and neither more strongly for or against any Party based on draftsmanship.

12. 10 Relationship of the Parties. This Agreement will not be construed as establishing a partnership or joint venture, joint enterprise, express or implied agency, or employer-employee relationship between the parties. The City, its past, present or future officers, elected officials, employees or agents, assume any responsibility or liability to any third party in connection with the development of the Project.

12. 11 Applicable Law. This Agreement is made, and will be construed and interpreted, under the laws of the State of Texas and venue will lie in Haysrcos County, Texas.

12. 12 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws, it is the intention of the Parties that the remainder of this Agreement not be affected and it is also the intention of the Parties that, in lieu of each provision that is found to be illegal, invalid or unenforceable, a provision be added to this I

EXECUTED to be effective as ofthe.?OP'fday of ~ ~ , 2007. I OWNER: C e ~r;ltSI A E S OtJ< ~ l"7ll .

By:

Date:

CITY:

THE CITY OF SAN MARCOS, TEXAS,

I By: If') J~) Dan ~ y Manager I

G"\Client\Durhman BassettSCM\ San Marcos\ Ch, 380 Agreement\ 380 Agreement.~ lldoc e e 104.

RESOLUTION NO. 2006- .9..L-R

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN MARCOS, TEXAS, ADOPTING A REVISED ECONOMIC DEVELOPMENT INCENTNES POLICY; AND DECLARING AN EFFECTIVE DATE.

RECITALS:

and for 1. The City Council desires to promote economic development within San Marcos, Incentives in a Resolution that reason the Council approved a revised Economic Development Policy approved on May 3, 2005.

to s Economic 2. The City Council wishes to approve further revisions the City' Development Incentives Policy in the following areas:

leased from the at A. To establish a formal policy for significant investments to property City the San Marcos Municipal Airport. of B. To require, in applications for incentives that involve the acquisition of land, disclosure the actual price of the land.

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SAN MARCOS, TEXAS:

PART 1. The City of San Marcos elects to continue its eligibility to participate in tax I abatement.

PART 2. The attached revised City of San Marcos Economic Development Incentives Policy is approved and adopted.

PART 3. lbis resolution shall be full force and effect from and after its passage.

on June 6 2006 Adopted J

Mayor

7~ST: . L/'U cd ;-,~'vt1f} J, " aJhyr./). (/! ~(! Janis K.Womack City Clerk I e e 050 City of San Marcos Economic Development Incentives Policy I A. Community Overview I The City of San Marcos is a culturally diverse, rapidly growing community that prides itself on its Texas- friendly ambiance. A part of the beautiful Central Texas Hill Country, San Marcos serves as the Hays County seat and is located half-way between Austin, the State Capitol, and its southern cousin, San Antonio Hays County is the fastest growing county in Central Texas and the sixth fastest growing county in the State. A number of factors make San Marcos an appealing place to live and work.

Quality of Life The clear, spring- fed San Marcos River meanders through Ihe city and is the focus of many of the city' s recreation activities including kayaking, snorkeling, fishing and " tubing" Local museums and four historic districts preserve the city' s rich history. The Downtown Historic District on the Courthouse Square offers a potpourri of shops referred to as the " Texas Natural" marketplace, as well as a variety of clubs and restaurants. Dance, theater, sports events, art exhibits and concerts are regularly staged throughout the community.

Also calling San Marcos home are the internationally recognized Tanger Outlet Center and Prime Outlets San Marcos. Situated adjacent to each other on over 200 acres along Interstate IH- 35, these two outlet malls combined house more than 200 retail outlets and numerous restaurants are located on separate pad" sites. Together the two outlet malls employ over 2, 500 people and attract visitors from every state and numerous foreign countries. In 2003 the malls attracted over B million shoppers.

A variety of special events draw crowds to San Marcos each year including the Central Texas Golf Fest in April, Cinco de Mayo and Texas Natural Western Swing Festival in May, Texas Water Safari in June, the Republic of Texas Chilympiad Chili Cook- off in September, and the Sights and Sounds of Christmas held on the banks of the San Marcos River in December.

I Educated Workforce I Educational opportunities abound in the San Marcos area, with 24 colleges and universities located within a 50- mile radius, providing an educated workforce with broad- based knowledge and skills. San Marcos is home to Texas State University- San Marcos. The university, originally founded in 1903 as a teacher- preparatory inslitution, has grown today into a major interdisciplinary university with an enrollment of over 27, 000

Texas Stale has produced a number of highly successful graduates, including the late President Lyndon B. Johnson who was a 1930 graduate. Among the university' s other Distinguished Alumni are Dan Bates, President and CEO of Southwest Research Institute, Tomas Rivera, a prominent Hispanic author, Gary Woods, President and CEO of Red McCombs Enterprises and President of the Minnesota Vikings, and Karen Thompson, technology and science manager for the Exploration Office at NASA1S John F. Kennedy Space Center

The San Marcos Consolidated Independent School District educates more Ihan 7, 000 students on ten campuses, and a number of private schools and academies are located in the area. Also found in Hays County are the Hays, Dripping Springs, and Wimberley Independent School Districts. The Gary Job Corps Center is the largest Job Corps center in the country with an enrollment of up to 1, 900 students between the ages of 16 and 24. Located on an BOO- acre campus just outside of the City, Gary Job Corps provides instruction in 25 vocational trades.

Transportation Availability San Marcos is a forward- thinking community ideally located to provide for the economical distribution of goods and services Conveniently located on Interstate 35 ( the NAFTA Highway), the central avenue for trade between Canada, Ihe United Slates, and Mexico, San Marcos is also only minutes away from I Interstate 10, the vital transportation link between the east and west coasts. Three motor freight carrier terminals are located in San Marcos serving several motor freight lines Bus service is provided by Greyhound Lines, Inc. I e e Economic Development Incentives Policy Page 2 June 2006

San Marcos has expansive rail service, offering both cargo and passenger service with approximately 30 trains passing through town each day. Union Pacific Railroad operates one of the nation' s major rail- II freight systems, serving 23 states and linking the Pacific Coast and the Texas Gulf Coast with the major gateway cities of Chicago, St. Louis, Memphis, and New Orleans. Union Pacific is one of the few U. S. railroads that interchange cars with both Canadian and Mexican railroads. San Marcos has two rail sidings for shipping and receiving cargo and piggyback and switching services are available in nearby San Antonio. Amtrak provides three weekly San Marcos stops for passenger trains that run north and south from Chicago to Laredo. Passengers needing to travel east and west can transfer in San Antonio to reach their destinations.

San Marcos is proud of its Municipal Airport, located just three miles from downtown San Marcos. The airport spreads over 1, 350 acres and offers sixty acres of open concrete parking ramps. Four runways, aligned in a configuration that virtually eliminates crosswind operations, range from 5, 500 to 6, 300 feet in length. All are 100 or more feet wide and are maintained to FAA standards. The primary runway is ILS equipped, allowing the FAA to designate the airport as a Reliever Airport, The San Marcos Municipal Airport is fully capable of handling aircraft operations up to and including small ( B- 737/ MD- BO) commercial airliners efficiently and safely. To meet the needs of the international marketer, a foreign trade zone has been established at the airport.

Scheduled commercial air transportation services can be easily accessed at the Austin- Bergstrom International Airport, located only 30 miles away, or the San Antonio International Airport situated 45 miles to the south.

B. Economic Development Objectives and Goals

San Marcos is open for business I Located in one of Texas' fastest growing counties and most important international trade corridors, San Marcos offers: II an affordable workforce and excellent training facilities; a network of dynamic technology and service firms; an expanding transportation system; an extensive utility infrastructure; a favorable tax structure; and an excellent quality of life with the amenities of the Texas Hill Country, located between two major metropolitan areas.

The San Marcos City Council seeks to attract new business to the City, and to provide expansion opportunities for its existing businesses. The Council would like to attract companies that will provide synergy for the existing area manufacturers, provide high paying jobs for San Marcos citizens and Texas State University graduates and continue the growth of our retail/tourism/ music industries. Because of the City' s location along the international NAFTA highway, and close proximity to several major metropolitan areas, San Marcos would make an excellent transportation center With its central location, and available land, San Marcos wants to attract a diverse mix of industries Lo complement the resources the City has to offer

The City works with other economic development team members including Economic Development San Marcos, the San Marcos Area Chamber of Commerce, the San Marcos Hispanic Chamber of Commerce, the Texas State University- San Marcos, the San Marcos Council of Neighborhood Associations, and Hays County On a regional and State level the City partners with the Office of the Governor, Capital Area Council of Governments ( CAPCO), Lower Colorado River Authority, Pedernales Electric Cooperative, Guadalupe Blanco River Authority, Texas Department of Transportation, Texas Commission on Environmental Quality, and Texas Department of Agriculture

In order to attract and grow businesses, the City of San Marcos has developed economic development II strategies to benefit and unite its citizens behind common goals The strategies include e Economic Development Incentives Policy Page 3 June 2006

Diversifying the industrial I commercial/ tourism segments of our economy through the effective marketing of available resources and attributes to targeted markets. I I Leveraging the assets of the City, including infrastructure, services and funds, with State and Federal programs to promote the retention and expansion of existing business and to attract new business to San Marcos.

Promoting, in conjunction with Texas State University, San Marcos Consolidated Independent School District and the Gary Job Corps, educational opportunities to provide a well-educated workforce to enhance existing job opportunities and enable the creation of additional jobs.

Striving to maintain the quality of life enjoyed by its citizens by protecting its natural beauty and physical environment and by preserving its historic heritage.

Promoting synergistic relationships between its existing businesses and new enterprises in order to enhance the economic value of the private sector and enhance the overall wealth of the community.

Utilizing its unique resources in business partnerships that the City can leverage to minimize risk to our citizens.

Assisting new businesses to ensure that their facilities needs are correctly matched to the appropriate Master Plan and Zoning requirements, transportation access, and available City resources.

C. Criteria for Economic Development Incentives 1. Introduction I I San Marcos is committed to the promotion of quality development in all parts of the City and to improving the quality of life for its citizens In order to meet these goals, the City Council will consider providing property tax abatement, sales tax rebates and other incentives to stimulate economic development in San Marcos and its extraterritorial jurisdiction ( ETJ). The City will consider providing incentives to appropriate businesses in accordance with the procedures and criteria outlined in this Policy. Prospective businesses are strongly encouraged to discuss potential incentives with City officials and staff members early in the stage of a development, since a project is not eligible for incentives under this Policy if a building or site development permit has been issued for the project before an incentive application is submitted.

2. Eliqibilitv Criteria The following criteria must be met for an applicant to be considered eligible for property tax abatement and any other economic development incentive. Additional criteria for sales tax rebate incentives are listed below under Part D. 3 of this Policy:

a. The proposed development and/ or redevelopment must create and maintain or retain at least 5 jobs, and/ or

b. An investment by the applicant of at least $ 50, 000. 00 in property improvements is required.

c. In addition to meeting a or b above, the project must conform to the requirements of the City' s Master Plan, Land Development Code and other applicable City ordinances ( except to the extent waived or modified in a development incentive agreement in accordance with this Policy)

3. Evaluation Criteria The following criteria will be considered in determining what level of incentives will be provided to the applicant. Preference will be given to businesses that use local suppliers, contractors and labor force, I and require no new public improvements. a. Expansion of the local tax base I e e Economic Development Incentives Policy Page 4 June 2006

b Creation of permanent employment opportunities The number and types of jobs to be created or retained ( full time vs. part time) and whether or not benefits for employees will be provided.

II c. Whether high quality architecture and site design including landscaping and public amenities beyond the minimum required by the City Code will be provided.

d. Whether City utilities will be used.

e. The types and cost of public improvements ( e g streets, water, wastewater, drainage) and services ( e. g. fire, police) which will be required of the City.

f. The types and value of public improvements which will be made by the applicant.

the g. The financial capacity of the applicant to undertake and complete proposed project.

h. The extent to which the proposed project will make use of local contractors, suppliers and labor force (from the San Marcos area) during construction and during opeiation.

i. Appropriate type of activity ( e. g. office, retail, etc.)

j. The market conditions and growth potential for the business activity.

k. The method or methods which will be available to recapture property tax revenue lost as a result of entering into a tax abatement agreement with the applicant if the applicant fails to fulfill its responsibilities under the agreement.

I. The amount of time necessary to complete the project and create the jobs which are to be provided by the applicant.

II carries out the and of the s Master m. The extent to which the proposed project goals objectives City' Plan.

n. A comparative analysis of the costs of the incentives requested to the benefits provided to the City by the applicant's development or expansion.

o. Other incentive programs for which the applicant has applied or is qualified.

the s economic p. Any other factors the City Council finds helpful and relevant to accomplishing City' development objectives.

4. Case- bv-Case Evaluation Nothing in this these policies, procedures or the application form shall imply or suggest, or be construed to imply or suggest that the City of San Marcos is under any obligation to provide any incentive to any applicant. All applicants for tax abatement and I or other economic development incentives shall be considered on an individual basis

D. Description of Incentives

1. Construction Incentives A. Facilitation of Permits. San Marcos is eager to work with companies locating or expanding in the City, and the staff will make every effort to expedite the permitting process and, when possible, meet necessary timelines

B. Fee Waivers The City is willing to consider reducing or eliminating fees including building permit fees, inspection and contractor' s fees site development permit fees utility connection fees, impact fees, and II processing fees for platting, zoning and land use applications e e Economic Development Incentives Policy Page 5 June 2006

C. Utility Infrastructure: 1. Standard utility incentive: The municipally- owned power, water, and wastewater departments I I have adopted rate policies that permit reduced rates for customer rate classifications or categories based upon usage. Agreements may be available to reduce utility rates based upon adopted usage categories.

2. Standard utility incentive: The City partners with developers on infrastructure improvements. The City' s development policy commits city funds to provide for the cost of over-sizing infrastructure when deemed necessary for future development. This policy eliminates the need for developers to absorb the total cost of over-sizing " up front" and then waiting to recover a portion of the costs when future development ties into the improvements.

3. Special utility incentive: The City has the capacity and flexibility to offer qualified companies infrastructure improvements and extensions at reduced cost. Such incentives may include improvements to curbs and gutters, street paving, water and wastewater, electrical supply, and public lighting.

D. Waiver or Modification of Development Regulations/Standards: A development incentive agreement may include provisions for waiving or modifying City development regulations or standards. To be eligible for such a waiver or modification, a development must:

1. Be a unique and regional economic draw with projections to support major direct new tax benefits for the City that far exceed those of the typical development or business, or

2. Incorporate design or construction features or characteristics that exceed City regulations or standards in other respects; or I 3. Make a unique or unequaled contribution to development or redevelopment efforts in the City of I San Marcos, due to its magnitude, uniqueness to the community, or aesthetic quality.

2. Property Tax Abatement Incentives The City of San Marcos offers property tax abatement for new or expanded commercial or industrial construction, as well as business personal property taxes associated with real property. City abatements are granted through a contract approved by the San Marcos City Council. After qualification, the City will assist applicants in seeking abatement agreements with the other taxing authorities.

3. Sales Tax Rebate Incentives A. Eligibility Criteria In addition to the eligibility criteria for incentives listed above, a project for which sales tax rebates are requested must meet the following minimum requirements

1. The project must either:

Result in a minimum increased taxable value for the City of $25, 000,000 in real and business personal property ( excluding inventory and supplies), or

Result in a minimum increased taxable value for the City of $250, 000 in real and business personal property ( e)(cluding inventory and supplies) in the Downtown Zoning District; or

Result in a minimum increased taxable value for the City of $ 15, 000,000 in real and business personal property ( excluding inventory and supplies) for the redevelopment - but not relocation-01 existing businesses; or

I Will result in a sales tax increase of at least $ 500, 000 to the City over the most recently completed fiscal year I e Economic Development Incentives Policy Page 6 June 2006

Note: An increased taxable value qualifier may be waived as consideration for a pioneering retail development anticipated to spur significant additional investment in a desired location or if development is proposed for an underutilized, obsolete industrial building in the downtown area II where redevelopment is expected to stimulate additional development in the surrounding area. 2. In addition, the project must

a. Qualify as a target industry according to these policies and procedures; or

b. Make a unique or unequaled contribution to development or redevelopment efforts in the City of San Marcos, due to its magnitude, significance to the community or aesthetic quality.

3. In addition, if the project involves new development, it must serve a regional market.

B. Additional Considerations Other factors to be considered by the City Council in determining whether to authorize an agreement for sales tax rebates are'

1. The number and types of jobs to be created or retained ( full time vs. part time)-describe wage and indicate if insurance benefits are provided.

2. Whether City utilities will be used.

3. Whether the project incorporates high quality architecture and site design, including landscaping and public amenities, beyond the minimum required by the City Code as represented in architectural drawings, site plans and landscaping plans.

4. The financial capacity of the applicant to undertake and complete the proposed project.

II 5, Whether the applicant has applied or is qualified for other incentive programs.

6. The market conditions and growth potential for the project's business activity

7. Any other factors the City Council finds helpful and relevant to accomplishing the City' s economic development objectives.

C. Level of Incentives Incentives established for any project will be provided to the extent that the revenue realized by the City and attributable to the project exceeds a minimum amount established in the Economic Development Agreement to be entered into by the City and the applicant. The public benefit or amount of revenue realized by the City and attributable to the project must equal or exceed the value of any incentives granted under the application. The City will not rebate more than 75% of sales taxes in any year.

4. Location Incentives A. Special Downtown Reinvestment Zone Provides for tax abatement, on a case- by-case basis, within the Central Business Area downtown. The City has been designated as a Texas Main Street City. The can such as or new Main Street program has a fac;:ade improvement grant that be used for things signage canopies.

B. Foreign Trade Zone Foreign trade zones ( FTZs) are sites in or near a U. S. Customs port of entry where foreign and domestic merchandise is generally considered to be in international trade. Goods can be brought into a zone without formal Customs entry or without incurring Customs duties or excise taxes unless and until they are imported into the United States The purpose of the Zone is the creation of jobs realized from the cost savings from delayed or forgiven tariffs The City of San Marcos currently has a II FTZ located at the San Marcos Municipal Airport. e e Economic Development Incentives Policy Page 7 June 2006

C. San Marcos Municipal Airport: A developer that invests $ 500, 000 or more in improvements to property leased from the City at the San Marcos Municipal Airport will be eligible for a credit of up to 5% I of the total investment for site preparation expenses against fixed rental payments due under the lease. I 5. Financing Incentives A. Revolving Loan Funds: The City has available a limited amount of funds to commit to businesses. Applicants should check with the City Community Development Block Grant staff for funding availability.

B. Tax Increment Financing ( TIF): Tax increment financing is a tax reinvestment tool that allows local governments to fund infrastructure improvements within a defined area. TIFs work by allowing taxing entities to repay the costs of improvements to a designated area with the future tax revenues generated by increased property values. TIFs can be created on a case- by- case basis by the City Council.

C. Freeport Exemption: Businesses involved in the export of tangible property such as goods, wares, and merchandise may be eligible for the Freeport Exemption. This incentive is designed to exempt some or a company' s entire inventory from property taxes, To be eligible, property must be assembled, stored, manufactured or fabricated locally and then exported out of the state within 175 days after the property was acquired or imported into the state. This is an exemption available to any company that conforms to qualifications set out by state law. Again, the City Council will consider granting a Freeport Exemption on a case- by- case basis.

D. Chapter 380 Grants and Loans: The City Council can provide grants or loans to eligible prospects on a case- by- case basis to promote local economic development and to stimulate business and commercial activity in the City, in accordance with Chapter 380 of the Texas Local Government Code. The grants or loans can be used to facilitate the acquisition or improvement of real property, the acquisition of equipment or facilities, or other purposes directly related to economic development.

6. Incentives Requirinq State Approval I The City of San Marcos can assist businesses with the application process for the following programs. I A. Enterprise Projects: The City of San Marcos will facilitate the designation of an Enterprise Zone and work with prospects on their State application to be recognized as an Enterprise Project. In order to qualify for an Enterprise Zone, a project must locate in a Census Tract that has a low and moderate income population of 20% or more. All of the City of San Marcos' Census Tracts qualify to be designated as an Enterprise Zone. Being designated by the State as an Enterprise Project provides valuable incentives including refunds of sales and use taxes, and franchise tax credits. Additionally the State Comptroller can refund sales tax on natural gas and electricity

B. Industrial Revenue Bonds: The State of Texas Industrial Revenue Bond Program is designed to provide tax- exempt financing of land and depreciable property for eligible industrial or manufacturing projects. The Development Corporation Act allows cities, counties, and conservation/ reclamation districts to form non- profit industrial development corporations or authorities on their behalf. The purpose is to issue taxable and tax-exempt bonds for eligible projects in their jurisdictions. The City of San Marcos Industrial Development Corporation acts as a conduit through which funds are channeled. Generally, all debt service on the bonds is paid by the business under the terms of a lease, sale, or loan agreement. As such, it does not constitute a debt or obligation of the City, the Industrial Development Corporation, or the State of Texas. If Revenue bonds would help a prospect, the City stands ready to assist with selecting bond counsel and working to issue the bonds.

C. Job Training Funds: The City of San Marcos will assist companies locating or expanding in San Marcos with securing State- provided job training assistance The State of Texas, through the Governor's Office, offers the Enterprise Fund to assist with training for newly-created jobs. Acting through the Texas Workforce Commission, the State offers the Skills Development Fund to finance customized job training for local businesses that is provided by public community and technical colleges. This fund offers. on I to $ 1, for each customized average, up 000 job needing job training I e e Economic Development Incentives Policy Page B June 2006

D. Capital Grants and Loans. The Federal Government offers a number of loan programs designed to provide companies with various capital access and expenditure assistance. The programs include the Small Business Administration' s 7( a) and 504 programs. The Greater San Marcos Chamber of II Commerce will work with locating or expanding companies that need assistance applying for and securing this assistance.

7. Texas ManufacturinQ Assistance Centers (TMAC)

TMAC exists to enhance the competitive position of the state' s manufacturing sector. Manufacturing specialists work with small to medium-sized manufacturers, providing technical support and implementing best business practices. Typical areas covered include cost management, productivity improvements, environmental assistance, software systems selection and application, and e-commerce decisions.

8. Chamber Assistance The San Marcos Area Chamber of Commerce provides these additional services to aid with relocations and expansions:

Relocation assistance for key personnel Special banking and mortgage assistance Job fairs to attract employees Residential real estate assistance Community orientation, introduction and tours Spouse employment assistance Welcome and announcemenUpress conference coordination Identification of business support services

E. Application Procedures

1. Application Submittal II for of San Marcos economic incentives should submit an Applicants City development application package to the office of the City Manager that includes:

A. A completed City of San Marcos Development Incentive Application Form

B A project description that includes: a summary of the new facility or expansion; details and costs of the proposed improvements or expansion a description of the proposed business operation the number of jobs created and the expected annual payroll for all new jobs For each new position, show the job title and salary range. the extent to which the proposed project will make use of local contractors, suppliers and labor force ( from the San Marcos area) during construction and during operation.

C A plat showing the precise location of the property, all roadways within 200 feet of the site, current zoning classification and existing land uses on the site,

D. A complete legal description of the property including property tax ID number(s)

E. A project timeline that details. a schedule of all elements of the project ( design phase, construction phase( s), start of operations) the improvements and jobs created for each year for which an economic incentive is requested

F A descriplion of the nature and extent of incentives requested by the applicant from the City.

G A copy of the applicant' s most recent fiscal- year-end financial statements If the applicant is an S" Corporalion, a partnership or a sole proprietorship, a copy of the most recent personal II financial statements for anyone owning 20% of more of the company must also be included e e Economic Development Incentives Policy Page 9 June 2006

H. Any other information that will assist the City with determining the economic impact of the project or that is requested by the City. I I I. For incentive that involve the of land, the must a requests acquisition application include disclosure of the actual land purchase price.

2. Review Process A. The application will be reviewed for completeness and accuracy by the City Manager' s staff and comments will be received from appropriate city departments. Once this information is compiled, the application, review comments and a staff recommendation will be forwarded to the City Council and to other entities which may be involved in offering incentives. After review by the City Council and other entities, additional information may be requested of the applicant.

B All requirements of Chapter 311 of the Texas Tax Code shall be followed, if tax increment financing is requested. All requirements of Chapter 312, of the Texas Tax Code, known as the Property Redevelopment and Tax Abatement Act, shall be followed, if a property tax abatement is requested. All requirements of Chapter 380 of the Local Government Code shall be followed, if sales tax rebates are requested.

C Applications for tax abatement and/ or any other economic incentives made to the City will be denied if the City finds that any material misstatement of fact has been made by the applicant.

3. Approval of Incentive ReQuest If the City Council determines that it is in the best interest of the City of San Marcos to provide incentives to a particular applicant, a resolution shall be adopted approving the terms and conditions of the economic development incentive agreement. The agreement contract will include the following elements: A. An enumeration of the types and duration of incentives to be provided and the conditions which are applicable to them. B A timetable and list of the kind and amount of property values, revenues, incomes or other public benefits that the proposed project will provide or development that the project will include, and conditions to assure that the project meets or exceeds the City' s requirements pertaining to I property values and revenues, which in no event shall be less than the minimum project I requirements established in the minimum requirements listed above. C. A legal description of any property to be designated as a reinvestment zone for the purposes of the agreement. D. Detailed information regarding the type, number, location and cost of planned improvements. E. A provision to allow access to and inspection of the property and proposed improvements by City inspectors and officials to ensure that the improvements are made according to the requirements and conditions of the agreement. F A provision limiting the uses of the property consistent with the general purpose of encouraging development or redevelopment during the period that tax abatements and/ or other economic development incentives are in effect. G A method to provide for the recovery of property tax revenues and all waived fees and costs which are lost as a result of the agreement if the applicant fails to perform its obligations under the terms of the agreement. H A provision requiring the proposed project to make use of local contractors, suppliers and labor force ( from the San Marcos area) during construction and/ or operation, if such use was considered in determining the incentives to be provided by the City. I A provision establishing the duration of the Agreement. J. A provision providing a tangible means for measuring whether the applicant and other responsible parties have met their obligations under the Agreement. K. A provision for cancellation of the Agreement and/ or non- payment of incentives if the project is determined to not be in compliance with the Agreement. L. A provision for granting lien rights to the City with respect to real or personal property purchased with funds granted or loaned by the City M. A provision that allows assignment of the Agreement with prior written approval of the City Council, or without the prior written approval of the City Council provided that: 1 All rights, duties, obligations and liabilities under the Agreement are assigned from the as signor to the assignee, and I 2. The assignment is made subject and subordinate to the Agreement and these City of San Marcos Economic Development Incentives Policies, and I e e Economic Development Incentives Policy Page 10 June 2006

3. The assignment document is in a form and contains content agreeable to the City Attorney' s office. N. Provisions relating to administration, delinquent taxes, reporting requirements and indemnification. II amended the to the the O. A provision that the Agreement may be by parties Agreement by using same procedure for approval as is required for entering into the Agreement; and P. Such other provisions as the City Council shall deem appropriate.

Additional Information about San Marcos

Please feel free to contact the following resources to obtain more information relating to economic development in San Marcos:

Economic Develocment San Marcos htlc.llwww. ecodevsanmarcos. orQ/ ( website) Kim Moore, Economic Development Director 512- 393- 3400 ( phone) kmoore~ ecodevsanmarcos. orQ ( e- mail)

City of San Marcos www.cLsan- marcos.tx. US ( website) Dan O' Leary, City Manager/Mayor Susan Narvaiz 512- 393- 8000 ( phone) citvhall@cLsan- marcos.tx. us ( e- mail)

businesses in San You may also contact the following resources to obtain more information relating to Marcos:

San Marcos Area Chamber of Commerce www.sanmarcostexas. com ( website) 512- 393- 5900 ( phone) chamber~ sanmarcostexas. com ( e- mail)

San Marcos Hiscanic Chamber of Commerce www. sanmarcoshiscanic. com ( website) II 512- 353- 1103 ( phone) [email protected] ( e- mail)

FN NO. 06- 412 (ACD) AUGUST I, 2006 PAGE 2 OF 2

THENCE, N46043' 59" W, along said northerly right- of- way line, being the northerly line of said 0. 009 acre tract. over and I across said Calderon 1 acre tract, for the southerly line hereof, a distance of 81. 37 feet to the POINT OF BEGINNING, and containing an area of 0. 496 acres ( 21, 607 square feet) of land, more or less, within these metes and bounds.

BEARING BASIS: TEXAS COORDINATE SYSTEM, SOUTH CENTRAL ZONE, NAD 83 ( 93), UTILIZING LCRA MONUMENT NO( S). A- 669, A- 670, AZ- 66 AND SMA2

I, ABRAM C. DASHNER, A REGISTERED PROFESSIONAL LAND SURVEYOR, DO HEREBY CERTIFY THAT THE PROPERTY DESCRIBED HEREIN WAS DETERMINED BY A SURVEY MADE ON THE GROUND UNDER MY DIRECTION AND SUPERVISION. A SURVEY EXHIBIT WAS PREPARED TO ACCOMPANY THIS FIELDNOTE DESCRIPTION.

to ...(-~ BURY & PARTNERS, INC. cstJL-- ENGINEERING SOLUTIONS ABRAM C. DASHNER DATE 3345 BEE CAVES ROAD, SUITE 200 NO. 5901 AUSTIN, TEXAS 78746 STATE OF TEXAS I

FN NO. 06- 413 ( ACD) AUGUST 1, 2006 PAGE 2 OF 2 right- of- way line of the M. K.& T_ railroad, being the corner of said 113. 133 acre tract, also the I southewesterly being northwesterly corner of said Vasquez Volume 307, page 168 tract bears N46032' 01" W, a distance of 359_ 50 feet;

THENCE, 546032' Ol" E, along the southerly line of said 113. 133 acre tract, being the northerly line of said Vasquez 1 acre tract, for the northerly line hereof, a distance of 81. 83 feet to a calculated point at the northeasterly corner of said Vasquez 1 acre tract, being the northwesterly corner of that certain 0. 51 acre tract conveyed to Gumesindo Ramirez, Jr. and wife, Rosa Ramirez, by Deed of record in Volume 499, Page 628, of the Real Property Records of Hays County, Texas, for the northeasterly corner hereof, from which a 1/ 2- inch iron rod found at the northeasterly corner of that certain 0. 626 acre tract conveyed to Jesus Campusano and wife, Aurora Campusano, by Deed of record in Volume 1268, Page 878, of said Official Public Records bears S46032' 01" E, a distance of 286. 75 feet;

THENCE, S45056' 51" W, leaving the southerly line of said 113. 133 acre tract, along the westerly lines of said 0. 51 acre tract and said Calderon 1 acre tract, being the easterly line of said Vasquez 1 acre tract, for the easterly line hereof, a distance of 537. 42 feet to the POINT OF BEGINNING, and containing 1. 009 acres ( 43, 972 square feet) of land, more or less, within these metes and bounds.

BEARING BASIS: TEXAS COORDINATE SYSTEM, SOUTH CENTRAL ZONE, NAn 83( 93), UTILIZING LCRA MONUMENT NO( S). A- 669, A- 670, AZ- 66 AND I SMA2

I, ABRAM C. DASHNER, A REGISTERED PROFESSIONAL LAND SURVEYOR, 00 HEREBY CERTIFY THAT THE PROPERTY DESCRIBED HEREIN WAS DETERMINED BY A SURVEY MADE ON THE GROUND UNDER MY DIRECTION AND SUPERVISION. A SURVEY EXHIBIT WAS PREPARED TO ACCOMPANY THIS FIELDNOTE DESCRIPTION.

6-'- Ob BURY & PARTNERS, INC. csa- ENGINEERING SOLUTIONS ABRAM C. DASHNER DATE 3345 BEE CAVES ROAD, SUITE 200 NO. 5901 AUSTIN, TEXAS 78746 STATE OF TEXAS

FN NO. 06- 411 (ACD) AUGUST I, 2006 PAGE 3 OF 3

THENCE, N46043' 59" W, along said northerly right- of- way line, I the line of said 0. 005 acre tract, over and being northerly across said 1/ 2 acre tract, for the southerly line hereof, a distance of 41. 17 feet to the POINT OF BEGINNcrNG, and containing 0. 339 acres ( 14, 775 square feet) of land, more or less, within these metes and bounds.

BEARING BASIS: TEXAS COORDINATE SYSTEM, SOUTH CENTRAL ZONE, NAD 83( 93), UTILIZING LCRA MONUMENT NO( S). A- 669, A- 67D, AZ- 66 AND SMA2

BURY & PARTNERS, INC. Ob ENGINEERING SOLUTIONS DATE 3345 BEE CAVES ROAD, SUITE 200 NO. 5901 AUSTIN, TEXAS 78746 STATE OF TEXAS I

FN NO. 06- 431 (ACD) AUGUST 1, 2006 PAGE 4 OF 4 I THENCE, S4scS6' S1nW, leaving the southerly line of said 113. 133 acre tract, along the westerly line of said Ramirez 1 acre tract, and in part along the westerly line of said 0. 50 acre tract, being the easterly line of said Calderon 1 acre tract and said 0. 51 acre tract, for the easterly line hereof, a distance of 273. 38 feet to the POINT OF BEGINNING, and containing 0. 507 acre ( 22, 089 square feet) of land, more or less, within these metes and bounds.

BEARING BASIS: TEXAS COORDINATE SYSTEM, SOUTH CENTRAL ZONE, NAn 83 ( 93), UTILIZING LCRA MONUMENT NO( S). A- 669, A- 670, AZ- 66 AND SMA2

BURY & PARTNERS, INC. I- ob ENGINEERING SOLUTIONS DATE 3345 BEE CAVES ROAD, SUITE 200 NO. 5901 AUSTIN, TEXAS 78746 STATE OF TEXAS I

FN NO. 06- 409 (ACD) AUGUST 1, 2006 PAGE 5 OF 5

THENCE, S45057' 57" W, leaving the southerly line of said 113. 133 acre tract, the I along westerly line of said access easement of record, being the easterly line of said Villegas Volume 743, Page 856 tract, for the easterly line hereof, a distance of 536. 35 feet to a 1/ 2- inch iron rod with cap set on the northerly right- of- way line of McCarty Lane ( R. O. W. varies), being the northeasterly corner of that certain 0. 004 acre tract conveyed to the County of Hays, by Deed of record in Volume 2580, Page 437, of said Official Public Records, for the southeasterly corner hereof, from a which 1/ 2- inch iron rod with cap found at an angle point in said northerly right- of- way line bears S46043' 59" E, a distance of 306. 59 feet;

THENCE, N46043' 59" W, along said northerly right- of- way line, being the northerly line of said 0. 004 acre tract, over and across said Villegas Volume 743, Page B56 tract, for the southerly line hereof, a distance of 34. 11 feet to a 1/ 2 - inch iron rod wi th cap found at the northwesterly corner of sa~d 0. 004 acre tract, being on the westerly line of said Villegas Volume 743, Page 856 tract, also being on the easterly line of said Villegas Volume 591, Page 758 tract, for the southwesterly corner hereof;

THENCE, N45057' 57/ E, leaving said northerly right- of- way line, along the easterly line of said Villegas Volume 591, Page 758 tract, being the westerly line of said Villegas Volume 743, Page 856 tract, for the westerly line hereof, a distance of 536. 47 feet to a calculated point on the southerly line of said 113. 133 acre tract, being the northeasterly corner of said Villegas I Volume 591, Page 758 tract, also being the northwesterly corner of said Villegas Volume 743, Page 856 tract, for the northwesterly corner hereof;

THENCE, S46032' 01" E, along the southerly line of said 113. 133 acre tract, being the northerly line of said Villegas Volume 743, Page 856 tract, . a distance of 34. 10 feet to the POINT 01' BEGINNING, and containing 0. 420 acres ( 18, 274 square feet) of land, more or less, within these metes and bounds.

BEARING BASIS: TEXAS COORDINATE SYSTEM, SOUTH CENTRAL ZONE, NAD 83( HARN), UTILIZING LCRA MONUMENT NO( S). A- 669, A- 670, AZ- 66 AND SMA2

BURY & PARTNERS, INC. ENGINEERING SOLUTIONS AB 3345 BEE CAVES ROAD, SUITE 200 NO. 5901 AUSTIN, TEXAS 78746 STATE OF TEXAS I

FN NO. 06- 410 (ACD) AUGUST I, 2006 PAGE 2 OF 2

2) S46000' 23" W, a distance of 270. 22 feet to a 1/ 2- inch iron on I rod with cap found the northerly right- of- way line of McCarty Lane ( R. O. W. varies), being the northeasterly corner of that certain 0. 002 acre tract conveyed to the County of Hays, by Deed of record in Volume 2612, Page 710, of said Official Public Records, for the southeasterly corner hereof;

THENCE, N46043' 59uW, along said northerly right- of- way line, being the northerly line of said 0. 002 acre tract, over and across said 0. 626 acre tract, for the southerly line hereof, a distance of 19. 84 feet to a 1/ 2- inch iron rod with cap found at the northwesterly corner of said 0. 002 acre tract, being on the westerly line of said 0. 626 acre tract, also being on the easterly line of that certain tract conveyed to Gumesindo Ramirez and Silvestre Ramirez, by Deed of record in Volume 410, Page 400, of said Real Property Records, for the southwesterly corner hereof;

THENCE, N45056' 51 " E, leaving said northerly right- of- way line, along the easterly line of said Ramirez tract and that certain 0. 50 acre tract conveyed to Gumesindo Ramirez, Jr. and wife, Rosa Ramirez, by Deed of record in Volume 1988, Page 294, of said Official Public Records, being the westerly line of said 0. 626 acre tract, for the westerly line hereof, at 536. 56 feet passing a 1/ 2- inch iron rod found, and continuing for a total distance of 537. 03 feet to a calculated point on the southerly line of said 113. 133 acre tract, being the northeasterly corner of said 0. 50 acre tract, also being the northwesterly corner of I said 0. 626 acre tract, for the northwesterly corner hereof;

THENCE, S46032' 01" E, along the southerly line of said 113. 133 acre tract, being the northerly line of said 0. 626 acre tract, a distance of 81. 93 feet to the POINT OF BEGINNING, and containing 0. 624 acres ( 27, 181 square feet) of land, more or less, within these metes and bounds.

BEARING BASIS: TEXAS COORDINATE SYSTEM, SOUTH CENTRAL ZONE, NAD 83( 93), UTILIZING LCRA MONUMENT NOeS). A- 669, A- 670, AZ- 66 AND SMA2

I BURY & PARTNERS, INC. f6" \...dp ENGINEERING SOLUTIONS ABRAM . DASHNER E 3345 BEE CAVES ROAD, SUITE 200 NO. 5901 AUSTIN, TEXAS 78746 STATE OF TEXAS I

Bk IIDl PI 05024201 CPR 2752 308

I li':w:hihlt "R" PII!.- lttHl F.uepdnftll

J. Easemenl executed by O.M. Jackson, to Texas Public Utilities CompanYt dated July 10, 1925, recorded inlundcr 901342 of the Real Property Records of Hays County, Texas. EascmeDt or right-oC-way for an electric transmission and distribution line, and all necessary or desimble appuramances. qetha with aU rigbLs Jecited d:mn)Ie:

2. Easement executed by Jasba Gmbh, a Gennan limited tompADY, to City ofSau Marcos, dated August 9, 1993, recorded iDhmder 10151570 of the Real Property Records of Hays Counlyt Texas. Easement( and right-of- way for electric transmission and/or distn'bution lines,and all necessary or desirable appurtenances, Iogeda with aD rights recited therein)

3. Easement executed by Capital Foresi&ht Limited Partnership, to City of San Man:oa,a MlmicipaI Corpomtion, filed June 29, 1998, n:corded iDIuoda 14271909 of the Real Property Records of HAYS County, T~ ( a nonexclusive private easc:mmt for public utiUdes, aad he iDgress,egress and ~ togedIa'with aU rights recited tbcrcin)

4. Easement executed by Capital Foresight Limi1ed Partnership, to City of San ~ 1 Muoicipal CorpmatioD, filed.TuDe 29, 1998, recorded inIundcr 14271915 of the Real Property Records of Hays County, Texas, (I nonexclusive private easement forpubJic utilitiClSt BDd Dee ingress, egress and regress,togetber with all rigID Jecited thaeiD) I S. ~ eeculed by Capital Fmesigbl Limited Parmaship 1 Nevada Limital P8l1Delship, to KBIB Partners, 1 Texas Oencral Partnership composed of E.W. Ricbardson, K.K.Blewett, and Kevin Blewett. dated' October 19, 1998. recorded inIundcr 14721568 of the Real Property Records of Hays County, Texas. (EasemCDI for drainage. togeIhs witb aU rigIds n:dted therein)

6. Easement executed by Capital Foresight Limited Partnership. 10 City of San Man:os, Texas, dated December 8. 2003, RCOrded iDIuIJlJt:r 23671417 ortbc Real Property Records of Hays County, Texas. ( Easem1:Dl for wastewater pipe line and related appurtenances including utility facilities,together with aD rialrts recitfd therein)

7. Deed Dedicating Drainage ADd Public Utility Easement executed by Capital Fcm:siabt LiJDjted Partnership, 10 City of San Marcos, da1ed October 9. 2001. ftlOOI'ded iDhmder 2683/653 ofb:Real Property Rcc:mds ofHays County. Texas.

8. Tmns, conditions and stipuIaIiorw contained in Public ImprovemrDl Construction And F'mancing Agreement r:cult'xc.Jd by and betwecD City of San Marcos, Texas. and F'maociaI Management Group.8 Par1ncrship comprised ofHeinz Schw8ded.app. et at,daIaI May ] 6, 1985. n:cordcd inIunde:r 549fl34 oC1he RcalI\~ 11 Records ofRays County, Texas.

I lie Vol P!I 05024201 DPR 2752 309

F."J:hihlt " 11" I PermiHM ~ w" 9ttftft. _ ~nnthnlHl

9. Subject propezty lies within the boundaries of Edwards UndergroUDd Water Dislrict.

10. Ovabead s) with utility Iioe( poles BOd guys Jocatecl akmg the DDItbeast property line as showu OD the survey prepared by Charles G. Walker R.PL.S. No. 5283. dated JUDe 15,2005.

11 . Any rishtst claims lIIJd/or tasernc:IIls ia amncction with b two &e\I'W:damouts lyiaa 0UIside of the the III Ehown 011 utility eastmeDllmIa'Iias subject property the survey i"....-ed by Charles O. WBIh:r RPLS; No. 5283, data:I Juoc 15,2005.

12. Umeeorded lease & dated gJeeIDeD1s March 10, 2000 by and between Capital Fmaight,LP, a Nevada limited PBI1Dership. as lessor and Gmmarson Outdoor Advcrtisiug, Ioc. ad& Iwr L 0um&1IOI1, individually as I..essec..

3. To the extent tha1 it affects the aD Laud, laws, codes. Jep.latioos, ordinAnuJ of any governmental or quasi eovemmenlal entity tbat have not been objected to by Buyer. I

A II...... ti.. wwtn..fft- Filed ror Record in: IIus Catmh Ill: Au! 19, 2005 at 03: 32P Texas General Laad Office DoclMellt NuMII': 05024201 P.O. Box ] 2873 t: U. OO Receipt ~ Texas 7871l- 2873 er - 131204 Austin, au Dba IIGrtlOez, hPuh Lee Carlisle, Atto: Dcwa)'llC NaUIDBDD CouRta Clerk IIcI!Is Counb Asset Manasement Division

4f- 5J].i1h~. . S t).,)I 5/2. .lJb 3.' 5/ 0:J- I I EXHIBIT C PUBLIC IMPROVEMENTS

Public road improvements- 1, 304, 000 Storm drainage improvements 1, 172, 000 Street landscaping and irrigation 531, 000 Upgraded street lighting 304, 000

Total 3, 311, 000