Are the required annual written reports public information?

They should be.

Ospurt,

Does section X - Default: Recapture of Tax Revenue apply here?

It reads: The company will be in default only if the company does not employ at least 75 percent of its employee commitment as provided in paragraph XXXIV below.
That commitment is 750 (X .75) is employment in the upper 500s.

Did the employer here get some wiggle room, which they are now taking advantage of?

Actually I guess you addressed that. Sorry I didn't see that earlier.

Stew, yes I am asserting that AT&T is taking advantage of the specific contract terms and not living up to the promise of the economic developmet and tax abatement deal sold to the public.

I don't blame AT&T, they needed to lay off people in a recession and they cut the Midland facility to a certain level that didn't trigger the recapture clause.

I guess you could argue the abatement is saving 600 jobs, but like I asked, what happens when the abatement goes away, or drops to a level where paying the tax penalty is more attractive than keeping the staff?

My understanding is that Cingular actually has two agreements with the city. The tax abatement agreement you cite and a separate agreement for job creation that doesn't give them any leeway from 750. So, and I could be wrong here, taking advantage of the terms of the abatement agreement would bite them in the other agreement.

Yes, there are multiple agreements. There are abatement agreements for Cingular AND the Owner of the Building from the City, County, Hospital District and College District. Then there is the "forgivable loan" from the water and sewer fund, which is the agreement you are thinking about. I have no clue of the terms of that agreement, since it wasn't filed with a state agency that readily responds to information requests with digital copies.

However, I do recall a couple of years ago that there was a story in the MRT that Cingular had fulfilled all of the requirements for that other agreement and a final payment was made the them at that time, but I can't find that story or the details of the original deal.

You are incorrect on whether the forgivable loan agreement is still in effect.

And I believe the reason there is "wiggle room" in the abatement agreement as to jobs is because the primary obligation of Cingular in the abatement agreement-not unlike most abatement agreements-is (was) to add taxable property to the tax rolls, in this case $7M. If Cingular fell on jobs, then that was already covered by the forgivable loan agreement. But if they really fell, then they were in default on both.

Basically, the job requirement, to a lesser degree, has been shoe-horned into the abatement agreement as well.

I doubt Cingular is "taking advantage" of anything. If they are under performing, then they're in a contractually comprised position.

Dear Bon:
I'm not certain that Ospurt is incorrect, at least not in the way you're arguing with the forgivable loan agreement. A company like Cingular/AT&T isn't going to commit to a variety of agreements that don't somehow overlap and create a sense of continuity -- If one agreement creates a range of employment, then I suspect that all agreements mirror that range ... It would be bad business to allow one agreement to hamstring another.

This sounds like a great opportunity for the ED Apparatus to demonstrate their new and improved communications and transparency by issuing a press release that contains detailed information on where, exaactly, AT&T stands in relation to all of the various agreements with the tax payers of Midland.

What could possibly be the argument against unilaterally providing that information?

Knight:
You are not understanding my point. The agreements don't hamstring Cingular, but there is an interplay between them that doesn't allow for Cingular to take advantage of the jobs requirment in the abatement agreement as Ospurt was suggesting might be happening.

The "wiggle room" on jobs in the abatement contract exists because the primary obligation is to add taxable property, the jobs are secondary insofar as they are already required (with no wiggle room) by the loan contract.

Now, if the loan contract isn't currently in effect then Ospurt's original premise raises a good question and I'm just spinning my wheels here.

Since I said "I had no clue" on the content of the agreement using the water and sewer funds, in calling me incorrect maybe Bon is saying I do have a clue?

All I have is a vague recollection that there was a story a couple of years ago in the paper that quoted a City official that said the terms of that agreement were fulfilled. I never claimed any more authority than just a memory fragment.

Basically, a copy of the other agreement is going to have to be obtained to see wether or not the terms have been fulfilled.

As for the abatement, if you carefully read the abatement contract, Cingular isn't even bound to the increase in taxable value. Per paragraphs III & IV, they provided a list of improvements to be performed at move in per Attachment B. The taxable value of those improvements were never contracted to go up over the life of the abatement.

Additionally, to say the abatement wasn't about jobs is flat wrong. The jobs component is OPTIONAL in an abatement contract, and is often omitted in projects which are for property valuation increases only, (think windmills). The wiggle room was for the front end of the abatement, incase Cingular didn't get to 750 in the first two years. For Cingular the risk was higher on the front end because the abatement was 100% and their equipmnet wouldn't have depreciated that much. Wiggle room on the end wouldn't matter when you are only abating 20% or 10% of depreciated equipment.

Ohhh, and before you bring it up Bon, remember that there are TWO abatement Contracts. One with Cingular and one with the Owner of the Building. The agreement with Cingular abated "Personal and Tangible Property" (think furniture and computers) ONLY. The other agreement covered the building and it IS for the property valuation, because it doesn't have a jobs component, just a requirement to lease to Cingular for the term of the agreement, (or some other call center should Cingular fold).

I can post that Agreement with Mid-Builder LLC (now called Midland Signal)

Ospurt, let me back up. I should not have said you were "incorrect." It would have been more precise to say Cingular has not fulfilled its obligations under the loan contract (maybe the story on this you vaguely remember was incorrect or incomplete as to when that contract expired).

At this point, you are attributing statements/arguments to me that I did not make.

I simply provided some additional context to your statement that Cingular is taking advantage of the abatement. Maybe they are. I have no idea how they are doing under any of the agreements. But if they are, they still had to install $7M in personal property under the abatement and, if they are taking advantage of the job obligation (Is "jobligation" a word?, it should be) under the abatement, it is going penalize them under the loan agreement.

I don't think it was objectionable to add that layer to the discussion.

No offense here Bon, I don't mind the extra layer. I'm just trying to keep what facts we do know straight.

The Cingular deal is a very convoluted Economic Development deal, because it was done before the MDC came to be, so it was cobbled together with abatements and water and sewer funds. It involves 4 taxing entities and no less than 9 agreements for abatements or direct funding with budgeted funds. The Comptroller's office has just provided us with 8 of the agreements (the two abatements from each of the 4 taxing entities), we don't have the rest (yet).

Like I said, Cingular isn't in breach of contract now, and if they aren't breaching the abatement contract, I doubt they are breaching the other contract.

However, I do stand by the premise, that on "Economic Development" success, based on the number of jobs sold to the public (ie what the media and officials said was in the contract: 750), the "spirit" of the agreement is not being upheld because of a reduced threshold in the contract language.

Which brings us back to transparency in government. For 8 years the public has been led to believe one thing, but the real fine print says something else, and it really needs to be addressed.

Personally, I think Cingular stopped at a certain point because of the abatement agreement, and once it expires, or the cost of the penalty is low enough, this call center may be history. Somebody at AT&T when looking at cutting jobs did an analysis of the abatement contract, cost of salary, value of abatement, cost of master lease with building owner and said we can cut to 563 and not be penalized, Midland's Taxpayer Charity be damned.

Also, go look at the parking lot these days, they may already be below 563 and nobody at the City has done the due diligence.

If you want to consider the other layer of time, I recall, perhaps incorrectly, that for a fairly long period Cingular/ATT employed over 1,000 at their call center here. Two years ago someone I know who worked there said that Cing/ATT, like so many other local companies, was having a very difficult time staffing this location. Perhaps, an emptying parking lot indicates not that ATT is trying to just scrape by in order to meet their agreements, but that a understaffed Midland location serendipitously fits well the current national climate. Or maybe it may not be so serendipitous, if ATT goes looking to cut back.

Doubtful as it may sound, 750 is the floor in the loan contract.