HomeMy WebLinkAbout2014-144AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING A MEMORANDUM
OF UNDERSTANDING REGARDING TERMS AND CONDITIONS FOR THE RAYZOR
RANCH PUBLIC IMPROVEMENT DISTRICT NO. l; AND PROVIDING AN EFFECTIVE
DATE.
WHEREAS, the City of Denton (the "City") is a home rule municipality and political
subdivision of the State of Texas; and
WHEREAS, Allegiance Hillview, L.P., a New York limited partnership ("Allegiance"),
and DB Denton II, LLC, a Delaware limited liability company ("DB Denton") have petitioned
the City requesting the establishment of a public improvement district within the corporate limits
of the City to be known as Rayzor Ranch Public Improvement District No. 1 (the "District")
pursuant to Chapter 372, Texas Local Government Code, as amended; and
WHEREAS, the City, Allegiance and DB Denton have agreed to the terms and
conditions upon which the City will create the District and public improvements within the
District may be financed; and
WHEREAS, the City, Allegiance and DB Denton have negotiated a Memorandum of
Understanding (the "MOU") to memorialize the agreement between the City, Allegiance and
DB Denton on the terms and conditions for the creation of the District and for the financing of
public improvements within the District; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Council of the City (the "Council") hereby approves the attached
form of MOU and authorizes the City Manager or Assistant City Manager and Chief Financial
Officer, for and on behalf of the City and the Council, to execute and deliver the MOU with such
other changes the officer executing the MOU determines to be necessary in connection
therewith.
SECTION 2. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the Ovh"' day of May, 2014.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:*\,
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY: k y x-
(Memorandum of Understanding)
MEMORANDUM OF UNDERSTANDING
REGARDING TERMS AND CONDITIONS FOR THE
I kAYZOR RANCH PUBLIC IMPROVEMENT DISTRICT NO. 1
THIS MEMORANDUM OF UNDERSTANDING REGARDING TERMS AND
CONDITIONS FOR THE RAYZOR RANCH PUBLIC IMPROVEMENT DISTRICT NO. 1,
dated as of May 1, 2014 (this "MOU'), is entered into by and between CITY OF DENTON, TEXAS,
a home rule municipality and a political subdivision of the State of Texas (the "City"), Allegiance
Hillview, L.P., a New York limited partnership ("Allegiance"), and D13 Denton 11, LLC, a Delaware
limited liability company ("DB Denton "). The City, Allegiance and D13 Denton being sometimes
collectively referred to as the "Parties" or individually as a "Party."
WHEREAS, the public improvement district to be known as Rayzor Ranch Public
Improvement District No. I (the "District") is to be located within the corporate limits of the City; and
WHEREAS, the City, Allegiance and DB Denton have agreed to the terms and conditions upon
which the City will create the District and public improvements within the District may be financed;
NOW, THEREFORE, for and in consideration of these premises, the City, Allegiance and DB
Denton agree to this MOU as follows:
This MOU has been developed in order to memorialize the agreement between the City, Allegiance
and DB Denton on the terms and conditions for the creation of the District and for the financing of public
improvements within the District.
OR
The District will be created and public improvements within the District may be financed in
accordance with the terms and conditions set forth in Attachment A to this MOU.
(a) The Parties acknowledge and agree that this MOU is fully enforceable in accordance with its
terms. If any provision of this MOU shall be held or deemed to be or shall, in fact, be invalid,
inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions,
or in all jurisdictions because it conflicts with any provisions of any Constitution, statute, rule of
public policy, or any other reason, such circumstances shall not have the effect of rendering the
provision in question invalid, inoperative or unenforceable in any other case or circumstance, or
of rendering any other provision or provisions of this MOU invalid, inoperative or unenforceable
to any extent whatsoever, and this MOU shall be interpreted, to the greatest extent legally permissible,
to effect the original intent of the Parties.
(b) This MOU shall expire and be of no further force and effect upon the execution of a Financing
Agreement with respect to the District between the City, Allegiance and DB Denton.
(c) This MOU may be amended only by a written instrument duly executed by the Parties or their
respective successors or assigns.
(d) The captions of the sections of this MOU are for convenience only and shall not be deemed part
of this MOU or considered in construing this MOU.
This MOU, together with the attachments attached hereto, contain the entire understanding of the
Parties with respect to the subject matter hereof and supersede all other prior agreements, understandings,
statements, representations and negotiations between the Parties with respect to its subject matter. This
MOU is made solely for the benefit of the City, Allegiance and DB Denton, and their successors or assigns,
and no other person shall acquire or have any right hereunder or by virtue hereof; provided, however, that
successors and assigns of DB Denton and/or Allegiance, for purposes of this MOU, shall include only those
parties which have demonstrated to the City's satisfaction that the party has the financial, technical and
managerial capacity, experience and expertise to perform any obligations or duties assigned or necessary to
develop the public improvements in the District.
This MOU may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Parties have executed this MOU by their duly authorized representatives to
be effective as of date first set forthabove.
City of Denton, Texas
By:--",
L.
Name:
Title: Aa/z
Allegiance Hillview, L.P., a New York limited
partnership
By: TH GP LLC, a Delaware limited liability company,
d/b/a TH Denton GP LLC in the State of Texas,
its general partner
By -
Name:
Title:
DB Denton I KI,C, a Delaware limited liability company
By: 6
Name:
Title: . .. ... ......
S-1
IN WITNESS WHEREOF, the Parties have executed this MOU by their duly authorized representatives to
be effective as of date first set forth above.
City of Denton, Texas
By:
Name:
Title:
Allegiance Hillview, L.P., a New York limited
partnership
By: TH GP LLC, a Delaware limited liability company,
d/b/a TH Denton GP LLC in the State of Texas,
its general partner
— ---------
By:
Name: n
Title: Authorized Signatory
DB Denton 11, LLC, a Delaware limited liability company
By: ___
Name:
Title:
S-1
(Term Sheet)
TERM SHEET
V,.A,YZOR RANCH PUBLIC IMPROVEMENT DISTRICT NO. I
111IF11111
In order to form the Rayzor Ranch Public Improvement District No. 1 ("the PID"), the following
limitations and performance standards shall apply:
FINANCING CRITERIA
1.
Maximum Total Indebtedness — PID 1
$ 40,000,000 subject to the limitation that the
estimated equivalent tax rate of the assessments upon
completion of the development does not exceed $0.50
per $100 of assessed value.
2.
Estimated Total Qualified Development Costs
$ 32,000,000
PID
3.
Maximum Total Indebtedness — Assessment
$ 12,000,000
Area #I
4.
Maximum annual assessment rate as
$0.50 per $100 of assessed value
equivalent tax rate upon completion of
develolinient — Assessment Area #1
5.
Maximum Construction Costs to be Funded —
$ 8,100,000
Assessment Area #1
6.
Minimum appraised value to lien ratio at date
3:1
of each bond issue
7.
Maximum years of capitalized interest for each
2
bond issue .
. ...... . .....
8.
... . ....
Maximum term of each bond issue (to extent
30 years
allowed by law)
The aggregate principal amount of bonds required to be issued shall not exceed an amount sufficient to
fund: (i) the actual costs of the qualified public improvements (ii) required reserves and capitalized
interest during the period of construction and not more than 12 months after the completion of
construction and in no event for a period greater than 2 years from the date of the initial delivery of the
bonds and (iii) any costs of issuance. Provided, however that to the extent the law(s) which limit the
period of capitalized interest to 12 months after completion of construction change, the foregoing
limitation may be adjusted to reflect the law(s) in effect at the time of future Bond issuances. Appraisals
shall be performed by an independent third party satisfactory to the City and shall assume development of
the property will only include completion of the Authorized Improvements financed with PID Bonds
and/or any other financial assurance as required according to the terms herein.
1. The specific Financing Criteria above includes potential financing activity associated with those land
parcels within Rayzor Ranch Town Center and the approximately 100 acres currently owned by RED
Development, LLC or its affiliates and identified on Exhibit A as Assessment Area #1.
2. The land owned by Allegiance Hillview, or its affiliates, within the PID is not included in the above
stated Financing Criteria but Allegiance Hillview and/or its affiliates retain the right to submit
Financing Criteria similar to the above for Future Assessment Areas as shown on Exhibit A.
3. The proposed PID does not include land located north of University Avenue or any land intended for
development as detached single family residential.
4. The City of Denton (the "City") agrees that PID Bonds, subject to compliance with the standards set
forth herein, may be issued in advance of construction for the Authorized Improvements within
Assessment Area #1.
5. RED Development, or its assignees, may seek bond issues either in advance of construction of and/or
on a reimbursement basis for an individual Phase of the Project subject to compliance with these
standards. No PID bonds will be issued without the approval by the City of a Service and Assessment
Plan for the Specific Assessment Area within the District.
6. No General Obligation or Certificate of Obligation bonds will be utilized by the City to fund the PIDs.
7. RED Development, Allegiance Hillview, their assignees and the City agree that all PID bond issues, if
any, will be subject to approval by the City Council but that the terms outlined here will apply.
8. Special assessments on any given portion of the property may be adjusted in connection with
subsequent bond issues as long as the maximum annual assessment rate is not exceeded, and the
special assessments are determined in accordance with applicable Service and Assessment Plan(s).
Special assessments on any portion of the property will bear a direct proportionate relationship to, and
will not exceed, the special benefit of the public improvements to that improvement area.
9. The City shall not be obligated to provide funds for any improvement except from the proceeds of the
PID Bonds and/or per the terms of the 380 Agreement, as may be amended from time to time.
10. Each PID Bond Indenture will contain language precluding the City from making any debt service
payments for the PID Bonds other than from available special assessment revenues.
11. The PID will be responsible for payment of all of the City's reasonable and customary costs and
expenses associated with both the issuance of bonds and the ongoing administration of the PID.
12. It is agreed that the PID will be exempt from any public bidding or other purchasing and procurement
policies to the extent the project qualifies under Texas Local Government Code Section 252.022(a) (9)
which states that a project is exempt from such policies if "paving drainage, street widening, and other
public ublic improvements, or related matters, if at least one-third of the cost is to be paid by or through
special assessments levied on property that will benefit from the improvements."
13. The City will not approve any PID Bonds for Assessment Area 41 unless at least 50% of the proposed
Gross Leasable Area has been pre -leased or under contract to be sold to retail operators.
14. It is agreed that the improvements to be funded by the PID for Assessment Area #1 or any other
parcels located within the PID are limited to those defined as Authorized Improvements under Texas
Local Government Code Section 372.003 ("Authorized Improvements"), and will be dedicated to the
City:
• Streets and sidewalks;
• Public safety and security services;
• Water, wastewater, health and sanitation, and drainage facilities
• Acquisition of rights of way;
• Art;
• Creation of pedestrian malls;
• Erection of fountains, landscaping and other aesthetics;
• Library facilities;
• Mass transit;
• Park, recreation and cultural facilities; and,
• Parking facilities.
2
15. The City retains the right to approve the use of future PID Bonds for construction costs of Authorized
Improvements for Future Assessment Areas or for additional assessments within Assessment Area #1.
16. RED Development, or its assignees, shall be obligated to provide funds, in a cash escrow/trust
agreement, or an irrevocable letter of credit (Financial Assurance), to pay projected construction
shortfalls, if any, for improvements to be financed with PID Bonds. Such funds or irrevocable letter
of credit shall be deposited with the trustee for the PID Bonds at closing. RED Development shall
also be obligated to pay any cost overruns for such improvements, if the cost of such improvements
exceeds the amount of the PID Bonds and Financial Assurance deposited with the trustee for payment
of such costs.
17. It is agreed that, if no PID Bonds are issued within a period of five (5) years from the date of the
formation of the PID by the Denton City Council, RED Development, or its assignees, will be
required to submit a petition to dissolve the PID.
18. It is agreed that all principal landowners will provide any required continuing disclosure obligations
associated with the issuance of PID Bonds as required under the Indenture, any continuing disclosure
agreement, or any other regulatory agreement or regulatory agency.
19. In connection with the issuance of the initial PID Bonds on behalf of Assessment Area 91, RED
Development, or its assignees, agrees to guarantee the funding of the City's costs associated with the
formation of the PID and the issuance of the initial PID Bonds through a mutually negotiated Escrow
and Deposit Agreement and to be paid back by the PID Bond proceeds.
20. This term sheet shall remain in place until such time and date that a Financing Agreement is executed
by the City, RED Development, Allegiance Hillview and/or their assignees.
21. Assignees of RED Development and/or Allegiance Hillview, for purposes of this Term Sheet, shall
include only those parties which have demonstrated to the City's satisfaction that the party has the
financial, technical and managerial capacity, experience and expertise to perform any obligations or
duties assigned or necessary to develop the Authorized Improvements of the PID.
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