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HomeMy WebLinkAbout2014-143AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING A SECON AMENDMENT TO AN ECONOMIC DEVELOPMENT PROGRAM GRANT AGREEMEN HILLVIEW; AND PROVIDING AN EFFECTIVE DATE. SECTION 1. The City Manager, or his designee, is hereby authorized to execute a Second Amendment to Economic Development Program Grant Agreement (the "Second Amendment"), in substantially the form of the Second Amendment which is attached hereto and made a part of this ordinance for all purposes. SECTION 2. The City Manager, or his designee, is authorized to exercise the City of Denton's rights and duties as set forth in the Amendment. SECTION 3. This ordinance shall become effective immediately upon its passage and approval. ' q PASSED AND APPROVED this the day of m- 2014. MARK A. BURRO' 1 jil1S vrYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY It " 1' B L u. APPROVED AS TO LEGAL FORM ANITA 13I IZGESS, CITY ATTORNEY BY: STATE OF TEXAS COUNTY OF DENTON SECOND AMENDMENT TO ECONOMIC DEVELOPMENT PROGRAM GRANT AGREEMENT WITH ALLEGIANCE HILLVIEW, L.P. This Second Amendment to Economic Development Program Grant Agreement Nylith Allegiaiwe Hillview, L.P. (this "Second Amendment") is made and entered into as of the/1-- lay of I-- , 2014, by Allegiance Hillview, L.P., a New York limited partnership (" ite`e Denton II LLC, a Delaware limited liability company ("Assignee"), and the City of Denton, Texas, a Texas municipal corporation (the "City"), Grantee, Assignee, and the City are individually referred to as a 'Party" and collectively as the "Parties." WHEREAS, on June 15, 2010, Grantee and the City entered into that certain Economic Development Program Grant Agreement with Allegiance Hillview, L.P. (the "Agreement"); WHEREAS, on September 14, 2010, Grantee, Assignee, and the City entered into that certain First Amendment to Economic Development Program Grant Agreement with Allegiance Hillview, L.P., (the "First Amendment"), which First Amendment approved the assignment of certain right, title, and interest of Grantee in and to the Agreement to Assignee; WHEREAS, capitalized terms used but not defined in this Second Amendment shall have the meanings given to them in the Agreement and the First Amendment; and WHEREAS, the Parties desire to further amend the Agreement and the First Amendment to expand the categories of Eligible Improvements, to increase the total cost of the Eligible Improvements, to approve Eligible Phase I Costs and Eligible Phase II Costs, to expand the definition of Total Taxable Sales, to define Retail Improvements in Phase II to include "Initial" and "Additional" improvements, and to extend the Program Grant for Phase II. NOW THEREFORE, for good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Parties agree to amend the Agreement and First Amendment as follows: 1. Revised Definitions a. Eligible Improvements and Eligible Costs. The term 'Eligible Improvements" is revised to mean any improvements included within the Categories of Eligible Improvements identified on Exhibit A to this Second Amendment. The maximum Estimated Cost for the Eligible Improvements shown on said Exhibit A is increased to $68,000,000. Payments of the Program Grant for Phase I monthly installment payments shall be used FIRST to repay Grantee for Eligible Phase I Costs up to a maximum of $20,000,000 and THEN, if Program Grants for Phase II have been initiated by the Assignee, to repay Assignee for Eligible Phase II Costs up to a maximum of $21,000,000.00 upon Substantial Completion of the Initial Retail Improvements in Phase II and up to an additional $27,000,000.00 upon Substantial Completion of the Additional Retail Improvements in Phase II. b. Required Infrastructure for Phase Il. The term "Required Infrastructure for Phase 11" is revised in its entirety as follows: "Required Infrastructure for Phase II" means the road and public utility infrastructure required to obtain final certificates of occupancy for the Initial Retail Improvements in Phase II or the Additional Retail Improvements in Phase II, as applicable [ including but not limited to the portion of Heritage Trail located within Phase 1I). C. Substantial Completion. The term "Substantial Completion" is revised in its entirety as follows: "Substantial Completion" means: (i) with respect to the Retail Improvements in Phase 1, when final certificates of occupancy have been issued for the Retail Improvements in Phase I; (ii) with respect to the Required Infrastructure for Phase I, when the Required Infrastructure for Phase I has been constructed and inspected in accordance with City and TxDot standards, as applicable, and as required to obtain final certificates of occupancy for the Retail Improvements or a phased portion of the Retail Improvements in Phase I; (iii) with respect to the Initial Retail Improvements in Phase I1, when final certificates of occupancy have been issued for the Initial Retail Improvements in Phase II; (iv) with respect to the Required Infrastructure for Phase II for the Initial Retail Improvements in Phase II, when such Required Infrastructure for Phase II has been constructed and inspected in accordance with City and TxDot standards, as applicable, and as required to obtain final certificates of occupancy for the Initial Retail Improvements in Phase II; (v) with respect to the Additional Retail Improvements in Phase 1I, when final certificates of occupancy have been issued for the Additional Retail Improvements in Phase II; (vi) with respect to the Required Infrastructure for Phase lI for the Additional Retail Improvements in Phase II, when such Required Infrastructure for Phase II has been constructed and inspected in accordance with City and TxDot standards, as applicable, and as required to obtain final certificates of occupancy for the Additional Retail Improvements in Phase II. d. Program Grant for Phase I1. The reference to "240 consecutive monthly payments" in the definition of "Program Grant for Phase 11" is amended to be "300 consecutive monthly payments". 2. Approved Eligible Costs. The categories and costs for Eligible Improvements will be reviewed by the City's Engineering, Real Estate, and Economic Development staff based on information provided by Grantee. The Eligible Costs acknowledged by this Second Amendment include, but are not limited to, Eligible Costs in the amount of $24,146,498 for Phase I (north of Highway 380) and $15,930,322 for Phase II (south of Highway 380) for a total of $40,076,820 as approved July 12, 2010, by letter from Linda Ratliff, Director Economic Development, to Allegiance Hillview, L.P., regarding "Rayzor Ranch Chapter 380 Agreement — Eligible Costs Approval," including Attachment "Request #1 Rayzor Ranch Eligible Costs" , attached hereto as Exhibit B. 3. Total Taxable Sales. The term "Total Taxable Sales" is revised in its entirety to read as follows: "Total Taxable Sales means the total amount of all sales (including mixed beverage sales covered by HB 3572 effective January 1, 2014) from which the City receives sales tax with a point of sale in Phase I or Phase II, regardless of whether such sales are retail sales and use occurring at a business located in Phase I or Phase II (excluding sales occurring at any Dillard's, J.C. Penney Co., Macy's, Sears Roebuck and Co., Barnes & Noble, DSW (Discount Shoe Warehouse), and Ross Dress for Less that locates within the Property and closes any store located within the retail shopping area commonly known as the 'Golden Triangle Mall'). All references in the Agreement that indicate that the Total Taxable Sales and the information shown on the Monthly Sales Tax Report are limited to sales from businesses located within Phase I or Phase II shall be expanded to include mixed beverage sales and all sales with a point of sale in Phase I or Phase II, regardless of whether such sales are retail sales occurring at a business located in Phase I or Phase II. 4. Retail Improvements in Phase IL The term "Retail Improvements in Phase II" is defined to include the following "Initial" and "Additional" improvements: a. "Initial Retail Improvements in Phase II" means a minimum of 300,000 gross square feet (as measured to the exterior building wall) of retail or commercial shopping center buildings located in Phase II, comprised of the Town Center (as described by the zoning applicable to the Property), and other retail development in Phase II. b. "Additional Retail 1niL yovenients in Phase 11" means a minimum of 300,000 additional gross square feet (as measured to the exterior building wall) of retail or commercial shopping center buildings located in Phase II, comprised of the Town Center (as described by the zoning applicable to the Property), and other retail development in Phase II, and which, in any case, are not included in the Initial Improvements in Phase II. 5. Program Grant for Phase II. a. Section 3.2 of the Agreement is revised in its entirety to read as follows: "Program Grant for Phase II. This Agreement shall be effective as of the date executed by the City and Grantee. At any time following execution of this Agreement and following Substantial Completion of the Required Infrastructure for Initial Retail Improvements in Phase II (but not later than January 1, 2018), Assignee may designate the first day of any month to be the Program Effective Date for Phase II by providing written notice to the City at least 60 days prior to the designated Program Effective Date for Phase II. The City will begin snaking Program Grant for Phase II monthly installment payments on the designated Program Effective Date for Phase II and shall continue to make such monthly installment payments for 300 consecutive months as provided by this Agreement. This Agreement will terminate with respect to the Program Grant for Phase II upon the earlier to occur of (i) the date Assignee has been paid for the full amount of the Eligible Phase I1 Costs, or (ii) 300 months after the Program Effective Date for Phase II regardless of whether Assignee has been paid the full amount of the Eligible Phase II Costs." b. Section 4.2 of the Agreement is revised in its entirety to read as follows: "Program Grant for Phase II. For each month during the term of the Program Grant for Phase II, the City agrees, subject to the conditions contained in this Agreement, to make a Program Grant for Phase II installment payment to Assignee on or before thirty days following the City's receipt from the State Comptroller of the Monthly Sales Tax Report indicating Total Taxable Sales from the preceding month that are allocable to Phase II. The Program Grant for Phase II installment payments shall be calculated as provided in Section 5.2 of this Agreement. Issuance of the first certificate of occupancy by the City to any tenant within Phase II shall be a condition precedent to the initiation of Program Grant for Phase II installment payments. Program Grant for Phase II installment payments may be temporarily withheld at any time if there are delinquent property taxes or assessments on any property owned by Assignee and located in the City, and such installment payments will not be resumed until such delinquency is cured, at which time withheld payments shall be paid to Assignee. The 300 month term for payment of Program Grant for Phase II shall not be suspended or extended if installment payments are withheld pursuant to prior sentence. Notwithstanding anything contained herein to the contrary, the Program Grant for Phase II installment payments will cease, this Agreement will automatically terminate as to the Program Grant for Phase Il, and Assignee will refund to the City all Program Grant for Phase II installment payments previously made if Substantial Completion of the Initial Retail Improvements in Phase II has not occurred on or before January 1, 2018. In addition, the City, in its sole discretion, may terminate this Agreement as to the Program Grant for Phase II if Substantial Completion of the Required Infrastructure for Phase II for the Initial Retail Improvements in Phase II has not occurred on or before January 1, 2018." C. The first paragraph of Section 5.2 of the Agreement is revised in its entirety to read as follows: "Program Grant for Phase II. Program Grant for Phase II monthly installment payments during the term of the Program Grant for Phase II shall be calculated as 50% of the 1.5% sales tax collected by the City with respect to the Total Taxable Sales allocable to Phase II during the preceding month as established by the most recent State Comptroller's Monthly Sales Tax Report. The City's obligation to make such payments is contingent upon the City's receipt of the sales taxes from the Texas State Comptroller and the Monthly Sales Tax Report; provided, however, if the State Comptroller ceases to issue Monthly Sales Tax Reports, the Parties shall cooperate to arrive at a reasonably equivalent and mutually agreeable alternative method of computing the Program Grant for Phase II monthly installment payments. Payments of the Program Grant for Phase II monthly installment payments will be used to repay Assignee for Eligible Phase II Costs not otherwise paid with Program Grant for Phase I payments (up to a maximum of $21,000,000.00 upon Substantial Completion of the Initial Retail Improvements in Phase II and up to an additional $27,000,000.00 upon Substantial Completion of the Additional Retail Improvements in Phase II)." 6. Default. Section 8 of the Agreement is revised in its entirety to read as follows: "Default. If a party fails to perform any of its obligations under this Agreement and such failure is not cured within 30 days after written notice, the failure of the non -performing party to cure within such 30 day period (or to commence to cure if the nature of the failure cannot reasonably be cured within 30 days) shall constitute a default under this Agreement and shall entitle the non - defaulting party to all remedies available at law or in equity (including injunctive relief, specific performance, and suspending or withholding Program Grant for Phase I or Program Grant for Phase II payments); PROVIDED, HOWEVER, NOTWITHSTANDING THE FOREGOING, (i) MONETARY DAMAGES SHALL BE LIMITED TO THE AMOUNT NECESSARY TO ENFORCE SPECIFIC PERFORMANCE OF THE FAILED OBLIGATION; (li) THE CITY CANNOT TERMINATE THIS AGREEMENT AS TO PHASE I UNLESS (1) SUBSTANTIAL COMPLETION OF THE RETAIL IMPROVEMENTS IN PHASE I DOES NOT OCCUR ON OR BEFORE JANUARY 1, 2013, AS PROVIDED BY SECTION 4 HEREOF, (2) SUBSTANTIAL COMPLETION OF THE REQUIRED INFRASTRUCTURE FOR PHASE I DOES NOT OCCUR ON OR BEFORE JANUARY 1, 2013, AS PROVIDED BY SECTION 4 HEREOF, OR (3) GRANTEE IS IN DEFAULT OF ITS OBLIGATION TO PROVIDE THE LETTER OF ti DiliMIKE r IMITA III:MM i ,1 1 114 am 1 r IN SECTIONHEREOF,i COMPLETION OF THE REQUIRED " ' FOR THE INITIAL RETAIL IMPROVEMENTSPHASE 11 DOES NOTOCCUR ON OR BEFORE JANUARY 1, 2018, AS PROVIDED BY SECTION1' DEFAULT OF ITS OBLIGATION ! PROVIDE THE LETTER OF CREDITPROVIDED 1 1 HEREOF; 1 (N) THE CITY MAY NOT TERMINATE,1' SUSPEND PAYMENTS,OR TAKE ANY OTHER REMEDY RESPECT 1 PROGRAM GRANTFOR PHASE I PAYMENTS OR OTHERWISE RELATED TO' rT FOR DEFAULTS RELATED TO PHASE I AND THE CITY MAY 1 TER7111ATE,171ThAOLD 1` 1' 1' 1T%T. r 1. r 1 PROGRAM GRANTFOR PHASE 11 PAYMENTSOR OTHERWISE RELATED 1 PHASE 11 EXCEPT 1' DEFAULTS RELATED TO PHASE 7. Offer to „Sell. Section 6.6 is revised in its entirety to read as follows: "In the event Grantee or any of its affiliates purchases any retail buildings in the retail shopping area commonly known as the "Golden Triangle Mall," Grantee or its affiliate shall offer in writing to sell such buildings to FMP Denton, LLC (or to the then -current owner of the Golden Triangle Mall) for: (i) the then fair market value of such buildings as established by a qualified, independent MAI appraiser, or (ii) the amount of any arms -length offer to purchase such buildings received by Grantee or its affiliate from any third -party retail user unrelated to Grantee or any of its affiliates, whichever is greater." 8. Auditing. The City's right to conduct audits of the sales and use tax records of businesses located within the Property, and Grantee's and Assignee's obligation to use reasonable efforts to assist the City in obtaining such records from tenant taxpayers, shall apply only to the extent the City is unable to obtain from the Texas State Comptroller the "Monthly Sales Tax Reports" showing the amount of Total Taxable Sales for a month period pursuant to Section 321.3022 of the Texas Tax Code. 9. Public Improvement District Financing of Eligible Improvements. If the City levies public improvement district assessments to pay any portion of the Assignee's costs of the Eligible Improvements shown on Exhibit A, the amount levied and collected from the Assignee shall be reimbursable costs under this Second Amendment so long as the TOTAL of such assessments and other Eligible Phase II Costs does not exceed the Exhibit A maximum amount of $68,000,000. 10. Conflicts; Effect of Second Amendment. To the extent of any inconsistency between the terms and provisions of this Second Amendment and the Agreement and the First Amendment, the terms and provisions of this Second Amendment will control. Except as amended by this Second Amendment, all of the terms, covenants and conditions of the Agreement and the First Amendment are in full force and effect and the Agreement and First Amendment are hereby ratified and confirmed. All references in the Agreement to January 1, 2015, are hereby amended to read January 1, 2018. 11. Binding Effect. This Second Amendment will be binding upon and will inure to the benefit of the Parties and their respective successors and permitted assigns. 12. Counterparts. This Second Amendment may be executed in one or more counterpart copies, all of which will constitute and be deemed an original, but all of which together will constitute one and the same instrument binding on the Parties. Delivery by facsimile or electronic mail of this Second Amendment or an executed counterpart hereof will be deemed a good and valid execution and delivery hereof. 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: ndr, -hnri-ia Title: Authorizod -aijna Qj:v FTQ71401-19"1�� STATE OF COUNTY 0 This, instillment was ACKNOWLEDGED before me on by the ie State -1 DenlorlGl-' LI-C, iii tI )1' TH GP LLC (d/b/a T zlkil_ I itjC of Texas), a Delaware limited y oil party, the general partner of Allegiance Hillview, L.P., a New York limited partnership, on behalf of icl imited partnership. INotary Public Printed Name of Notary Public [SEAL] My Commission Expires: HEATHER N, MARTIN .'�.jr' Notary Public, SWO 01 Taxes My Commission EX085 June 06, 2016 DB DENTON H LLC, a Delaware limited liability company By: DB Denton Holdings LLC, a Delaware limited liability company Its: Sole Member By: RED Rayzor Ranch, LLC, a Delaware limited liability company Its: Maiiagirio Member IF By: Michael Ebert Its: Manager STATE OF COUNTY OF This instrument was ACKNOWLEDGED before me on -- 7 4by WW & Michael Ebert, the manager of RED Rayzor Ranch, LLC, a Delaware limited- liability company, the managing member of DB Denton Holdings LLC, a Delaware limited liability company, the sole member of DB Denton 11 LLC, a Delaware limited liability company, on behalf of such limited liability company.-1-1-1111- RAMONA ZAPUSTAS Notary Public,StatO of Arizona County mar=pa My commimon Expires February 03, 2017 My Commission Expires: Notary Public Printed Name of Notary Public CITY OF 1) 1' TOj'N 11, 1 l* c Campbell, City Manager . � 1 STATE OF TEXAS ) COUNTY OF DENTON ) This instrument was ACKNOWLEDGED before me on `1' . by of fie City of Deiitori Texas, on dehiavof the City of Denton, I he �. JANE E. RICHARDSON My co; june 27, 2017 My Commission Expires: 1) m ,. z$ Notary Public cT w Printed Name of Notary Public Exhibit A Table A-1 Categories of Eligible Improvements Estimated Costs Hwy 380 Improvements $8,133,150 Site drainage $4,720,750 Regional drainage improvements $2,696,750 Internal commercial roads, including water, sewer, streetscapes, plazas, and amenities $20,004,064 Scripture Road improvements $675,050 Bonnie Brae improvements $1,271,900 Public Parking garage $6,730,375 Major public infrastructure relocation $2,013,650 Miscellaneous fees/services $5,754,311 Interest during construction on non-residential development $10,000,000 SUBTOTAL Table A-1 $62,000,000 The actual cost of any individual category of Eligible Improvements may vary from the Estimated Costs shown on this Table A-1. Grantee and Assignee have the right to adjust individual line items of the Estimated Costs of the individual Categories of Eligible Improvements so long as the SUBTOTAL of $62,000,000 is not exceeded. Table A-2 _ 1-35 access roads and ramps $3,000,000 Additional Interest during construction on non-residential development after 1/1/15 $3,000,000 SUBTOTAL Table A-2 $6,000,000 The actual cost of Table A-2 individual category of Eligible Improvements may NOT exceed the Estimated Costs shown on this Table A-2. Actual costs up to but NOT exceeding the amounts in Table A-2 are considered Estimated Costs of Eligible Costs. TOTAL Table A-1 and Table A-2 $68,000,000 The amounts levied and collected through PID Assessments by the City for Eligible Improvements defined in Table A-1 and Table A-2 shall be considered reimbursable costs so long as the amounts levied and collected through PID Assessments are deducted from the Category(ies) in Table A-1 or Table A-2 above and so long as the TOTAL of $68,000,000 is not exceeded. 215 E. McKinney Denton, Texas 76201 (940) 349-7776 phone (940) 349-8596 fax Economic Development Department July 12, 2010 Allegiance Hillview, L.P. 1345 Avenue of the Americas - 46th Floor New York, New York 10105 Attention: Constantine Dakolias, President Re: Rayzor Ranch Chapter 380 Agreement — Eligible Costs Approval Dear Andy: I am in receipt of your Request #1 detailing eligible costs incurred to date for the Rayzor Ranch project. 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