2011-084ORDINANCE NO. 2011-084
AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING AND
APPROVING A SECOND EXTENSION TO THE "AGREEMENT BY AND BETWEEN THE
CITY OF DENTON, TEXAS AND DENTON 288, L.P. FOR THE PROVISION OF
SANITARY SEWER AND WATER FACILITIES" ENTERED INTO BY THE PARTIES ON
THE 5TH DAY OF JUNE, 2007; PROVIDING THE CITY MANAGER WITH AUTHORITY
TO PERFORM SAID SECOND EXTENSION AND TO EXPEND FUNDS AS NECESSARY;
PROVIDING AN EFFECTIVE DATE;
WHEREAS, the City of Denton, Texas and Denton 288 L.P., a Texas Limited
Partnership, entered into an "Agreement by and between the City of Denton, Texas and Denton
288, L.P." (hereafter the "Agreement") providing for the mutual costs and responsibilities
regarding the furnishing of water and sewer facilities regarding a certain tract of land described
therein, within the City of Denton, commonly known as the "Hills of Denton." This agreement
was approved by Ordinance No. 2007-125 by the City Council on the 5th day of June, 2007; and
WHEREAS, the City of Denton, Texas and Denton 288 L.P., a Texas Limited
Partnership entered into a "First Extension to the Agreement by and between the City of Denton,
Texas and Denton 288, L.P., a Texas Limited Partnership" (hereafter the "First Extension") for a
further two-year term, from and after June 5, 2009 providing for the mutual costs and
responsibilities of the parties regarding their mutual obligations regarding the furnishing of sewer
and water facilities in a certain tract of land described therein, within the City of Denton,
commonly known as the "Hills of Denton." This First Extension was approved by Ordinance
No. 2009-095 by the City Council on the 21St day of April, 2009; and
WHEREAS, since April 21, 2009 the circumstances have materially changed, as the
"Hills of Denton" formerly owned by Denton 288 L.P., a Texas Limited Partnership filed a
Chapter 11 Bankruptcy in the Northern District of Texas, Dallas Division, being Case No. 10-
33213, and an Order was entered by the Bankruptcy Court on October 8, 2010 entitled "Agreed
Order Lifting the Automatic Stay as to Compass Bank and Resolving All Remaining Issues in
the Bankruptcy Case." As a result, a non judicial foreclosure sale was conducted in Denton
County, Texas on the 7th day of December, 2010; COMPASS BANK, an Alabama State Banking
Corporation and successor-in-interest to Texas State Bank (hereafter "COMPASS BANK"), was
the successful bidder for the property described in both the Agreement and the First Extension;
and
WHEREAS, COMPASS BANK has recently requested that the City of Denton, Texas
further extend the Agreement for an additional period of two years, from June 5, 2011 until June
5, 2013; COMPASS BANK states that it is malting its best efforts to sell the real property to a
qualified developer and this Agreement is of value to a future developer; and
WHEREAS, the City believes that the Second Extension is in the best interests of the
City and provides for the measured water and sewer growth of a new development north of the
City of Denton, and further that a valid governmental purpose is served by said Second
Extension; NOW THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager is hereby authorized to execute a "Second Extension to
the Agreement by and between the City of Denton, Texas and COMPASS BANK, an Alabama
State Banking Corporation, and successor-in-interest to Texas State Bank," extending the terms
of the Agreement for a period of an additional two-years from and after June 5, 2011 and ending
on June 5, 2013, regarding that same real property more particularly described in the "Agreement
by and between the City of Denton, Texas and Denton 288, L.P. for the Provision of Sanitary
Sewer and Water Facilities;" such further extension being in substantially the form of the Second
Extension which is attached hereto and made a part of this ordinance for all purposes; as well as
to exercise all rights and duties of the City of Denton, Texas under the Second Extension.
SECTION 2. The City Manager is hereby authorized to expend funds as necessary as
provided for in the Agreement as well as the Second Extension.
SECTION 3. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the c
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By:
APPR ED A TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
By: /
Page 2
STATE OF TEXAS §
COUNTY OF DENTON §
SECOND EXTENSION TO THE AGREEMENT BY AND BETWEEN
THE CITY OF DENTON, TEXAS AND DENTON 288, L.P.
FOR THE PROVISION OF SANITARY SEWER AND WATER FACILITIES
This SECOND EXTENSION, is made and entered into this the day of
,
LAW,
2011, but is effective from and after the 5th day of June, 2011, by and between th ty of
Denton, a Texas municipal corporation, with its principal offices at 215 East McKinney, Denton,
Texas 76201, hereinafter referred to as "City"; and COMPASS BANK, an Alabama Banking
Corporation, and being successor-in-interest to TEXAS STATE BANK, 2525 Ridgmar
Boulevard, Suite 410, Fort Worth, Texas 76118, hereinafter referred to as the "Bank."
WITNESSETH
WHEREAS, City and Bank find it necessary and appropriate to agree to this Second
Extension to the "Agreement by and between the City of Denton, Texas and Denton 288, L.P. for
the Provision of Sanitary Sewer and Water Facilities" (as amended by the First Extension,
hereafter the "Agreement") heretofore entered into by the City and Denton 288, L.P. on the 5th
day of June 2007; and the First Extension to said Agreement entered into by and between the
City of Denton and Denton 288, L.P. (the "First Extension") which extended the provisions of
the Agreement, from and after June 5, 2009, the end of the agreement's primary term, for a
period of two additional years, until June 5, 2011; and
WHEREAS, the Bank is now the record owner of the real property formerly owned by
Denton 288, L.P. (the "Property"), having acquired said Property by a non judicial foreclosure
sale in December 2010; and Bank and the City are willing to extend the term of said Agreement
so that a qualified developer and purchaser of the Property (such purchaser from the Bank of the
Property is hereafter referred to as the "Purchaser") may continue development under the terms
of the Agreement; and
NOW, THEREFORE, in consideration of the promises and the mutual obligations herein,
the parties hereto do hereby mutually AGREE as follows:
1. This Second Extension shall be for a term of an additional twenty-four (24)
months, beginning effective June 5, 2011 and ending on June 5, 2013. For avoidance of doubt,
Section 2.E. of the Agreement provides that the "Developer" has until the second anniversary of
the execution of the Agreement to complete construction of the "Phase I" project and by their
execution hereof the parties acknowledge that the Purchaser now has until June 5, 2013 to
complete construction of the "Phase I" project in accordance with the terms of the Agreement.
This Second Extension may terminate sooner in accordance with the provisions of the
Agreement.
2. Notwithstanding anything to the contrary herein or in the Agreement, the Bank
has no obligation to complete any work or construction under the terms of the Agreement,
including, without limitation, any of the obligations of the "Developer" under the Agreement.
Rather, the parties agree that only a Purchaser will be liable for the obligations of the
"Developer" under the Agreement and if the Bank does not sell the Property to a Purchaser,
under no circumstances will the Bank have any obligations to the City or any other third party
under the Agreement, it being a condition precedent to the obligations of the "Developer" under
the Agreement that the Bank sell the Property to a Purchaser.
3. Upon a Purchaser's purchase of the Property, full and accurate records shall be
maintained by the Purchaser at its place of business with respect to all matters covered by the
Agreement and this Second Extension, Such records shall be maintained by Purchaser for a
period of at least three (3) years after the date of termination of this Second Extension.
4. City and Bank and/or Purchaser agree that they will use their best efforts to
resolve any dispute(s) regarding the Agreement and Second Extension, through the use of
negotiation. In the event that the dispute(s) cannot be resolved, then the parties agree that
mediation or other forms of alternate dispute resolution as are set forth in Chapter 154 of the
Texas Civil Practice and Remedies Code shall be pursued.
5. Unless expressly modified by this Second Extension all of the terms and
provisions of the "Agreement by and between the City of Denton, Texas and Denton 288, L.P.
for the Provision of Sanitary Sewer and Water Facilities" shall remain in full force and effect.
6. This Second Extension shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors, administrators, legal representatives,
successors, and assigns where permitted by this Agreement, and notwithstanding any provisions
in the Agreement to the contrary, the Bank is under no obligation to obtain the consent of the
City prior to selling the Property to a Purchaser and upon the purchase of the Property, a
Purchaser shall succeed to all of the rights of the "Developer" under the Agreement without any
consent from the City.
IN WITNESS WHEREOF, the City of Denton, Texas, has caused this Agreement to be
executed by its duly authorized City Manager; and Bank has executed t is Agreement through its
duly authorized undersigned officer, dated this the / Mhday of , 2011; but to be
effective, confirmed and ratified as of the 5t' day of June, 2011.
"CITY"
CITY OF DENTON, TEXAS
A Texas Municipal Corporation
By:
GEORGE C. CAMPBELL,
CITY MANAGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
B'
AP VED ~TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
By:
"BATIK"
COMPASS BANK, an Alabama
Banking Corporation
By. aw/~/
Amanda L. Ma n, Vice President
ATTEST:
~ppY P SHARON K. WARD
Notary Pubic
STATE OF TEXAS
pp My Comm, Exphb, 22, 2013