2016-077ORDINANCE NO. 2016 -077
AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING A
REIMBURSEMENT AGREEMENT FOR RAYZOR RANCH PUBLIC
IMPROVEMENT DISTRICT NO.1 DATED " r ,, 1�_ BETWEEN THE
CITY OF DENTON, ALLEGIANCE HILLVIEW, L.P., AND DB DENTON II,
LLC; AUTHORIZING THE CITY MANAGER TO EXECUTE SAID
AGREEMENT; AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, Allegiance Hillview, L.P. and DB Denton II, LLC ( "Developers ") petitioned
for the creation of Rayzor Ranch Public Improvement District No. 1 covering 231.693 contiguous
acres within the City of Denton, Texas ( "PID ") on March 25, 2014, which PID was thereafter
established by City Council in Resolution No. R2014 -022, dated May 13, 2014; and
WHEREAS, the City is authorized to reimburse certain eligible costs of improvements in
the PID that are dedicated, conveyed, leased, or otherwise provided to or for the benefit of the City
pursuant to Tex. Loc. Gov't Code Sec. 372.023, and
WHEREAS, the City and Developers desire to enter into a Reimbursement Agreement for
the Rayzor Ranch Public Improvement District No. 1 that is in substantially the form of the
Reimbursement Agreement which is attached as Exhibit A and made a part of this Ordinance for
all purposes (the "Agreement "); and
WHEREAS, the Developers shall prepare and submit to the City for review a service and
assessment plan required by Tex. Loc. Gov't Code, Sec. 372.013 and 372.014 to apportion to the
Property the final costs to design and construct improvements to the PID area, which shall cause
special benefits to accrue to the property within the PID, and Developers shall comply with all
other requirements of the Agreement and local, State, and Federal law; NOW THEREFORE,
THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS:
SECTION 1. The City Manager, or his designee, is hereby authorized to execute the
Reimbursement Agreement for the Rayzor Ranch Public Improvement District No. 1, substantially
in the form as Exhibit A attached hereto.
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 Agreement.
SECTION 3. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the 1St Day of March 2016.
: ........
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( `l l IS ..S, YOR
1
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
PP
ANITA BURGESS, CITY ATTORNEY
BY:.
i li fer- W. qcC � s, Deputy City Attorney
MPH DRAFT February 23, 2016
RAYZOR RANCH PUBLIC IMPROVEMENT DISTRICT NO. 1
REIMBURSEMENT AGREEMENT
This REIMBURSEMENT AGREEMENT (this "Agreement ") is executed by the City of
Denton, Texas (the ".City"), Allegiance Hillview, L.P., ( "Allegiance "), and DB Denton II, LLC,
( "DB Denton ") to be effective`MoAcJ- , 2016 (the "Effective Date ").
1. RECITALS.
111 WHEREAS, Allegiance is a New York limited partnership whose principle place of
business is in Irving, Texas; and
1_2 WHEREAS, DB Denton is a Delaware limited liability company whose principle place
of business is in Phoenix, Arizona; and
1_3 WHEREAS, the City is a Texas home -rule municipality; and
1_4 WHEREAS, the City, Allegiance, and DB Denton are sometimes individually referred
to as a "P_ arty" and collectively as the "Parties "; and
1_5 WHEREAS, Allegiance and DB Denton are sometimes referred to, collectively, as the
"Developer "; and
1_6 WHEREAS, the RECITALS in this Section: (1) are true and correct; (2) are
incorporated as part of this Agreement for all purposes; (3) evidence the intent of the
Parties in entering into this Agreement; and (4) shall be used in interpreting this
Agreement; and
1_7 WHEREAS, terms used in this Agreement that have their initial letters capitalized
shall have the meanings given to them in Section 2 unless a term is otherwise defined or
unless the context in which a term is used clearly requires a different meaning; and
1_8 WHEREAS, except as otherwise provided, all references to an "Ordinance" or
"Resolution" shall refer to an ordinance or resolution adopted by the City Council; all
references to "Section" shall refer to a section of this Agreement; and all references to
"Exhibit" shall refer to an exhibit attached to and made a part of this Agreement for all
purposes; and
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1_9 WHEREAS, on March 25, 2014, Allegiance and DB Denton submitted to the City
Secretary of the City a petition (the "Petition ") requesting the creation of Rayzor Ranch
Public Improvement District No. 1 (the "District ") covering approximately 231.693
contiguous acres within the corporate limits of the City (the "Property "); and
1.10 WHEREAS, the Parties entered into a Memorandum of Understanding Regarding
Terms and Conditions for the Rayzor Ranch Public Improvement District No. 1 dated as of May
1, 2014 (the "MOU ") setting forth the agreement between the Parties on the terms and
conditions for the creation of the District and for the financing of public improvements
within the District; and
1.11 WHEREAS, pursuant to the Petition, and after notices were mailed and published as
required by the Act, and after a public hearing was conducted as required by the Act, on
May 13, 2014, the City Council approved and adopted Resolution No. R2014 -022 (the
"District Resolution ") establishing the District covering the Property, which Property is
described on Exhibit A to the District Resolution and depicted on Exhibit B to the District
Resolution; and
1.12 WHEREAS, notice of the District Resolution was published in the Denton Record
Chronicle as required by the Act; and
1.13 WHEREAS, the Property will be developed in phases; and
1.14 WHEREAS, the District Resolution provides that the public improvements generally
described on Exhibit A (the "Authorized Public Improvements ") are authorized by the Act
to be undertaken and financed through the District; and
1.15 WHEREAS, the Authorized Public Improvements must confer a special benefit on
the Property and a direct benefit on the City; and
1.16 WHEREAS, the District Resolution estimates the cost of the Authorized Public
Improvements for the District to be $40,000,000.00; and
1.17 WHEREAS, DB Denton and Dunaway Associates, L.P. entered into that certain
RED Professional Services Agreement dated August 5, 2013, for the design of, and other
professional services related to: (1) Heritage Trail Boulevard as a secondary arterial 4 -lane
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divided street from U.S. Highway 380 (University Drive) to Linden Street, a distance of
approximately 2,400 feet; and (2) a water main loop from U.S. Highway 380 (University
Drive) at the north end connection along Heritage Trail and future Panhandle Street to
Bonnie Brae Street at the east end connection (the foregoing public street and public water
improvements are depicted on Exhibit B and are collectively referred to as the "Phase 1
Heritage Trail Improvements "; and the design services for such public improvements are
collectively referred to as the "Phase 1 Heritage Trail Design Services "); and
1.18 WHEREAS, the estimated cost of the Phase 1 Heritage Trail Design Services is shown
on Exhibit C; and
1.19 WHEREAS, DB Denton and Strategic Construction, Ltd. entered into that certain AIA
Document A101 -2007, Standard Form of Agreement Between Owner and Contractor,
dated April 17, 2015, to construct the Phase 1 Heritage Trail Improvements described as
Heritage Trail & Infrastructure (Roadway Phase 1) (the "Phase 1 Heritage Trail Construction
Contract "); and
1.20 WHEREAS, as of the Effective Date, work is proceeding under the Phase 1 Heritage
Trail Construction Contract; and
1.21 WHEREAS, the estimated cost of the Phase 1 Heritage Trail Construction Contract,
when the work is completed, is shown on Exhibit D; and
1.22 WHEREAS, RED Development, as manager of DB Denton, and Olsson Associates
entered into that certain RED Professional Services Agreement dated April 23, 2014, for the
design of, and other professional services related to, water, sewer, and storm water public
utilities (the foregoing public utilities are depicted on Exhibit E and are collectively referred
to as the "Phase 1 Public Utilities "; and the design services for such public utilities are
collectively referred to as the "Phase 1 Public Utilities Design Services "); and
1.23 WHEREAS, the estimated cost of the Phase 1 Public Utilities Design Services is
shown on Exhibit F, and
1.24 WHEREAS, DB Denton and Ratcliff Constructors, LP entered into that certain AIA
Document A101 -2007, Standard Form of Agreement Between Owner and Contractor,
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dated July 6, 2015, to construct the Phase 1 Public Utilities described as Phase 1 and Lot 4
Retail Building (the "Phase 1 Public Utilities Construction Contract "); and
1.25 WHEREAS, as of the Effective Date, work is proceeding under the Phase 1 Public
Utilities Construction Contract; and
1.26 WHEREAS, the estimated cost of the Phase 1 Public Utilities Construction Contract,
when the work is completed, is shown on Exhibit G; and
1.27 WHEREAS, the Phase 1 Heritage Trail Improvements and the Phase 1 Public Utilities
are collectively referred to as the " Rayzor Ranch Phase 1 PID Improvements;" and
1.28 WHEREAS, as of the Effective Date, none of the Rayzor Ranch Phase 1 PID
Improvements has been dedicated to the City; and
1.29 WHEREAS, upon completion, and prior to the dedication to and acceptance by the
City, of the Rayzor Ranch Phase 1 PID Improvements, the City shall have the right to review
and approve the final cost paid or incurred by the Developer to design and construct such
improvements; and
1.30 WHEREAS, the Developer will prepare and submit to the City for review a service
and assessment plan required by the Act that will apportion to the Property the final cost to
design and construct the Rayzor Ranch Phase 1 PID Improvements, which apportionment
shall be based on the special benefit conferred on the Property by such improvements (the
"Phase 1 SAP "); and
1.31 WHEREAS, based on the Phase 1 SAP as approved by the City, the City intends to
levy by ordinance in accordance with the Act special assessments against the Property to
reimburse DB Denton for all or a portion (as set forth in the Phase 1 SAP approved by the
City) of the final cost to the Developer to design and construct the Rayzor Ranch Phase 1
PID Improvements as approved by the City; and
1.32 WHEREAS, pursuant to Section 372.023(d) of the Act, costs payable from a special
assessment that is payable in installments may be paid by any combination of the following
methods: (1) under an installment sales contract or a reimbursement agreement between
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the municipality and the person who constructs the improvements; or (2) by the issuance
and sale of revenue bonds by the City pursuant to Section 372.024 and 372.025 of the Act;
and
1.33 WHEREAS, this Agreement is a "reimbursement agreement" within the meaning of
Section 372.023(d) of the Act.
NOW THEREFORE, in consideration for the covenants of the Parties set forth in this
Agreement, and for other good and valuable consideration the receipt and adequacy of
which the Parties acknowledge, the Parties agree as follows:
2. DEFINITIONS
2_1 "Act" means Chapter 372, Texas Local Government Code, as amended.
2_2 "Agreement" is defined in the introductory paragraph.
2_3 "Allegiance" is defined in the introductory paragraph.
2_4 "Assessment Ordinance" is defined in Section 3.5.
2_5 "Authorized Public Improvements" are defined in Section 1.14.
2_6 "City" is defined in the introductory paragraph.
2_7 "City Council" means the City Council of the City.
2_8 "DB Denton" is defined in the introductory paragraph.
2_9 "Developer" is defined in Section 1.5.
2.10 "District" is defined in Section 1.9.
2.11 "District Resolution" is defined in Section 1.11.
2.12 "District Revenue Fund" is defined in Section 3.6.
2.13 "Economic Development Agreement" means the Economic Development Program
Grant Agreement dated as of June 15, 2010 between Allegiance and the City, as amended
and supplemented by the First Amendment to Economic Development Program Grant
Agreement dated as of September 14, 2010 between Allegiance, DB Denton and the City,
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the Second Amendment to Economic Development Program Grant Agreement dated as of
May 13, 2014 between Allegiance, DB Denton and the City (the "Second Amendment to
Lf)ll(7 ill j lLQA-- 1(-)J)-UjgDLA ' iigt°jj "), and the Third Amendment to Economic Development
Program Grant Agreement dated as of November 10, 2015 between Allegiance, DB Denton
and the City, and as may be further amended and supplemented from time to time in
accordance with its terms.
2.14 "Effective Date" is defined in the introductory paragraph.
2.15 "Exhibit" is defined in Section 1.8.
2.16 "Final Phase 1 Heritage Trail Cost" is defined in Section 3.2.1.
2.17 "Final Phase 1 Public Utilities Cost" is defined in Section 3.2.2.
2.18 "Final Rayzor Ranch Phase 1 Cost" is defined in Section 3.2.
2.19 "Interest" is defined in Section 3.9.
2.20 "Landowner Agreement" is defined in Section 3.12.
2.21 "Maturity Date" is defined in Section 3.10.
2.22 NOT is defined in Section 1.10.
2.23 "Ordinance" is defined in Section 1.8.
2.24 "Party" and "Parties" are defined in Section 1.4.
2.25 "Petition" is defined in Section 1.9.
2.26 "PID Bonds" are defined in Section 3.7.
2.27 "Phase 1 Heritage Trail Construction Contract" is defined in Section 1.19.
2.28 "Phase 1 Heritage Trail Design Services" are defined in Section 1.17.
2.29 "Phase 1 Heritage Trail Improvements" are defined in Section 1.17.
2.30 "Phase 1 Public Utilities" are defined in Section 1.22.
2.31 "Phase 1 Public Utilities Construction Contract" is defined in Section 1.24.
2.32 "Phase 1 Public Utilities Design Services" are defined in Section 1.22.
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2.33 "Phase 1 SAP" is defined in Section 1.30.
2.34 "Property" is defined in Section 1.9.
2.35 "Rayzor Ranch Phase 1 PID Improvements" are defined in Section 1.27..
2.36 "Reimbursement Amount" is defined in Section 3.3.
2.37 "Resolution" is defined in Section 1.8.
2.38 "Second Amendment to Economic Development Agreement" is defined in Section
2.13.
2.39 "Section" is defined in Section 1.8.
2.40 "Special Assessments" are defined in Section 3.5.
3. AGREEMENTS OF THE PARTIES
3.1 Authorized Public Improvements. The Rayzor Ranch Phase 1 PID Improvements are
Authorized Public Improvements.
3.2 Final Rayzor Ranch Phase 1 Cost. The "Final Rayzor Ranch Phase 1 Cost" is the sum
of the Final Phase 1 Heritage Trail Cost and Final Phase 1 Public Utilities Cost determined
as follows:
3.2.1 Final Phase 1 Heritage Trail Cost. Upon completion of the Phase 1 Heritage
Trail Improvements, and prior to the dedication to and acceptance by the City of such
improvements, the Developer shall submit to the City a detailed accounting of the final
costs paid or incurred to design and construct the Phase 1 Heritage Trail Improvements.
The City shall review the Developer's design and construction costs and provide the
Developer with a letter, signed by the City Manager or his designee, notifying the Developer
that items or amounts on the accounting are approved or denied or requesting additional
detail if needed to perform the review. The amount of costs to design and construct the
Phase 1 Heritage Trail Improvements approved by the City is referred to as the "Final
Phase 1 Heritage Trail Cost."
3.2.2 Final Phase 1 Public Utilities Cost. Upon completion of the Phase 1 Public
Utilities, and prior to the dedication to and acceptance by the City of such utilities, the
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Developer shall submit to the City a detailed accounting of the final costs paid or incurred
to design and construct the Phase 1 Public Utilities. The City shall review the Developer's
design and construction costs and provide the Developer with a letter, signed by the City
Manager or his designee, notifying the Developer that items or amounts on the accounting
are approved or denied or requesting additional detail if needed to perform the review.
The amount of costs to design and construct the Public Utilities approved by the City shall
be referred to as the "Final Phase 1 Public Utilities Cost."
3.3 Dedication of Improvements. When the Final Rayzor Ranch Phase 1 Cost has been
approved by City staff and all Rayzor Ranch Phase 1 PID Improvements have been
inspected and approved by the City, the Developer shall dedicate the Rayzor Ranch Phase 1
PID Improvements to the City or to or for the benefit of the public, as directed by the City,
and the City shall accept such dedication. City acceptance shall be evidenced by written
confirmation of the assumption of ownership or control of the Rayzor Ranch Phase 1 PID
Improvements by the City. Such dedication shall be in accordance with all applicable
requirements of the City including, but not limited to, requirements for as -built drawings,
lien releases, payment and performance bonds, contractor warranties, and, if applicable,
easements or licenses in favor of the City or the public. Upon such dedication, the City
agrees to reimburse DB Denton for all or a portion (as set forth in the Phase 1 SAP
approved by the City) of the Final Rayzor Ranch Phase 1 Cost solely in accordance with and
subject to the terms of this Agreement and state law. The amount of the Final Rayzor
Ranch Phase 1 Cost to be reimbursed to the Developer shall be payable solely to DB Denton
and shall not exceed the aggregate amount of the Special Assessments initially levied by the
City pursuant to Section 3.5, but in any event shall not exceed $32,000,000 (the
"Reimbursement Amount "). The Developer will have no right to reimbursement under this
Agreement of the amount of the Final Rayzor Ranch Phase 1 Cost in excess of the
Reimbursement Amount. The Developer acknowledges and agrees that while the Rayzor
Ranch Phase 1 PID Improvements may be "Eligible Improvements" under the Economic
Development Agreement, pursuant to Section 3(4) of the District Resolution, the amount of
the Final Rayzor Ranch Phase 1 Cost equal to the Reimbursement Amount does not qualify
as an "Eligible Phase II Cost" under the Economic Development Agreement and such
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amount is not eligible for grant payments or reimbursement under the Economic
Development Agreement. Any amount of the Final Rayzor Ranch Phase 1 Cost in excess of
the Reimbursement Amount may be qualified by the Developer as an "Eligible Phase I1
Cost" under the Economic Development Agreement and such excess amount is eligible for
grant payments or reimbursement under the Economic Development Agreement.
3.4 Phase 1 SAP. After the dedication of all Rayzor Ranch Phase 1 PID Improvements in
accordance with Section 3.3, the Developer shall prepare and submit to the City for review
a Phase 1 SAP that complies with the Act and with the terms and conditions in the MOU (or
any financing agreement executed by the Parties replacing the MOU), and that apportions
to the Property or portions thereof the Final Rayzor Ranch Phase 1 Cost based on the
special benefit conferred on the Property or portions thereof by the Rayzor Ranch Phase 1
PID Improvements. The Phase 1 SAP shall contain, among other provisions, the assessment
methodology that will apportion the Final Rayzor Ranch Phase 1 Cost based on special
benefit conferred. The Phase 1 SAP shall also contain an assessment roll for the Property
or portions thereof. The Phase 1 SAP shall be approved by the Developer.
3.S A,62(: -51D R O—rdi.ra���� ;, 5 ae gal A �,.strt �� s. Based on the assessment
methodology set forth in the Phase 1 SAP as approved by the City, the City intends to adopt
an ordinance (the "Assessment Ordinance ") that levies against the Property or portions
thereof special assessments (the "Special Assessments ") to reimburse DB Denton for the
Reimbursement Amount with interest to accrue on the Special Assessments at a rate
sufficient to pay the Interest on the Reimbursement Amount or, if PID Bonds are issued,
interest on the PID Bonds. Special Assessments shall be based on the special benefit
conferred on the Property or portions thereof by the Rayzor Ranch Phase 1 PID
Improvements. Special Assessments may be paid in full at any time without penalty, and if
not paid in full, shall be paid in installments as set forth in the Phase 1 SAP and Assessment
Ordinance. The Reimbursement Amount represents the total costs to be assessed against
the Property for the Rayzor Ranch Phase 1 PID Improvements. The City will not levy the
Special Assessments until such time as all Landowner Agreements required under
Section 3.12 have been executed and delivered to the City.
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3.6 District Revenue Fund. The City shall use reasonable efforts to collect or cause to be
collected payments of Special Assessments and annual installments of Special Assessments
in accordance with the Phase 1 SAP and Assessment Ordinance. The City shall not be
required under any circumstances to expend any funds for costs to collect payments and
annual installments of Special Assessments other than funds on deposit in the District
Revenue Fund. All such payments shall be deposited into a District fund created by the City
that is segregated from all other funds of the City (the segregated fund, including accounts
created by the City in the fund that the City determines to be necessary, are collectively
referred to as the "District Revenue Fund "). The District Revenue Fund shall only be used
as follows: FIRST, to reimburse or reserve therein for the City the costs paid or incurred or
expected to be paid or incurred by the City to administer and operate the District,
including, without limitation, costs to collect Special Assessments and attorney's fees; and
SECOND, to reimburse DB Denton for the Reimbursement Amount plus Interest either from
the District Revenue Fund or from the net proceeds of PID Bonds. The creation of the
District Revenue Fund, the deposit of Special Assessments and annual installments of
Special Assessments into the District Revenue Fund, and the payment to DB Denton of the
Reimbursement Amount plus Interest in accordance with this Agreement are ministerial
and administrative functions that are performable by City staff without City Council
approval.
3.7 PID Bonds. After all Rayzor Ranch Phase 1 PID Improvements have been dedicated
in accordance with Section 3.3, and when requested by DB Denton, the City will consider
issuing and selling revenue bonds payable from and secured solely by the District Revenue
Fund and not by any other revenues, taxes, income, funds or property of the City (the "PID
Bonds ") subject to the terms and conditions in the MOU or any financing agreement
executed by the Parties replacing the MOU. If PID Bonds are issued and sold, the net
proceeds shall be used solely to reimburse DB Denton for the Reimbursement Amount, net
of the amount of the Reimbursement Amount, if any, previously reimbursed to DB Denton
from the District Revenue Fund. Unless otherwise approved by DB Denton and the City, the
net proceeds from the issuance and sale of PID Bonds shall fully reimburse DB Denton for
the then - outstanding balance of the Reimbursement Amount. The City will not issue and
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sell PID Bonds until such time as all Landowner Agreements required under Section 3.12
have been executed and delivered to the City. The failure of the City to issue and sell PID
Bonds shall not affect the continuing obligation of the City to reimburse DB Denton for the
Reimbursement Amount plus Interest from the District Revenue Fund.
3.8 Governmental Functions. The approval of the Phase 1 SAP, the adoption of the
Assessment Ordinance, the levy of Special Assessments, and the issuance and sale of PID
Bonds are governmental functions within the sole discretion of the City Council. The
inability or failure by the City to approve the Phase 1 SAP, to adopt the Assessment
Ordinance, to levy Special Assessments, or to issue and sell PID Bonds shall not under any
circumstances constitute a failure to perform an obligation of, or a default by, the City
under this Agreement.
3.9 Interest. The Reimbursement Amount shall bear simple interest per annum at the
rate of 6.25% for years one through five, with year one beginning on the Effective Date, and
[5.83]% for years six to the Maturity Date or until PID Bonds are sold, if ever ( "Interest "). If
any portion of the Reimbursement Amount remains unpaid after the City issues and sells
PID Bonds, the per annum rate of Interest shall be the per annum true interest rate on the
PID Bonds; provided, however, that such rate shall not exceed [8.83]% for years one
through five, with year one beginning on the Effective Date, and [5.83]% for years six to the
Maturity Date. Interest shall begin accruing on the date the Special Assessments are
effective. The Interest rate has been approved by the City Council and is authorized by the
Act and was determined based upon the Bond Buyer Revenue Bond Index published in The
Bond Buyer, a daily publication that publishes this interest rate index, and on the date of the
determination, the highest average index rate was [3.83]% for the month prior to the
Effective Date. The rates of Interest contained in this Section comply with Section
372.023(e)(1) and 372.023(e)(2) of the Act.
3.10 Payment of Reimbursement Amount. The City agrees to pay to DB Denton the
Reimbursement Amount plus Interest on the unpaid balance in accordance with the terms
of this Agreement until the date which is 30 years from the date the Special Assessments
are initially levied by the City (the "Maturity Date "). The Reimbursement Amount plus
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Interest shall be payable to the Developer solely as described in Section 3.6. Until PID
Bonds are issued, if ever, the balance in the District Revenue Fund shall be paid to DB
Denton annually beginning on the first June 301h to occur after the first installment of the
Special Assessments is due and payable and continuing on each June 30th thereafter until
the earlier of the Maturity Date or the date the Reimbursement Amount and accrued
Interest have been paid in full. No other City funds, revenue, taxes, income, or property
shall be used even if the Reimbursement Amount or Interest are not paid in full as of the
Maturity Date. Notwithstanding its collection efforts, if the City fails to receive all or any
part of the Special Assessments and, as a result, is unable to make payments from the
District Revenue Fund to DB Denton as required under this Agreement, such failure and
inability shall not constitute a failure to perform an obligation of, or default by, the City
under this Agreement. This Agreement shall not and shall never give rise to or create:
(1) a charge against the general credit or taxing powers of the City or any other
taxing unit; or
(2) a debt or other obligation of the City payable from any source of revenue,
taxes, income, or properties of the City other than from the District Revenue Fund or
the net proceeds of PID Bonds; or
(3) any obligation of the City to issue PID Bonds or other obligations; or
(4) any obligation of the City to pay any amount due or to become due under this
Reimbursement Agreement to pay the Reimbursement Amount plus Interest other
than from the District Revenue Fund and from the net proceeds of PID Bonds.
3.11 Unpaid Balance on Maturity Date. If on the Maturity Date, after application of the
net proceeds of PID Bonds plus the annual payments to DB Denton from the District
Revenue Fund pursuant to Section 3.6, any portion of the Reimbursement Amount or
accrued Interest remains unpaid, such unpaid amounts shall be canceled and for all
purposes of this Agreement shall be deemed to have been conclusively and irrevocably
PAID IN FULL, and such unpaid Reimbursement Amount and Interest shall no longer be
deemed to be payable; provided, however, if any installments of Special Assessments
remain due and payable and are uncollected on the Maturity Date, such installments, when,
as, and if collected after the Maturity Date, shall first be applied to any amounts due in
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connection with outstanding PID Bonds and then paid to DB Denton and applied to the
unpaid Reimbursement Amount and Interest.
3.12 Approval of Special Assessments Through Landowner Agreement. Concurrently
with the levy of the Special Assessments for any portion of the Property, each owner of
property that is or will be subject to Special Assessments shall execute a landowner
agreement ( "Landowner Agreement ") in which the owners shall approve and accept the
apportionment of assessments in the Phase 1 SAP and the levy of the Special Assessments
by the City. The Landowner Agreement further shall (a) evidence the owner's intent that
the Special Assessments be covenants running with the land that (i) will bind any and all
current and successor owners of the Property to the Special Assessments, including
applicable interest thereon, as and when due and payable thereunder and (ii) provide that
subsequent purchasers of such land take their title subject to and expressly assume the
Special Assessments subject to the terms and conditions of the Phase 1 SAP and the
Assessment Ordinance; and (b) provide that the liens created by the levy of the Special
Assessments are a first and prior lien on the Property, subject only to liens for ad valorem
taxes of the State (if any) or any municipality including the City, school district, special
district or other political subdivision. The Landowner Agreements shall be recorded in the
Real Property Records of Denton County, Texas.
4. ADDITIONAL PROVISIONS
4.1 Representation and Warranties.
4.1.1 The City is a home -rule, Texas municipal corporation with the power and
authority to enter into and perform its obligations under this Agreement.
4.1.2 The City knows of no litigation, proceedings, initiative, referendum,
investigation or threat contesting the powers of the City to perform its obligations under
this Agreement.
4.1.3 The City knows of no law, order, rule or regulation applicable to the City that
would be contravened by or conflict with the performance by the City of its obligations
under this Agreement.
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4.1.4 This Agreement constitutes a valid and binding obligation of the City,
enforceable according to its terms, except to the extent limited by bankruptcy, insolvency
and other laws of general application affecting creditors' rights and by equitable principles,
whether at law or in equity.
4.1.5 Allegiance is a New York limited partnership duly organized and validly
existing under the laws of the State of Texas, is qualified to do business in the State of
Texas, and has the legal capacity and authority to enter into and perform its obligations
under this Agreement.
4.1.6 The execution and delivery of this Agreement by Allegiance, and the
performance and observance by Allegiance of its terms, conditions and obligations, have
been duly authorized.
4.1.7 Allegiance knows of no litigation proceeding, initiative, referendum,
investigation or threat contesting the powers of the Allegiance to perform its obligations
under this Agreement.
4.1.8 Allegiance has the necessary legal ability to perform its obligations under this
Agreement. This Agreement constitutes a valid and binding obligation of Allegiance,
enforceable according to its terms, except to the extent limited by bankruptcy, insolvency
and other laws of general application affecting creditors' rights and by equitable principles,
whether at law or in equity.
4.1.9 DB Denton is a Delaware limited liability company duly organized and validly
existing under the laws of the State of Texas, is qualified to do business in the State of
Texas, and has the legal capacity and authority to enter into and perform its obligations
under this Agreement.
4.1.10 The execution and delivery of this Agreement by DB Denton, and the
performance and observance by DB Denton of its terms, conditions and obligations, have
been duly authorized.
Page 14
MPH DRAFT February 23, 2016
4.1.11 DB Denton knows of no litigation proceeding, initiative, referendum,
investigation or threat contesting the powers of DB Denton to perform its obligations
under this Agreement.
4.1.12 DB Denton has the necessary legal ability to perform its obligations under
this Agreement. This Agreement constitutes a valid and binding obligation of DB Denton,
enforceable according to its terms, except to the extent limited by bankruptcy, insolvency
and other laws of general application affecting creditors' rights and by equitable principles,
whether at law or in equity.
4.2 Performance: Venue. This Agreement shall be performed in Denton County, Texas,
and shall be construed according to the laws of the State of Texas, and all disputes arising
under this Agreement shall be litigated in a District Court in Denton, County, Texas.
4.3 Default: Remedies.
4.3.1 If a Party fails to perform any obligation imposed on or required of the Party
by this Agreement, and if such non - performing Party does not cure the failure within 30
days after notice of the non - performance is given by any other Party (unless the nature of
the unperformed obligation is such that the non - performance cannot reasonably be cured
within 30 days, in which case the non - performing Party shall be deemed to have cured the
non - performance if a cure is materially initiated within such 30 -day period and thereafter
diligently pursued to completion without interruption or delay), then such non - performing
Party shall be in default under this Agreement.
4.3.2 If the City is in default under this Agreement, the sole and exclusive remedy
of Allegiance or DB Denton shall be to file suit seeking specific performance of this
Agreement by the City. Remedies shall not include the recovery of damages from the City.
4.3.3 If Allegiance or DB Denton is in default under this Agreement, the sole and
exclusive remedy of the City shall be to file suit seeking specific performance of this
Agreement by Allegiance or DB Denton.
4.3.4 If any Party is in default under this Agreement, the non - defaulting Parties
waive any claims of consequential or other monetary damages.
Page 15
MPH DRAFT February 23, 2016
4.3.5 If any Party is in default under this Agreement, the non - defaulting Parties
waive the right to terminate this Agreement.
Nothing in this Agreement is intended to constitute a waiver by the City of any
remedy the City may otherwise have outside this Agreement against any person or entity
involved in the design, construction, or installation of the Rayzor Ranch Phase 1 PID
Improvements.
4.4 Notices. Any notice required or contemplated by this Agreement to be given to a
Party shall be in writing and shall be deemed given at the addresses shown below each
Party's signature: (1) five business days after depositing the notice with the United States
Postal Service, CERTIFIED MAIL RETURN RECEIPT REQUESTED, postage prepaid; (2) when
delivered by a nationally recognized delivery service (e.g., FedEx or UPS) with evidence of
delivery to the notice address whether or not delivered to the person to whom the notice is
directed; or (3) when actually received by the Party to whom the notice is addressed,
whether delivered to the Party in person or sent to the Party by FAX or E -mail. Any Party
may change its address by delivering written notice of such change in accordance with this
section.
4.5 Assignment.
4.5.1 Allegiance. Allegiance has the right (without the consent of, but with prior
written notice to, the City) to assign, in whole or in part, its duties, obligations, and rights
under this Agreement to any affiliate of Allegiance (i.e., to any person or entity that is
controlled by Allegiance, that is under common control with Allegiance, or that controls
Allegiance). Allegiance also has the right to assign, in whole or in part, its duties,
obligations, and rights under this Agreement to any other person or entity with the written
consent of the City. The rights of Allegiance to assignment are conditioned upon the
assignee agreeing, in writing, to assume the duties, obligations, and rights being assigned
and to be bound by the terms and conditions of this Agreement to the extent they apply to
the duties, obligations, or rights being assigned. An assignment by Allegiance pursuant to
this Section shall be effective upon delivery to the City of a copy of the fully executed
Page 16
MPH DRAFT February 23, 2016
assignment, which shall include the information required by Section 4.4 and unambiguous
provisions regarding any apportionment between Allegiance and the assignee of the right
to receive any payments under this Agreement, and from and after the effective date of any
assignment, Allegiance shall be released from performing or benefiting from the duties,
obligations, and rights assigned.
4.5.2 DB Denton. DB Denton has the right (without the consent of, but with prior
written notice to, the City) to assign, in whole or in part, its duties, obligations, and rights
under this Agreement to any affiliate of DB Denton (i.e., to any person or entity that is
controlled by DB Denton, that is under common control with DB Denton, or that controls
DB Denton). DB Denton also has the right to assign, in whole or in part, its duties,
obligations, and rights under this Agreement to any other person or entity with the written
consent of the City; provided that, if the Special Assessments are payable in annual
installments, DB Denton shall have the right to assign, in whole or in part, its rights to
receive payment of the Reimbursement Amount and Interest, and any duties and
obligations related thereto, without the consent of, but with prior written notice to, the
City. The rights of DB Denton to assignment are conditioned upon the assignee agreeing, in
writing, to assume the duties, obligations, and rights being assigned and to be bound by the
terms and conditions of this Agreement to the extent they apply to the duties, obligations,
or rights being assigned. An assignment by DB Denton pursuant to this Section shall be
effective upon delivery to the City of a copy of the fully executed assignment, which shall
include the information required by Section 4.4 and unambiguous provisions regarding any
apportionment between DB Denton and the assignee of the right to receive payment of the
Reimbursement Amount and Interest or any other payment, and from and after the
effective date of any assignment, DB Denton shall be released from performing or
benefiting from the duties, obligations, and rights assigned.
4.5.3 Cam. The City does not have the right to assign, in whole or in part, its duties,
obligations, or rights under this Agreement.
Page 17
MPH DRAFT February 23, 2016
4.5.4 City Reliance The City may rely on any notice of an assignment or executed
assignment received from a Developer without obligation to investigate or confirm the
validity or occurrence of such assignment. The Developer waives all rights or claims
against the City for any such funds provided to a third party as a result of an assignment for
which the City has received notice, and the Developer's sole remedy shall be to seek the
funds directly from the third party. If the City determines in its sole discretion that the
executed assignment received from a Developer does not unambiguously provide for the
apportionment between the Developer and the assignee of the right to receive payments of
the Reimbursement Amount or Interest or any other amount, the City will make such
payments solely to that Developer until such time as the executed assignment is amended
to unambiguously provide for such apportionment and the assignee or other third party's
sole remedy shall be to seek the funds directly from the Developer.
4.6 Unenforceability. If any provision of this Agreement is held by a court to be
unenforceable for any reason, this Agreement shall nevertheless remain in effect, and the
Parties shall interpret the remaining provisions to achieve their intent in entering into this
Agreement.
4.7 Counterparts. This Agreement may be executed in counterparts, each of which shall
constitute an original, and all of which, when taken together, shall constitute one
agreement.
4.8 Waiver of Immunity.
4.8.1 The obligations of the City under this Agreement are non - recourse. The City
expressly does not waive or surrender its governmental powers, immunities, defenses, and
rights with respect to any action brought against the City by any Party to this Agreement,
except to the extent permitted by law and necessary to allow the Developer to enforce its
remedies under this Agreement, limited to Section 4.3 of this Agreement to pursue only
specific performance through declaratory judgment after an opportunity to cure as
described herein. Nothing in this Agreement shall be construed as creating or giving rise to
any rights in any third parties or any persons other than the Parties hereto. Nothing in this
Page 18
MPH DRAFT February 23, 2016
Agreement is intended to delegate or impair the performance by the City of its
governmental functions,
4.8.2 The City does not waive or surrender any of its governmental powers, immunities,
defenses, limitations, or rights with respect to any action brought against the City for any
type of damages whatsoever, whether general or special, economic, or noneconomic, or
exemplary, as well as attorney's fees.
4.8.3 The City does not waive or surrender any of its governmental powers, immunities,
defenses, limitations, or rights with respect to any action brought against the City alleging a
negligent or intentional tort by the City.
4.9 Amendments. This Agreement may be amended, modified, revised, or changed only
by written instrument executed by the Parties.
4.10 Third Party Beneficiaries. Nothing in this Agreement, expressed or implied, is
intended to or shall be construed to confer upon or to give to any person or entity other
than the City and the Developer any rights, remedies, or claims under or by reason of this
Agreement, and all covenants, conditions, promises, and agreements in this Agreement
shall be for the sole and exclusive benefit of the City and the Developer.
4.11 No Individual Liability. None of the City's elected or appointed officials or any of its
officers or employees shall incur any liability hereunder to the Developer or any other
party in their individual capacities by reason of this Agreement or their acts or omissions
under this Agreement.
4.12 Second Amendment to Economic Development Agreement. The City and DB Denton
each acknowledge that Special Assessments paid by DB Denton (and its permitted
successors or assigns under the Economic Development Agreement) are public
improvement district assessments contemplated by, and subject to, Section 9 of the Second
Amendment to Economic Development Agreement.
Page 19
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4.13 Term. The term of this Agreement shall commence on the Effective Date and shall
terminate on the earlier to occur of the Maturity Date or the date on which DB Denton has
been paid the Reimbursement Amount plus accrued Interest, whether from the District
Revenue Fund or from the net proceeds of PID Bonds. Additionally, this Agreement shall
terminate on May 13, 2019 if the City has not levied the Special Assessments by such date.
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
Page 20
1915,013 \53432.3
MPH DRAFT February 23, 2016
Allegiance Hillview, L.P., a New York limited partnership
By: TH GP LLC (d /b /a TH Denton GP LLC, in the State of
Texas), a Delaware limited liability company,
its general partner
By:
Name: Andrew Osborne
Authorized Signatory
Title:
Address: 5221 N. O'Connor Boulevard, Suite 700
Irving, Texas 75039
Attn: Andrew Osborne
Phone: 972 - 532 -4300
FAX:
Email: aosborne @fortress.com
Page 22
MPH DRAFT February 23, 2016
DB Denton 11, JIL(' -i C
Del"ware firuited liability company
By:
Name:., j� k'e
Title: V'''C,G
Address: C L 0,w
Attn:
Phone:
FAX:
Email:
Page 23
1915.013\53432.3
MPH DRAFT February 23, 2016
City of Denton, Texg„ a Tevjs.444, 1J1C' a, Municipality
By� _._.
Name:, e.or
.. ., v
Title: ��.`� .���.r"
Address: e k
Attn:
Phone. ,
FAX
Email: hO ,,,. 1
APPROVED AS TO FORM:
CITY ATTORNEY
CITY OF DENTON, TEXAS
Page 24
1915.013 \53432.3
Exhibit A
Authorized Public Improvements
a. Arterial, collector, and local street improvements including, but not limited to,
grading, drainage channels and structures, storm drains, retention basins, paving,
curb, gutter, sidewalks, medians, landscaping, street lights, traffic signals, sewer
lines, utility lines and appurtenances, irrigation lines and facilities, signing and
striping, dust control and erosion protection, any necessary transitions, tapers and
temporary improvements to existing roadways and facilities, and other associated
improvements; and
b. Interstate Highway I -35 frontage roads and associated entry /exit ramp reversal
improvements including, but not limited to, grading, drainage channels and
structures, storm drains, retention basins, paving, curb, gutter, sidewalks, medians,
landscaping, street lights, traffic signals, sewer lines, utility lines and appurtenances,
irrigation lines and facilities, signing and striping, dust control and erosion
protection, any necessary transitions, tapers and temporary improvements to
existing roadways and facilities, and other associated improvements; and
C. Sanitary sewer line improvements from the main collector and arterial roadways
through the Property to serve individual lots and pad sites; and
d. Water line improvements from the main collector and arterial roadways through
the Property to serve individual lots and pad sites; and
e. Storm water improvements.
Page 25
MEMEMENIM
Exhibit B
Depiction of Phase 1 Heritage Trail Improvements
w I Al
A,
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PUBLIC
STORM
PUBLIC
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WATEI-j WATER PUBLIC
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PUBLIC
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WATER
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PUBLIC ROADWAY
PUBLIC WATER
PUBLIC STORM
PROJECTNO: 013-3111 EXHIBIT
........ . ......... ......... OEXHIBIT B, DEPICTION n6o N �OXH
T sum 11 a
............... . . . Phw., A�
DRAWN BY: SS F HE HERITAGE TRAIL OkOLSSON. TEL. 002J46AWO
DATE: 1 A.16 IMPROVEMENTS ASSOCIATES FAX W2,T48A001 1 OF2
Page 26
Exhibit C
Estimated Cost of Phase 1 Heritage Trail Design Services
HUI
Base Contract $285,500
Construction Administration « 0 1 !
City Permit & Inspection
Platting 5000
Reimburseables 4000
TOTAL $30
1 �r
1-Jaterials Testing and Inspection estimate 20,000
Total 413,967
Page 2 7
Estimated Cost of Phase I Heritage Trail Construction Contract
ITEM Estimated Cost
Heritage Trail Phase I Base Contract
$
2,985,565.00
Change Order # I- Fire Hydrant
$
8,154.00
Change Order # 2
Storm Sewer
$
7,523.00
Change Order# 3
Grade Change
$
8,781.10
Change Order # 4
Grade Change (N/A to PID)
$
Change Order# 5
Gas Line Allownace Credit
$
(200,000.00)
ChangeOrder#6
Irrigationpump
$
12,009.80
Change Order # 7
Canes Fire Hydrant (N/A to PID)
$
Change Order # 8
Water main valves -estimate
$
16,025.00
Tota 1 $ 2,838,057.90
INKINIffi9m
4-J
V
4-J
C6
0
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T,
IN,
'a
. .. ........ "I
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Is
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4
Exhibit F
Estimated Cost of Phase 1 Public Utilities Design Services
ITEM
ESTIMATED COST
Civil Design Contract- OLSSON
Base Contract $222,000
Construction Administration 20,000
Easements (estimate) 10,000
Platting (estimate) 5000
Reimburseables (estimate) 15,000
TOTAL $272,000 $272,000.00
City Inspection Fees $51,816.12
Irrigation Water Meter Impact Fee $19,500
Sewer Tap Fee $8,250
Materials Testing and Inspection estimate 25,000
Survey (estimate) 8000
Total $ 384,566.12
Page 30
MEMENERM
Exhibit G
Estimated Cost of Phase 1 Public Utilities Construction Contract
Page 31