2008-138FILE REFERENCE FORM 2008-138
X Additional File Exists
Additional File Contains Records Not Public, According to the Public Records Act
Other
FILES Date Initials
Amendment to Development Agreement - Ordinance No. 2009-100 04/21/09 JR
2nd Amendment to Development Agreement - Ordinance No. 2009-133 06/02/09 JR
ORDINANCE NO. / my 1,5e,
AN ORDINANCE APPROVING A DEVELOPMENT AGREEMENT BETWEEN THE CITY
OF DENTON AND ALLEGIANCE HILLVIEW, L.P., A NEW YORK LIMITED
PARTNERSHIP ACTING BY AND THROUGH ITS GENERAL PARTNER, TH GP, LLC
(DB/A TH DENTON GP, LLC), A DELAWARE LIMITED LIABILITY COMPANY
(HEREINAFTER CALLED "DEVELOPER") FOR SECURING THE FUNDING
ASSOCIATED WITH THE CONSTRUCTION OF THE WIDENING OF U.S. HIGHWAY 380
THROUGH THE RAYZOR RANCH DEVELOPMENT, REIMBURSEMENT FOR THIRD
PARTY INSPECTION SERVICES FOR THE HIGHWAY CONSTRUCTION AND THE
EXPENDITURE OF UTILITY FUNDS FOR THE RELOCATION OF WATER AND
WASTEWATER UTILITIES BETWEEN IH-35 AND BONNIE BRAE ROAD; AND
DECLARING AN EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager or his designee is hereby authorized to execute a
Development Agreement in substantially the form attached and incorporated herein as Exhibit A,
and to exercise all of the City's rights, duties and obligations thereunder.
SECTION 2. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of 2008.
PERK McNEILL, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY: A
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATzTORNEY
BY:
s9 Aour documents\ordinan*08\/ymr ranch dev agreement ord.doc
THE STATE OF TEXAS §
COUNTY OF DENTON §
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON,
YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION
FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC
RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE
NUMBER.
DEVELOPMENT AGREEMENT
FOR RAYZOR RANCH (U.S. 380)
This Development Agreement ("Agreement") is entered into by and between the CITY
OF DENTON, a Texas municipal corporation of Denton County, Texas (hereinafter called the
"City") and ALLEGIANCE HILLVIEW, L.P., a New York limited partnership acting herein by
and through its general partner, TH GP LLC (d/b/a TH Denton GP LLC), a Delaware limited
liability company (hereinafter called "Developer").
WITNESSETH:
WHEREAS, Developer owns a portion of 410 acres of property, more or less, situated
generally north and south of West University Drive/U.S. Highway 380, between IH-35 and
Bonnie Brae Street and zoned as the Rayzor Ranch Overlay District Classification ("Ordinance
2007-068") (such property also being described herein as the "Property"); and
WHEREAS, Developer wishes to develop the Property to include a wide variety of
commercial, retail, office, housing of various types, open space areas, and other uses pursuant to
Ordinance 2007-068, also to be known as the Rayzor Ranch Development (the "Development"
or "Rayzor Ranch"); and
WHEREAS, the Developer wishes to commit to certain improvements to public
infrastructure (as more fully specified herein) which are connected to the overall development of
Rayzor Ranch, which will involve the provision of expedited and special services from the City
of Denton; and
WHEREAS, the City has accommodated Developer by implementing land use and
development standards unique to this Development, designed to permit and promote the unique
design characteristics of the Development; City has further accommodated Developer's
scheduling requests by expediting the City's review and consideration of portions of the
Development as necessary to meet Developer's schedule; and
WHEREAS, in consideration of the above accommodations, the risks associated with
consideration of the advancement of utility improvements in a piecemeal fashion and the
construction of the widening of U.S. Hwy. 380, the City wishes to formulate this Agreement to
ensure that Developer and its successors, assigns, agents and representatives, if any, carry out
Developer's stated intention to provide utility relocations and extensions and improvements to
the aforementioned State highway, either for the Development as herein defined, or for any other
alternative use of the Property.
NOW THEREFORE, in consideration of the mutual covenants and obligations herein,
the parties agree as follows:
SECTION 1. DEVELOPER PARTICIPATION
The Developer agrees that the Property will be developed in accordance with the
following terms and conditions:
A. Extensions and Relocations of City Owned Utilities Between IH35 and Bonnie
Brae. The Developer has agreed to advance and undertake the installation and relocation of all
utilities necessitated by the Development or impacted by the widening of U.S. Hwy 380, in
conjunction with the Developer's widening of U.S. Hwy. 380 between IH35 and Bonnie Brae, as
more particularly shown on the plans entitled "U.S. Hwy. 380 Roadway & Utility Improvements
IH 35 to Bonnie Brac for Rayzor Ranch". The City of Denton Water Utilities Department
originally included a total of $4,954,000 in construction funds in its Capital Improvement
Program (CIP) for the relocation of water and wastewater lines in association with the Texas
Department of Transportation (TxDOT) widening of U.S. Hwy. 380 between Elm Street and
Interstate Highway 35 (II-I35), $2,927,000 and $2,027,000 for water and wastewater (i.e. sanitary
sewer) relocates respectively. The scope of the original relocation project for water lines out of
the TxDOT ROW between Bonnie Brae and IH35 included: (1) Relocation of an existing 16"
water line out of U.S. Hwy. 380 right of way (ROW) between IH35 and the east side of I1-135; (2)
Two crossings of U.S. Hwy. 380 between IH35 and Bonnie Brae and just east of Bonnie Brae
with 12" diameter water lines; and (3) Construction of an 8" diameter water line on the north side
of U.S. Hwy. 380 along the frontage of the existing Chevron Station. The scope of the original
relocation project for wastewater lines out of the TxDOT ROW between Bonnie Brae and IH35
and for extension of a relocated wastewater interceptor east of Bonnie Brae to Cornell Street and
south to connect to an existing interceptor along Denton I.S.D. property (such extension is
necessary to convey the projected wastewater loading of the Development offsite) included:
Upsizing of an existing 10" diameter sanitary sewer line to 15" diameter and relocation out of the
U.S. Hwy. 380 ROW from approximately the west side of 2828 W. University Drive (U.S. Hwy.
380) east to Cornell Street and south to connect to an existing interceptor along Denton I.S.D.
property. Additional upsizing of the sanitary sewer line from the planned size of 15" diameter to
18" and 21" diameters is caused by the sanitary sewer loading resulting from the rezoned use of
the property by the Development, and payment for such additional pipe sizes is the sole
responsibility of the Developer.
The City will contribute a total not to exceed the sum of $500,000 plus 10% contingency
plus the total of all costs for City Field Changes, as hereinafter defined, for water installation and
relocation and $300,000 plus 10% contingency plus the total of all costs for City Field Changes,
as hereinafter defined, for wastewater installation and relocation to the Development to be used
for the relocation of the referenced water and wastewater utilities. No City funds will be
contributed to or used by the Development for the relocation of utilities, extensions of utilities,
upsizing of utilities, relocation of utilities owned by entities other than the City or any other
utility work caused solely by or required for the Development. Bids will be received by the
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Developer for the relocations of the water and wastewater utilities and will be structured such
that subtotals are shown separately for the water and wastewater utilities that the City would
have relocated in conjunction with the U.S. Hwy. 380 widening project. In the event that the
subtotals actually bid for the water and wastewater utilities are less than $500,000 and/or
$300,000 respectively, then the City will only participate by providing funds in the total amounts
that were received for these subtotals plus all costs incurred in connection with City Field
Changes. In the event that the subtotals actually bid are more than $500,000 plus 10%
contingency for water relocations and/or $300,000 plus 10% contingency for wastewater
relocations, then the City will have the option of either requesting a redesign per City's input and
rebid of the project or limiting the City's participation in the Development's relocation of water
and wastewater utilities to $500,000 plus 10% contingency and/or $300,000 plus 10%
contingency respectively plus all costs incurred for City Field Changes.
Developer shall provide separate monthly invoices to the City in writing by the 25th of
each month relative to all portions of the construction costs required for the relocation of the
water and wastewater utilities respectively. Upon confirmation by City personnel of actual work
completed on the relocation of each utility, the City shall endeavor to pay each such invoice out
of the funds on deposit in the accounts for each utility by the 15th of the following month.
The Developer shall submit all plans and specifications for this work to the City. Once
the plans and specifications for this work have been reviewed by the City and it is determined
that they are sufficient, the City will approve the plans (the "Approved Utility Plans") for the
beginning of work, pending receipt of all required permits. The Developer is solely responsible
for satisfying all requirements set forth to complete the work. Developer agrees that it will
perform the work in accordance with the Approved Utility Plans and to the standards and
satisfaction of City and TxDOT, if any TxDOT standards and specifications should apply.
Developer shall request prior written approval for all field changes through the City. All such
changes caused by unforeseen conditions or changed site conditions that would have been
incurred by the City if the project had been designed and built per the City's original schematic
design, as well as all changes to the project requested by the City for its benefit or TxDOT's
("City Field Changes"), shall be reimbursed to the Developer. Payment for all other changes will
be the sole responsibility of the Developer. Developer agrees that it shall cause to be provided
performance, payment and maintenance bonds and the appropriate insurance for the work to be
performed and will carry the City and TxDOT, if necessary, as an Obligee or an additional
insured, as appropriate.
B. Widening of U.S. Hwy. 380. TxDOT has been working towards the widening of
U.S. Hwy. 380 between Elm Street and I1-135, publishing plans adequate for utility relocations
(65% complete) in November 2006. The Developer has offered to reconstruct this roadway
along the extents of the Development, between IH35 and Bonnie Brae, increasing the Right of
Way ('ROW") width in conjunction with the Development. The Developer will be solely
responsible for all costs associated with the reconstruction of U.S. Hwy. 380 over the stated
extents, including all ancillary construction caused by or instituted as a result of the Developer's
reconstruction of U.S. Hwy. 380 (excluding the costs to be reimbursed by the City to the
Developer pursuant to Section I.A. hereof) and agrees to deposit supplemental funding to secure
such increases due to project delays or cost increases in materials and labor. The Developer will
be required to receive a permit from TxDOT through the City for this construction. The
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Developer shall submit all plans and specifications for this work to the City. Once the plans and
specifications for this work have been reviewed by the City and it is determined that they are
sufficient for submission to TxDOT, the City will forward the plans and specifications to
TxDOT for approval. Upon such approval, such plans and specifications shall be referred to as
the "Approved Roadway Plans." The Developer is solely responsible for satisfying all
requirements set forth by TxDOT in order for the permit to be issued and for the work to
commence. Developer agrees that it will perform the work in accordance with the Approved
Roadway Plans and to the standards and satisfaction of the City and TxDOT. Developer agrees
that it shall cause to be provided performance, payment and maintenance bonds and the
appropriate insurance for the work to be performed and will carry the City and TxDOT as an
Obligee or an additional insured, as appropriate. Inasmuch as the City will be the entity
receiving the permit and responsible for the proper construction of the project in accordance with
TxDOT standards and inasmuch as the Developer has asked that this project be advanced in an
expedited fashion, the City has contracted with an outside consultant for review of the plans and
specifications, construction administration, representation and material testing services in the
amount of $456,618. The services of the City's outside consultant are solely related to the
highway widening work and not with the utility relocation work described herein above. The
outside consultant will act as an agent of the City, reporting to the Inspections Manager of the
Utility and CIP Engineering division of Water Utilities. The Developer will provide funding for
a total of $456,618 with the City prior to beginning work on the widening of the roadway;
however, the Developer will increase this funding as required during the construction project in
order to reimburse the City for actual costs for such services, including amounts for additional
services required by changed site conditions, contractor initiated change orders or delays in
project duration beyond the one-year projected construction period.
C. Three-Way Contracts. The Developer will enter into three-way contracts with the
City for those items which are discussed in Section 1, paragraphs A and B of this Agreement.
Inspections fees for the City of Denton are normally set at 3.5% of public works construction
costs. The inspection services for the Extensions and Relocations of City Owned Utilities shall
be performed by the Utility and CIP Engineering division of Water Utilities, and the fee for these
services shall be absorbed by the City up to a maximum of 3.5% of the amount agreed to for the
construction of those facilities as described in Section 1, paragraph A, plus the City Field
Changes. In the event that the actual expenditures for these inspection services exceed 3.5% of
the amount agreed to for the construction of those facilities as described in Section 1, Paragraph
A, plus the City Field Changes, including the effort to manage and coordinate the activities of
the outside consultant discussed in Section 1, paragraph B above, the Developer agrees to deposit
additional funds with the City within fifteen (15) days from receipt of written notice for the
continued provision of these services prior to proceeding with construction. The inspection fees
for the Widening of U.S. Hwy. 380 shall be as set forth in Section 1, paragraph B.
SECTION 2. DELAYS AND FORCE MAJEURE
It is expressly understood and agreed by the parties to this Agreement that if the
substantial completion of the construction of any improvements contemplated hereunder is
delayed by reason of war, civil commotion, acts of God, inclement weather, governmental
restrictions, regulations, or interferences, delays caused by the franchised utilities (Denton
Municipal Electric, CoServ, Southwestern Bell Telephone, Atmos Energy, Charter Cable,
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Verizon or any of their predecessors or successors or other utilities, or any of their contractors),
fire or other casualty, court injunction, necessary condemnation proceedings, acts of the other
party, its affiliates/ related entities, and/or their contractors, or any circumstances which are
reasonably beyond the control of the party obligated or permitted under the terms of this
Agreement to do or perform the same, regardless of whether any such circumstance is similar to
any of those enumerated or not, the party so obligated or permitted shall be excused from doing
or performing the same during such period of delay, so that the time period applicable to such
design or construction requirement shall be extended for a period of time equal to the period such
party was delayed. The obligations subject to enlargement of time without penalty do not
include funding obligations or obligations delayed for financial reasons. Developer understands
that the enlargement of time is the only relief to which it may be entitled and that will be granted
under this Agreement and that the right to any additional funding, compensation or damages,
consequential or others, is hereby waived and released.
SECTION 3. TERM
The term of this Agreement shall begin on the date of execution, and end upon the
complete performance of all obligations and conditions precedent by the parties to this
Agreement. Developer's obligations shall be binding upon subsequent primary developers of the
entire portion of the Property along U.S. Highway 380 (but not on individual lot purchasers)
and/or the Developer's successors, assigns, agents or representatives, until all obligations of the
Developer are satisfied in full.
SECTION 4. CONSTRUCTION AGREEMENTS AND DOCUMENTS
Developer shall deliver a copy of all construction agreements and contract documents
that it awards for the completion and/or performance of the work contemplated under this
Agreement. Developer shall incorporate the provisions of this Agreement into the provisions of
all construction agreements and contract documents as may be required in order to fully meet its
obligations under the terms of this Agreement. Developer shall require as part of each
construction agreement and contract document protection of the City against any liability that
may arise from the work contemplated by this Agreement, to include but not limited to bonds,
insurance and appropriate indemnity language. Developer will be required to provide a
maintenance bond or warranty for the work contemplated under this Agreement to run for two
(2) years from the date of final completion. A copy of all bonds shall be provided to the City as
part of the construction agreement and contract documents. Developer will be required to
deliver a copy of the insurance declaration along with adequate information to contact the insurer
to verify that the City is named as an additional insured.
SECTION 5. INDEMNIFICATION
DEVELOPER SHALL INDEMNIFY AND HOLD HARMLESS THE CITY,
MEMBERS OF THE CITY COUNCIL, AND ITS OFFICERS, EMPLOYEES, AGENTS,
REPRESENTATIVES AND CONSULTANTS (EACH PERSON DESCRIBED HEREIN
CALLED AN "INDEMNIFIED PARTY" AND COLLECTIVELY, THE "INDEMNIFIED
PARTIES") AGAINST ANY AND ALL INDEMNIFIED LIABILITIES SUBJECT TO THE
RESTRICTIONS IN THIS SECTION 5. IF AN INDEMNIFIED PARTY INCURS ANY
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INDEMNIFIED LIABILITIES, THE DEVELOPER SHALL FULLY REIMBURSE SUCH
INDEMNIFIED PARTY FOR ALL SUCH INDEMNIFIED LIABILITIES INCURRED.
HOWEVER, THE DEVELOPER WILL NOT BE REQUIRED TO INDEMNIFY AND/OR
HOLD HARMLESS ANY INDEMNIFIED PARTY FOR ANY LOSSES OR INDEMNIFIED
LIABILITIES THAT RESULT FROM THE INDEMNIFIED PARTY'S SOLE NEGLIGENCE,
INTENTIONAL MISCONDUCT OR KNOWING VIOLATION OF THE LAW. TO THE
EXTENT APPLICABLE, THE DEVELOPER SHALL BE SUBROGATED TO ANY CLAIMS
OR RIGHTS OF THE INDEMNIFIED PARTIES AS AGAINST ANY OTHER PERSON (BUT
NOT AN INDEMNIFIED PARTY) WITH RESPECT TO INDEMNIFIED LIABILITIES PAID
BY THE DEVELOPER. FOR PURPOSES OF THIS SECTION 5, "INDEMNIFIED
LIABILITIES" SHALL BE DEFINED TO INCLUDE ALL LOSSES INCURRED BY ANY OF
THE INDEMNIFIED PARTIES THAT ARE RELATED TO, ARISE OUT OF OR ARE
ASSOCIATED WITH: (1) THE CONSTRUCTION OF THE WORK THAT IS
CONTEMPLATED BY THIS AGREEMENT; (2) ANY BREACH OF OR INACCURACY IN
ANY REPRESENTATION OR WARRANTY MADE BY THE DEVELOPER, ITS GENERAL
PARTNER, OR PARTIES UNDER ITS CONTROL; (3) ANY BREACH OR NON-
PERFORMANCE, PARTIAL OR TOTAL, BY DEVELOPER AND ITS GENERAL
PARTNER OF ANY COVENANT OR AGREEMENT OF THE DEVELOPER CONTAINED
IN THIS AGREEMENT OR ANY AGREEMENT ASSOCIATED WITH THE
DEVELOPMENT OF RAYZOR RANCH TO WHICH THE DEVELOPER, OR ANY
PREDECESSOR OR SUCCESSOR DEVELOPER, REPRESENTATIVES, AGENTS OR
ASSIGNS ARE A PARTY OR PARTIES; (4) ANY CONDITION CREATED IN OR ABOUT
THE SITE OF THE WORK CONTEMPLATED BY THIS AGREEMENT; AND (5) ANY
ACCIDENT, INJURY OR PROPERTY DAMAGE WHATSOEVER OCCURRING IN, AT OR
UPON THE SITE OF THE WORK CONTEMPLATED BY THIS AGREEMENT.
SECTION 6. EVENTS OF DEFAULT
A default shall exist if the Developer or City fail to perform or observe any material
covenant contained in this Agreement. The non-defaulting party shall immediately notify the
defaulting party in writing upon becoming aware of any change in the existence of any condition
or event which would constitute a default or, with the giving of notice or passage of time, or
both, would constitute a default under this Agreement. Such notice shall specify the nature and
the period of existence thereof and what action, if any, the notifying party requires or proposes to
require with respect to curing the default. If this Agreement has been partially or wholly
assigned by Developer to a Permitted Assignee (defined below), and the Permitted Assignee
defaults hereunder, then City shall also concurrently with its notice to the defaulting Permitted
Assignee, notify Developer, and Developer within five (5) business days of such notice may
apply to the City to be reinstated as the Developer hereunder, and if approved by the City which
shall have sole discretion in making this decision, this Agreement shall be deemed to be re-
assigned to Developer for all purposes. However, the City is under no obligation to approve
Developer's reinstatement.
SECTION 7. REMEDIES
A. If a default shall occur and continue, after thirty (30) days advance written notice
to cure default (provided, however, such thirty (30) day period shall be extended if Developer
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has satisfied the City of its good faith efforts to cure such failure within such thirty (30) day cure
period and is diligently pursuing such cure to completion, for a period not to exceed a total of
ninety (90) days), City may, at its sole option, terminate this Agreement in accordance with
Texas law, without the necessity of further notice to or demand upon the Developer and full
funding of the improvements and contract listed under Section 1, paragraph B, shall become due
and payable by the Developer. The City, may at its sole option provide written notice to the
surety bond company or lending institution and make written demand upon the bond company or
lending institution to provide the funds relating to the bond in order for City to either finish those
portions of the project underway up to the point of default or to pay unpaid bills. The City may
also at its sole option, draw the full amount of the Construction Letter of Credit to complete the
remaining portions of the project, including any administrative or other costs incurred by the
City. All funds received by the City shall be used solely for the purpose of completing the
improvements required to be completed by Developer pursuant to this Agreement, and if any
funds are remaining after all such improvements to be completed by Developer pursuant to this
Agreement have been completed by the City, such remaining funds shall be returned to
Developer. These agreements regarding (i) circumstances of making draws on the Construction
Letter of Credit and (ii) use of funds after draws on the Construction Letter of Credit are between
City and Developer only, and are not a part of the Construction Letter of Credit, and the only
requirements for draws on the Construction Letter of Credit between City and the issuer of the
Construction Letter of Credit are the terms contained in the Construction Letter of Credit.
B. All Developer's warranty and indemnification obligations shall survive any
termination or assignment unless Developer is released. Nothing in this Section shall be
construed to waive any sovereign, governmental immunity available to City under Texas law.
Nothing in this Section shall be construed as a waiver or release of any right, remedy or cause of
action that is available to the City under or as a result of this Agreement, in equity or at law.
SECTION 8. VENUE AND GOVERNING LAW
THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS OF THE
PARTIES DETERMINED IN ACCORDANCE WITH THE LAWS OF THE UNITED STATES
APPLICABLE THERETO AND THE LAWS OF THE STATE OF TEXAS APPLICABLE TO
AN AGREEMENT EXECUTED, DELIVERED AND PERFORMED IN THE STATE OF
TEXAS. This Agreement is performable in Denton County, Texas, and venue of any action
arising out of this Agreement shall be exclusively in the state district courts of Denton County,
Texas.
SECTION 9. NOTICES
Any notice required by this Agreement shall be deemed to be properly served if deposited
in the U.S. Mail by certified letter, return receipt requested, addressed to the recipient at the
recipient's address shown below, subject to the right of either party to designate a different
address by notice given in the manner just described.
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If intended for City, to:
George C. Campbell
City Manager
City Hall
215 E. McKinney
Denton, Texas 76201
If intended for the Developer, to:
Fortress Investment Group, L.L.C.
5221 N. O'Connor Blvd., Suite 700
Irving, Texas 75039
Attention: Andrew Osborne
Phone: (972) 532-4335
Fax: (214) 260-0938
With copies to:
Allegiance Hillview, L.P.
c/o Torreon Capital, L.P.
515 Congress Avenue, Suite 2525
Austin, Texas 78701
Attention: Rex M. Paine
Phone: (512) 472-6777
Fax: (512) 472-6731
Brown McCarroll, L.L.P.
111 Congress Avenue, Suite 1400
Austin, Texas 78701
Attention: Robert L. Davis
Phone: (512) 479-9706
Fax: (512) 479-1101
SECTION 10. GIFT TO PUBLIC SERVANT
A. City may, at its sole option and discretion, terminate this Contract immediately if the
Developer has offered, conferred or agreed to confer any benefit upon a City employee
or official that the City employee or official is prohibited by law from accepting.
B. For purposes of this Article, "benefit" means anything reasonably regarded as pecuniary
gain or pecuniary advantage, including benefit to any other person in whose welfare the
beneficiary has a direct or substantial interest, but does not include a contribution or
expenditure made and reported in accordance with law.
C. Notwithstanding any other legal remedies, City may require the Developer to remove any
employee of the Developer from the Project who has violated the restrictions of this
Article or any similar state or federal law, and obtain reimbursement for any expenditures
made to the Developer as a result of the improper offer, agreement to confer, or
conferring of a benefit to a City employee or official.
SECTION 11. APPLICABLE LAWS
This Agreement is made subject to the provisions of the Charter and ordinances of City,
as amended, and all applicable state and federal laws. All work to be performed under this
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Agreement shall be in accordance will all applicable laws, including without limitation all
applicable licenses, permits, building codes, restrictive covenants, zoning and subdivision
ordinances and flood disaster, environmental laws, the Americans with Disabilities Act, all local
ordinances, and state laws.
SECTION 12. LEGAL CONSTRUCTION
In case any one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision thereof and this Agreement shall be
considered as if such invalid, illegal, or unenforceable provision had never been contained in this
Agreement. The election of the City to not exercise a right or seek a remedy at a particular time
shall not be construed as a waiver or release of the City's rights, remedies, or causes of action
under this Agreement or those that are available at law or in equity.
SECTION 13. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and constitute one and the same instrument.
SECTION 14. CAPTIONS
The captions to the various clauses of this Agreement are for informational purposes only
and shall not alter the substance of the terms and conditions of this Agreement.
SECTION 15. SUCCESSORS AND ASSIGNS
The terms and conditions of this Agreement are binding upon the successors and assigns
of the parties to this Agreement until satisfied in full, regardless of whether the Property is
developed as the Development, or as any other alternative use. With the City's prior written
approval of the action and the assignee, which shall not be unreasonably withheld, Developer
may assign, in whole or in part, this Agreement to an affiliate of Developer, or a successor owner
of the Property, (a "Permitted Assignee") at any time during the term hereof. Developer shall be
released from all liability hereunder to the extent of such assignment to a Permitted Assignee and
City shall correlatively be released from all liabilities and obligations to the Developer/Assignor,
to the extent of such assignment. A Permitted Assignee will be required to assume all legal and
financial obligations of the Developer, including but not limited to the terms of this Development
Agreement, and to demonstrate same to the satisfaction of the City, including, but not limited to,
furnishing proof of Permitted Assignee's financial status and documenting that all bills are paid
and all liens are released on all work completed up to the time of assignment, prior to the
approval of the assignment. In lieu of receipt of such written approval from the City, Developer
retains full legal and financial responsiblility and all associated liability associated with this
Agreement.
SECTION 16. NO THIRD-PARTY BENEFICIARIES OR JOINT VENTURE
The City and Developer intend that this Agreement shall inure only to their benefit and shall
not benefit or create any right or cause of action in or on behalf of any third-party beneficiary, or any
9
individual or entity other than the City and Developer or any of their assigns except where such a
right arises from an indemnification or hold harmless obligation which shall inure to the benefit of a
proper indemnitee.
Nothing contained in this Agreement or any ancillary document created as part of this
Agreement is intended to create a partnership or joint venture between the City and Developer and
any implication to the contrary is expressly disavowed. It is understood that this Agreement does not
create a joint enterprise, nor does it appoint either party as an agent for the other for any purpose
whatsoever. Neither party shall in any way assume any liability of the other for acts of the other or
obligations of the other unless specifically set forth in this Agreement or an ancillary document.
SECTION 17. TIME IS OF THE ESSENCE; COMMENCEMENT; FUNDING
AND SECURITY
Developer understands and agrees that time is of the essence in this Agreement and
accordingly agrees to move forward with beginning construction on the improvements described
herein not later than one hundred twenty (120) calendar days after execution of this Agreement.
Failure to begin the project as stated will be regarded as a breach. Developer shall maintain at all
times adequate funding or security for completion of its obligations under the Agreement,
supplementing as necessary to assure adequate funding for Developer's remaining obligations under
the Agreement, including increases necessitated by changing costs in labor and materials over time,
as well as increases in construction costs caused by Developer's failure to timely commence the
project or pursue it to completion in a timely manner. Unless otherwise specified, all time periods
are expressed in calendar days.
SECTION 18. ENTIRE AGREEMENT
This Agreement embodies the complete agreement of the parties hereto, superseding all
oral or written previous and contemporary agreements between the parties relating to matters
contained in this Agreement and, except as otherwise provided in this Agreement, cannot be
modified without written agreement of the parties to be attached to and made a part of this
Agreement. The exhibits to Denton Ordinance 2007-068 referenced in this Agreement are
incorporated by reference as if set forth fully herein, and shall remain component parts of this
Agreement even in the event that Ordinance 2007-068 is amended, superseded or repealed. The
scope of this Agreement is limited to the specific funding obligations of the Developer set forth
in Section 1. The parties stipulate that this Agreement does not satisfy any other development
obligation under law or City ordinances; particularly, it does not satisfy any applicable impact
fee requirements or development exactions to construct required public infrastructure
improvements, including those associated with transportation, storm sewer, water, sanitary
sewer, or utilities. The parties further stipulate that with respect to the limited scope of this
agreement, the funds provided are not disproportionate to the burdens of the development. The
parties stipulate that this Agreement does not constitute a permit for development under Chapter
245 of the Texas Local Government Code.
10
SECTION 19. COMMENCEMENT OF AGREEMENT, INITIAL FUNDING AND
PERFORMANCE BOND
A. Developer shall, not later than ninety (90) days from the date of execution of this
Agreement by both parties, deposit with City funding for the widening of U.S. Highway 380,
which may take the form of the following irrevocable letters of credit (the "Letters of Credit"):
(1) An irrevocable letter of credit to secure the construction obligations of
Developer under this Agreement, in an amount equal to the construction related funding
required to be provided by Developer to the City pursuant to this Agreement, issued by
Wells Fargo Bank, N.A., a California Corporation, at 601 West University Drive,
Denton, Texas 76201, or any other bank approved by City in City's sole discretion (an
"Approved Bank") and in all other respects materially in the form and on the terms
attached hereto as Exhibit A, or such other form and terms as may be approved by the
City in its sole discretion, together with such supplemental funding as needed for cost
increases (the "Construction Letter of Credit"). The City shall be entitled to draw on the
Construction Letter of Credit as set forth in Section 7 hereof, and
(2) An irrevocable letter of credit in the amount of $456,618.00 from an
Approved Bank, and in all other respects in the form and on the terms as the letter of
credit attached hereto as Exhibit B, or such other form and terms as may be approved by
the City in its sole discretion, together with such supplemental funding as needed for cost
increases (the "Consultant Letter of Credit"). The City shall be authorized to make draws
on the Consultant Letter of Credit for the sole purpose of providing payments to the
City's outside consultant pursuant to Section LB hereof.
The City agrees that any funding related to the construction obligations of Developer under this
Agreement, including the Construction Letter of Credit, shall be reduced, each time a payment is
made by Developer for construction for which Developer is obligated to make payment under
this Agreement, based on evidence of payment submitted to and approved by the City. If a
Construction Letter of Credit is deposited, the City agrees that it will send a statement to the
issuer of the Construction Letter of Credit, upon approval by the City of a payment having been
paid by the Developer, as required by the Construction Letter of Credit to authorize a reduction
of the Construction Letter of Credit for the amount paid by the Developer and approved by the
City.
In addition to the Letters of Credit, Developer shall, at the same time as delivery of the Letters of
Credit, deliver to the City a performance bond in the amount of $500,000.00, which may be
drawn upon to cover administrative and bidding expenses incurred by the city, in the event that
construction of the improvements to be constructed by Developer hereunder shall cease, after
construction has commenced, and the City is required to take over and complete such
improvements.
B. Notwithstanding anything herein to the contrary, Developer shall deposit with the
City the required funding for the widening of U.S. Highway 380. If Developer shall fail to
provide such funding within ninety (90) calendar days of the execution of this Agreement, this
Agreement shall terminate and be of no further force and effect, unless it is extended in writing
by both parties hereto, whereupon, the City and State may elect to construct the widening of U.S.
Hwy. 380 and the associated utility relocations as originally envisioned.
EXECUTED this %-/--Oday of 2008, by e City signing by and
through its City Manager, dal author same b No. Q~ -
approved by the City Council on2008, and by the Developer, acting through its
duly authorized officers.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
12
APPROVED AS TO FORM:
CITY OF DENTON
George C. Campbell
City Manager
BY: e~2
City Manager
ALLEGIANCE HILLVIEW, L.P.,
a New York limited partnership
By: TH GP LLC (d/b/a TH Denton GP
LLC), a Delaware limited liability
company, its general partner
B:
I-„dy 06~tf~e
IT+1 Dr;14 Sig-aiv-Y
13
EDWIN M. SNYDER
ACKNOWLEDGEMENTS
THE STATE OF TEXAS
COUNTY OF DENTON §
This ' trument was acknowledged before me, the undersigned authority on this the
L 4M& 2008, by George C. Campbell, City Manager of the City of
day of
Denton, Tea s, a Municipal Corporation, on behalf of the same.
JANE E. RIC
Notary Public, State of Texas tats of e
My Commission Expires Ng tary Public in and for the State of Texas
S''June 27, 2009
THE STATE OF TEXAS §
COUNTY OF HAY e3xt §
T-,.) 11 I4.5
This instrument was acknowledged before me, the undersigned authority on this ~J '
day of 4t.►le 2008, by /j„_/te, Manager of Allegiance Hillview
Management, LLC, on behalf of same. ~7
Notary Public in and for the State of Texas
- f,,,,
kk;t DAVID PAGE
MY COMMISSION EXPIRES
October 7,2008
14
EXHIBIT A
15
IRREVOCABLE STANDBY LETTER OF CREDIT
[ Date ]
[ Name of Issuing Bank, Address and Other Identification ]
STANDBY CREDIT
REFERENCE No.
To: City of Denton
City Hall
215 E. McKinney
Denton, Texas 76201
Attn: George Campbell, City Manager
ALL DRAFTS DRAWN UNDER THIS CREDIT MUST BE MARKED:
"Drawn Under Letter of Credit No. [ insert No.
By the order of Allegiance Hillvicw, L.P., we hereby issue in favor of the City of Denton, Texas
(Beneficiary") our irrevocable credit for the account of Allegiance Hillview, L.P., for an
amount or amounts not to exceed in the aggregate
.00) United States Dollars available by your drafts at sight on the [ name of issuing
bank and address ] U.S.A., effective from and expiring at our office at the close of
business on [ insert date ] for use in accordance with the terms and conditions below.
Funds under this credit are available against your draft(s) marked with our credit number as
shown above.
The documents specified below must be presented at sight on or before the expiry date in
accordance with the terms and conditions of this letter of credit:
Performance Deficiency - If there is a default by Allegiance Hillview, L.P. under the terms and
conditions of the Development Agreement (U.S. 380) entered into between Allegiance Hillview,
L.P. and Beneficiary dated (the "Contract'), the Beneficiary shall:
1) provide an affidavit executed by the Beneficiary or its designated representative
which states: "In accordance with terms of the Contract, we certify that Allegiance Hillview,
L.P. has defaulted and that notice has been provided to Allegiance Hillview, L.P. under the terms
and conditions of the Contract and Allegiance Hillview, L.P. has failed to cure its default in the
time allotted under the Contract. We further certify that Allegiance Hillview, L.P. has been
notified of our intent to draw under the credit."; and
16
2) provide a copy of the written notification that was served on Allegiance Hillview,
L.P. as required under the terms and conditions of the Contract referenced in the Affidavit.
Reduction - This credit shall be reduced as follows: Upon receipt of written notification,
executed by the Beneficiary or its designated representative, that states: "In accordance with
terms of the Contract, we certify that Allegiance Hillview, L.P. is entitled to a reduction of the
credit in the amount of $ This credit shall be reduced by the amount stated in such
notice.
We engage with you that drafts drawn under and in conformity with the terms of this credit will
be duly honored on presentation if presented to us at our office at the address shown above on or
before the expiry date. If the draft is less than the amount of the Letter of Credit, the documents
required under this credit and this original letter of credit must accompany the draft for
endorsement of the amount paid. If the draft is for the full amount, the documents required
under this credit must accompany the draft and The Letter of Credit must be surrendered to us.
In no event shall the Letter of Credit be terminated prior to [insert date which is 6 months after
the Scheduled Date for Substantial Completion or the one year warranty period whichever is
later].
Unless the undersigned elects not to renew this Letter of Credit as provided below, this Letter of
Credit shall automatically renew for one year periods commencing on the initial expiration date
and continuing on each succeeding expiration date. In the event that the undersigned elects not
to renew this Letter of Credit, it agrees to give written notice of such election by certified mail,
return receipt requested, and postmarked no less than 45 days prior to the expiration of the initial
term or any renewed terms, as the case may be. Upon receipt of said notice, Beneficiary may at
any time prior to the expiration of this Letter of Credit, present a draft in an amount equal to
either i) the remaining amount of the Letter of Credit or; ii) 150% of the unpaid Contract
Amount, whichever is less, without the necessity of meeting the requirement of I and 2 above.
Failure to give such notice will cause this Letter of Credit to automatically renew for an
additional one year period.
The credit is subject to the uniform customs and practice for documentary credits (1994
Revision), International Chamber of Commerce - Publication 500 [ or other appropriate
revision
Please address all correspondence regarding this letter of credit to the attention of our Letter of
Credit Department, at the address shown above mentioning our reference number as it appears
above.
Sincerely,
[ Signature ]
17
EXHIBIT B
19
IRREVOCABLE STANDBY LETTER OF CREDIT
[ Date ]
[ Name of Issuing Bank, Address and Other Identification ]
STANDBY CREDIT
REFERENCE No.
To: City of Denton
City Hall
215 E. McKinney
Denton, Texas 76201
Attn: George Campbell, City Manager
ALL DRAFTS DRAWN UNDER THIS CREDIT MUST BE MARKED:
"Drawn Under Letter of Credit No. [ insert No.
By the order of Allegiance Hillview, L.P., we hereby issue in favor of the City of Denton, Texas
(`Beneficiary") our irrevocable credit for the account of Allegiance Hillview, L.P., for an
amount or amounts not to exceed in the aggregate Four Hundred Fifty-Six Thousand Six
Hundred Eighteen and No/100 Dollars ($456,618.00) United States Dollars available by your
drafts at sight on the [ name of issuing bank and address ] U.S.A., effective from
and expiring at our office at the close of business on [ insert date ] for use in accordance with the
terms and conditions below.
Funds under this credit are available against your draft(s) marked with our credit number as
shown above.
The Beneficiary shall provide an affidavit executed by Beneficiary or its designated
representative which states:
"In accordance with the Development Agreement (U.S. 380) between Beneficiary
and Allegiance Hillview, L.P., dated (the "Contract"), we
certify that the attached Payment Application from Beneficiary's consultant is due
and payable. We further certify that Allegiance Fillview, L.P. has been notified
of our intent to draw under credit."
We engage with you that drafts drawn under and in conformity with the terms of this credit will
be duly honored on presentation if presented to us at our office at the address shown above on or
before the expiry date. If the draft is less than the amount of the Letter of Credit, the documents
19
required under this credit and this original letter of credit must accompany the draft for
endorsement of the amount paid. If the draft is for the full amount, the documents required
under this credit must accompany the draft and The Letter of Credit must be surrendered to us.
In no event shall the Letter of Credit be terminated prior to [insert date which is 6 months after
the Scheduled Date for Substantial Completion or the one year warranty period whichever is
later].
Unless the undersigned elects not to renew this Letter of Credit as provided below, this Letter of
Credit shall automatically renew for one year periods commencing on the initial expiration date
and continuing on each succeeding expiration date. In the event that the undersigned elects not
to renew this Letter of Credit, it agrees to give written notice of such election by certified mail,
return receipt requested, and postmarked no less than 45 days prior to the expiration of the initial
term or any renewed terms, as the case may be. Upon receipt of said notice, Beneficiary may at
any time prior to the expiration of this Letter of Credit, present a draft in an amount equal to
either i) the remaining amount of the Letter of Credit or; ii) 150% of the unpaid Contract
Amount, whichever is less, without the necessity of meeting the requirement of 1 and 2 above.
Failure to give such notice will cause this Letter of Credit to automatically renew for an
additional one year period.
The credit is subject to the uniform customs and practice for documentary credits (1994
Revision), International Chamber of Commerce - Publication 500 [ or other appropriate
revision
Please address all correspondence regarding this letter of credit to the attention of our Letter of
Credit Department, at the address shown above mentioning our reference number as it appears
above.
Sincerely,
[ Signature ]
4091341.30
38635.208
20