2006-284
S:\Our Documents\Ordinances\06\Dcnton Crossing 380 2nd Amendment.doc
ORDINANCE NO. 2. 006-? f3/-
AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING A SECOND
AMENDMENT TO AN ECONOMIC DEVELOPMENT PROGRAM GRANT AGREEMENT
DATED NOVEMBER 27, 2001 BETWEEN THE CITY OF DENTON AND DENTON
CROSSING PARTNERS LTD. WHICH WAS DULY ASSIGNED TO ORIX HUNT DENTON
VENTURE; AND PROVIDING AN EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON HERBY ORDAINS:
SECTION 1. The City Manager, or his designee, is hereby authorized to execute a
Second Amendment to the Economic Development Program Grant Agreement (the
"Amendment"), in substantially the form of the Amendment which is attached hereto and made a
part of this ordinance for all purposes.
SECTION 2. The City Manager, or his designee, is authorized to exercise the City of
Denton's rights and duties as set forth in the Amendment.
SECTION 3. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the 2t/:EdaYOf oelJ-fem her:2006.
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ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPR ED AS TO LEGAL FORM:
EDWIN M. S Y ATTORNEY
BY:
SECOND AMENDMENT TO
ECONOMIC DEVELOPMENT PROGRAM GRANT AGREEMENT
THIS SECOND AMENDMENT TO ECONOMIC DEVELOP%,ENT PROGRAM
GRANT AGREEMENT (this "Amendment") is entered into as of this~day of September,
2006, by and between THE CITY OF DENTON, a municipal corporation ("City") and ORIX
HUNT DENTON VENTURE, an Illinois general partnership ("OHDV").
WIT N E SSE T H:
WHEREAS, the City and Denton Crossing Partners Ltd. ("DCP") entered into that
certain Economic Development Program Grant Agreement, dated as of November 27,2001 and
filed of record with the County Clerk of Denton, Texas on December 21,2001 at Volume 4989,
Page 00274, as assigned by DCP to OHDV by Assignment of Economic Development Grant
Agreement, dated September II, 2002 and recorded with the County Clerk or Denton on
September 13, 2002 at Volume 5170, Page 84 and as amended by Amendment to Economic
Development Program Grant Agreement, dated January 21,2003 (collectively, the "Agreement")
WHEREAS, OHDV sold the Property on October 18, 2004 to Inland Western Denton
Crossing Limited Partnership, but retained the rights of Grantee under the Agreement.
WHEREAS, the City and OHDV desire to make certain amendments clarifying the rights
of OHDV under the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
I. Recitals; Definitions. The recitals set forth in this Amendment are incorporated
herein by this reference and made a part hereof as if fully set forth as paragraphs in this
Amendment. Initial capitalized terms used but not defined herein shall have the meaning
ascribed to them in the Agreement.
2. Amendments.
(a) The following definitions/are added to Section 2 of the Agreement:
(i) "Property Owner" means the owner or owners of the Property, at any
given time.
(b) The following definitions are amended and restated in their entireties in Section 2
of the Agreement:
(i) "Actual Cost" or "Actual Cost of the Public Participation Items" means
$7,250,000.
NGEDOCS: 015078.0530: 1306538.2
(ii) "Grantee" means OHDV and its successors and assigns of the right to
receive Program Grant payments under the Agreement and any and all
rights under the Agreement related thereto.
(iii) "Interest" means interest on any unpaid balance of the Program Grant
which shall accrue at a rate equal to the three month LIBOR rate as
identified by Fannie Mae plus 275 basis points, and shall be calculated and
compounded monthly. The unpaid balance of the Program Grant shall be
calculated based on the Actual Cost [of the improvements and work
represented as Public Participation Items in Exhibit A]. As such Actual
Costs are incurred by Grantee, such costs shall represent an equivalent
component of the Program Grant for purposes of calculating Interest. Such
program Grant components shall accrue Interest for the term of the
Program from the date that Grantee incurs the corresponding costs for the
design, construction or other work representing the Public Participation
Items.
(iv) "Program Effective Date" means June I, 2005 (Sales tax reported as of
June I, 2005, actually paid to Grantee on September 2, 2005).
(v) "Program Grant" means a grant of Y, of 1% of the Total Taxable Sales for
a period of 180 consecutive months, but not to exceed $7,250,000.00 plus
accrued Interest, to be paid by the City to the Grantee in 180 monthly
installments during the term of the Program
(vi) "Property" means that certain tract of approximately 54 acres more
particularly described in Exhibit B attached hereto.
(vii) "Tenant Occupancy" means November 1,2004.
(c) Section 4 of the Agreement is hereby amended and restated in its entirety as
follows:
"For each month of the Program Grant term, City agrees, subject to the
conditions contained in this Agreement, to make a Program Grant installment
payment to Grantee on or before thirty days following the City's receipt from the
State Comptroller of the Monthly Sales Tax Report indicating sales tax revenue
from businesses located on the Property. Monthly Program Grant installation
payments shall be calculated as provided in Section 5 below. Tenant Occupancy
shall be a condition precedent to the initiation of Program Grant payments. If
Grantee and Property Owner are the same entity, Program Grant payments may
be withheld at any time if there are delinquent property taxes on the Property and
will not be resumed until such delinquency is cured. The City and Grantee
acknowledge that Substantial Completion of the Improvements occurred on
August 2, 2004 with respect to the Retail Improvements and on August 2, 2004
with respect to the public works."
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(d) Section 6 of the Agreement is hereby amended by deleting the section ill its
entirety.
(e) Section 7 of the Agreement is hereby amended and restated in its entirety as
follows:
"During the term of this Agreement, the City reserves the right to conduct
audits of the sales and use tax records of businesses located on the Property if, in
the sole opinion ofthe City, such action is determined to be necessary. If Grantee
and the Property Owner are the same entity, Grantee agrees upon request to use
reasonable efforts to assist the City in obtaining such records from tenant
taxpayers. If Grantee and Property Owner are the same entity, failure to provide
such assistance shall be grounds for default, and City may withhold any
installment payment until such assistance is provided. During the term of this
Agreement, the City will keep, or cause to be kept, copies of the Monthly Tax
Reports and proper and current books and accounts in which complete and
accurate entities shall be made of the amount of sales taxes received by the City
from the State of Texas attributed to the Retail Improvements and such other
calculations, allocations and payments required by this Agreement. During the
term, the City shall prepare within 120 days after the close of each fiscal year of
the City and within 90 days after the close of each calendar quarter, a complete
financial statement for such year or quarter, as applicable, in reasonable detail
covering the above information, and shall furnish a copy of such statement to
Grantee. Upon the request of Grantee, and at Grantee's expense, City shall have
the annual Program Grant financial statement prepared by an independent
certified public accountant. Upon request of Grantee, City shall provide copies of
City records related to the Program Grant to Grantee or its investors, lenders, or
other parties designated by the Grantee. The City shall allow Grantee access to
all reports, books, accounts and other information related to sales tax, except for
documents that are deemed confidential by the State Comptroller's office during
business hours upon forty-eight (48) hours advance written request. The City
shall furnish Grantee a copy of the Monthly Sales Tax Report, or similar report
from the State of Texas in a timely marmer each month during the life of the
Program Grant."
(f) Section 8 of the Agreement is hereby amended by deleting the word "either" in
the first (1 st) line thereof and replacing the same with the word "any".
(g) Section 10 of the Agreement is amended by adding the following phrase after the
phrase "arising out of Grantee's obligations hereunder" in the first (1 st) sentence
thereof: "(but not Property Owner's)".
(h) Section 15 of the Agreement is hereby amended and restated in its entirety as
follows: 'This Agreement shall be binding on and inure to the benefit of the
parties, their respective successors and assigns. Upon written notice to the City,
each of Grantee and Property Owner, in its sole and absolute discretion, may
assign all of its rights and/or obligations hereunder; provided, however that in no
NGEDOCS, 015078.0530,1306538.2
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event may Grantee or Property Owner assign only a portion of their respective
rights and/or obligations hereunder."
(i) The following Section 21 is added to the Agreement: "Casualty: In the event of
any casualty to the Property that results in the physical destruction to the Property
(whether fire, act of God or otherwise) which closes operation of all or a portion
of the Property and results in a decrease in sales at the Property of 25% or more,
Grantee shall give the City written notice of such casualty no later than (60) days
after the occurrence of such casualty, and the Program term shall be extended
from the time of such notice for an amount of time equal to the amount of time
that operation of the Property is closed due to such casualty, not to exceed twelve
(12) months with respect to any given casualty. During such time period the
Program Grant Payments will be suspended so that the total Program Grant
Payments shall not exceed one hundred eighty (180) monthly payments. Also,
during such suspended time period interest will not accrue. However, in no event
shall the Program term be extended for more than twenty four (24) months total as
a result of such casualties."
3. Assignments. The City acknowledges that OHDV has conveyed the Property to
Inland Western Denton Crossing Limited Partnership, but has retained the rights of Grantee
under the Agreement and hereby recognized OHDV as the Grantee under the Agreement.
4. Representations. The City hereby reaffirms the representations set forth in
Section II of the Agreement. OHDV hereby reaffirms the representations set forth in Section 12
(b) through (d) and hereby represents that Grantee is a general partnership duly organized and
validly existing under the laws of the State of Illinois and had and has the legal capacity and
authority to enter into and perform its obligations under the Agreement.
5. Successors and Assigns. This Amendment shall extend to, be binding upon and
inure to the benefit of the respective heirs, devisees, legal representatives, successors, permitted
assigns and beneficiaries of the parties hereto.
6. Counterparts. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, and all of such counterparts shall together constitute
one Amendment.
7. Conflicts. To the extent of any inconsistency between the terms and provisions of
this Amendment and the Agreement, the terms and provisions of this Amendment shall control.
8. Except as expressly amended herein, all other terms, covenants and conditions of
the Agreement shall remain in full force and effect.
9. Facsimile signatures shall be deemed originals signatures for purposes of creating
a valid and binding Amendment.
NGEDOCS: 015078.0530: 1306538.2
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the day and year first above written.
CITY OF DENTON, TEXAS
a~f3,~~(lJJ
~EST' J
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t Secret
APPROV TO GAL FORM:
GRANTEE:
ORIX HUNT DENTON VENTURE, an Illinois
general partnership
By: ORIX Denton Limited Partnership, an
Illinois limited partnership, its partner
By: ORIX Power Center Denton, LLC,
its general partner
By:
ORIX Real Estate Capital,
Inc., its man i member
.......
By:
i,r---
ame:
Title:
Mlch.....Mlnn
8VP I GIImI Counsel
NGEDOCS: 015078.0530: 1329333.1
NGEDOCS: 015078.0530:1306538.2
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