HomeMy WebLinkAboutContract 30445 CITY `TCRETAR'Y
ACCEPTANCE 01
,. `,"F.hACT NO.
City of Fort Worth, in consideration of the assignment to it of that certain construction
contract between with HM & MF Ltd. d/b/a/ Muckleroy & Falls and Fort Worth Mercado, I. L.P.,
attached hereto as Exhibit A, accepts said assignment and agrees to assume and perform all of
the duties and obligations of Fort Worth Mercado, I. L.P. contained in Exhibit "A".
SIGNED this Y` day of ,2004.
ATTEST: CITY OF FORT WORTH
y
I By; / ?
Marty Hendrik' Dale risseler
Assistant City Manager
Appr d as to Form and Legality:
Assistafit City Attorney �. "k
Contract Authoriz tiox
STATE OF TEXAS § 9-31-
.._
Date
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas, on
this day personally appeared Dale Fisseler, Assistant City Manager of the City of Fort Worth,
known to me to be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that the same was the act of the City of Fort Worth and that he executed the
same as the act of said the City of Fort Worth for the purposes and consideration therein
expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS day of_�9
2004.
J``'RY PUq KAREIJ EDWARDS FISHER Notary Public in and for the State oTexas
Notary Public,State of Texas
✓ fr" My Commission Expires My Commission expires:
Page 1 of 2
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 8/31/2004 - Ordinance No. 16107
DATE: Tuesday, August 31, 2004
LOG NAME: 17FWMERCADO REFERENCE NO.: C-20251
SUBJECT:
Appropriation Ordinance and Acceptance of Grant from Fort Worth Local Development Corporation
and Assignment of Contract between Fort Worth Mercado I, L.P. and Muckelroy and Falls for
Construction of the Fort Worth Mercado
RECOMMENDATION:
It is recommended that the City Council:
1. Approve the assignment and transfer of all rights, title and interest of Fort Worth Mercado 1, L.P. in the
contract between Fort Worth Mercado I, L.P. and Muckelroy & Falls for the construction of the Fort Worth
Mercado to the City of Fort Worth; and
2. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
Local Development Corporation Fund by $1,300,000 from available funds; and
3. Authorize the City Manager to execute a contract agreement accepting the amount of$1,300,000 from
the Fort Worth Local Development Corporation (LDC) to complete the construction of the Fort Worth
Mercado building located at 1500 North Main Street.
DISCUSSION:
The City and Fort Worth Mercado I, L.P. began discussions in September 2001 regarding the development
of a "Mercado" style building in the 1500 block of North Main Street. An agreement to construct the building
was finalized in August 2003, and work began in October 2003. At the time of the construction agreement,
the developer had a letter of intent from Northwest Bank to fund the estimated construction gap of$300,000
on the project with all remaining costs in the project to be covered by cash from the developer.
In February 2004, the developer informed the City that she was not able to provide the required 20% equity
in the project. The funding from Northwest Bank had fallen through and another lender had not been
secured. The construction was continued using available Section 108 loan funds designated for the project
while the developer sought third party financing to complete the building. Several meetings were held with
the developer, the contractor and the City staff to try and resolve the funding issues. When a funding
source failed to materialize, the contractor, Muckelroy & Falls, informed the City that work on the building
would be shut down if the developer was not able to secure additional financing.
The developer attempted to bring in an equity partner as an alternative as well as to secure a collateralized
loan with a local bank to secure the funds to complete the project. These efforts by the developer also
failed to secure financing for the project, so in order to complete the construction of the building; City staff
proposes that the City take over the project. The developer has assigned its interest in the contract to the
City, which will allow for the completion of the 58,000 square foot building, which has space for retail, office
http://www.cfwnet.org/council_packet/Reports/mc_print.asp 9/1/2004
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and a meeting facility. This recommendation to take over the project and complete the building is superior
to closing down the project at this time. The building is approximately 60% complete and the current
construction contract is at favorable terms. To close down the project would likely expose the building to
the elements and be subject to theft and vandalism as well as a liability risk. The start-up costs and a rebid
of the construction contract to continue the project at a later time would make the project much more costly
and likely economically impractical.
City staff plans to complete the construction of the building at a cost of approximately $1,300,000 and then
place it on the market for immediate sale. The funds to complete the project will consist of $700,000 from
the LDC Mercado repayment account and $600,000 from LDC revenue received from the lease of property
at Blue Mound Road. Both of these funding sources are from Non-General Fund sources. The $700,000
from the LDC Mercado repayment account will need to be returned to the account within 1 year. Staff
expects that this will be possible once a sale is completed on the building.
City staff expects to bring a future M&C to Council after the required public comment period to allocate up to
an additional $300,000 in CDBG funds to complete tenant finish-out for the building if these funds are
determined to be needed.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that upon approval of the above recommendations, receipt of the grant, and
adoption of the attached appropriation ordinance, funds will be available in the current operating budget, as
appropriated, of the Local Development Corporation Fund.
TO Fund/Account/Centers FROM Fund/Account/Centers
R106 441060 013106003000 $600,000.00 R106 539120 013106003000 $700,000.00
R106 441060 013106003000 $700,000.00 R106 539120 013106003000 $600,000.00
Submitted for City Manager's Office by: Joe Paniagua (6191)
Originating Department Head: Tom Higgins (6192)
Additional Information Contact: Robert Sturns (8634)
http://www.cfwnet.org/council_packet/Reports/mc_print.asp 9/1/2004