HomeMy WebLinkAboutContract 33870-CA2 CITY SECRETAW
CONTRACT NO. � '�
CONSENT TO ASSIGNMENT OF
ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
(CITY SECRETARY CONTRACT NO. 33870)
This CONSENT TO ASSIGNMENT OF ECONOMIC DEVELOPMENT
PROGRAM AGREEMENT (CITY SECRETARY CONTRACT NO. 33870) ("Consent") is
made and entered into by and between the CITY OF FORT WORTH ("City"), a home rule
municipal corporation organized under the laws of the State of Texas; PRESIDIO HOTEL
FORT WORTH, L.P. ("Presidio'), a Texas limited partnership; and 1701 COMMERCE
ACQUISITION LLC, a Delaware limited liability company authorized to do business in the
State of Texas as 1701 Fort Worth Hotel LLC ("1701").
The following introductory provisions are true and correct and form the basis upon which
the City, Presidio and 1701 have entered into this Consent:
A. As of August 14, 2006 the City and Presidio entered into that certain Economic
Development Program Agreement on file in the City Secretary's Office as City Secretary
Contract No. 33870, as subsequently amended by City Secretary Contract Nos. 34442, 35075,
36660, 33870-A4 and 33870-A5 (collectively, the "Agreement"). Under the Agreement,
Presidio agreed, among other things, to construct certain improvements to the Hotel owned by
Presidio and located at 1701 Commerce Street in the City, which is now generally known as the
Sheraton Fort Worth Hotel and Spa. In return, the City agreed to pay Presidio certain Program
Grants as authorized by Chapter 380 of the Texas Local Government Code and outlined in the
Agreement.
B. The Hotel and Hotel Property were subsequently sold by Presidio to 1701 Commerce,
LLC, a Texas limited liability company that is not affiliated with 1701. Pursuant to an order of
the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division, in
the case styled In re 1701 Commerce, LLC, Case No. 12-41748-DML-11, 1701 Commerce, LLC
has been authorized to sell the Hotel and Hotel Property to 1701.
C. Presidio and 1701 have requested that the City consent to an assignment by Presidio of all
its right, title and interest in the Agreement to 1701. The City is willing to consent to an assignment
of the Agreement to 1701 solely in accordance with this Consent.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
M which are hereby acknowledged, the City, Presidio and 1701 agree as follows:
M_
M 1. The City hereby consents to an assignment by Presidio to 1701 of all right, title and
o interest granted to Developer by the Agreement, effective as of the date on which the City,
Presidio and 1701 have all executed this Consent ("Effective Date").
z
co Page I of 3 OFFICIAL RECORD
o consent to Assignment of CSC No. 33870(Economic Development Program Agreement) CITY SECRETARY
�' by Presidio Hotel Fort Worth.L.P. to 1701 Commerce Acc{uisition LLC d/b/a 1701 Fort Worth Hotel LL �� �T�
2. The City consents to such assignment expressly upon the promise and covenant by 1701,
and 1701 hereby promises and covenants to the City, that as of the Effective Date, 1701 will
comply with all duties and obligations of Developer set forth in the Agreement. This Consent
does not grant 1701 any greater or different rights under the Agreement than those of Developer.
3. 1701 understands and agrees that no act or omission of Presidio, whether before or after
the Effective Date, will serve to mitigate any Event of Default set forth in Section 8 of the
Agreement or any failure to meet any or all of the numerical commitments for employment and
supply and service spending on the Hotel Property, as set forth in Sections 4.3 and 4.4 of the
Agreement.
4. All terms in this Consent that are capitalized but not defined shall have the meanings
assigned to them in the Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Consent to be executed in
multiples as of the last date indicated below:
CITY OF FORT WORTH: ATTEST:
By: �� By:
Fernando Costa a r y k'ai s r
Assistant City Manager City Sec y Q� FOR'
Dater °
00
�s M
APPROVED AS TO FORM AND LEGALITY: 0 °y
00 000
B y:
Peter Vaky
Deputy City Attorney
M&C:_ C-2 4 l U 2 -j2 -13
[SIGNATURES CONTINUE IMMEDIATELY ON NEXT PAGE]
OFFICIAL RECORD
CITY SECRETARY
FT.WORTH,TX
Page 2 of 3
Consent to Assignment of CSC No. 33870(Economic Development Program Agreement)
by Presidio Hotel Fort Worth.L.P. to 1701 Commerce Acquisition LLC d/b/a 1701 Fort Worth Hotel LLC
PRESIDIO HOTEL FORT WORTH, L.P.,
a Texas limited partnership:
By: Presidio Hotel Ge ar, LLC, a
Texas limited li ility company:
By:
Sushil Patel
Manager
Date: .���y -2-%
1701 COMMERCE ACQUISITION
LLC, a Delaware limited liability company
doing business as 170 ort Worth
Hotel LLC:
By:
Narne: -i"vi ;
Title: f I-,-,;
Date:
Page 3 of 3
Consent to Assignment of CSC No. 33570(Economic Development Program Agreement)
by Presicio Hotel Fort Worth,L.P.to 1701 Commerce Acquisition LLC d/b/a 1701 Fort Worth Hotel LLC
PRESIDIO HOTEL FORT WORTH,L.P.,
a Texas+* it
ip:
By: nPar, LLC, a
ility company:
By
Date: Co WI
1701 COMMERCE ACQUISITION
LLC,a D laware limited liability company
doing bus' ess as 1701 Fort Worth
Hotel
By:
Na r t
T.tl
Date: I I 1
Page 3 of 3
Consent to Assignment of CSC No.33870(Economic Development Program Agreement)
by Presidio Hotel Fort Worth,L.P.to 1701 Commerce Acquisition LLC d/b/a 1701 Fort Worth Hotel LLC
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 3/19/2013
DATE: Tuesday, March 19, 2013 REFERENCE NO.: **C-26147
LOG NAME: 17SHERATONAMEND6ASSIGNALL
SUBJECT:
Authorize Execution of Consents to Assignment of Economic Development Program
Agreement and Room Block Agreement by Presidio Hotel Fort Worth, LP,to 1701 Commerce
Acquisition, LLC d/b/a 1701 Fort Worth Hotel, LLC, or an Affiliate and Authorize Execution of
Amendment to Economic Development Program Regarding Payment and Assignment Rights
(COUNCIL DISTRICT 9)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the execution of Consents to Assignment of Economic Development Program
Agreement(City Secretary Contract No. 33870, as amended) and Room Block Agreement
(City Secretary Contract No. 33998)by Presidio Hotel Fort Worth, LP,to 1701 Commerce
Acquisition, LLC d/b/a 1701 Fort Worth Hotel, LLC, or an affiliate; and
2. Authorize the execution of Amendment No. 6 to the Economic Development Agreement
(City Secretary Contract No. 33870, as amended and assigned)regarding payment and
assignment rights.
DISCUSSION:
On February 28, 2006,the City Council authorized execution of an Economic Development
Program Agreement and a Room Block Agreement with Presidio Hotel Fort Worth, LP, (City
Secretary Contract Nos. 33870 and 33998) for the redevelopment of the former Plaza Hotel
located at 1701 Commerce Street(the Hotel). Under the Economic Development Program
Agreement, Presidio was required to expend at least$25 million to renovate the Hotel into a
400 room hotel with a minimum Mobil Travel Guide 3-Star rating that was operated under a
first tier brand name. Presidio complied with those obligations, and the Hotel has since been
rebranded under the Sheraton flag. Under the Room Block Agreement, Presidio is required to
coordinate with the Fort Worth Convention and Visitors Bureau and the City's Public Events
Department to ensure that blocks of hotel rooms are available for potential conventions in the
City.
On December 21, 2006,the City consented to an assignment of the Agreements by Presidio to
Dougherty Funding, LLC, as security for financing that was secured in order for Presidio to
make the required renovations to the Hotel. In 2012, Presidio conveyed the property to
another lender,1701 Commerce, LLC, in lieu of the institution of foreclosure
proceedings. 1701 Commerce, LLC, subsequently filed for Chapter 11 bankruptcy in the
United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division. As
part of the bankruptcy proceedings,the court has authorized a conveyance of the property to
1701 Commerce Acquisition, LLC d/b/a 1701 Fort Worth Hotel, LLC, which is managed in
large part by the management of Presidio Hotel Fort Worth, L.P., the original owner of the
Hotel. In order to complete the court-ordered sale, it is necessary for the Economic
Development Program Agreement and the Room Block Agreement to be assigned to 1701
Commerce Acquisition,LLC d/b/a 1701 Fort Worth Hotel, LLC.
Under the Agreements,the City Council is required to consent to any assignment, conditioned
on a finding that the assignee will be able to operate and market the hotel under a first tier flag
brand name and has the financial resources to operate a minimum 3-Star hotel. The assignee
must also execute a Consent to Assignment Agreement with the City. The bankruptcy court
has found that it is in the best interest of the Hotel's continued operations, if it is sold to 1701
Commerce Acquisition, LLC d/b/a 1701 Fort Worth Hotel, LLC, and Staff does not object to
the court's order.
The proposed Amendment revises the Economic Development Program Agreement to specify
that future economic development grant payments can only be made to the owner of the Hotel
at the time that such payment is due and makes limited provision for future assignments to
lenders for collateral purposes. Pursuant to the Agreement, as amended, 1701 Commerce
Acquisition, LLC d/b/a 1701 Fort Worth Hotel, LLC, is expected to make a collateral
assignment of the Agreement to a new lender, ARK Realty Capital.
The Hotel is located in COUNCIL DISTRICT 9.
FISCAL. INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that this action will have no material
effect on City funds.
FUND CENTERS:
TO Fund/Account/Centers FROM Fund/Account/Centers
CERTIFICATIONS:
Submitted for City Manager's Office by: Fernando Costa (6122)
Originating Department Head: Jay Chapa (5804)
Additional Information Contact: Robert Sturns (8003)
ATTACHMENTS
1. 130326 Sheraton Map.pdf (Public)