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HomeMy WebLinkAboutContract 31475 CITY SECRETARY CONTRACT NO. �-� ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Agreement") is entered into by and between the CITY OF FORT WORTH ("City"), a home rulem icipal c oration organized under the laws of the State of Texas, acting by and through , I s my authorized Assistant City Manager, and BCM/CHI WORTHINGTON, INC. ("Owner"). ` RECITALS The City and Owner hereby agree that the following statements are true and correct and constitute the basis upon which the City and Owner have entered into this Agreement: A. The City has created an Economic and Community Development Department in order to, among other things, oversee economic development programs authorized by Texas law and approved by the City Council, including those authorized by Chapter 380 of the Texas Local Government Code, to promote state and local economic development and to stimulate business and commercial activity in the City, as further outlined in Resolution No. 2704, adopted by the City Council on January 30, 2001. B. In accordance with the 2004 Comprehensive Plan adopted by the City Council pursuant to M&C G-14276 on February 24, 2004, the City's economic development programs are based on a model of custom-designed incentives and partnership programs with private businesses on a case-by-case analysis of individual projects to help ensure the growth and diversification of the local economy. C. The 2004 Comprehensive Plan recognizes that tourism, both for business and for pleasure, is a significant component of the City's economy and cites the importance of the Fort Worth Convention Center and surrounding hotels as critical elements in the City's efforts to promote tourism in the City. D. A study undertaken in 2002 on behalf of the City by HVS International (the "HVS Study") reveals that if the City is to be competitive amongst its peers, both in Texas and throughout the nation, in its ability to attract convention business to the Fort Worth Convention Center, a minimum of 1,500 first class quality hotel rooms in the City's downtown are necessary. The HVS Study concluded that only two (2) hotels in the City's downtown have rooms that are of first class quality: the 504 rooms in the Renaissance Worthington and the 203 rooms in the Marriott Courtyard. Even though the City is currently in negotiations to cause development of a 600-room hotel directly across X3-1 u—lh G5 c 12 RCVD Page I Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington,Inc. _ from the Fort Worth Convention Center, the HVS Study shows that the existence of other first class hotel rooms in the downtown area are and will continue to be needed. E. Owner owns the hotel located at 200 Main Street in the City, which is currently operating as the Renaissance Worthington. Owner wishes to redevelop and significantly upgrade the hotel and has asked the City to create an economic development program under which Owner will receive the financial assistance necessary to make the redevelopment of the hotel feasible. F. The City Council has found and determined that by entering into this Agreement, the potential economic benefits that will accrue to the City under the terms and conditions of this Agreement are consistent with the City's economic development objectives and the efforts to increase tourism in the City as set forth in the 2004 Comprehensive Plan. G. This Agreement is authorized by Chapter 380 of the Texas Local Government Code. NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: AGREEMENT 1. INCORPORTION OF RECITALS. The City Council hereby finds, and the City and Owner hereby agree, that the recitals set forth above are true and correct and form the basis upon which the City has entered into this Agreement. 2. DEFINITIONS. In addition to terms defined in the body of this Agreement, the following terms shall have the definitions ascribed to them herein: Adjusted Hotel Occupancy Tax Revenue means an amount of revenue from the hotel occupancy taxes lawfully imposed by the City pursuant to Chapter 351 of the Texas Tax Code and Chapter 32 of the City Code that are derived from or attributable to the Hotel Property and paid in a given year to the City equal to seven percent (7%) of the taxable Hotel room revenue (upon which the actual taxes paid were based), minus $1,225,126 (which is the full amount of the hotel occupancy taxes that were payable to the City for the 2003 tax year). Adjusted Hotel Sales Tax Revenue means the City's share of a one percent (1%) Page 2 Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington,Inc. municipal sales tax, such as that presently in effect pursuant to Texas Tax Code §§ 321.101(a) and 321.103, resulting from sales tax collected on sales transacted on the Hotel Property, whether by Owner or another person or entity, for merchandise physically located on the Hotel Property, minus $115,475 (which is the full amount of sales taxes that were payable to the City for the 2003 tax year). Adjusted Hotel Sales Tax Revenues specifically exclude all revenues from (i) the Crime Control District Sales Tax imposed by the City pursuant to Texas Tax Code §323.105 and Local Government Code §363.005 and (ii) the Transit Authority Sales Tax paid to the City by the Fort Worth Transportation Authority under City Secretary Contract No. 19689, as previously or subsequently amended or restated, from the sales tax imposed by the Fort Worth Transportation Authority pursuant to Texas Tax Code Chapter 322. If the City ever charges less than a one percent (1%) sales tax, then Adjusted Hotel Sales Tax Revenues shall be computed to reflect that lesser percentage. If the City ever charges less than a one percent (1%) sales tax and then subsequently adds a sales tax that increases such lower percentage and whose use is not controlled or regulated, in whole or in part, by another governmental entity or authority, then Adjusted Hotel Sales Tax Revenues shall be computed to reflect that increased percentage up to a maximum aggregate of one percent (1%). Central City means the area of the corporate limits of the City within Loop 820 (i) consisting of all Community Development Block Grant ("CDBG") eligible census block groups; (ii) all state-designated enterprise zones; and (iii) all census block groups that are contiguous by seventy-five percent (75%) or more of their perimeter to CDBG eligible block groups or enterprise zones, as well as any CDBG-eligible block in the corporate limits of the City outside Loop 820, as more specifically depicted in the map of Exhibit "A", attached hereto and hereby made a part of this Agreement for all purposes. Central City Resident means an individual whose principal place of residence is at a location within the Central City. Construction Costs means hard construction costs, signage costs, and the costs of supplies and materials expended by Owner in the redevelopment of the Hotel in two (2) phases as outlined in Section 4.1 and Exhibit"C" of this Agreement. Excluded Hotel Revenue means any revenue received by the City in a given year from (i) the full amount of any hotel occupancy taxes that were payable to the City for the 2003 tax year; (ii) the amount of Adjusted Hotel Occupancy Tax Revenue and Adjusted Hotel Sales Tax Revenue in excess of the Maximum Annual Program Grant payable to Owner for the next calendar year; and (iii) the amounts by which any Program Grant may be reduced, in whole or in part, by operation of Sections 5.2.1, 5.2.2, 5.3.1 and 5.3.2. First Tier Fla;r means one of the following brand names under which the Hotel is operating and marketing itself. Westin; Sheraton; Marriott; Hilton; Renaissance, Hyatt; Embassy Suites; Omni; Doubletree; or another first-class hotel brand name that has Page 3 Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington,Inc. specifically been approved by the City Council of the City for purposes of this Agreement, which approval shall not be unreasonably withheld. Fort Worth Certified M/WBE Company means a minority or woman-owned business that has received certification as either a minority business enterprise (MBE) or a woman business enterprise (WBE) by either the North Texas Regional Certification Agency (NTRCA) or the Texas Department of Transportation (TxDOT), Highway Division, and whose principal business office is located within the corporate limits of the City. Fort Worth Company means a business that has a principal office located within the corporate limits of the City. A Fort Worth Certified MIWBE Company is also a Fort Worth Company for purposes of this definition. Fort Worth Resident means an individual whose principal place of residence is located within the corporate limits of the City. A Central City Resident is also a Fort Worth Resident for purposes of this definition. Full-time Job means a job filled by one (1) individual as an employee of the Hotel and employed in the normal and customary manner for Hotel operations to meet the demands of the Hotel. Hotel means the building and other facilities located on the Hotel Property which are operated as a hotel. Hotel Property means real property in the City located at 200 Main Street and the Hotel and other real property improvements located thereon. Maximum Annual Program Grant means the maximum Program Grant that the City will pay Owner in a given year, as set forth in Exhibit "B-1" or, if Owner does not complete the Phase I1 Improvements to the Hotel in accordance with Section 4.1 of this Agreement, then as set forth in Exhibit "B-2", both of which are attached hereto and hereby made a part of this Agreement for all purposes. Program means the economic development program authorized by Chapter 380 of the Texas Local Government Code and established and outlined in this Agreement. Program Cap means the aggregate amount of Program Grants that the City is required to pay Owner pursuant to this Agreement, as further outlined in Section 5.4 hereof. Program Grants means the annual economic development grants paid by the City to Owner in accordance with this Agreement and as part of the Program. Page Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington,Inc. Program Year means a calendar year in which the City is obligated to pay Owner a Program Grant pursuant to this Agreement, beginning with calendar year 2005 (Program Year 1). Redevelopment Costs means the costs expended by Owner in the redevelopment of the Hotel in two (2) phases as outlined in Section 4.1 Exhibit "C" of this Agreement, including all Construction Costs; the costs of furniture, fixtures and equipment; third- party fees, such as surveyors, appraisers, engineers, architects, environmental assessments and legal fees; and lender imposed fees and costs and interest in connection with construction loans. Room Block Agreement means a legally binding written agreement between the City and Owner under which Owner will cause the Hotel to have reserved specific percentages of the Hotel's standard guest rooms and suites for specific periods of time in the future for attendees, participants and planners of conventions and/or trade shows at the Fort Worth Convention Center. Substantially Complete means that construction and/or renovation work under a given phase, as more specifically set forth in Section 4.1, is completed to the extent that the areas subject to such construction and/or renovation work are fully accessible and able to be utilized by Hotel guests for their intended purposes. 3. TERM. This Agreement shall be effective as of May 25, 2004 and shall expire upon the earlier of (i) the date as of which the City has paid Owner the Program Cap, less the aggregate reductions, if any, to the Program Grants made hereunder in accordance with the terms and conditions of this Agreement, or (ii) subject to Section 5.3.1, payment by the City to Owner of the twentieth (20th) annual Program Grant, as provided by Section 5 hereof(the "Term"), unless terminated earlier as provided by and in accordance with this Agreement. 4. OWNER'S OBLIGATIONS. 4.1. Redevelopment of Hotel. By December 31, 2004 (i) Owner will spend or cause to be spent at least $6.7 million in Redevelopment Costs for upgrades to the Hotel identified as the "Phase I Improvements", as more specifically set forth in Exhibit "C", attached hereto and hereby made a part of this Agreement for all purposes, and (ii) the Phase I Improvements shall be Substantially Complete. By December 31, 2008 (i) Owner will spend or cause to be spent at least $4.5 million in Redevelopment Costs for upgrades to the Hotel identified as the "Phase II Improvements", as more specifically set forth in Exhibit "C", and (ii) the Phase II Improvements Page 5 Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington,Inc. shall be Substantially Complete. Throughout the Term of this Agreement, the Hotel will be a full service hotel and, except for room closures necessary to complete the Phase I Improvements and/or Phase II Improvements, will have a minimum of five hundred and four (504) first-class standard guest rooms and/or suites. 4.2. Construction Spending Goals. 4.2.1. Fort Worth Companies. Without regard to the actual amount of dollars spent on the Construction Costs for the Phase I Improvements and the Construction Costs for the Phase II Improvements, Owner will spend at least thirty percent (30%) of the Construction Costs for the Phase I Improvements and at least thirty percent (30%) of the Construction Costs for the Phase II Improvements with contractors that are Fort Worth Companies; provided, however, that if Owner spends more than thirty percent (301/,) of the Construction Costs for the Phase I Improvements with contractors that are Fort Worth Companies, the number of dollars by which Owner exceeded that goal shall be applied toward Owner's Construction Cost spending commitment with Fort Worth Companies for the Phase II Improvements. In other words, if Owner exceeded its commitment for Construction Cost spending with Fort Worth Companies for the Phase I Improvements by $25,000, then the number of dollars that Owner must spend in order to meet its commitment for Construction Cost spending with Fort Worth Companies for the Phase II Improvements will be reduced by $25,000. 4.2.2. Fort Worth Certified M/WBE Companies. Without regard to the actual amount of dollars spent on the Construction Costs for the Phase I Improvements and the Construction Costs for the Phase II Improvements, Owner will spend at least twenty percent (20%) of the Construction Costs for the Phase I Improvements and at least twenty percent (20%) of the Construction Costs for the Phase II Improvements with contractors that are Fort Worth Certified MJWBE Companies; provided, however, that if Owner spends more than twenty percent (20%) of the Construction Costs for the Phase I Improvements with contractors that are Fort Worth Certified M/WBE Companies, the number of dollars by which Owner exceeded that goal shall be applied toward Owner's Construction Cost spending commitment with Fort Worth Certified M/WBE Companies for the Phase II Improvements. In other words, if Owner exceeded its goal for Construction Cost spending with Fort Worth Certified MJWBE Companies for the Phase I Improvements by $10,000, then the number of dollars that Owner must spend in order to meet its commitment for Construction Cost spending with Fort Worth Page Jt.•� 2 ;,._ Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington, Inc. Certified M/WBE Companies for the Phase I1 Improvements will be reduced by $10,000. 4.3. Employment Goals. 4.3.1. Fort Worth Residents. Beginning in calendar year 2004 and in each calendar year thereafter, Owner will cause at least sixty percent (60%) of all Full-time Jobs on the Hotel Property to be filled by Fort Worth Residents. 4.3.2. Central City Residents. Beginning in calendar year 2004 and in each calendar year thereafter, Owner will cause at least thirty percent (30%) of all Full-time Jobs on the Hotel Property to be filled by Central City Residents. 4.3.3. Measurement. The annual employment goals set forth in this Section 4.3 shall be measured by averaging Owner's employment data for the last month of each calendar quarter. In other words, in determining whether the goal for employment of Fort Worth Residents was met in a given calendar year, the City will average the percentage of Full-time Jobs on the Hotel Property that were held by Fort Worth Residents in March, June, September and December of such year. This average percentage shall equal the percentage applicable for the entire calendar year. The parties may mutually agree to measure Owner's compliance with the annual employment goals set forth in this Section 4.3 by data other than that from the last month of each calendar quarter. 4.4. Additional NMBE Opportunities. Owner will work with the City's Minority/Women Business Enterprise Office in establishing a goal for Owner to utilize minority-owned and women- owned business enterprises in aspects of the upgrade and redevelopment of the Hotel Property other than the Phase I Improvements and Phase II Improvements, if any. 4.5. Star Rating. Throughout the Term, the Hotel must maintain a Mobil Travel Guide rating of at least three (3) stars. The criteria for a three (3)-star rating by Mobil Travel Guide are attached hereto as Exhibit "D", which is hereby made a part of this Agreement for all purposes. In the event that Mobil Travel Guide changes its star rating system from that used in 2003, the City and Owner agree to modify this Page 7 Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington, Inc. Section 4.5 to provide that the Hotel must maintain the Mobil Travel Guide star rating that most closely applies at the time to hotels meeting the criteria set forth in Exhibit"D". In the event that Mobil Travel Guide is no longer published or no longer provides a hotel star rating system, the City and Owner will negotiate in good faith a modification to this Section 4.5 to provide that the Hotel must meet a standard provided by another publication or index reasonably agreed to by both the City and Owner that applies as closely as possible to hotels meeting the criteria set forth in Exhibit"D". 4.6. Competitive Name Brand. Throughout the Term of this Agreement, the Hotel must be operating and marketing itself under a First Tier Flag brand name. 4.7. Room Block Agreement. By not later than March 15, 2005 (or such other date as may be mutually agreed to in writing by the parties), the City and Owner shall have negotiated in good faith and executed a Room Block Agreement. A Room Block Agreement must be in effect and in full force as of the date that a Room Block Agreement is first executed pursuant to this Agreement and all times thereafter for the remainder of the Term of this Agreement. 4.8. Employment Reports. On or before March 15, 2005 and on or before February 1, 2005 of each subsequent year for the remainder of the Term of this Agreement, Owner will provide the City with a report that sets forth the total number of Full-time Jobs provided on the Hotel Property; the number of such Full-time Jobs filled by Fort Worth Residents; and the number of such Full-time Jobs filled by Central City Residents, all as of the last month of each quarter in the preceding calendar year or such other time period or time periods mutually agreed to by the parties in accordance with Section 4.3.3, together with reasonable documentation regarding the residency of such employees. 4.9. Inspection of Hotel and Hotel Property. At any time during the Term of this Agreement, following reasonable advance notice to Owner, the City shall have, and Owner shall provide or cause to be provided, access to the Hotel and Hotel Property in order for the City to inspect the same to ensure compliance with this Agreement and to evaluate the Hotel with respect to the public purposes supporting this Agreement. Owner, its officers, agents, servants, employees, contractors and subcontractors, shall cooperate fully with the City during any such inspection or evaluation. Page 8 Economic Development Program Agreement between City of Fort Worth and 13CM/CHl Worthington,Inc. 4.10. Audits. Owner agrees that the City will have the right to audit the financial and business records of Owner that relate to the Hotel Property and the Required Improvements (collectively "Records") at any time during the Term of this Agreement in order to determine compliance with this Agreement. Owner shall make all Records available to the City on the Hotel Property or at another location in the City acceptable to both parties following reasonable advance notice by the City and shall otherwise cooperate fully with the City during any audit. 5. PROGRAM GRANTS. Beginning in calendar year 2005, the City will pay to Owner annual Program Grants as provided by and calculated in accordance with this Section 5, subject to reductions outlined in Section 5.2 and full or partial forfeitures outlined in Section 5.3 as well as all other terms and conditions of this Agreement. 5.1. Calculation of the Base Amount of Each Program Grant. Subject to the terms and conditions of this Agreement, and specifically Sections 5.2.1, 5.2.2, 5.3.1, 5.3.2 and 5.4 of this Agreement, the base amount of each Program Grant paid by the City to Owner in a given Program Year will be the lesser of (i) the Maximum Annual Program Grant payable for that Program Year as specified in Exhibit "B-1" hereof or, if Owner does not expend at least $4.5 million for the Phase I1 Improvements and the Phase II Improvements are not Substantially Complete by December 31, 2008, then the Maximum Annual Program Grant payable for that Program Year as specified in Exhibit "B-2" hereof, or (ii) the sum of (a) the Adjusted Hotel Sales Tax Revenue for the previous tax year paid by Owner and received by the City as of January 31 of that Program Year plus (b) the Adjusted Hotel Occupancy Tax Revenue for the previous tax year paid by Owner and received by the City as of January 31 of that Program Year. 5.2. Reduction of Program Grants. 5.2.1. Failure to Meet Construction Spending Goals. 5.2.1.1. For Phase I Improvements. Beginning with the first Program Grant, which will be payable in calendar year 2005, the base amount of each annual Program Grant, calculated in accordance with Section 5.1 of this Agreement, shall be reduced throughout the Term of this Agreement by the cumulative percentage by which Owner failed to Page 9 Economic Development Program Agreement between City of Fort Worth and BCNUCHI Worthington,Inc. meet its Construction Cost spending commitments for the Phase I Improvements, as outlined in Sections 4.2.1 and 4.2.2. For example, if Owner spent $6.7 million in Redevelopment Costs for the Phase I Improvements, $3 million of which were Construction Costs, then Owner would be required to have spent at least thirty percent (30%) of those Construction Costs, or $900,000, with Fort Worth Companies and at least twenty percent (20%) of those Construction Costs, or $600,000, with Fort Worth Certified M/WBE Companies. However, if Owner actually spent only $855,000 in Construction Costs with Fort Worth Companies [thereby missing that spending commitment by five percent (5%)] and only $540,000 in Construction Costs with Fort Worth Certified M/WBE Companies [thereby missing that spending commitment by ten percent (10%)], then each annual Program Grant payable to Owner by the City would be reduced throughout the Term of this Agreement by fifteen percent (15%). 5.2.1.2. For Phase II Improvements. Beginning with the Program Grant payable in calendar year 2009, the amount of each annual Program Grant, calculated in accordance with Section 5.1 of this Agreement and subject to reduction pursuant to Section 5.2.1.1, shall be further reduced throughout the Term of this Agreement by the cumulative percentage by which Owner failed to meet its Construction Cost spending goals for the Phase 1I Improvements, as outlined in Sections 4.2.1 and 4.2.2. For example, continuing with the illustration set forth in Section 5.2.1.1, if Owner spent $4.5 million in Redevelopment Costs for the Phase I1 Improvements, $1 million of which were Construction Costs, then Owner would be required to have spent at least thirty percent (30%) of those Construction Costs, or $300,000, with Fort Worth Companies (subject to any Phase I Improvement credit to which Owner might be entitled pursuant to Section 4.2.1) and twenty percent (20%) of those Construction Costs, or $200,000, with Fort Worth Certified M/WBE Companies (subject to any Phase I Improvement credit to which Owner might be entitled pursuant to Section 4.2.2). However, if Owner actually spent only $285,000 in Construction Costs with Fort Worth Companies [thereby missing that spending commitment by five percent (5%)], and only $196,000 in Construction Costs with Fort Worth Certified M/WBE Companies [thereby missing that spending commitment by two percent (2%)], then each annual Program Grant payable to Owner by the City in 2009 and thereafter would be reduced throughout the Term of this Agreement by another seven percent (7%), for a total Program Grant reduction of twenty-two percent (22%) (taking into account Page 10 J f�Jry _ Economic Development Program Agreement r, r• .i�, between City of Fort Worth and BCM/CHI Worthington, Inc. J� + `' `��� L 3i' ,tiia the previous 15% reduction for Phase I Improvement Redevelopment Cost spending shortfalls). 5.2.2. Failure to Meet Employment Goals. The amount of any annual Program Grant, calculated in accordance with Section 5.1 of this Agreement and as may be reduced pursuant to Section 5.2.1 of this Agreement, may, subject to Section 5.2.3, additionally be reduced in a given year by the cumulative degree to which Owner failed to meet its employment goals for the previous calendar year, as outlined in Sections 4.3.1 and 4.3.2. For example, if three hundred (300) Full-time Jobs were provided on the Hotel Property during a given calendar year, then Owner would be required to have filled at least sixty percent (60%), or one hundred eighty (180), of those positions with Fort Worth Residents and at least thirty percent (30%), or ninety (90), of those positions with Central City Residents. However, if Owner actually filled only one hundred fifty-three (153) of those positions with Fort Worth Residents [thereby missing that employment goal by fifteen percent (15%)] and only eighty-one (81) of those positions with Central City Residents [thereby missing that employment goal by ten percent (10%)], then the Program Grant, as already may have been reduced pursuant to Section 5.2.1 of this Agreement, could, subject to Section 5.2.3, be reduced additionally in the following year only by another twenty-five percent (25%). 5.2.3. Employment Goal Contingency. If in any year during the Term of this Agreement Owner failed to meet either or both of the employment goals outlined in Sections 4.3.1 and 4.3.2 and the Hotel's occupancy rate in that same year was less than sixty- three percent (63%), before taking any action to reduce the Program Grant payable in the following calendar year, the City will give Owner an opportunity to explain the reason for the lower-than-expected occupancy rate and how that occupancy rate may have affected Owner's employment needs on the Hotel Property. If Owner can demonstrate to the City's reasonable satisfaction that the lower-than-expected occupancy rate was not caused by Owner or a deficiency in the amenities or customer service standards at the Hotel, then upon receipt of approval by the City Council, which approval shall be determined by a simple majority vote of the City Council, (i) the City may elect to not impose the reduction provided by Section 5.2.2 or(ii) the City staff and Owner will negotiate in good faith a reduction that, under the circumstances, is more reasonable and less onerous than that provided by Section 5.2.2. Page I1 Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington,[nc. 5.2.4. No Offsets. A deficiency in attainment of any of the goals set forth in Sections 4.2.1, 4.2.2, 4.3.1 and/or 4.3.2 may not be offset by exceeding other such goals (except as specifically provided in Sections 4.2.1 and 4.2.2 with respect to shortfalls in Redevelopment Cost spending for the Phase II Improvements with Fort Worth Companies and Fort Worth Certified M/WBE Companies). In other words, if Owner exceeded its Redevelopment Cost spending goal with respect to the use of contractors that are Fort Worth Companies for the Phase I Improvements, as set forth in Section 4.2.1, by five percent (5%), but failed to meet its Redevelopment Cost spending goal with respect to the use of contractors that are Fort Worth Certified M/WBE Companies for the Phase I Improvements, as set forth in Section 4.2.2, by five percent (5%), each annual Program Grant payable to Owner by City hereunder world be reduced by five percent (5%) on account of Owner's failure to meet the latter Redevelopment Cost spending goal. 5.3. Cessation or Pro-rated Payment of Program Grants. 5.3.1. Loss of Star Rating and/or Competitive Name Brand and/or Breach of Room Block Agreement for Full Year. If (i) the Hotel does not for any full calendar year have its minimum star rating, as required by Section 4.5 of this Agreement (but subject to Section 5.3.3), and/or (ii) the Hotel does not for any full calendar year operate and market itself under a First Tier Flag brand name, as required by Section 4.6 of this Agreement, and/or (iii) at any time during the Term of this Agreement Owner is in breach of the Room Block Agreement for any full calendar year and the City has not exercised its right to terminate the Room Block Agreement, then Owner shall waive, and the City will not be required to pay, the Program Grant in the following year that the City would otherwise have been required to pay. In such an event, (i) such waiver shall be counted as a Program Grant payment for purposes of calculating the Term of this Agreement; (ii) the Term of this Agreement shall not be extended; and (iii) the revenue comprising the Program Grant that the City would otherwise have been required to pay shall instead be treated as Excluded Hotel Revenue, as provided in Section 5.5 of this Agreement, and will be retained by the City and shall not be carried over to any Program Grant paid by the City in a subsequent year. Page 12 Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington,Inc. 5.3.2. Loss of Star Rating and/or Competitive Name Brand and/or Breach of Room Block Agreement for Partial Year. If(i) the Hotel does not for a portion of any calendar year have its minimum star rating, as required by Section 4.5 of this Agreement (but subject to Section 5.3.3), and/or (ii) the Hotel does not for a portion of any calendar year operate and market itself under a First Tier Flag brand name, as required by Section 4.6 of this Agreement, and/or (iii) at any time during the Term of this Agreement Owner is in breach of the Room Block Agreement for a portion of any calendar year and the City has not exercised its right to terminate the Room Block Agreement, the Program Grant payable for the following year, as may be reduced pursuant to Sections 5.2.1 and 5.2.2, may, subject to Section 5.3.3, shall additionally be reduced by a fraction, to be expressed as a percentage, where (i) the numerator is the number of days in that year in which Owner was in full compliance with the Room Block Agreement and the Hotel had both its minimum star rating, as required by Section 4.5 of this Agreement, and operated and marketed itself under a First Tier Flag brand name, as required by Section 4.6 of this Agreement, and (ii) the denominator is three hundred sixty-five (365). In such an event, the revenue comprising the difference between the Program Grant actually made in that year and the Program Grant that the City would otherwise have been required to pay shall be treated as Excluded Hotel Revenue, as provided in Section 5.5 of this Agreement, and will be retained by the City and shall not be carried over to any Program Grant paid by the City in a subsequent year. 5.3.3. Star Rating Contingency. The City recognizes that some of the criteria for a three (3)-star rating by Mobil Travel Guide are subjective in nature. Therefore, if the Hotel fails to receive a Mobil Travel Guide rating of at least three (3) stars at any time during the Term of this Agreement, before the City takes any action to cease or reduce a Program Grant for the following year pursuant to Sections 5.3.1 or 5.3.2, Owner will be granted the opportunity for a hearing before the City Council at which Owner may present an explanation as to why the Hotel did not receive or maintain such a rating and request that the City Council grant it relief from the application of Sections 5.3.1 or 5.3.2, as the case may be. The City Council's decision in this regard may be based on reasonable findings derived from a record of the proceedings and shall be reflected by a simple majority vote of the City Council, which decision shall be final and non-appealable. Page 13 Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington,Inc. 5.4. Program Cap. Notwithstanding anything to the contrary herein, in no event shall the City be obligated to pay Owner Program Grants in an aggregate amount exceeding (i) $2,885,044 gross if by December 31, 2008 Owner has spent at least $4.5 million in Redevelopment Costs for the Phase II Improvements and such Phase II Improvements are Substantially Complete, as required by Section 4.1 hereof or (ii) $1,432,582 gross if by December 31, 2008 Owner failed to spend at least $4.5 million in Redevelopment Costs for the Phase II Improvements and/or such Phase II Improvements are not Substantially Complete. 5.5. Excluded Hotel Revenue Remains Property of City. Owner understands and agrees that any Excluded Hotel Revenue shall remain the property of the City; that the City will not at any time be required to pay Owner any amounts equal to the Excluded Hotel Revenue; and that Excluded Hotel Revenue received in one year will not in any manner be applied or carried over to any Program Grant payable to Owner in a subsequent year, even if any previous year's Program Grant was less than the Maximum Program Grant payable for that year. 5.6. Deadline for Payment. Annual Program Grants will be paid to Owner no sooner than March 1 and no later than June 1 of the first full calendar year following the Project Completion Date and each subsequent calendar year during the Term of this Agreement. 5.7. Source of Program Grants. It is understood and agreed that all Program Grants paid pursuant to this Agreement shall come from currently available general revenues of the City and not directly from any sales or hotel occupancy taxes paid to the City. 6. DEFAULT, TERMINATION AND FAILURE TO MEET VARIOUS GOALS AND OBLIGATIONS. 6.1. Failure of Owner to Meet Certain Goals and Obligations. If(i) Owner fails to meet its Redevelopment Cost spending goals set forth in Sections 4.2.1 and 4.2.2; and/or (ii) Owner fails to meet any of its employment goals set forth in Sections 4.3.1 and 4.3.2; and/or (iii) the Hotel does not at any time have its minimum star rating, as required by Section 4.5; and/or (iv) the Hotel does not at any time operate or market itself under a First Tier Flag brand Page 14 Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington,Inc. name, as required by Section 4.6, the Program Grants payable by the City will be subject to reduction or waiver pursuant to Sections 5.2.1, 5.2.2, 5.3.1 and 5.3.2, as the case may be, but an Event of Default, as defined in Section 6.2 of this Agreement, shall not occur. 6.2. Events of Default. Owner shall be in default under this Agreement if (i) Owner failed to spend or cause to be spent at least $6.7 million in Redevelopment Costs for the Phase I Improvements by December 31, 2004; or (ii) the Phase I Improvements are not Substantially Complete by December 31, 2004; or (iii) any state or local taxes with respect to the Hotel, the Hotel Property and/or any tangible personal property located therein become delinquent and Owner does not timely and properly follow the legal procedures for protest and/or contest of any such taxes; (iv) the City lawfully terminates the Room Block Agreement on account of a breach or default thereunder by Owner; or (v) subject to the effect of Section 6.1, Owner breaches any provision or condition of this Agreement, and the City shall be in default under this Agreement if the City unlawfully fails to pay any Program Grant as required by and in accordance with this Agreement (collectively, each an "Event of Default"). 6.3. Remedies. If Owner is in default under this Agreement due to the fact that (i) Owner failed to spend or cause to be spent at least $6.7 million in Redevelopment Costs for the Phase I Improvements by December 31, 2004; or (ii) the Phase I Improvements are not Substantially Complete by December 31, 2004; or (iii) Owner is in default under this Agreement due to the fact that the City has lawfully terminated the Room Block Agreement for any breach or default thereunder by Owner, the City shall have the right to terminate this Agreement immediately by providing written notice thereof to Owner. If any other Event of Default arises under this Agreement, promptly after becoming aware of the default the non- defaulting party shall provide written notice to the other party that describes the nature of the default. The defaulting party shall have thirty (30) calendar days to cure the default, or if such default is not reasonably curable within thirty (30) calendar days, such additional time as may be reasonably necessary provided that the defaulting party is diligently pursuing cure of the default. If the default has not been fully cured within such time, the non-defaulting party shall have all rights and remedies available under the law or in equity, including, but not limited to, the right to terminate this Agreement, which may be effected by providing written notice thereof to the defaulting party. Page 15 Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington,Inc. 7. INDEPENDENT CONTRACTOR It is expressly understood and agreed that Owner shall operate as an independent contractor in each and every respect hereunder and not as an agent, representative or employee of the City. Owner shall have the exclusive right to control all details and day- to-day operations relative to the Project and the Hotel and shall be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors, subcontractors, licensees and invitees. Owner acknowledges that the doctrine of respondeat superior will not apply as between the City and Owner, its officers, agents, servants, employees, contractors, subcontractors, licensees and invitees. Owner further agrees that nothing in this Agreement will be construed as the creation of a partnership or joint enterprise between the City and Owner. 8. INDEMNIFICATION. OWNER AGREES TO DEFEND, INDEMNIFY AND HOLD THE CITY, ITS OFFICERS, AGENTS SERVANTS AND EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS, ACTIONS, COSTS AND EXPENSES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO OWNER'S BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJUR Y, INCLUDING DEA TH, THA T MA Y RELA TE TO, ARISE OUT OF OR BE OCCASIONED BY (i) OWNER'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT OR (it) ANY NEGLIGENT ACT OR OMISSION OR INTENTIONAL MISCONDUCT OF OWNER, ITS OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE CITI) OR SUBCONTRACTORS, RELATED TO THE PROJECT, THE HOTEL OR THE PERFORMANCE OF THIS AGREEMENT, EXCEPT THAT THE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH SHALL NOT APPLY TO ANY LIABILITY RESULTING FROM THE SOLE NEGLIGENCE OF THE CITY OR ITS OFFICERS, AGENTS, EMPLOYEES OR SEPARATE CONTRACTORS, AND IN THE EVENT OF JOINT AND CONCURRENT NEGLIGENCE OF BOTH OWNER AND CITY, RESPONSIBILITY, IF ANY, SHALL BE APPORTIONED COMPARATIVEL Y IN ACCORDANCE WITH THE LA WS OF THE STATE OF TEXAS. 9. NOTICES. All written notices called for or required by this Agreement shall be addressed to the following, or such other party or address as either party designates in writing, by certified mail, postage prepaid, or by hand delivery: Page 16 Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington,Inc. City: Owner: Attn: Director Attn: Chief Executive Officer Economic and Community Capital Hotel Investments, LLC Development Dept. 299 Park Avenue, Floor 21-23 1000 Throckmorton St. New York, New York 10171 Fort Worth, TX 76102 Phone: 212-891-2100 with a copy to: with copies to: Attn: City Attorney Attn: Nina Matis City Attorney's Office Katten Muchin Zavis 1000 Throckmorton St. 525 West Monroe Street, Suite 1600 Fort Worth, TX 76102 Chicago, Illinois 60661 Phone: 312-902-5560 and Attn: Chief Executive Officer Capital Hotel Management 548 Cabot Street Beverly Massachusetts 01915 Phone: 978-522-7000 and Barry R. Knight Winstead Sechrest& Minick P.C. 5400 Renaissance Tower Dallas, Texas 75270 Phone: 214-745-5400 and Renaissance Hotel Management Company, LLC c/o Renaissance Worthington Hotel 200 Main Street Fort Worth, TX 76102 10. ASSIGNMENT AND SUCCESSORS. Owner may not assign, transfer or otherwise convey any of its rights or obligations under this Agreement to any party without the prior written consent of the Page 17 Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington, Inc. City, which consent shall not be unreasonably withheld or delayed, conditioned on (i) the prior approval of the assignee or successor and a finding by the City Council that the proposed assignee or successor is financially capable of completing the Project and (ii) the proposed assignee or successor has executed a written agreement with the City under which it agrees to assume all covenants and obligations of Owner under this Agreement, in which case such assignee or successor shall thereafter be deemed "Owner" for all purposes under this Agreement. 11. COMPLIANCE WITH LAWS,ORDINANCES, RULES AND REGULATIONS. This Agreement will be subject to all applicable federal, state and local laws, ordinances, rules and regulations, including, but not limited to, all provisions of the City's Charter and ordinances, as amended. 12. GOVERNMENTAL POWERS. It is understood that by execution of this Agreement, the City waives its immunity from suit and immunity from liability as to the enforcement of the terms of this Agreement, but does not otherwise waive or surrender any of it governmental powers. 13. NO WAIVER. The failure of either party to insist upon the performance of any term or provision of this Agreement or to exercise any right granted hereunder shall not constitute a waiver of that party's right to insist upon appropriate performance or to assert any such right on any future occasion. 14. VENUE AND JURISDICTION. If any action, whether real or asserted, at law or in equity, arises on the basis of any provision of this Agreement, venue for such action shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas — Fort Worth Division. This Agreement shall be construed in accordance with the laws of the State of Texas. 15. NO THIRD PARTY RIGHTS. The provisions and conditions of this Agreement are solely for the benefit of the City and Owner, and any lawful assign or successor of Owner, and are not intended to create any rights, contractual or otherwise, to any other person or entity. Page 18 Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington,Inc. 16. FORCE MAJEURE. It is expressly understood and agreed by the parties to this Agreement that if the performance of any obligations hereunder is delayed by reason of war, civil commotion, acts of God, inclement weather, governmental restrictions, regulations, or interferences, unreasonable delays by the City in issuing any permits or certificates of occupancy or conducting any inspections of or with respect to the Project (based on the amount of time that the City customarily requires in undertaking such activities and based on the then- current workload of the City department(s) responsible for undertaking such activities), or delays caused by unforeseen construction or site issues, fire or other casualty, court injunction, necessary condemnation proceedings, acts of the other party, its affiliates/related entities and/or their contractors, or any actions or inactions of third parties or other 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 of rtot, 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. 17. INTERPRETATION. In the event of any dispute over the meaning or application of any provision of this Agreement, this Agreement shall be interpreted fairly and reasonably, and neither more strongly for or against any party, regardless of the actual drafter of this Agreement. 18. CAPTIONS. Captions and headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement. 19. ENTIRETY OF AGREEMENT. This Agreement, including any exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the City and Owner, and any lawful assign and successor of Owner, as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with any provision of this Agreement. This Agreement shall not be amended unless executed in writing by both parties and approved by the City Council of the City in an open meeting held in accordance with Chapter 551 of the Texas Government Code. Page 19 Economic Development Program Agreement -1 between City of Fort Worth and BCM/CH1 Worthington, Inc. �, ~t c'r 20. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall be considered an original, but all of which shall constitute one instrument. EXECUTED as of the last date indicated below: CITY OF FORT WORTH: BCM/CHI WORTHINGTON, INC. � ac��i L By: Dale Fisseler Name: G� Assistant City Manager Title: c ' Date: /0 V Date: APPROVED AS TO FORM AND LEGALITY: By: Peter Vaky Assistant City Attorney M&C: C -200"t S-2G-QL{ Attested By: Marty Hendrix City Sccrctary 2, tq : gg yy7� g 1. Page 20i. s` 1:N � 0@, Economic Development Program Agreement between City of Fort Worth and BCM/CHI Worthington, Inc. EXHIBITS "A" —Map of Central City "B-1" —Maximum Annual Program Grants (if Phase II Improvements Completed) "B-2"—Maximum Annual Program Grants (if Phase II Improvements Not Completed) "C"—Description of Phase I Improvements and Phase II Improvements "D"—Criteria for Mobil Travel Guide 3-Star Rating Economic Development Program Agreement between City of Fort Worth and Harrell Galway Associates, L.L.C. Exhibit "A" iv W a w- :� 3 0 N ,v ti s ,:l t r U r ' L I - J t� O C t1l ti Y O � m a i Exhibit "B-1" Maximum Annual Program Grants if Phase II Improvements Completed Program Year Maximum Grant 1 $15,913 2 $93,389 3 $104,171 4 $96,171 5 $104,481 6 $114,730 7 $127,593 8 $141,466 9 $156,409 10 $168,647 11 $181,282 12 $194,290 13 $207644 14 $222,561 15 $237,588 16 $253,339 17 $269,843 18 $287,133 19 $305,663 20 $323,755 Economic Development Program Agreement between City of Fort Worth and Harrell Galway Associates, L.L.C. Exhibit"B-2" Maximum Annual Program Grants if Phase II Improvements Not Completed Program Year Maximum Grant 1 $15,913 2 $93,389 3 $104,171 4 $96,171 5 $104,481 6 $68,838 7 $76,556 8 $84,880 9 $93,845 10 $101,188 11 $108,769 12 $116,574 13 $124,587 14 $133,537 15 $142,553 16 $152,003 17 $161,906 18 $172,280 19 $183,398 20 $194,253 DALLAS_1\396586111 42750-105/0412004 Economic Development Program Agreement between City of Fort Worth and Harrel I Galway Associates, L.L.C. Exhibit C Description of Phase I Improvements and Phase II Improvements Phase I Improvements (must be complete by December 31, 2004 Guestroom and Guestroorn Corridor Renovations • Soft goods (to include fabrics, bedding, carpet, wall vinyl) and replace headboards • Bathrooms (replace floor tile, toilets, shower curtain rods) • HVAC (new thermostats) Lobby • Replace carpet • Replace furniture and lighting Bridge • Replace carpet • Redesign buffet and buffet area • Recover seating Phase II Improvements (must be complete December 31, 2008) Grand Ballroom, Trinity Ballroom, Rio Grande Ballroom, Public Meeting ,areas and Meeting Rooms • Replace carpet • Replace permanent and moveable wall coverings • Recover seating and touchup casegoods • Address lighting, AN, electrical and HVAC systems as necessary • Paint and repair walls, ceilings, trim and doorways • Re-configure spaces as necessary • Replace tile, vanities, fixtures and bright work in Public Restrooms • Address Graphics needs Building Facade • Re-caulk and seal the building exterior • Repair as necessary EXHIBIT D Mobil Stars: Lodging Star Definitions Mobwl *** Travel Guide A Mobil One-Star Lodging Establishment is a limited service Hotel/Motel that is considered a clean, comfortable and reliable establishment. * tlr A Mobil Two-Star Lodging Establishment is a Hotel/Resort that is considered a clean, comfortable and reliable establishment, but also has expanded amenities, such as a full-service Restaurant on the property. * A Mobil Three-Star Lodging Establishment is a Hotel/Resort which is well-appointed, with a full-service Restaurant and expanded amenities, such as, but not limited to: fitness center, golf course, tennis courts, 24-hour room service, and optional turndown service. * A Mobil Four-Star Lodging Establishment is a Hotel/Resort/Inn which provides a luxury experience with expanded amenities in a distinctive environment. Services may include, but are not limited to: automatic turndown service, 24 hour room service, and valet parking. * * * * * A Mobil Five-Star Lodging Establishment provides consistently superlative service in an exceptionally distinctive luxury environment with expanded services. Attention to detail is evident throughout the Hotel/Resort/Inn From the bed linens to staff uniforms. tm- Mobil Travel Guide recognizes the individualized nature of many different types of lodging establishments, such as bed-and-breakfasts, limited service inns, guest ranches and other unique hotel properties. For that reason, we have chosen to place our stamp of approval on the properties that fall into this category in lieu of applying our traditional Mobil One — Five Star rating. Lodging Criteria and Expectations Note: The following criteria are suggested criteria of what a guest can generally expec _ They are not indiudually mandated nor are they limited to those items listed below. Thee'amrrrevo a-,- -, sampling of the hundreds of points covered during our inspection proces . Actdition2y;•dt_ _ EXHIBIT D,Page I each level the lodging establishment is required to meet or exceed the requirements of the previous star rating. For example, a Two-Star hotel meets the criteria expectations of a Two-Star hotel as well as the One-Star hotel. A Three-Star hotel meets the criteria expectations of a Three-Star hotel, a Two-Star hotel and One-Star hotel, and so forth. * One Star Lodging Establishment is a clean, comfortable, and reliable, limited service establishment. Courteous service and good housekeeping, including daily maid service, are standard. Characteristics of a One-Star Hotel or Motel include: Services Detail - Staff is well-groomed with professional, neat and well-maintained attire. -All staff encountered are pleasant and professional in their demeanor. - Coffee, hot tea and breakfast pastry are available on-site (could be in-room). Facilities Details - Self parking area is free of debris, good condition; surfaces, curbs, paths. -All outdoor walkways and approaches are well-maintained and cleaned. - Outdoor awnings, signs, marquees, flags, and plantings are clean and in good condition. - Public spaces are free of obvious hazards. - Lobby floors, walls and ceiling are free of debris, marks and damage. - Elevator landings, cars and doors/tracks are clean and in good condition. -Guest room corridor floors, walls and ceilings are free of debris, marks, and damage. Vending and/or ice machines are located within one floor of guest room. Vending and/or ice areas and equipment are clean, well-lit, and well-maintained. -All furniture, fixtures and equipment are clean, neat and well-maintained. -Ashtrays throughout public areas are well-maintained and free of excessive debris. -Temperature in all interior public areas are maintained in general comfort range. - If public phonebook present, it is neat and in good condition. - Public washrooms very hygienic and neat, with well-stocked paper and soap. -Public washroom fixtures, walls and floors are in very good condition. - If available, meeting rooms are well-signed so that it is easy to find and arrive at a specific room. If available, meeting room doors are in good condition, free of nicks and damage. - If available, meeting room interiors are in generally good condition, including walls, floors and ceiling. - Televisions feature cable TV (four networks plus four other channels). - Direct dial phones with direct long distance dialing are available in each guest room. Guest Room Detail - Hardware and hangings (door locks, racks, artwork, etc.) are secure and in good condition. -Carpet/floor is free of debris, stains, wear, loose threads, open seams, etc. -Walls and ceilings are free of marks, stains and damage. - Drapes are free of stains, damage; pull easily and hang properly. - Furniture is free of dust, marks and damage. -All printed material including collateral, phonebooks and stationery are neat, crisp and current. - Drawers and shelves are clean, free of dust and debris. -All light bulbs operate; all light fixtures and lamps are in good condition, clean. - Mirrors and windows are free of smudges and damage throughout. - If safe is provided, it is clean, functional and convenient. - Room equipped with accurate, functional clock and radio/stereo. -Color television works and is equipped with remote control, and is minimum 19". - Ice bucket and glasses (may be molded plastic) are clean, hygienic. - If minibar is present, it is hygienic, free of spills and damage, all products are sealed, price list present. - If coffeemaker is present, it is hygienic, contains ample, sealed supplies and cups. -All bedding and linens are free of debris, hairs, damage and stains. - Room heating and air conditioning is easily controlled by guest and is quiet. -Air is fresh and clean, no stuffiness or odors. EXHIBIT D,Page 2 - Sink, tub, shower, toilet, bidet are very clean, free of hairs, stains and discoloration. - Bathroom tile and grouting is clean, not discolored, cracked or mildewed. - Faucets and drains operate smoothly and easily. - Hygienic soap and shampoo is provided. -Minimum bath linen is present: one bathmat; two each of facecloth, hand towel and bath towel. -Towels are free of spots, stains, tears and obvious frays. - If robes are provided, they are free of spots, stains and loose threads. Specialized Facility Detail - Pool/beach furniture is clean, hygienic and well-maintained. - Pool deck or beach/sand is clean and free of excessive debris. - Pool deck and tiling are in good condition, free of excessive damage or wear. - Pool water is clean, free of debris and free of notable odors. - Pool fittings and equipment (ladders, dive boards) are secure and in good condition. - Tennis court surfaces are in good condition, free of damage and well-marked. -Tennis courts and surrounding areas are clean and free of debris. - Fixtures, nets, lights, fences are well-maintained and good condition. - Pro shop/clubhouse interior are clean and well-maintained; displays and counters neat and tidy. - Pro shop/clubhouse and surrounding areas are clean with well-maintained appearance. -Golf carts are clean, well-organized and maintained. - Rental equipment is clean and good condition, including bags. - Floors throughout the casino are well-maintained and free of excessive debris. -Air circulation in casino is adequate, not stuffy or smoky. - Slot banks are free of excessive debris, soiled glassware and soiled ashtrays. - Slot chairs are in good condition, clean and free of rips and stains. -Cashier and change booths are tidy, well-organized and well-signed. -Table game tops are well-maintained, free of damage and wear. * Two-Star Lodging Establishment provides clean, comfortable and reliable accommodations along with expanded amenities and services, such as a full-service restaurant on-site. Guests at a Two-Star Hotel, Resort or Inn can expect to find all of the qualities for a One-Star Hotel, or Resort plus the following characteristics: Services Detail - Front desk staff are articulate, smile and make eye contact. -Staff is attired in well-fitting, consistent uniforms. - Baggage assistance is available on request. -The front desk is staffed twenty-four hours. - Restaurant on-site serving three meals daily. - If Inn, twenty-four hour guest service available on-call Facilities Detail Lobby provides a comfortable seating area. -and notices are professional, matching decor, not"homemade" -Vending and/or ice machines are located on each guest floor - Service doors are clean, free of marks and damage, and closed - Public phones are convenient, clean and well-maintained Guest rooms equipped with data ports (guest can connect laptop to the Internet) -A variety of different sized and appointed rooms available in hotel Guest Room Detail -Guest room door and frame free of marks, scratches and scuffs. - Comfortable seating for two people (other than bed). - Guest service directory, pad and pen/pencil present and conveniently placed EXHIBIT D, Page 3 - Enclosed closets (means closets must have doors). - There are a minimum six non-captive hangers. -There are three spacious drawers or enclosed shelves (inside closet). -A Luggage rack or bench provided; and adequate space to leave suitcase. - Extra clean and hygienic blanket and pillow provided in room - Lighting throughout the room is adequate. -The room can be fully darkened. - Full-length mirror present in room. -A hairdryer present in room, clean and functional. - Hygienic soap, shampoo and two other bath amenities are provided. Specialized Facility Detail -Guest can pick up e-mail and access the Internet from a Business Center workstation -Business Center working areas are clean, tidy and professional - Comfortable office-style chairs at the Business Center guest workstations. -All fitness, treatment and relaxation areas are hygienic, neatly organized and maintained - Spa reception area is well-defined, neat and professional - Fitness equipment is clean, in very good condition, conveniently laid out - Fitnesstworkout area is well-ventilated, with comfortable temperature - Sound system or television provided in fitness/workout areas -Towels are provided in locker and fitness areas -Grooming area equipped with hairdryers; soap and shampoo conveniently placed -All amenities are neatly and professionally presented; very hygienic - Locker room, showers, sauna and hot tub extremely clean, hygienic appearance * * * Three-Star Lodging Establishment is an establishment that is well-appointed, with full services and expanded amenities. Guests at a Three-Star Hotel, Resort or Inn can expect to find all of the qualities for a Two-Star Hotel or Resort plus the following characteristics: Services Detail -Turndown service is available upon request- -Valet parking is available. - Baggage assistance is automatic. -Same day laundry and dry cleaning available five days/week. -Complimentary newspapers are delivered to room automatically. -Complete room service is available. -Workstation is available where guest can access Internet. - Basic fitness equipment is provided, including treadmills and cycles. - If Inn, restaurant on-site which serves full breakfast is available. - If Resort, complimentary newspapers (or newsfaxes) are delivered to room automatically. Facilities Detail - High quality, varied, and major brand sundry selections are available in an on-site store. - If public phonebook present, it is displayed in attractive cover. - Pay-Movie selections are available through television. -Suite (separate bedroom and living areas) accommodations are available. Guest Room Detail - Each guest room has two phones (one could be in the bathroom). -Comfortable desk and chair are available for working, complete with telephone, data port, and light. - Insulated ice bucket, vinyl or better, as well as glass glassware; clean and hygienic are present in room - Minibar is present (defined as selection several beverages and snacks). - If Inn, refreshments present in room or readily available - If coffeemaker is present, ceramic mugs and napkins are available. EXHIBIT D,Page - Pillows are plush and full, no foam. - Framed artwork or interesting architectural features exist in room. - Excellent lighting is provided in bathroom for makeup and shaving. - Hygienic soap, shampoo and four other bath amenities are provided. -Amenities are presented attractively, thoughtfully (not simply lined up on counter). -Towels are of absorbent quality, with soft nap and no discoloration. - If Inn, Pay-Movie selections available through television OR VCR/DVD in-room - If Resort, guest room is of generous size, and provides ample seating for more than two persons. Specialized Facility Detail - If Business Center is present, a semi-private working area with workstation and telephone is available for guests. - If a spa exists on site, robes and slippers or spa sandals are available in variety of sizes, and they are clean and in good condition. - If spa or fitness center exists on site, complimentary amenities to include body lotion, shower caps, talc/deodorant and combs. - If spa exists on site, at least two types of massage and either body treatments or facials are also offered- - If tennis is available on site, water is available courtside. - If pool or beach service is present, ample towels are available poolside or at the beach. * yk * * Four-Star Lodging Establishment indicates an outstanding hotel providing the guest with a luxury experience in a distinctive setting, including expanded amenities and exceptional service. Guests at a Four-Star Hotel, Resort or Inn can expect to find all of the qualities for a Three-Star Hotel, Resort or Inn plus the following characteristics: Services Detail -Written confirmation is automatic or offered, either by mail, fax or e-mail. -Guests name is used effectively, but discreetly, as a signal of recognition. -The time from arriving at the reception area until registration is complete does not exceed five minutes (includes queuing). Bed is plush and inviting with oversized or numerous pillows. - Bedcovers are elegant and stylish and with linens of exceptional quality and comfort. -All written information is provided on good quality paper or pads, custom-printed or logoed. - Bathroom presentation and placement of amenities and linens is thoughtful, careful, and elegant. -Fresh ice is provided during evening service or at another time during the day. -Turndown service is automatically provided. -During turndown service, guest clothing is neatly handled and guest toiletries are neatly arranged and displayed on a cloth or shelf. - Room service is delivered within 30 minutes. - Room service order is delivered within five minutes of quoted time. -One hour pressing is available. - If resort, two hour pressing available - Same day laundry and dry cleaning is available seven days/week. -Wake-up call is personalized with guest's name and time of day. -Wake-up call is delivered within two minutes of requested time. -Special service desk identified as concierge/guest service is situated apart from reception/front desk. - If Inn, Workstation where guest can access Internet (may be "borrowed"office) is available. - If spa services are present, treatments are begun and ended on schedule, within five minutes of expected or booked time. - If spa services are present, during treatment, therapist appears to be genuinely expert, moving seams:,--- through the treatment as described and expected. If casino services are present, when playing slots for more than 20 minutes, drink service is offered. - If casino services are present, when playing a table game for more than 15 minutes, drink service is offered. EXHIBIT D,Page 5 Facilities Detail Lobby areas feature elegant live plants and/or fresh floral displays. -A dedicated and secure luggage storage area is available. - Public phones are equipped with seats, privacy panels and pad/pens. - Public washrooms are furnished with upgraded materials and appointments/luxurious design. -Televisions feature premium cable TV (two movie channels, two all-news, two financial). -Guest room telephones have two lines. Guest Room Detail Selection of at least 10 hangers including a variety of bars, clips and padded. - In-room safe is present. - If Inn, in-room safe is present or readily accessible on-site. - If minibar is present, it is non auto-charge, and premium products are attractively displayed. - Bed is triple sheeted or features washable duvets. - Live plants are present in guest rooms. - Shaving/makeup, lighted magnifying mirror is present. Specialized Facility Detail - Fitness equipment is available with personal headphones/televisions - Current newspapers and national-title magazines are provided in fitness and locker areas. - If spa, treatment rooms are equipped with individually controlled temperature and sound systems. * * * * * Five-Star Lodging Establishment has consistently superlative service and expanded amenities in a luxurious, distinctive environment, making this establishment one of the best in the country. Guests at a Five-Star Hotel, Resort or Inn can expect to find all of the qualities for a Four-Star Hotel, Resort or Inn plus the following characteristics: Services Detail - Staff is extremely well spoken, polite and clear, avoids slang and phrase-fragments. - Staff is extremely well informed about requirements within their department. -Overall service is flawless from initial reservation call to departure service. - Choice of at least two complimentary newspapers is distributed. -Twenty-four hour room service is available, including hot food. -Any work undertaken by the staff is handled with complete professionalism, as would be expected by professional secretaries; and returned to guests neatly, in folders or envelopes. - If Inn, choice of at least two complimentary newspapers are offered on-site. - If Inn, a restaurant on-site, serving full breakfast and dinner is available. - If pool service is available, guests are proactively greeted and escorted to their chairs, and set-up assistance is provided or offered. - If pool service is available, during a 90 minute period and in warm conditions, some sort of complimentary refreshment is offered (for example, mineral water, fresh fruit, water spritz). Facilities Detail - Public washrooms feature well-maintained cloth towels, fresh plants or flowers. Guest Room Detail - Each guest room has three phones, including one in the bathroom. - CD player/stereo is present and functional. - Ice bucket and glasses are high quality (glass, metal, stone etc.), with tongs which are clean and hygienic. - Fresh flowers are present in guest rooms. - Separate shower and tub are present in bathroom. EXHIBIT D,Page 6 City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 5/25/2004 DATE: Tuesday, May 25, 2004 LOG NAME: 17WORTHINGTON REFERENCE NO.: C-20094 SUBJECT: Authorize Execution of Economic Development Program Agreement with BCM/CHI Worthington, Inc. Regarding Redevelopment of the Renaissance Worthington Hotel RECOMMENDATION: It is recommended that the City Council: 1. Authorize the City Manager to execute an Economic Development Program Agreement with BCM/CHI Worthington, Inc. (Worthington) or an affiliated entity related to the redevelopment of the Renaissance Worthington Hotel; and 2. Find that the terms and conditions of the incentive program, as outlined below, constitute a custom- designed economic development program in accordance with Chapter 380 of the Texas Local Government Code. DISCUSSION: According to studies that have been commissioned by the City to analyze how tourism and convention business in the City can best be promoted, there is a need for at least 1,500 first class hotel rooms in downtown Fort Worth. Despite the fact that the City is in negotiations to cause development of a 600-room hotel directly across from the Convention Center, this hotel alone will not be sufficient to accommodate a full-size convention at the Convention Center or to fulfill the hotel needs of the City that have been identified in the City's studies. The Worthington is one of only two hotels in downtown Fort Worth that were identified by the study undertaken by HVS International as "good quality". As a result, it is in the City's best interest to ensure that the Worthington at a minimum maintains its current standards. Under the proposed agreement, the Worthington has committed to i) substantially complete at least $6.7 million in upgrades to the hotel by December 31, 2004, and at least $4.5 million in upgrades to the hotel by December 31, 2008; and ii) spend at least 30% of its total construction costs in making those improvements with Fort Worth contractors; and iii) spend at least 20% of its total construction costs in making those improvements with Fort Worth contractors that are certified as Fort Worth M/WBE companies. Worthington will be required to maintain a Mobil Travel Guide 3-Star rating at a minimum; and ensure that the Hotel continues to operate and market itself under a first tier flag brand name, as outlined below. In addition, Worthington will be required to enter into a Room Block Agreement with the City that allows rooms to be reserved for Convention Center events. Worthington will make major renovations to the hotel ballrooms, the facade, and the 505 guest rooms. The planned renovation will be instrumental in increasing Fort Worth's ability to attract large conventions. In return for the economic benefits and the number of first class hotel rooms that will be retained as a result of the Hotel, the City will make economic development program grants to Worthington, as authorized by Logname: 17WORTH NGTON Page 1 of 3 Section 380 of the Texas Local Government Code, until either i) Worthington has received the maximum grant payments outlined in the attachment or ii) the expiration of 20 years. These grant payments will commence in the first full year following the renovation. Employment: Worthington has committed 60% of the total number of full-time jobs on the property to be filled by Fort Worth residents, and 30% of the total number of full-time jobs on the property to be filled by Central City residents. However, in any year that these commitments are not met and Worthington's occupancy rate is less than 63%, Worthington will have the right to a public hearing before the City Council before any program grant payment under the Agreement may be reduced. Utilization of Fort Worth Businesses: Regarding the utilization of Fort Worth based businesses, Worthington has committed 30% of total construction to Fort Worth construction contractors and/or subcontractors. Utilization of Fort Worth M/WBE: Regarding the utilization of Fort Worth Minority Business Enterprises (MBEs) and Fort Worth Women Business Enterprises (WBEs), Worthington has committed 20% of total construction spending to certified Fort Worth M/WBE construction contractors and/or subcontractors. Annual Grants The actual amount of each grant will depend upon the extent to which Worthington meets all of its commitments outlined above, and will be an amount equal to i) up to 100% incremental sales tax (1%) generated on the property and ii) up to 100% incremental Hotel Occupancy Tax (7%) generated on the property, as capped per the attached schedule. However, each grant may be reduced by the cumulative degree to which Worthington fails to meet its construction spending goals and its employment goals. In addition, the City will suspend the payment of grants for any period in which (i) the Hotel fails to retain a Mobil Travel Guide 3-Star rating or to operate as a first tier flag hotel or ii) Worthington is in breach of its Room Block Agreement. The proposed Agreement is authorized by Chapter 380 of the Texas Local Government Code and is consistent with the City's commitment to use custom-designed incentives and partnership programs with private businesses on a case-by-case basis to help ensure the growth and diversification of the local economy, as stated in the 2004 Comprehensive Plan adopted by the City Council on February 24, 2004. The 2004 Comprehensive Plan recognizes, and the City Council hereby finds, that tourism, both for business and for pleasure, is a significant component of the City's economy and that the Fort Worth Convention Center and downtown hotels are critical elements in the City's efforts to promote tourism in the City. This property is located is COUNCIL DISTRICT 9. Logname: 17WORTHINGTON Page 2 of 3 FISCAL INFORMATION/CERTIFICATION: The Finance Director certifies that this action will have no direct expenditure from currently held City funds. TO Fund/Account/Centers FROM Fund/Account/Centers Submitted for City Manager's Office by: Reid Rector (6140) Originating Department Head: Tom Higgins (6192) Additional Information Contact: Petery Vaky (7601) Tom Higgins (6192) Logname: 17WORTHINGTON Page 3 of 3