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CONTRACT W,
MEMORANDUM OF UNDERSTANDING BETWEEN
THE CITY OF FORT WORTH AND
FORT WORTH CONVENTION AND VISITORS BUREAU
This Memorandum of Understanding ("MOU") is made and entered into by and
between Fort Worth Convention and Visitors Bureau ("Bureau"), a Texas non-profit
corporation, acting by and through its duly authorized representative, and the City of Fort
Worth ("City"), a Texas home-rule municipal corporation, acting by and through its duly
authorized Assistant City Manager, to document the impact of certain City Council actions on
the funding to be provided to the Bureau under Fort Worth City Secretary Contract No. 44949.
City and Bureau may be referred to herein individually as a "Party" or collectively as the
"Parties."
SECTION 1
Background and Purpose of MOU
I.I. Background.
a. In 2013, the City entered into a new agreement with the CVB to provide
marketing and promotional services to raise awareness of the City as a business
and leisure destination (M&Cs C-26483, C-26493; Fort Worth City Secretary
Contract No. 44949). The core marketing services are funded through an
allocation of 47% of "Tax Collections." The concept of Tax Collections is
defined as revenue that (i) has been generated by the City's 7% local hotel
occupancy tax (HOT) and (ii) is not designated for another purpose.
b. On October 22, 2013, City Council adopted Ordinance 21011-10-2013, which
designated Project Financing Zone No. One (the "PFZ" or "Zone"). As
designated, the Zone encompasses a three-mile area around dual radii consisting
of two identified "qualified projects" — the Fort Worth Convention Center and a
proposed Multipurpose Arena to be located at the intersection of Harley Avenue
and Gendy Street.
C. On August 4, 2015, the Fort Worth City Council adopted an initial funding plan
for the planned Multipurpose Arena, adjacent facilities, and related infrastructure
(collectively, the "Arena Project") (Resolution No. 4498-08-2015). That plan is
predicated on a portion of the future incremental growth in local HOT revenue
being available for use in funding the Arena Project.
d. On December 1, 2015, the Fort Worth City Council dedicated a portion of
incremental growth in revenue from the City's 7% HOT for eligible special
projects. Incremental HOT revenue generated by hotels inside the Zone will be
dedicated to special projects. Incremental HOT revenue generated by hotels
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MOU—Fort Worth Convention&Visitors Bureau R l of 3
outside the Zone will continue to be programmed in accordance with past
practices.
1.2. Purpose. This MOU represents the intent of the Parties to memorialize the
impact of the listed actions on Funding for General Marketing and Promotional
Obligations under Section 4.01 of Fort Worth City Secretary Contract No. 44949, with
such impact effective October 1, 2015 and continuing in effect for the remainder of the
contract, which has an initial term ending on September 30, 2018 and two, one year
renewal options.
SECTION 2
Baseline, Increment, and Funding Under Section 4.01
2.1 Dedication of HOT Revenues. M&C G-18614 dedicates a portion of the
incremental growth in revenue from the City's 7% HOT in excess of an identified
Baseline. The Baseline for calculating the increment is $18,850,936.00, which represents
the total annual revenue from the 7% local HOT based on April 2015 re-estimate data,
which is the figure that was used in the initial funding plan City Council adopted for the
Arena Project. If the City receives HOT revenue in excess of the Baseline, the additional
revenue, or incremental growth, will be allocated according to the location of the hotel
generating the revenue. HOT revenue in excess of the Baseline that is generated by
hotels inside the Zone will be dedicated to eligible special projects and therefore
excluded from the calculation of Bureau funding under Section 4.01. Incremental
revenue from hotels outside of the Zone will continue to be taken into account in
calculating Bureau funding under Section 4.01.
2.2 Funding for General Marketing and Promotional Obligations.
In accordance with Section 4.01, in connection with the annual budget process,
the City may allocate forty-seven percent (47%) of projected Tax Collections for the
upcoming Fiscal Year to the Bureau to carry out its general marketing and promotional
obligations and duties set forth in Fort Worth City Secretary Contract No. 44949 with
such amount to be known as "General Funding."
As a result of the dedication of certain incremental revenue by adoption of M&C
G-18614, effective December 1, 2015, Tax Collections consist of(a) all City 7% HOT
revenues up to the Baseline ($18,850,936.00) plus (b) City 7% HOT that exceeds the
Baseline and that is generated and collected from hotels outside the Zone.
For purposes of example only, for Fiscal Year 2016, funding under Section 4.01 is
projected at $9,117,480, which represents the sum of (a) $8,859,940 (47% of the
Baseline) plus (b) $257,540 (47% of projected City 7% HOT revenues above the
Baseline generated by hotels outside the PFZ). Funding, including the impact of the
dedication, shall be subject to the "true up"process as outlined in Section 4.01(iii).
MOU—Fort Worth Convention&Visitors Bureau 2 of 3
Dedication of a portion of the City's 7% HOT does not impact any other portion
of the funding under Fort Worth City Secretary Contract No. 44949, and all other
portions of Article 4, "Funding," and of Fort Worth City Secretary Contract N. 44949
shall continue to operate as they have since the contract first went into effect.
SECTION 3
Anticipated Additional Services
3.1 Additional Marketing for Additional Convention Center Hotel. The Parties
acknowledge and agree that the City is currently in the process of seeking a developer for
an additional convention center hotel and that additional marketing services will be
required in connection with the promotion of the additional hotel when construction
commences. The Parties commit to work cooperatively to develop a plan to market and
promote the new hotel and to identify and agree to reasonable funding to the Bureau to
compensate for these additional services. The scope of any such additional services and
compensation therefor shall be documented in the form of a written agreement or contract
amendment or addendum signed by both Parties.
EXECUTED this 3rd day of December, 2015.
CITY OF FORT WORTH, TEXAS FORT WORTH CONVENTION AND
BUREAU
By: RS B
By: By:
....� usan Alanis ober-t J eson
srstant Cit y Mana g er P and CE
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Attested e gg"
F 1'
Allison Tidwoll,Assistant to the l 6 r .'
E:l io m 111J1T
OFFICIAL RECORD
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MOU—Fort Worth Convention&Visitors Bureau 3 of 3
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