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HomeMy WebLinkAboutContract 33140 STATE OF TEXAS § 0-ITY COUNTY OF TARRANT § GCM1 RACTENo. 3/4- AMENDMENT NO. 2 TO CITY SECRETARY CONTRACT NO. 31735 TAX ABATEMENT AGREEMENT This AMENDMENT NO. 2 TO CITY SECRETARY CONTRACT NO. 31375 ("Amendment"), is entered to by and between the CITY OF FORT WORTH ("City"), a home rule municipal corporation organized under the laws of the State of Texas, and OMNI FORT WORTH PARTNERSHIP, L.P. ("Omni"). RECITALS The City and Omni hereby agree that the following statements are true and correct and constitute the basis upon which the City and Omni have entered into this Agreement: A. On or about April 27, 2005, the City and Omni executed that certain Tax Abatement Agreement and that certain Economic Development Program Agreement, both of which are public documents on file in the City Secretary's Office as City Secretary Contract Nos. 31735 and 31734, respectively. These agreements provide certain economic development incentives to Omni in return for Omni's construction of a hotel, condominium units and a parking garage, as defined in both agreements and hereinafter referred to as the "Project", on land leased by Omni from the City. Specifically, the Tax Abatement Agreement provides for a 100% Abatement of City taxes on certain real property owned by Omni and on Tangible Personal Property owned by Omni and located on such real property. B. Effective as of August 2, 2005, the City and Omni executed Amendment No. 1 to the Tax Abatement Agreement in order to clarify deadlines by which Omni is required to file various reports with the City. Amendment No. 1 to the Tax Abatement Agreement is a public document on file in the City Secretary's Office as City Secretary Contract No. 32177. The Tax Abatement Agreement and Amendment No. 1 to the Tax Abatement Agreement are hereinafter referred to collectively as the "Tax Abatement Agreement". C. Effective as of December 15, 2005, the City and Omni executed Amendment No. 1 to the Economic Development Program Agreement in order to extend the deadline by which Omni must file a Completion Guaranty, as defined and outlined in the Economic Development Program Agreement. Amendment No. 1 to the Economic Development Program Agreement is a public document on file in the City Secretary's Page 1 Amendment No.2 to Tax Abatement Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. Office as City Secretary Contract No. 32921. The Economic Development Program Agreement and Amendment No. 1 to the Economic Development Program Agreement are hereinafter referred to collectively as the "380 Agreement". D. Due to construction costs for the Project that will be higher than originally anticipated, the City and Omni intend to amend the 380 Agreement in order to increase the amount of the economic incentives that the City will provide to Omni in return for Omni's agreement to move forward with the Project and the City's receipt of the public benefits outlined in both the 380 Agreement and the Tax Abatement Agreement. Accordingly, the City and Omni intend to enter into an Amended and Restated Economic Development Program Agreement (the "Amended and Restated 380 Agreement"). In order for pertinent provisions of the Amended and Restated 380 Agreement to be consistent with similar provisions in the Tax Abatement Agreement, the City and Omni wish to amend the Tax Abatement Agreement contemporaneously upon execution of the Amended and Restated 380 Agreement. 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. The City and Omni hereby agree that the recitals set forth above are true and correct and form the basis upon which they have executed this Amendment. 2. The following definitions in Section 2 of the Tax Abatement Agreement ("Definitions") are hereby amended to read as follows: Completion Date means the date as of which the Project is Substantially Complete. Completion Deadline means 1,320 calendar days from the Effective Date of this Agreement, as may be extended by Force Majeure. Force Maieure means (i) with respect to Omni, an event beyond Omni's reasonable control, including, without limitation, acts of God, fires, strikes, national disasters, wars, riots, material or labor restrictions, delays caused by unforeseen structural issues, weather delays, injunctions or other legal proceedings brought by third parties, unreasonable delays by the City in issuing any permits, consents or certificates of occupancy or conducting any inspections of or with respect to the Project, delays caused by the City's failure to complete "Lessor's Work" as provided for and defined in the Ground Lease, or delays caused by unforeseen construction or site issues, but shall not include construction delays caused due to purely financial matters involving Omni, such as, without limitation,delays in the obtaining of adequate financing, and(ii)with respect to the Page 2 Amendment No.2 to Tax Abatement Agreement between City of Fort Worth and Omni Fort Worth Partnership,LP. City, an event beyond the City's reasonable control, including, without limitation, acts of God, fires, strikes, national disasters, wars, riots, material or labor restrictions, or acts of third parties. Hard Construction Costs means the following site development and building costs expended directly in connection with the Project: actual construction costs, signage costs, and the costs of labor, supplies and materials, including all costs and fees paid to Omni's general contractor, subcontractors and suppliers. Residential Units means at least 125,000 aggregate square feet of residential condominium spaces constructed on top of the Hotel and initially owned by Omni. Substantially Complete means (i) as to the Hotel and the Hotel Garage, that a final or temporary certificate of occupancy has been issued for all of the Hotel(including, but not limited to, all guest rooms and public areas) and the Hotel Garages, and both the Hotel and Hotel Garage are lawfully open for business to the general public, and (ii) as to the Residential Units, that the core and shell of the portion of the Project comprising the Residential Units has been constructed and the portions of the electrical, plumbing and heating/ventilation/air conditioning systems that are common to all Residential units have been constructed to provide for vertical (but not necessarily horizontal) distribution throughout the portion of the Project comprising the Residential Units, in each case substantially in accordance with the plans and specifications for the Project. 3. Section 4.1 of the Tax Abatement Agreement is hereby amended to read as follows: 4.1. Construction and Completion of Proiect. Omni agrees that by the Completion Deadline and otherwise in accordance with the EDPA, (i) at least One Hundred Million Dollars ($100,000,000) in Hard Construction Costs shall have been expended or incurred for the Project and (ii) the Project shall be Substantially Complete. The Project will be constructed on the Hotel Property and will consist of those amenities described and set forth in the EDPA. For any sums incurred but not yet paid as of the Completion Date, Omni shall provide the City with proof that such amounts were paid promptly following actual payment. 4. Section 4.2 of the Tax Abatement Agreement is hereby amended to read as follows: Page 3 Amendment No.2 to Tax Abatement Agreement between City of Fort Worth and omni Fort Worth Partnership,LP. 4.2. Construction Spending Commitments. 4.2.1. Fort Worth Companies. By the Completion Date, Omni agrees to have spent or incurred a minimum of Twenty Million Dollars ($20,000,000) in Hard Construction Costs for the Project with Fort Worth Companies. For any sums incurred but not yet paid as of the Completion Date, Omni shall provide the City with proof that such amounts were paid promptly following actual payment. A failure by Omni to meet this commitment will result in a reduction in the amount of EDPA Program Grants paid by the City to Omni under the EDPA, as specifically provided by the EDPA, and therefore will not serve to reduce the Abatement granted under this Agreement. 4.2.2. Fort Worth Certified M/WBE Companies. By the Completion Date, Omni agrees to have spent or incurred a minimum of Fifteen Million Dollars ($15,000,000) in Hard Construction Costs for the Project with Fort Worth Certified M/WBE Companies. Dollars spent with Fort Worth Certified M/WBE Companies shall also count as dollars spent with Fort Worth Companies for purposes of the commitment set forth in Section 4.2.1. For any sums incurred but not yet paid as of the Completion Date, Omni shall provide the City with proof that such amounts were paid promptly following actual payment. A failure by Omni to meet this commitment will result in a reduction in the amount of EDPA Program Grants paid by the City to Omni under the EDPA, as specifically provided in the EDPA, and therefore will not serve to reduce the Abatement granted under this Agreement. 5. Section 4.8 of the Tax Abatement Agreement (Reports and Filings) is hereby amended to replace (i) all references therein to "Hotel and Hotel Garage" with "Project" and (ii) the reference in Section 4.8.3 to 11$59,360,000"with 1100,000,000". 6. Section 4.9 (Inspection of Hotel and Hotel Garage) and Section 4.10 (Audits) of the Tax Abatement Agreement is hereby amended to replace all references therein to "Hotel and Hotel Garage"with"Project', including the caption of Section 4.9. 7. Section 5.1 of the Tax Abatement Agreement (Amount) is hereby amended to replace the reference to 16,300,000" with "$8,600,000" in regard to the minimum aggregate taxable appraised value of Residential Units that is necessary in order for Omni Page 4 Amendment No.2 to Tax Abatement Agreement between City of Fort Worth and Omni Fort Worth Partnership,LP. I' to qualify for real property tax abatements on the Hotel Garage and personal property tax abatements on Tangible Personal Property that is located in the Hotel Garage. 8. Section 6.1 of the Tax Abatement Agreement (Failure to Complete Hotel and Hotel Garage) is hereby amended to replace (i) all references therein to "Hotel and Hotel Garage" with "Project", including the caption; (ii) the reference to "$59,360,000" with "$100,000,000"; and (iii) the reference to 16,300,000" with 18,600,000" in regard to the minimum aggregate taxable appraised value of Residential Units that is necessary in order for Omni to qualify for real property tax abatements on the Hotel Garage and personal property tax abatements on Tangible Personal Property that is located in the Hotel Garage. 9. All capitalized terms used but not specifically defined in this Amendment shall have the same meanings ascribed to them in the Tax Abatement Agreement. 10. All terms and conditions of the Agreement that are not expressly amended pursuant to this Amendment shall remain in full force and effect. EXECUTED to be effective April 27, 2005: CITY OF FORT WORTH: OMNI FORT WORTH PARTNERSHIP, L.P.: By: By:Omni Fort Worth GP Corporation, Joe Paagu a Delaware corporation and its sole Assistit City Manager GenTme: ner ,_A,.,./ By: 57.a-1 f'" o , a.X Title: U P, G�/' — APPROVED AS TO FORM AND LEGALITY: Attested B-, By: btarty Hendr ri Peter Vaky City Secretary Assistant City Attorney M&C: C-2/275 I-2*-06 Page 5 Amendment No.2 to Tax Abatement Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. STATE OF TEXAS § COUNTY OF TARRANT § BEFORE ME, the undersigned authority, on this day personally appeared Joe Paniagua, Assistant City Manager of the CITY OF FORT WORTH, a municipal corporation organized under the laws of the State of Texas, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of the CITY OF FORT WORTH,that he was duly authorized to perform the same by appropriate resolution of the City Council of the City of Fort Worth and that he executed the same as the act of the CITY OF FORT WORTH for the purposes and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this lay of Cie 92006. BETTY J.TANNER o ary P in and for MY COMMISSION EXPIRES Mamh 31,2008 I th"tatt,of Texas._- __JJ .Q� Notary's Printed Name STATE OF TEXAS § COUNTY OF TARRANT § BEFORE ME, the undersigned authority, on this day personally appeared Z5CojQ(2k"501 Vf—D-v,- 0 of Omni Fort Worth GP Corporation, a Delaware corporation and sole general partner of Omni Fort Worth Partnership, L.P., known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that s/he executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of OMNI FORT WORTH PARTNERSHIP, L.P. GIVEN UNDER MY HAND AND SEAL OF OFFICE this tyl day of 2006. Av 914 Z N61WP014 and for the State of Texas """'' BETTY J.TANNER +: MY cOMMISSION EXPIRES r MBITh$1,2008 Notary's Printed Name , Amendment No.2 to Tax Abatement Agreement between City of Fort Worth and Omni Fort Worth Partnership,LP. 1 LI.�N L Vl G City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 1/24/2006 DATE: Tuesday, January 24, 2006 LOG NAME: 170MNI TA REFERENCE NO.: C-21275 SUBJECT: Authorize Execution of Amendment No. 2 to Tax Abatement Agreement with Omni Fort Worth Partnership, L.P. Pertaining to Development of Convention Center Headquarters Hotel RECOMMENDATION: It is recommended that the City Council authorize the City Manager to execute the attached Amendment No. 2 to Tax Abatement Agreement with Omni Fort Worth Partnership, L.P. (City Secretary Contract No. 31735, as previously amended by City Secretary Contract No. 32177). DISCUSSION: On April 27, 2005 the City and Omni Fort Worth Partnership, L.P. (Omni) executed numerous documents relating to Omni's development of a headquarters hotel for the Fort Worth Convention Center. The primary economic development incentive agreement was an Economic Development Program Agreement (City Secretary Contract No. 31734, as amended by City Secretary Contract No. 32921) (the Original 380 Agreement) pursuant to which the City would pay Omni certain monetary grants in return for, among other things, Omni's constructing the hotel and a hotel parking garage. However, as part of the economic incentives negotiated between the City and Omni, the parties also executed a Tax Abatement Agreement pursuant to which the City agreed to abate for 10 years 100% of the real and personal property taxes on the hotel and, provided that Omni constructed residential condominium or apartment units on top of the hotel with a certain minimum appraised value, the hotel garage. Under a separate agenda item, City staff is recommending that the City Council authorize the City Manager to execute an Amended and Restated Economic Development Program Agreement (the Amended 380 Agreement). The Amended 380 Agreement provides for, among other things, Omni to meet certain commitments with respect to overall construction spending on the project, which now includes residential condominium units, as well as spending commitments with Fort Worth companies and Fort Worth certified M/WBE companies. The Amended 380 Agreement and the Tax Abatement Agreement will need to be consistent in order to work in tandem. The attached amendment to the Tax Abatement Agreement will provide this consistency. The amendment does not increase the percentage of tax abatement offered or extend the term of the tax abatement. FISCAL INFORMATIONXERTIFICATION: The Finance Director certifies that this action will have no material effect on City funds. http://www.cfwnet.org/council_packet/Reports/mc_print.asp 2/9/2006 Page 2 of 2 TO Fund/Account/Centers FROM Fund/Account/Centers Submitted for City Manager's Office by: Joe Paniagua (6191) Originating Department Head: Tom Higgins (6192) Additional Information Contact: Peter Vaky (760 1) http://www.cfwnet.org/council_packet/Reports/mc_print.asp 2/9/2006