HomeMy WebLinkAboutContract 33870 CITY SECRETARY
CONTRACT NOr �L.0
ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
("Agreement") is entered into by and between the CITY OF FORT WORTH ("City"),
a home rule municipal corporation organized under the laws of the State of Texas, and
PRESIDIO HOTEL FORT WORTH, L.P. ("Developer"), a Texas limited partnership
whose sole general partner is Presidio Hotel GenPar, LLC, a Texas limited liability
company.
RECITALS
The City and Developer hereby agree that the following statements are true and
correct and constitute the basis upon which the City and Developer 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 Govermnent 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 2006 Comprehensive Plan adopted by the City
Council pursuant to M&C G-15090 on February 21, 2006, 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 2006 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 Hotel and the 203 rooms in the Marriott Courtyard Hotel.
Although the City has entered into an Economic Development Program Agreement with
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between City of Fort Worth and Presidio Hotel Fort Worth, L.P. A 77
DRH Worthington Owner Limited Partnership (the assignee of BCM/CHI Worthington
Owner) for redevelopment of the Renaissance Worthington Hotel, that project will only
retain existing first class hotel rooms, and not add new first class hotel rooms to the
City's downtown, which the HVS Study recommends are needed. Moreover, even
though the City has entered into an Economic Development Program Agreement with
Omni Fort Worth Partnership, L.P. to cause development of an approximately 600-room
hotel directly across 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. Developer is under contract to purchase the hotel located at 1701
Commerce Street in the City, which is currently operating as the Plaza Hotel. Developer
wishes to redevelop and significantly upgrade the hotel and has asked the City to create
an economic development program under which Developer 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 2006
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 Developer 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:
Adiusted 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
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Tax Code and Chapter 32 of the City Code that are derived from or attributable to the
Hotel Property and paid by Developer 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 $147,684.00 (which is the full amount of the hotel occupancy taxes based on a
seven percent(7%) rate that were payable to the City for the 2005 calendar year).
Affiliate means all entities, incorporated or otherwise, (i) under common control
with, controlled by or controlling Developer or (ii) leasing space in the Hotel or on the
Hotel Property from Developer. For purposes of this definition, "control" means fifty
percent (50%) or more of the ownership, determined by either value or vote. The
requirements imposed on Developer under this Agreement shall be deemed satisfied if
met by Developer or its Affiliates.
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 Employment Commitment has the meaning ascribed to it in
Section 4.3.3.
Central City Resident means an individual whose principal place of residence is
at a location within the Central City.
Certificate of Completion means a written certificate issued to Developer by the
Director, after reviewing all reports and other documentation submitted by Developer in
accordance with this Agreement and after any audits of Records undertaken in
accordance with this Agreement, that establishes the amount of Construction Costs
expended on the Project as of a date certain, the degree to which Developer met the Fort
Worth Construction Commitment and the M/WBE Construction Commitment, and the
Program Grant Percentage.
Completion Date means the date as of which (i) a final certificate of occupancy
has been issued for at least 400 guest rooms and all restaurants and meeting spaces in the
Hotel, and (ii) the Hotel is fully open for business and operating under a First Tier Flag.
Completion Deadline means October 1, 2007.
Construction Costs means pre-construction costs, demolition costs, hard
construction costs, signage costs, architectural and engineering fees, and the costs of
supplies and materials actually expended for the Project, but specifically excludes
furniture, fixtures and equipment in the Hotel as well as any financing costs associated
with the Project.
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Courtesy Period has the meaning ascribed to it in Section 8.4.2.
Director means the director of the City's Economic and Community
Development Department or authorized staff member.
Excluded Hotel Occupancy Tax Revenue means any revenue received by the
City in a given year from (i) the full amount of any hotel occupancy taxes based on a rate
of seven percent (7%) of taxable Hotel room revenue and that were payable to the City
for the 2005 tax year or a previous tax year (which amount equals $147,684.00); (ii) the
full amount of any hotel occupancy taxes attributable to a rate in excess of seven percent
(7%) of taxable Hotel room revenue; (iii) the amount of Adjusted Hotel Occupancy Tax
Revenue in excess of the Maximum Annual Program Grant payable to Developer for the
next calendar year; (iv) the amounts by which any Program Grant may be reduced, in
whole or in part, pursuant to the terms and conditions of this Agreement, whether
factored into the Program Grant Percentage or by annual reduction; and (v) any hotel
occupancy taxes paid by Developer prior to January 1 of the year following the year in
which the Completion Date occurs.
First Tier Flag means one of the following brand names under which the Hotel is
operating and marketing itself. Sheraton; Westin; Marriott; Hilton; Renaissance, Hyatt;
Embassy Suites; Omni; Doubletree; or another first-class hotel brand name that has
specifically been approved by the City Council of the City for purposes of this
Agreement, which approval shall not be unreasonably withheld.
Force Maieure means (i) with respect to Developer, an event beyond
Developer's reasonable control, including, without limitation, inclement weather and
other acts of God, fires, strikes, national disasters, wars, riots, material or labor
restrictions, delays caused by unforeseen structural issues, unreasonable delays by the
City in issuing any permits, consents or certificates of occupancy (based on the amount of
time that the City requires in undertaking such activities and based on the then-current
workload of the City department(s) responsible for undertaking such activities, but also
taking into account the fast-track development procedure negotiated between the City and
Developer pursuant to Section 7.2 of this Agreement), but shall not include delays due to
purely financial matters involving Developer, such as, without limitation, delays in the
obtaining of adequate financing, or due to purely internal or external business matters of
Developer, and (ii) with respect to the City, an event beyond the City's reasonable
control, including, without limitation, inclement weather or other acts of God, fires,
strikes, national disasters, wars, riots, material or labor restrictions or acts of Developer
or third parties.
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
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Division, and whose principal business office is located within the corporate limits of the
City from which the service claimed is provided.
Fort Worth Company means a business that has a principal office located within
the corporate limits of the City from which the service claimed is provided. A Fort
Worth Certified M/WBE Company is also a Fort Worth Company for purposes of this
definition.
Fort Worth Construction Commitment has the meaning ascribed to it in
Section 4.2.1.
Fort Worth Construction Percentage has the meaning ascribed to it in Section
6.1.2.
Fort Worth Employment Commitment has the meaning ascribed to it in
Section 4.3.2.
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.
Fort Worth Supply and Service Spending Commitment has the meaning
ascribed to it in Section 4.4.1.
Full-time Equivalent Job means a job filled by one (1) or more individuals for a
period of not less than thirty-five (35)hours per week.
Hotel means the hotel building and other facilities located on the Hotel Property.
Hotel Property means the real property at 1701 Commerce Street in the City and
all improvements thereon.
Maximum Annual Program Grant means the maximum Program Grant that the
City will pay Developer in a given Program Year, as set forth in Exhibit "B", attached
hereto and hereby made a part of this Agreement for all purposes.
Minimum Star Rating has the meaning ascribed to it in Section 4.5.
M/WBE Construction Commitment has the meaning ascribed to it in Section
4.2.2.
M/WBE Construction Percentage has the meaning ascribed to it in Section
6.1.3.
M/WBE Supply and Service Spending Commitment has the meaning ascribed
to it in Section 4.4.2.
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Overall Construction Percentage has the meaning ascribed to it in Section 6.1.1.
Overall Employment Commitment has the meaning ascribed to it in Section
4.3.1.
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 $21,497,791.00 gross, which is the aggregate amount of
Program Grants that the City is required to pay Developer pursuant to this Agreement.
Program Grant Percentage has the meaning ascribed to it in Section 6.1.
Program Grants means the annual economic development grants paid by the
City to Developer in accordance with this Agreement and as part of the Program.
Program Year means a calendar year in which the City is obligated to pay
Developer a Program Grant pursuant to this Agreement, beginning with the year selected
by Developer in accordance with Section 4.8.6 of this Agreement (Program Year 1).
Proiect means the redevelopment of the Hotel in accordance with and as more
specifically outlined in Exhibit "C", attached hereto and hereby made a part of this
Agreement for all purposes.
Records means all financial and business records of Developer that relate to the
duties and obligations of Developer under this Agreement or that contain information
necessary for the Director to calculate or verify the amount of Construction Costs
expended for the Project, including amounts expended with Fort Worth Companies and
Fort Worth Certified M/WBE Companies.
Room Block Agreement means a legally binding written agreement between the
City and Developer under which Developer 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.
Supply and Service Expenditures means expenditures made for supplies and
services provided directly in connection with the operation and maintenance of the Hotel
and Hotel Property.
3. TERM.
This Agreement shall be effective as of the date of execution by both parties (the
"Effective Date") and shall expire upon the earlier of(i) the date as of which the City
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has paid Developer 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 6.4.1, payment by the City to Developer of the
twentieth (20th) annual Program Grant in accordance with this Agreement (the "Term"),
unless terminated earlier as provided by and in accordance with this Agreement.
4. DEVELOPER'S OBLIGATIONS.
4.1. Redevelopment of Hotel.
In accordance with the terms and conditions of this Agreement, (i)
Developer shall expend or cause to be expended by the Completion Date at least
$25 million in Construction Costs for the Project, as verified in a written
Certificate of Completion issued by the Director, and (ii) the Completion Date
must occur on or before the Completion Deadline, as may be extended by Force
Majeure in accordance with Section 18 of this Agreement. From the Completion
Date and at all times thereafter, the Hotel will be a full service hotel with a
minimum of four hundred (400) standard guest rooms and/or suites.
4.2. Construction Spending Commitments.
4.2.1. Fort Worth Companies.
By the Completion Date, Developer will expend or cause to be
expended with Fort Worth Companies the greater of (i) at least twenty-
five percent (25%) of total Construction Costs for the Project, regardless
of the total amount Construction Costs actually expended for the Project
as of the Completion Date, or (ii) at least $6,250,000.00 in Construction
Costs for the Project (the "Fort Worth Construction Commitment").
Dollars counted toward the M/WBE Construction Commitment, as
provided in Section 4.2.2, shall also be counted toward the Fort Worth
Construction Commitment.
4.2.2. Fort Worth Certified M/WBE Companies.
By the Completion Date, Developer will expend or cause to be
expended with Fort Worth Certified M/WBE Companies the greater of(i)
at least twenty-five percent (25%) of total Construction Costs for the
Project, regardless of the total amount Construction Costs actually
expended for the Project as of the Completion Date, or (ii) at least
$6,250,000.00 in Construction Costs for the Project (the "M/WBE
Construction Commitment").
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4.3. Employment Commitments.
4.3.1. Overall Employment.
Beginning in the first full calendar year following the year in
which the Completion Date occurs and in each calendar year thereafter
during the Term of this Agreement, at least two hundred fifty (250) Full-
time Equivalent Jobs will be provided and filled on the Hotel Property (the
"Overall Employment Commitment").
4.3.2. Fort Worth Residents.
Beginning in the first full calendar year following the year in
which the Completion Date occurs and in each calendar year thereafter
during the Term of this Agreement, (i) at least fifty percent (50%) of all
Full-time Equivalent Jobs provided on the Hotel Property, regardless of
the total number of Full-time Equivalent Jobs so provided, or (ii) at least
one hundred twenty-five (125) Full-time Equivalent Jobs, whichever is
greater, will be filled with Fort Worth Residents (the "Fort Worth
Employment Commitment"). Full-time Equivalent Jobs counted toward
the Central City Employment Commitment, as provided in Section 4.3.3,
shall also be counted toward the Fort Worth Employment Commitment.
4.3.3. Central City Residents.
Beginning in the first full calendar year following the year in
which the Completion Date occurs and in each calendar year thereafter
during the Term of this Agreement, (i) at least twenty-five percent (25%)
of all Full-time Equivalent Jobs provided on the Hotel Property, regardless
of the total number of Full-time Jobs so provided, or (ii) sixty-two (62)
Full-time Equivalent Jobs, whichever is greater, will be filled by Central
City Residents(the "Central City Employment Commitment").
4.3.4. Measurement.
If Developer, in accordance with Section 4.8.6, selects the first full
calendar year following the Completion Date as Program Year 1, the
annual employment commitments set forth in this Section 4.3 shall be
measured by (i) for purposes of the first Program Grant, assessing
Developer's employment data for the month of March of Program Year 1
and (ii) for purposes of all subsequent Program Grants, by averaging
Developer's employment data for the last month of each calendar quarter
of the previous calendar year, as more fully explained in the example
below. If Developer, in accordance with Section 4.8.6, selects the second
full calendar year following the Completion Date as Program Year 1, the
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annual employment commitments set forth in this Section 4.3 shall be
measured by averaging Developer's employment data for the last month of
each calendar quarter of the previous calendar year. In other words, in
determining whether the Fort Worth Employment Commitment was met
in a given calendar year, the City will average the percentage of Full-time
Equivalent 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 Developer's
compliance with the annual employment commitments set forth in this
Section 4.3 by data other than that from the last month of each calendar
quarter.
4.4. Supply and Service Spending Commitments.
4.4.1. Fort Worth Companies.
Beginning with the first full calendar year following the year in
which the Completion Date occurs and in each calendar year thereafter
during the Term of this Agreement, Developer will cause at least
$75,000.00 in Supply and Service Expenditures to be made with Fort
Worth Companies (the "Fort Worth Supply and Service Spending
Commitment"). Dollars counted toward the M/WBE Supply and Service
Spending Commitment, as provided in Section 4.4.2, shall also be counted
toward the Fort Worth Supply and Service Spending Commitment.
4.4.2. Fort Worth Certified M/WBE Companies.
Beginning with the first full calendar year following the year in
which the Completion Date occurs and in each calendar year thereafter
during the Term of this Agreement, Developer will cause at least
$37,500.00 in Supply and Service Expenditures to be made with Fort
Worth Certified M/WBE Companies (the "M/WBE Supply and Service
Spending Commitment").
4.5. Star Rating.
Beginning in the year following the year in which the Completion Date
occurs and at all times thereafter, the Hotel must achieve and maintain a Mobil
Travel Guide rating of at least three (3) stars (the "Minimum Star Rating"). The
criteria for the Minimum Star Rating 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 2006, the City and
Developer agree to modify this 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
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Travel Guide is no longer published or no longer provides a hotel star rating
system, the City and Developer 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 Developer that
applies as closely as possible to hotels meeting the criteria set forth in Exhibit
«D„
4.6. Competitive Name Brand.
From and at all times after the Completion Date, the Hotel must be
operated and marketed under a First Tier Flag brand name.
4.7. Room Block Agreement.
Contemporaneously with the execution of this Agreement, the City and
Developer shall execute a Room Block Agreement. A Room Block Agreement
must be in effect and in full force at all times thereafter for the remainder of the
Term of this Agreement.
4.8. Reports.
4.8.1. Plan for Use of Fort Worth Certified M/WBE Companies.
Within sixty (60) calendar days of the Effective Date, Developer
will file a plan with the City as to how Developer intends to achieve the
M/WBE Construction Commitment, as outlined in Section 4.2.2.
Developer agrees to meet with the City's M/WBE Office and Minority
and Women Business Enterprise Advisory Committee as reasonably
necessary for assistance in implementing such plan and to address any
concerns the City may have with such plan.
4.8.2. Monthly Construction Spending Reports.
From the date of issuance by the City of a permit to initiate
construction of the Project until the Completion Date, Developer will
provide the City with a monthly report in a form reasonably acceptable to
the City that specifically outlines the then-current aggregate Construction
Costs expended by or on behalf of Developer for the Project, including
breakdowns of such Construction Costs expended with Fort Worth
Companies and Fort Worth Certified M/WBE Companies. Developer
agrees to meet with the City's M/WBE Office and Minority and Women
Business Enterprise Advisory Committee as reasonably necessary for
assistance in meeting the M/WBE Construction Commitment or to resolve
any problems with the report.
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4.8.3. Final Construction Spending Report.
Within thirty (30) calendar days following the Completion Date, in
order for the City to assess whether Developer satisfied the construction
spending requirements of Section 4.1 as well as the degree to which
Developer met the Fort Worth Construction Commitment and M/WBE
Construction Commitment, and to determine the Program Grant
Percentage, as defined in Section 6.1, Developer will provide the City with
a report in a form reasonably acceptable to the City that specifically
outlines the Construction Costs expended by and on behalf of Developer
for the Project, including breakdowns of such Construction Costs
expended with Fort Worth Companies and Fort Worth Certified M/WBE
Companies, together with supporting invoices and other documents
necessary to demonstrate that such amounts were actually paid by or on
behalf of Developer, including, without limitation, final lien waivers
signed by Developer's general contractor (provided, however, that
Developer will have up to ninety (90) calendar days following the
Completion Date to supply all final lien waivers).
4.8.4. Annual Employment Report.
On or before February 1 of the first full calendar year following the
Completion Date and of each calendar year thereafter, Developer will
provide the City with a report in a form reasonably acceptable to the City
that sets forth the total number of Full-time Equivalent Jobs provided and
filled on the Hotel Property; the number of such Full-time Equivalent Jobs
filled with Fort Worth Residents; and the number of such Full-time
Equivalent Jobs filled with 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
4.3.4, together with reasonable documentation regarding the residency of
such employees; provided, however, that if Developer, in accordance with
Section 4.8.6, selects the first full calendar year following the Completion
Date to be Program Year 1, Developer shall submit its first report by not
later than April 30 of the following year that sets forth the data specified
herein for the month March of that same year and begin filing annual
reports thereafter in accordance with this Section 4.8.4.
4.8.5. Quarterly Supply and Service Spending Report.
Beginning with the first calendar year following the year in which
the Completion Date occurs (or if Developer, in accordance with Section
4.8.6, selects the first full calendar year following the Completion Date to
be Program Year 1, the calendar year in which the Completion Date
occurs), within thirty (30) calendar days following the end of each
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calendar quarter Developer will provide the City with a report in a form
reasonably acceptable to the City that specifically outlines the then-
aggregate Supply and Service Expenditures made in the same calendar
year with Fort Worth Companies and with Fort Worth Certified M/WBE
Companies; provided, however, that if Developer, in accordance with
Section 4.8.6, selects the first full calendar year following the Completion
Date to be Program Year 1, Developer shall submit one (1) report within
thirty (30) calendar days following the Completion Date outlining all
Supply and Service Expenditures previously made in that calendar year
with Fort Worth Companies and Fort Worth Certified M/WBE Companies
and begin filing quarterly reports thereafter in accordance with this
Section 4.8.5. Developer agrees to meet with the City's M/WBE Office
and Minority and Women Business Enterprise Advisory Committee as
reasonably necessary for assistance in meeting the M/WBE Supply and
Service Spending Commitment or to resolve any problems with the report.
4.8.6. Selection of Program Year 1 by Developer.
Within thirty (30) calendar days following the Completion Date,
Developer shall provide the City with a written statement indicating
whether Developer wishes to receive its first Program Grant in (i) the first
full calendar year following the Completion Date (meaning that
Developer's compliance with the Overall Employment Commitment, the
Fort Worth Employment Commitment and the Central City Employment
Commitment shall, in accordance with Section 4.3.4, be measured by
assessing Developer's employment data for March of Program Year 1, and
Developer's compliance with the Fort Worth Supply and Service
Spending Commitment and M/WBE Supply and Service Spending
Commitment shall be based on such expenditures made in the year in
which the Completion Date occurred), or (ii)the second full calendar year
following the Completion Date (meaning that Developer's compliance
with the Overall Employment Commitment, the Fort Worth Employment
Commitment and the Central City Employment Commitment shall, in
accordance with Section 4.3.4, be measured by averaging the quarterly
data provided for the previous calendar year, and Developer's compliance
with the Fort Worth Supply and Service Spending Commitment and
M/WBE Supply and Service Spending Commitment shall be based on
such expenditures made in the previous calendar year.
4.9. Inspection of Hotel and Hotel Property.
At any time during the Term of this Agreement, following reasonable
advance notice to Developer, the City shall have, and Developer 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. Developer,
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its officers, agents, servants, employees, contractors and subcontractors, shall
cooperate fully with the City during any such inspection or evaluation. The City
and any authorized representative conducting any such inspection or evaluation
shall comply with all safety and job requirements then in effect on the Hotel
Property.
4.10. Audits.
Developer agrees that the City will have the right, at the City's own
expense, to audit Developer's Records at any time during the Term of this
Agreement in order to determine compliance with this Agreement. Developer
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. The City will provide Developer with a copy of any audit report within
thirty (30) calendar days of completion.
5. ISSUANCE BY DIRECTOR OF CERTIFICATE OF COMPLETION.
Subject to the City's audit rights, as set forth in Section 4.10, within thirty (30)
calendar days following receipt by the City of the final construction spending report
required by Section 4.8.3 (including all final lien waivers) and assessment by the City of
the information contained therein, if the City is able to verify that Developer expended or
caused to be expended at least $25 million in Construction Costs for the Project and that
the Completion Date occurred on or before the Completion Deadline, the Director shall
issue Developer a certificate stating the amount of Construction Costs that Developer
expended or caused to be expended by the Completion Date for the Project, including
amounts expended with Fort Worth Companies and Fort Worth Certified M/WBE
Companies, as well as the Program Grant Percentage.
6. PROGRAM GRANTS PAYABLE BY CITY.
Beginning in the year selected by Developer as Program Year 1, as more
specifically set forth in Section 4.8.6, the City will pay to Developer annual Program
Grants as provided by and calculated in accordance with this Agreement.
6.1. Calculation of the Base Amount of Each Program Grant.
Subject to the terms and conditions of this Agreement, the base amount of
each Program Grant paid by the City to Developer in a given Program Year will
equal the Program Grant Percentage multiplied by the Adjusted Hotel Occupancy
Tax Revenue received by the City in the previous year. The "Program Grant
Percentage" shall be the sum of the Overall Construction Percentage, the Fort
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Worth Construction Percentage and the M/WBE Construction Percentage, all as
defined below.
6.1.1. Completion of Proiect (50% Component).
If (i) Developer expends or causes to be expended at least $25
million in Construction Costs for the Project by the Completion Date and
(ii) the Completion Date occurs on or before the Completion Deadline, the
"Overall Construction Percentage" shall equal fifty percent (50%).
Notwithstanding anything to the contrary herein, if(i) Developer fails to
expend or cause to be expended at least $25 million in Construction Costs
for the Project by the Completion Date or (ii) the Completion Date does
not occur by the Completion Deadline, Developer shall be in default under
this Agreement, as more specifically outlined in Section 8.2.
6.1.2. Fort Worth Construction Cost Spending (Maximum 25%
Component).
The "Fort Worth Construction Percentage" shall equal the
product of twenty-five percent (25%) multiplied by the percentage by
which the Fort Worth Construction Commitment, as outlined in Section
4.2.1, was met, which will be calculated by dividing the actual
Construction Costs expended for the Project with Fort Worth Companies
by the Completion Date by the number of dollars comprising the Fort
Worth Construction Commitment, as determined in accordance with
Section 4.2.1. For example, if the Fort Worth Construction Commitment
is $8 million and only $6 million in Construction Costs were expended for
the Project with Fort Worth Companies by the Completion Date, the Fort
Worth Construction Percentage will be 18.75%, which is .25 x [$6
million/$8 million], or .25 x .75, or .1875. If the Fort Worth Construction
Commitment is met or exceeded, the Fort Worth Construction Percentage
will be twenty-five percent (25%). In no event will the Fort Worth
Construction Percentage exceed twenty-five percent(25%).
6.1.3. Fort Worth Certified M/WBE Construction Cost Spending
(Maximum 25% Component).
The "M/WBE Construction Percentage" shall equal the product
of twenty-five percent (25%) multiplied by the percentage by which the
M/WBE Construction Percentage, as outlined in Section 4.2.2, was met,
which will be calculated by dividing the actual Construction Costs
expended for the Project with Fort Worth Certified M/WBE Companies by
the Completion Date by the number of dollars comprising the M/WBE
Construction Commitment, as determined in accordance with Section
4.2.2. For example, if the M/WBE Construction Commitment is $8
million and only $6 million in Construction Costs were expended for the
Page 14
Economic Development Program Agreement ^;;'`-P I!'i 11 ^, ,
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
Project with Fort Worth Certified M/WBE Companies by the Completion
Date, the M/WBE Construction Percentage will be 18.75%, which is .25 x
[$6 million/$8 million], or .25 x .75, or .1875. If the MJWBE
Construction Commitment is met or exceeded, the M/WBE Construction
Percentage will be twenty-five percent (25%). In no event will the
M/WBE Construction Percentage exceed twenty-five percent(25%).
6.2. Reduction of Annual Program Grants.
If in the previous calendar year Developer failed to meet any of its
commitments to employ a minimum number of individuals, of Fort Worth
Residents and of Central City Residents on the Hotel Property, and to make
minimum Supply and Service Expenditures with Fort Worth Companies and Fort
Worth Certified M/WBE Companies, the following provisions shall apply:
6.2.1. Failure to Meet Overall Employment Commitment.
If during the previous calendar year the Overall Employment
Commitment, as outlined in Section 4.3.1 and measured in accordance
with Section 4.3.4, was not met, the Program Grant payable to Developer
in the following Program Year shall be reduced by $4,500.00 for each
Full-time Equivalent Job by which the Overall Employment Commitment
was missed.
6.2.2. Failure to Meet Fort Worth Employment Commitment.
If during the previous calendar year the Fort Worth Employment
Commitment, as outlined in Section 4.3.2 and measured in accordance
with Section 4.3.4, was not met, the Program Grant payable to Developer
in the following Program Year shall be reduced by $4,500.00 for each
Full-time Equivalent Job by which the Fort Worth Employment
Commitment was missed.
6.2.3. Failure to Meet Central City Employment Commitment.
If during the previous calendar year the Central City Employment
Commitment, as outlined in Section 4.3.3 and measured in accordance
with Section 4.3.4, was not met, the Program Grant payable to Developer
in the following Program Year shall be reduced by $9,000.00 for each
Full-time Equivalent Job by which the Central City Employment
Commitment was missed.
Page 15
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
6.2.4. Failure to Meet Fort Worth Supply and Service Spending
Commitment.
If during the previous calendar year the Fort Worth Supply and
Service Spending Commitment, as outlined in Section 4.4.1, was not met,
the Program Grant payable to Developer in the following Program Year
shall be reduced by an amount equal to the product of the number of
dollars by which the Fort Worth Supply and Service Commitment was met
multiplied by three (3).
6.2.5. Failure to Meet M/WBE Supply and Service Spending
Commitment.
If during the previous calendar year the M/WBE Supply and
Service Spending Commitment, as outlined in Section 4.4.2, was not met,
the Program Grant payable to Developer in the following Program Year
shall be reduced by an amount equal to the product of the number of
dollars by which the M/WBE Supply and Service Spending Commitment
was met multiplied by three (3).
6.3. No Offsets.
A deficiency in attainment of any of the commitments set forth in Sections
4.2.1, 4.2.2, 4.3.1, 4.3.2, 4.3.3, 4.4.1 and/or 4.4.2 may not be offset by exceeding
other such commitments. In other words, if in a given year Developer exceeded
the Fort Worth Employment Commitment, as set forth in Section 4.3.2, by five
(5) Full-time Equivalent Jobs, but failed to meet the Central City Employment
Commitment, as set forth in Section 4.3.3, by five (5) Full-time Equivalent Jobs,
the Program Grant payable to Developer in the following year would still be
$45,000.00 (5 Full-time Equivalent Jobs multiplied by $9,000.00 per Full-time
Equivalent Job in accordance with Section 6.2.3).
6.4. Cessation or Pro-rated Payment of Program Grants.
6.4.1. 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 6.4.3), 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, or (iii) at any time during the
Term of this Agreement Developer 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 Developer shall
Page 16
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
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 Occupancy Tax
Revenue, as provided in Section 6.6 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.
6.4.2. 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 6.4.3), 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, or(iii) at any time during the
Term of this Agreement Developer 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
Section 6.2, 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 Developer 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 Occupancy
Tax Revenue, as provided in Section 6.6 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. Notwithstanding anything to the
contrary herein, if Developer, in accordance with Section 4.8.6, selects the
first full calendar year following the Completion Date as Program Year 1
and the City has not received verification by August 1 of that year that the
Hotel achieved the Minimum Star Rating, the City will hold the Program
Grant payable in Program Year 1 in escrow, without any obligation to pay
Developer interest on such amount, until the City has received verification
that the Hotel achieved the Minimum Star Rating during that year (and
with the understanding that (i) the City will pay the Program Grant due in
Program Year 1 within thirty (30) calendar days following receipt of
verification that the Hotel achieved the Minimum Star Rating during that
Page 17
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
year and (ii) if the City has not received verification that the Hotel
achieved the Minimum Star Rating by January 31 of Program Year 2,
Section 6.4.1 of this Agreement shall apply).
6.4.3. 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 6.4.1 or 6.4.2, Developer will be granted the opportunity for a
hearing before the City Council at which Developer 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 6.4.1 or 6.4.2, 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.
6.5. Program Cap.
Notwithstanding anything to the contrary herein, in no event shall the City
be obligated to pay Developer Program Grants in an aggregate amount exceeding
the Program Cap.
6.6. Excluded Hotel Revenue Remains Property of City.
Developer understands and agrees that any Excluded Hotel Occupancy
Tax Revenue shall remain the property of the City; that the City will not at any
time be required to pay Developer any amounts equal to the Excluded Hotel
Occupancy Tax Revenue; and that Excluded Hotel Occupancy Tax Revenue
received in one year will not in any manner be applied or carried over to any
Program Grant payable to Developer in a subsequent year, even if any previous
year's Program Grant was less than the Maximum Annual Program Grant payable
for that year.
6.7. Deadline for Payment.
Annual Program Grants will be paid to Developer by June 1 of the
Program Year in which they are due; provided, however, that, if Developer, in
accordance with Section 4.8.6, selects the first full calendar year following the
Completion Date as Program Year 1, the Program Grant payable for Program
Year 1 will be paid by Developer by August 1 of Program Year 1 (unless the
Hotel has not received the Minimum Star Rating by such time, in which case
Section 4.5 shall apply).
Page 18
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
6.8. Source of Proeram 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 hotel occupancy taxes paid to the City.
7. OTHER OBLIGATIONS OF THE CITY.
7.1. Waiver of Certain City Fees.
Developer will be required to apply for and receive all permits and other
licenses and certificates required by the City with respect to the Project.
However, unless otherwise provided herein or prohibited by applicable law,
ordinance, rule or regulation, the City hereby agrees to waive the following fees
related to the Project that would otherwise be charged by the City: (i) building
permit, plan review, inspection and re-inspection fees; (ii) zoning and platting
fees; and (iii) temporary and permanent encroachment fees for encroachments
lasting no more than one hundred eighty (180) calendar days. Notwithstanding
anything to the contrary herein, in no event will the City waive or reimburse
Developer for (i) any water or sewer impact fees or (ii) fees of any nature
assessed by third parties, such as third party inspection fees.
7.2. Fast-Track Development Process.
The City will work with Developer to establish a procedure by which the
City can expedite all City development approvals, including permits and
inspections, for the Project, with the understanding that such procedure will
include inspections undertaken by third parties.
8. DEFAULT, TERMINATION AND FAILURE TO MEET VARIOUS
COMMITMENTS AND OBLIGATIONS.
8.1. Failure of Developer to Meet Certain Commitments and Obligations.
If(i) Developer fails to meet its Construction Cost spending commitments
set forth in Sections 4.2.1 and 4.2.2; or (ii) Developer fails to meet any of its
employment commitments set forth in Sections 4.3.1, 4.3.2 and 4.3.3; or (iii)
Developer fails to meet any of its Supply and Service Expenditure commitments
set forth in Sections 4.4.1 or 4.4.2; or (iv) the Hotel does not at any time have its
Minimum Star Rating, as required by Section 4.5; or(v) the Hotel does not at any
time operate or market itself under a First Tier Flag brand name, as required by
Section 4.6, then the Program Grants payable by the City will be subject to
reduction (whether factored into the Program Grant Percentage or deducted on an
Page 19
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
annual basis) or waiver pursuant to Sections 6.1, 6.2 or 6.4, as the case may be,
but Developer shall not be in default under this Agreement.
8.2. Failure to Complete Proiect.
Developer shall be in default under this Agreement if(i) Developer fails to
expend or cause to be expended at least $25 million in Construction Costs for the
Project by the Completion Date or (ii) the Completion Date does not occur on or
before the Completion Deadline. In this event, the City shall have the right to
terminate this Agreement effective immediately upon provision to Developer of
written notice of such intent.
8.3. Termination of Room Block Agreement.
If the City lawfully terminates the Room Block Agreement on account of a
breach or default by Developer, this Agreement shall automatically terminate on
the effective date of the termination of the Room Block Agreement without
further obligation of the City hereunder.
8.4. Failure to Submit Reports.
8.4.1. Final Construction Spending Report.
If Developer fails to submit the final construction spending report
pursuant to and in accordance with Section 4.8.3, the City shall notify
Developer in writing and Developer shall have thirty (30) calendar days to
submit such report to the City. If the City has not received this final
construction spending report following such thirty (30)-day cure period,
and the Director is therefore unable to issue the Certificate of Completion
in accordance with Section 5, then the Completion Date shall be deemed
to have not occurred by the Completion Deadline and Section 8.2 shall
apply.
8.4.2. All Other Reports.
If Developer fails to submit any report pursuant to and in
accordance with Section 4.8 of this Agreement (other than the final
construction spending report required by Section 4.8.3), the City shall
notify Developer in writing and Developer shall submit such report within
ten (10) calendar days following receipt of the City's notice (`Courtesy
Period"). If Developer fails to submit any such report within the
Courtesy Period, the City shall notify Developer in writing and Developer
will have thirty (30) calendar days to submit any such report to the City.
If Developer fails to submit any such report within such thirty (30)
calendar days, the City will have the right to terminate this Agreement
effective immediately upon provision to Developer of written notice of
Page 20
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
such intent. Notwithstanding anything to the contrary herein, after
Developer has been delinquent in the submission of three (3) reports
pursuant to and in accordance with Section 4.8 of this Agreement, the City
shall no longer be required to provide Developer with the Courtesy Period,
but may simply proceed to provide Developer with the thirty (30)-day cure
period, as described above.
8.5. Failure to Pay City Taxes.
Developer shall be in default under this Agreement if any ad valorem
taxes on the Hotel, the Hotel Property, or tangible personal property located
within the Hotel or otherwise on the Hotel Property that are owed to the City by
Developer or an Affiliate become delinquent and Developer or the Affiliate, as
the case may be, does not either pay such taxes in full or properly follow the legal
procedures for protest and/or contest of any such taxes within thirty (30) calendar
days following receipt of written notice from the City. In the event such default
remains uncured following such thirty (30)-day period, the City shall have the
right to terminate this Agreement immediately by providing written notice to
Developer and shall have all other rights and remedies that may be available to it
under law or in equity.
8.6. Violation of Applicable Law.
8.6.1. City Code Violations.
Developer shall be in default under this Agreement if any written
citation is issued to Developer or an Affiliate due to the occurrence of a
material violation of a provision of the City Code on any portion of the
Hotel Property then owned by Developer or an Affiliate or on or within
the Hotel or any other improvements thereon (including, without
limitation, any material violation of the City's Building or Fire Codes and
any other City Code violations related to the environmental condition of
the Hotel Property; the environmental condition of other land or waters
which is attributable to operations on the Hotel Property then owned by
Developer or an Affiliate or to matters concerning the public health, safety
or welfare) and such citation is not paid in full or the recipient of such
citation does not properly follow the legal procedures for protest and/or
diligent contest of any such citation within thirty (30) calendar days
following receipt by Developer of written notice from the City specifically
referencing this Section 8.6.1. If the default remains uncured after such
time, the City shall issue a second written notice of default to Developer
specifically referencing this Section 8.6.1, in which case Developer shall
have an additional sixty (60) calendar days (or if Developer or the
Affiliate, as the case may be, has diligently pursued cure of the default but
such default is not reasonably curable within sixty (60) calendar days, then
such amount of time that reasonably is necessary to cure such default).
Page 21 %' f J v bn.'
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P. rm
�1r1
Developer shall be in default under this Agreement if Developer or an
Affiliate is convicted of the charges set forth in any such citation (whether
by payment of the citation or a guilty or no contest plea to the charges set
forth in the citation) and does not fully cure the offense within the cure
period set forth above, in which case the City, as its sole and exclusive
remedy under this Agreement, shall have the right to terminate this
Agreement immediately by providing written notice to Developer and
shall have all other rights and remedies that may be available to the City
under the law with respect to such violation of the City Code.
8.6.2. Violations of State or Federal Law.
Developer shall be in default under this Agreement if the City is
notified by a governmental agency or unit with appropriate jurisdiction
that the City, Developer or an Affiliate is in violation of any material state
or federal law, rule or regulation on account of the Hotel Property, the
Hotel or other improvements on the Hotel Property or any operations
thereon (including, without limitation, any material violations related to
the environmental condition of the Hotel Property; the environmental
condition of other land or waters which is attributable to operations on the
Hotel Property; or to matters concerning the public health, safety or
welfare) and such violation (i) is not caused solely by the City, and (ii) is
not fully cured within thirty (30) calendar days following receipt by
Developer of written notice from the City specifically referencing this
Section 8.6.2. If the event of default remains uncured after such time, the
City shall issue a second written notice of default to Developer
specifically referencing this Section 8.6.2, in which case Developer shall
have an additional sixty (60) calendar days in which to cure such default
(or if Developer or the Affiliate, as the case may be, diligently pursues
cure of the default but such default is not reasonably curable within sixty
(60) calendar days, then such amount of time that reasonably is necessary
to cure such default). Developer shall be in default under this Agreement
if Developer or an Affiliate fails to cure such violation within the cure
period set forth above, in which case the City, as its sole and exclusive
remedy under this Agreement, shall have the right to terminate this
Agreement immediately by providing written notice to Developer and
shall have all other rights and remedies that may be available to the City
under the law with respect to such violation of state or federal law.
8.7. In General.
Subject to Sections 8.1 through 8.6 and unless specifically provided
otherwise in this Agreement, Developer shall be in default under this Agreement
if Developer breaches any term or condition of this Agreement. In the event that
such a breach remains uncured after thirty (30) calendar days following receipt of
written notice by the City referencing this Agreement (or, if Developer has
Page 22
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
diligently and continuously attempted cure following receipt of such written
notice but reasonably requires more than thirty (30) calendar days to cure, then
such additional amount of time as is reasonably necessary to effect cure, as
determined by both parties mutually and in good faith), the City shall have the
right to terminate this Agreement immediately by providing written notice of such
intent to Developer.
8.8. By Mutual Agreement.
The parties may terminate this Agreement by mutual written agreement.
9. INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Developer shall operate as an
independent contractor in each and every respect hereunder and not as an agent,
representative or employee of the City. Developer 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. Developer acknowledges
that the doctrine of respondeat superior will not apply as between the City and
Developer, its officers, agents, servants, employees, contractors, subcontractors, licensees
and invitees. Developer further agrees that nothing in this Agreement will be construed
as the creation of a partnership or joint enterprise between the City and Developer.
10. INDEMNIFICATION.
DEVELOPER 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
DEVELOPER'S BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR
PERSONAL INJURY, INCLUDING DEATH, THAT MAY RELATE TO, ARISE
OUT OF OR BE OCCASIONED BY(i) DEVELOPER'S BREACH OFANY OF THE
TERMS OR PROVISIONS OF THIS AGREEMENT OR (ii)ANY NEGLIGENT ACT
OR OMISSION OR INTENTIONAL MISCONDUCT OF DEVELOPER, ITS
OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER
THAN THE CITU OR SUBCONTRACTORS, RELATED TO THE PROJECT, THE
HOTEL OR THE PERFORMANCE OF THISAGREEMENT,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
DEVELOPER AND CITY, RESPONSIBILITY, IF ANY, SHALL BE
Page 23
Economic Development Program Agreement a.0 I E,
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
APPORTIONED COMPARATIVELY IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS.
11. 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:
City: Developer:
Attn: Director Attn: Sushil Patel
Economic and Community Dev. Dept. Presidio Hotel Fort Worth, L.P.
1000 Throckmorton St. 1300 Oliver Road, Suite 270
Fort Worth, TX 76102 Fairfield, CA 94533
Phone: 817-392-6103 Phone: 707-429-6000
with a copy to: with copies to:
Attn: City Attorney Attn: Eric D. Dean, Esq.
City Attorney's Office General Counsel
1000 Throckmorton St. Presidio Hotel Group, LLC
Fort Worth, TX 76102 201 E. Sandpointe, Suite 200
Phone: 817-392-7600 Santa Ana, CA 92707
Phone: 714-641-3914
and
Attn: Brian T. McCabe
Cantey & Hanger, L.L.P.
400 West 15th St., Suite 200
Austin, TX 76701
Phone: 512-474-4200
12. ASSIGNMENT AND SUCCESSORS.
Prior to the Completion Date and for two (2) years thereafter, Developer may not
assign, transfer or otherwise convey any of its rights or obligations under this Agreement.
Thereafter, provided that Developer is not in default under any of its obligations under
this Agreement or the Room Block Agreement, Developer may assign, transfer or
otherwise convey any of its rights and obligations under this Agreement to another party
upon receipt in advance of the written consent of the City, which consent shall not
unreasonably be withheld or delayed, conditioned on (i) the prior approval of the assignee
and a finding by the City Council that the proposed assignee or successor will operate
Page 24
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
and market the Hotel under a First Tier Flag brand name and is financially capable of
operating the Hotel in compliance with the Minimum Star Rating and (ii) prior execution
by the proposed assignee or successor of a written agreement with the City under which
the proposed assignee or successor agrees to assume all covenants and obligations of
Developer under this Agreement. Any lawful assignee or successor in interest of
Developer under this Agreement shall be deemed "Developer" for all purposes under this
Agreement.
13. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND
REGULATIONS.
This Agreement will be subject to, and the parties hereto shall comply with, 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.
14. GOVERNMENTAL POWERS.
It is understood that by execution of this Agreement, the City does not waive or
surrender any of it governmental powers.
15. 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.
16. 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.
17. NO THIRD PARTY RIGHTS.
The provisions and conditions of this Agreement are solely for the benefit of the
City and Developer, and any lawful assign or successor of Developer, and are not
intended to create any rights, contractual or otherwise,to any other person or entity.
Page 25
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
18. FORCE MAJEURE.
It is expressly understood and agreed by the parties to this Agreement that if the
performance of any obligations hereunder is delayed on account of an event of Force
Majeure, the party so obligated will be excused from doing the same for an amount of
time equal to the duration of the event of Force Majeure.
19. 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.
20. CAPTIONS.
Captions and headings used in this Agreement are for reference purposes only and
shall not be deemed a part of this Agreement.
21. 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 Developer, and any lawful assign and successor of Developer, 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.
22. 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:
Page 26
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
CITY OF FORT WORTH: PRESIDIO HOTEL FORT WORTH,
L.P., a Texas limited partnership:
By: Presidio Hc tel GenPar, LLC, a
Texas limit d liability company:
By: By:
Dale Fisseler jNaeAssistant City Manager
Date: 011 Date: 1�wa
W
APPROVED AS TO FORM AND LEGALITY:
By:
Peter Vaky
Assistant City Attorney
M&C: C-21326 2-28-06
Attested By: _
Marty Hendrix
City Secretary
Page 27
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P. V,
EXHIBITS
"A"—Map of Central City
"B" —Maximum Annual Program Grants
"C"—Description of Project
"D"—Criteria for Mobil Travel Guide 3-Star Rating
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth, L.P.
EXHIBIT "A"
MAP OF CENTRAL CITY
CDBG Eligible Areas & Central City
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61
76020 760
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Exhibit "B"
Maximum Annual Program Grants
Program Year Maximum Grant
1 $644,613
2 $821,391
3 $821,391
4 $886,663
5 $929,234
6 $960,831
7 $993,383
8 $1,026,964
9 $1,061,499
10 $1,085,228
11 $1,109,431
12 $1,134,118
13 $1,159,298
14 $1,184,983
15 $1,211,181
16 $1,237,903
17 $1,265,159
18 $1,292,960
19 $1,321,318
20 $1,350,243
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
Z� 9
EXHIBIT "C"
DESCRIPTION OF PROJECT
The Hotel, currently operating as the Plaza Hotel and depicted on the following page, will
be redeveloped as a Sheraton Grande, substantially as depicted on the second following
page, which will contain a minimum of 400 guest rooms, restaurants, meeting rooms and
a spa.
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EXHIBIT "D"
MINIMUM STAR RATING
THREE-STAR RATING-MOBIL TRAVEL GUIDE
Lodging Criterta and Expectations
Now:rhe fadowirap w4ado are suggesaod o*w*of what a gayest on 0e orrady expect at
each star levet They are riot individually r wWoto+d tar are they ed to those Hems Netted
bolow. Those ars a w Wyr a mpmsonfafiva sampAV of tho hundrerds ofpa**covemd during
our dtspecdon process. AdditbnaUy,at each AnW pee bdoftV what hmerrt is mganhed to
meet or exceed the reigeriremwft of then star rating.For oxerraple,a Two-Star hotel
mets the criteria expectations of a Two-Stor hotel as as the One-Star hof. A r rae-
Star hotel mets rho cr#&*expectatlnns of a rhme-Star hotol,a rwo-SW hill and Or;e-Star
hotel,OW so forth.
* Orta-Star I-oktinu Establishment is a+dean,comfortable,and reakote,limited services
estalfthnvnt, Courfaous service and good IousekaWmg,inctudog daily maid aexvice, are
standard. Characteristics of a Urge-Star Hotel or Motel include.
Services Detail
-Staff is well-groomed with prolong onat,nerA and well-maunta d attire.
-Ail staff encountered are pleasant mid professional in thea demeanor,
-Coffee.hot tea and breakfast pastry we arab ort-sire(coW be ira-vw).
* it TYo4tair Life Establistinlent provides demos,comforteNee and tdatrie
ar comtodatioacs along with expanded ementlies and services.such as a full-service
restaurant on-site.Guests at a Two-Staf Hotel,Resort or Inn can expect to flad all of the
qualifies for a One-Star Hotel,or Resort plus the following chter istkx:
Services Detail
•Freon desk stttd`f are watt Vate.smile and hike w1v cdrntsict.
Staff is attired in well-fitting.consistent u6fom*s.
-Sa Ws"assistance is available on request.
The front desk I$staffed twenty-dots hours.
RestauMt ort-sxo sit VMQ three meets daily.
-
If Inn,twonty-four how quest swvice available on-call
* * * Thtae-Starr Lodging Establishment 4 an a statrlishme m that is well-appointed,with
fall services and expanded arnesndie s Gusts at a Three-Stec Hetet,Resort or Inn can expect
to find all of the qualities for a Taro-Star Wei or Resort plus the fang characteristics,
Sarvices Detail
-Turrxiown service is avaWe upon request,
-Valeo parking is avakible.
-&Vpge assistance is automatic,
-Sante day ti kAviry aid dry cleaning evaiabfe five dayshAaaek.
-Complimentary newspapers are delivered to room autocratically.
-Complote room service is available.
-WorkSlatiOn is as itatrttt VWN"guest Can amass Interrteal.
•Basic fitness equiy ment is provided,#nckxkrsg treadmills and cycles,
-If tin's,restaurant on-site which se"s 6A brosAfast is availabW
if Resort,cornplkmentery newspapers(or newsfaxes)are delivered to room automatically.
Economic Development Program Agreement
between City of Fort Worth and Presidio Hotel Fort Worth,L.P.
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 2/28/2006
DATE: Tuesday, February 28, 2006
LOG NAME: 17PLAZA EDPA REFERENCE NO.: C-21326
SUBJECT:
Authorize Execution of Economic Development Program Agreement with Presidio Hotel Fort Worth,
L.P. for the Redevelopment of the Plaza Hotel
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to execute the attached Economic Development Program Agreement with
Presidio Hotel Fort Worth, L.P. subject to non-material changes acceptable to both parties and their legal
counsel; and
2. Find that the terms and conditions of the Agreement, as outlined below, constitute a custom designed
Economic Development Program, as provided in the 2006 Comprehensive Plan and in accordance with
Chapter 380 of the Texas Local Government Code, and comprise an appropriate public incentive to
encourage the redevelopment of the Plaza Hotel.
DISCUSSION:
Presidio Hotel Fort Worth, L.P. (Presidio) intends to invest approximately $46 million to redevelop the hotel
located at 1701 Commerce Street (the Hotel), which is currently operating as the Plaza. The Hotel will be
re-branded as a Sheraton Grande. Under the proposed Agreement, Presidio has committed to (i) spend at
least $25 million in construction costs to improve the physical Hotel by October 1, 2007; and (ii) spend the
greater of 25% or $6,250,000 of its total construction costs with Fort Worth contractors; and (iii) spend the
greater of 25% or $6,250,000 of its total construction costs with contractors that are certified as Fort Worth
M/WBE companies. The Hotel will have approximately 430 rooms, a full-service restaurant, meeting rooms,
a spa and other supporting facilities commensurate with a full-service hotel. Presidio will also be required to
obtain and maintain a Mobil Travel Guide 3-Star rating and ensure that the hotel is operating and marketing
itself under a first tier flag brand name. In addition, Presidio will be required to enter into a Room Block
Agreement with the City.
The Property currently has 430 guestrooms; however, only 245 are rentable. The planned redevelopment
will be instrumental in increasing Fort Worth's ability to attract large conventions. In return for the economic
benefits and increased first class hotel rooms that will accrue as a result of Presidio's redevelopment of the
Property, the City will make 20 annual economic development program grants to Presidio as authorized by
Section 380 of the Texas Local Government Code. These grant payments will commence in the second full
year following the completion of the redevelopment.
PRESIDIO COMMITMENTS
As part of this project, Presidio Hotel Group has made the following commitments:
Construction Spending. If Presidio fails to spend at least $25,000,000 in construction costs for the
Logname: 60SOUTHWEST Page 1 of 3
redevelopment of the Hotel, an event of default will occur and the Economic Development Program will
terminate. If Presidio fails to meet the spending commitments with Fort Worth companies and Fort Worth
certified M/WBE companies, the grant payment will be reduced in subsequent years by the product of the
percentage by which the commitment was not met and the weighted percentage of the commitment (each
commitment comprising 25% of the total grant amounts).
Employment. Presidio annually will provide a minimum of 250 full-time equivalent jobs (FTEs) in the hotel
by January 1, 2009. At least 50% of all FTEs or 125 FTEs, whichever is greater, must be held by residents
of the City of Fort Worth and at least 25% of all FTEs or 62 FTEs, whichever is greater, must be held by
residents of the Central City. Jobs provided to residents of the Central City will also count as jobs provided
to residents of the City of Fort Worth. If Presidio fails to meet the employment commitments for any year,
the grant payments for the following year will be reduced by $4,500 for each FTE below the 250 overall
commitment; $4,500 for each FTE below the City of Fort Worth commitment; and $9,000 for each FTE
below the Central City commitment.
Supply and Service Spending_ Presidio will spend at least $75,000 per year with Fort Worth companies and
at least $37,500 per year with Fort Worth M/WBE companies in discretionary supplies and services for the
Hotel. Spending with Fort Worth M/WBE companies shall also count toward the spending commitment for
Fort Worth companies. If Presidio fails to meet the supply and service spending commitments for any year,
the grant in the following year will be reduced by three times the number of dollars by which the
commitments were not met.
Operating Standards. If the Hotel at any time loses or fails to attain a Mobil Travel Guide rating of at least 3-
stars or is not operated under a first tier hotel brand name, the City will suspend payment of the economic
development grants payable under the agreement until the Hotel has attained a 3-star rating or higher and
is operated under a first tier brand name.
CITY INCENTIVES
The City will make 20 annual economic development grants to Presidio as authorized under Chapter 380 of
the Texas Local Government Code. The amount of the program grants will be equal to 100% of the City's
7% incremental hotel occupancy tax revenues attributable to the Property (the program grants will not
include the 2% of the incremental hotel occupancy tax already committed to the Convention Center),
subject to reduction or suspension as outlined above.
In addition, no annual grant will exceed the Maximum Annual Program Grant payable for that calendar year,
as outlined in Exhibit "B" of the attached Agreement. If City revenues to be rebated to Developer fall short
of the annual cap amount, the differential will not be carried forward and any tax revenue generated in
excess of the annual cap flows solely to the City. Furthermore, the total amount of the grants will not
exceed a maximum cap of$21,497,741, gross, over the 20 year term of the Agreement.
In addition, the City will waive certain development-related fees for the project as specified in the
Agreement.
The 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 2006 Comprehensive Plan adopted by the City Council on February 21, 2006, (M&C G-
15090).
The Sheraton Grande Hotel will be located in COUNCIL DISTRICT 9.
FISCAL INFORMATION/CERTIFICATION:
Logname: 60SOUTHWEST Page 2 of 3
The Finance Director certifies that this action will have no material effect on City funds.
TO Fund/Account/Centers FROM Fund/Account/Centers
Submitted for City Manager's Office bk Dale Fisseler(6266)
Originating Department Head: Tom Higgins (6192)
Robert Sturns (8634)
Additional Information Contact: Peter Vaky(7601)
Logname: 60SOUTHWEST Page 3 of 3