HomeMy WebLinkAboutContract 52382 CITY SECRETARY
CONTRACT NO. 523$31,
ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
("Agreement") is entered into by and between the CITY OF FORT WORTH, TEXAS
(the "City"), a home rule municipality organized under the laws of the State of Texas, and
714 MAIN REAL ESTATE HOLDINGS, LLC, a Delaware limited liability company
("Developer").
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. Developer owns or will own real property in the City at 714 Main St., as
more specifically described in Exhibit"A", attached hereto and hereby made a part of this
Agreement for all purposes (the "Land"). The Land is located within 1,000 feet of the
Fort Worth Convention Center.
B. The Land contains a historic office tower with approximately 190,000
square feet of space that currently is vacant. In return for the economic development
incentives set forth in this Agreement (specifically, payment by the City of the
Performance-Based Grants, as outlined more specifically in this Agreement), Developer
has agreed to redevelop the existing tower on the Land into a full-service hotel with,among
other things, at least 220 Guest Rooms, at least 10,000 square feet of combined meeting
space (which may, as subsequently determined by Developer, include ballroom,
conference room or board room space as well as rooftop banquet space), and a full-service
restaurant of at least 3,100 square feet (collectively, the "Hotel"). Once the Hotel is
completed, Developer will transfer title to the Land, but not the improvements,to the City
and then lease the Land back from the City. Developer has represented to the City that
financial feasibility for this Hotel redevelopment project is dependent on receipt of the
Performance-Based Grants hereunder and that Developer could not proceed with the
project without the City's promise to pay such Performance-Based Grants. The City has
reviewed Developer's financial prospectus and other relevant financial information and
concurs with that conclusion.
C. The City's 2019 Comprehensive Plan,adopted by the City Council pursuant
to Ordinance No. 23589-03-2019 (the "Comprehensive Plan"), recognizes that tourism,
both for business and for pleasure, is a significant component of the City's economy. As
recommended by the Comprehensive Plan and in accordance with Resolution No. 3716-
03-2009 (which was in force on October 30, 2018, the date on which the City Council
authorized execution of this Agreement pursuant to M&C C-28913), the City has
established an economic development program pursuant to which the City will, on a case-
Page 1 OFFICIAL RECORD
Economic Development Program Agreement CITY SECRETARY
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
FT. WORTH,TX
by-case basis, offer economic incentives authorized by Chapter 380 of the Texas Local
Government Code that include monetary loans and grants of public money, as well as the
provision of personnel and services of the City, to businesses and entities that the City
Council determines will promote state or local economic development and stimulate
business and commercial activity in the City in return for verifiable commitments from
such businesses or entities to cause specific employment and other public benefits to be
made or invested in the City(the 11380 Program"). On January 29,2019,the City Council
adopted a new 380 Program pursuant to Resolution No. 5039-01-2019, under which the
City Council, among other things, broadened requirements for utilization of minority-
owned and other disadvantaged businesses under the 380 Program by expanding the
available pool of such businesses from those with principal offices in the City only to those
with principal offices in the six-county metropolitan region (Tarrant, Dallas, Denton,
Johnson,Parker,and Wise Counties). Although M&C C-28913 contained references under
which Developer would utilize "Fort Worth Certified M/WBE Companies", in this
Agreement the City is willing to define such businesses consistent with the new definition
of"Certified M/WBE Company"adopted by the City Council under Resolution No. 5039-
01-2019.
D. The City of Fort Worth Convention and Hospitality Market Feasibility
Study created by Hunden Strategic Partners in July 2014 for the City (the "Market
Study") emphasizes the need to have full-service hotels within walking distance of the
Fort Worth Convention Center. The Market Study states that "The demands are not just
for hotel rooms, but high-quality, full-service hotel room blocks ... Cities that wish to
remain competitive in the tourism and convention market must be visionary,proactive and
creative in the sizing, placement and connectivity of major hotels with their convention
center(s) and other attractions. Cities are now helping to finance hotels due to the fact that
convention hotels are key to the success of their tourism package" (p. 7-2 and 7-3).
E. The City Council has determined that the proposed development and use of
the Hotel will benefit and stimulate the local economy and that the 380 Program is an
appropriate means to achieve this project. In addition, the City Council has 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, as outlined in the Comprehensive Plan, as well as the
goals set forth in the Market Study. 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 City and Developer agree as follows:
AGREEMENT
Page 2
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
1. INCORPORATION OF RECITALS.
The City Council has found, and the City and Developer hereby agree, that the
recitals set forth above are true and correct and form the basis upon which they have entered
into this Agreement.
2. DEFINITIONS.
In addition to other terms defined in the body of this Agreement, the following
terms will have the definitions ascribed to them as follows:
380 Program has the meaning ascribed to it in Recital C.
Affiliate means all entities, incorporated or otherwise, under common control with,
controlled by or controlling Developer. For purposes of this definition, "control" means
fifty percent (50%) or more of the ownership determined by either value or vote.
Available Hotel Occupancy Tax Revenue means revenue received by the City
from the hotel occupancy tax lawfully assessed and collected by the City pursuant to
Chapter 351 of the Texas Tax Code and Chapter 32 of the City Code at a rate of seven
percent (7%) of the cost of a Hotel room and that is derived from or attributable to the
Hotel.
Base Grant Percentage has the meaning ascribed to it in Section 6.1.
Central City means the area of the corporate limits of the City within Loop 820 (i)
consisting of all Community Development Block Grant ("CDBG")-eligible census block
groups; (ii) all enterprise zones, designated as such pursuant to the Texas Enterprise Zone
Act, Chapter 2303, Subchapter F of the Texas Government Code; (iii) all census block
groups that are contiguous by seventy-five percent (75%) or more of their perimeters 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
attached hereto as Exhibit`B", 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
4.6.3.
Central City Employment Percentage has the meaning ascribed to it in Section
6.6.
Central City Resident means an individual whose principal place of residence is
at a location within the Central City.
Page 3
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
Certificate of Completion has the meaning ascribed to it in Section 5.
Certified M/WBE Company means a minority- or woman-owned business that
(i) has received certification as either a minority business enterprise (MBE), a woman
business enterprise (WBE), or a disadvantaged business enterprise (DBE) by the North
Central Texas Regional Certification Agency (NCTRCA), D/FW Minority Supplier
Development Council (MSDC), or Women's Business Council — Southwest (WBC) and
(ii) has a Principal Office located within Tarrant,Dallas, Denton, Johnson,Parker, or Wise
Counties, Texas.
Completion Date means the date as of which all occupiable space within the Hotel
building has received a temporary or permanent certificate of occupancy.
Completion Deadline means June 30, 2021.
Development Costs means the following costs expended directly for the Hotel:
Hard Construction Costs; engineering fees; architectural and design fees; real estate
commissions; costs of third party consultants, including attorneys and environmental
consultants; state and federal historic tax credit costs; developer fees; zoning fees;
insurance and taxes directly related to construction of the Hotel; financing costs, including
capitalized interest, directly related to construction of the Hotel; and furniture, fixtures and
equipment (FF&E) for the Hotel. For removal of doubt, property acquisition costs, pre-
opening expenses, inventory investment costs, and franchise fees do not constitute
"Development Costs."
Director means the director of the City's Economic Development Department or
his or her authorized designee.
Effective Date has the meaning ascribed to it in Section 3.
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 attributable to
or derived from the Hotel at a rate in excess of seven percent (7%) of the cost of a Hotel
room; and (ii) the amounts by which any Performance-Based Grant may be reduced, in
whole or in part, in accordance with the terms and conditions of this Agreement, whether
factored in for all Performance-Based Grants or by annual reduction to a single
Performance-Based Grant.
First Full Operating Year means the first full calendar year following the Initial
Operating Year, which is the year in which the Completion Date occurred.
Fort Worth Company means a business that has a principal office located within
the corporate limits of the City that performs a commercially useful function.
Page 4
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
Fort Worth Construction Percentage has the meaning ascribed to it in Section
6.2.
Fort Worth Construction Spending Commitment has the meaning ascribed to it
in Section 4.5.1.
Fort Worth Employment Commitment has the meaning ascribed to it in Section
4.6.2.
Fort Worth Employment Percentage has the meaning ascribed to it in Section
6.5.
Fort Worth Resident means an individual whose principal place of residence is at
a location within the corporate limits of the City.
Fort Worth Supply and Service Spending Commitment has the meaning
ascribed to it in Section 4.7.1.
Fort Worth Supply and Service Percentage has the meaning ascribed to it in
Section 6.7.
Full-Time Equivalent Job means a job which provides full-time employment of
at least 1,600 hours per year, and permanent part-time jobs, which, when combined, total
at least 1,600 hours of employment at the Hotel. For example, if the Hotel has one worker
working 1,600 hours per year and two workers working 800 hours per year each, that
employer would be providing employment for two Full-Time Equivalent Jobs.
Ground Lease has the meaning ascribed to it in Section 4.3.
Guest Room means one of the approximate 220 guest rooms in the Hotel.
Hard Construction Costs means the following costs expended directly for the
Hotel: actual site development and construction costs; contractor fees; furniture, fixtures
or equipment affixed to the Hotel structure; demolition; environmental remediation;
signage costs; and the costs of supplies and materials. For removal of doubt, property
acquisition costs,pre-opening expenses, inventory investment costs, and franchise fees do
not constitute "Hard Construction Costs."
Hotel has the meaning ascribed to it in Recital A.
Initial Operating Year means the calendar year in which the Completion Date
occurred, regardless of when during such calendar year the Completion Date occurred.
Land has the meaning ascribed to it in Recital A.
Page 5
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
Lease-Based Grant has the meaning ascribed to it in Section 7.
Management Company means a management company engaged, from time to
time, by the Developer to manage the operations of the Hotel.
Minimum Hotel Operating Standards has the meaning ascribed to it in Section
4.8.
M/WBE Construction Percentage has the meaning ascribed to it in Section 6.3.
M/WBE Construction Spending Commitment has the meaning ascribed to it in
Section 4.5.2.
M/WBE Supply and Service Percentage has the meaning ascribed to it in Section
6.8.
M/WBE Supply and Service Spending Commitment has the meaning ascribed
to it in Section 4.7.2.
Operating Standards Breach has the meaning ascribed to it in Section 4.8.
Overall Employment Commitment has the meaning ascribed to it in Section
4.6.1.
Overall Employment Percentage has the meaning ascribed to it in Section 6.4.
Performance-Based Grant has the meaning ascribed to it in Section 6.
Performance-Based Program Cap means Six Million Dollars ($6,000,000.00),
gross, which is the maximum aggregate amount of all Performance-Based Grants that the
City will be obligated to pay under this Agreement.
Principal Office means an office facility that is fully operational and has sufficient
equipment, supplies, and personnel to provide the product or service of the business in
question to clients in the City without significant reliance on the resources of another entity
or affiliate or of an auxiliary facility of the business which is located outside of Tarrant,
Dallas, Denton, Johnson, Parker, and Wise Counties, Texas.
Program Grants means the annual economic development grants comprising the
Performance-Based Grants, the Lease-Based Grant and the Sale-Based Grant, which will
be paid by the City to Developer in accordance with this Agreement and as part of the 380
Program.
Program Source Funds means an amount of City funds available for inclusion in
a Performance-Based Grant that is payable in a given year, which will be the amount equal
Page 6
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
to the Available Hotel Occupancy Tax Revenue received by the City in the preceding
calendar year.
Real Property Commitment has the meaning ascribed to it in Section 4.1.
Records has the meaning ascribed to it in Section 4.11.
Room Block Agreement has the meaning ascribed to it in Section 4.4.
Sale-Based Grant has the meaning ascribed to it in Section 8.
Second Full Operating Year means the second full calendar year following the
Initial Operating Year, which is the year in which the Completion Date occurred.
Supply and Service Expenditures means all expenditures by Developer or
Management Company expended directly for the operation and maintenance of the Hotel,
excluding amounts paid for electric, gas, water and any other utility services at the Hotel
or otherwise on the Land.
Term has the meaning ascribed to it in Section 3.
3. TERM.
This Agreement will be effective as of the date of execution by both parties (the
"Effective Date") and, unless terminated earlier pursuant to and in accordance with this
Agreement, will expire on the date as of which the City has paid all Program Grants
required hereunder (the "Term").
4. DEVELOPER OBLIGATIONS AND COMMITMENTS.
4.1. Completion of Hotel.
By the Completion Date, Developer must have expended or caused to be
expended at least Fifty-six Million Dollars($56,000,000.00)in Development Costs
for the Hotel, of which at least Thirty-six Million Dollars ($36,000,000.00) must
be Hard Construction Costs (the "Real Property Commitment"); provided,
further, the Hotel meets the standards described in Section 4.8 of this Agreement.
In addition,the Completion Date must occur on or before the Completion Deadline.
4.2. Conveyance of Land to the City.
Within ninety (90) calendar days of issuance by the Director of the
Certificate of Completion, as provided in Section 5 of this Agreement, and subject
Page 7
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
to Sections 4.3 and 4.4 below,Developer must convey the Land(but not the Hotel),
free of all encumbrances, except for the "Permitted Encumbrances," from time to
time, described on Exhibit "H" attached hereto and hereby made a part of this
Agreement for all purposes,to the City in accordance with the terms and conditions
set forth in Exhibit"C", attached hereto and hereby made a part of this Agreement
for all purposes.
4.3. Ground Lease.
As a condition to the closing on the conveyance of the Land in accordance
with Section 4.2, the parties must deliver a fully executed lease of the Land by the
City back to Developer, effective on the same date as the deed and containing all
of the terms and conditions set forth in Exhibit "D", attached hereto and hereby
made a part of this Agreement for all purposes (the "Ground Lease").
4.4. Room Block Agreement.
As a condition to the closing on the conveyance of the Land in accordance
with Section 4.2,Developer must deliver a fully executed Room Block Agreement,
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 trade shows at
the Fort Worth Convention Center and at other City-owned venues (the "Room
Block Agreement"). The Room Block Agreement must run with the land and be
in substantially the same form as that attached hereto as Exhibit "E", which is
hereby made a part of this Agreement for all purposes.
4.5. Construction Spending Commitments
4.5.1. Construction Spending with Fort Worth Companies.
Developer must expend or cause to be expended by the Completion
Date the greater of at least(i)Five Million Four Hundred Thousand Dollars
($5,400,000.00) in Hard Construction Costs or (ii) fifteen percent(15%) of
all Hard Construction Costs, regardless of the total amount of such Hard
Construction Costs, with Fort Worth Companies (the "Fort Worth
Construction Spending Commitment").
4.5.2. Construction Spending with Certified M/WBE Companies.
Developer must expend or cause to be expended by the Completion
Date the greater of at least(i)Five Million Four Hundred Thousand Dollars
($5,400,000.00) in Hard Construction Costs or (ii) fifteen percent(15%) of
all Hard Construction Costs, regardless of the total amount of such Hard
Construction Costs, with Certified M/WBE Companies (the "M/WBE
Page 8
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
Construction Spending Commitment"). Expenditures made with any
Certified M/WBE Company that has a Principal Office located within the
corporate limits of the City will also count as expenditures made with a Fort
Worth Company for purposes of measuring the Fort Worth Construction
Spending Commitment.
4.6. Employment Commitments.
The City's determination of compliance with the following employment
commitments will be based on the information provided by Developer to the City
in accordance with Section 4.9.2, subject to the City's inspection and auditing rights
under this Agreement.
4.6.1. Overall Employment.
By December 31, 2021, and at all times thereafter for the remainder
of the Term,at least thirty(30)Full-Time Equivalent Jobs must be provided
in the Hotel (the "Overall Employment Commitment").
4.6.2. Employment of Fort Worth Residents.
By December 31, 2 02 1, and at all times thereafter for the remainder
of the Term, the greater of(i) 18 Full-Time Equivalent Jobs in the Hotel or
(ii)sixty percent(60%)of all Full-Time Equivalent Jobs provided and filled
in the Hotel, regardless of the total number of such Full-Time Equivalent
Jobs, must be held by Fort Worth Residents (the "Fort Worth
Employment Commitment").
4.6.3. Employment of Central City Residents.
By December 31, 2021, and at all times thereafter for the remainder
of the Term, the greater of(i) 8 Full-Time Equivalent Jobs in the Hotel or
(11) twenty-five percent (25%) of all Full-Time Equivalent Jobs provided
and filled in the Hotel, regardless of the total number of such Full-Time
Equivalent Jobs, must be held by Central City Residents ("Central City
Employment Commitment"). Full-Time Equivalent Jobs held by Central
City Residents in a given year will also count as Full-Time Equivalent Jobs
held by Fort Worth Residents for purposes of measuring attainment of the
Fort Worth Employment Commitment in the same year.
4.6.4. Job Fair.
Within sixty (60) calendar days following the Completion Date,
Developer agrees to publicize in advance and conduct a job fair (or to cause
its Management Company to publicize in advance and conduct a job fair) at
Page 9
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
the Hotel or another location in the City reasonably acceptable to the
Director in order to publicize the opening of the Hotel and to recruit Fort
Worth Residents and Central City Residents for available Full-Time
Equivalent Jobs at the Hotel.
4.7. Supply and Service Spending Commitments.
4.7.1. Supply and Service Expenditures with Fort Worth Companies.
Beginning in the First Full Operating Year (or, if Developer elects
in accordance with Section 6.11 of this Agreement to receive payment of its
first Performance-Based Grant in the First Full Operating Year, rather than
the Second Full Operating Year, then beginning in the Initial Operating
Year), and in each year thereafter for the remainder of the Term, Developer
must make or cause its Management Company to make at least Fifty
Thousand Dollars ($50,000.00) in Supply and Service Expenditures with
Fort Worth Companies (the "Fort Worth Supply and Service Spending
Commitment").
4.7.2. Supply and Service Expenditures with Certified M/WBE
Companies.
Beginning in the First Full Operating Year (or, if Developer elects
in accordance with Section 6.11 of this Agreement to receive payment of its
first Performance-Based Grant in the First Full Operating Year, rather than
the Second Full Operating Year, then beginning in the Initial Operating
Year), and in each year thereafter for the remainder of the Term,Developer
must make or cause its Management Company to make at least Fifty
Thousand Dollars ($50,000.00) in Supply and Service Expenditures with
Certified M/WBE Companies (the "M/WBE Supply and Service
Spending Commitment"). Supply and Service Expenditures made with
any Certified M/WBE Company that has a Principal Office located within
the corporate limits of the City will also count as Supply and Service
Expenditures made with a Fort Worth Company for purposes of measuring
the Fort Worth Supply and Service Spending Commitment.
4.8. Minimum Hotel Operating Standards.
Throughout the Term,the Hotel must at all times be marketed and operated
as a full-service hotel in accordance with (i) Kimpton brand standards or (ii)a four
star rating by Forbes Travel Guide, as more specifically outlined in Exhibit "F",
attached hereto and hereby made a part of this Agreement for all purposes (the
"Minimum Hotel Operating Standards"). In the event that the Hotel is not
operated in accordance with all Minimum Hotel Operating Standards for a period
of more than ninety(90) consecutive calendar days(except on account of a casualty
Page 10
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
beyond Developer's control (or remodel or renovation), and provided that
Developer is diligently and continuously attempting to remedy the casualty (or
complete the remodel or renovation), in which case Section 19 shall apply),
Developer shall be in breach of this Agreement (an "Operating Standards
Breach"), and Section 9.4 will apply.
4.9. Reports and Filings.
4.9.1. Construction Spending Reports.
4.9.1.1. Quarterly Reports.
From the Effective Date until the Completion Date,
Developer must provide the Director with a quarterly report in a
form reasonably acceptable to the Director that specifically outlines
(i) the then-current aggregate Development Costs and Hard
Construction Costs expended or caused to be expended for the
Hotel; (ii) the then-current aggregate Hard Construction Costs
expended or caused to be expended with Fort Worth Companies for
the Hotel; and (iii) the then-current aggregate Hard Construction
Costs expended or caused to be expended with Certified M/WBE
Companies for the Hotel.
4.9.1.2. Final Construction Report.
Within sixty (60) calendar days following the
Completion Date, in order for the City to assess whether the Real
Property Commitment was met, and the extent to which the Fort
Worth Construction Spending Commitment and the M/WBE
Construction Spending Commitment were met, Developer must
provide the Director with a report in a form reasonably acceptable
to the Director that specifically outlines (i) the total Development
Costs and Hard Construction Costs expended or caused to be
expended for the Hotel as of the Completion Date; (ii)the total Hard
Construction Costs expended or caused to be expended with Fort
Worth Companies for the Hotel as of the Completion Date; and(iii)
the total Hard Construction Costs expended or caused to be
expended with Certified M/WBE Companies for the Hotel as of the
Completion Date, together with supporting invoices and other
documents necessary to demonstrate that such amounts were
actually paid,including,without limitation, final lien waivers signed
by the general contractor for the Hotel.
Page 11
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
4.9.2. Annual Employment Report.
On or before February 1,2022 and February 1 of each year thereafter
for the remainder of the Term, in order for the City to assess the extent to
which the Overall Employment Commitment, the Fort Worth Employment
Commitment, and the Central City Employment Commitment were met in
the previous calendar year, Developer must provide the Director with a
report in a form reasonably acceptable to the Director that sets forth the
number of hours worked by individuals counted towards working Full-Time
Equivalent Jobs,Fort Worth Residents counted towards working Full-Time
Equivalent Jobs, and Central City Residents counted towards working Full-
Time Equivalent Jobs in the Hotel as of December 31 (or such other date
requested by Developer and reasonably acceptable to the City) of the
previous year, together with reasonable supporting documentation.
4.9.3. Annual Supply and Service Spending Report.
On or before February 1 of the Second Full Operating Year (or, if
Developer elects in accordance with Section 6.11 of this Agreement to
receive payment of its first Performance-Based Grant in the First Full
Operating Year, rather than the Second Full Operating Year, then on or.
before February 1 of the Initial Operating Year) and of each year thereafter
for the remainder of the Term, in order for the City to assess the degree to
which the Fort Worth Supply and Service Spending Commitment and the
M/WBE Supply and Service Spending Commitment were met in the
previous calendar year, Developer must provide the Director with a report
in a form reasonably acceptable to the Director that sets forth the aggregate
Supply and Service Expenditures made in such calendar year, as well as the
aggregate Supply and Service Expenditures made with Fort Worth
Companies and with Certified M/WBE Companies in that same year.
4.10. Inspections of Land and Hotel.
At any time during Developer's normal business hours throughout the Term
and following reasonable written notice to Developer, the City will have the right
to inspect and evaluate the Land and any improvements thereon, including the
Hotel, and Developer will provide full access to the same, in order for the City to
monitor compliance with the terms and conditions of this Agreement. Developer
will cooperate fully with the City during any such inspection and evaluation.
Notwithstanding the foregoing, Developer will have the right to require that any
representative of the City be escorted by a representative or security personnel of
Developer during any such inspection and evaluation.
Page 12
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
4.11. Audits.
The City will have the right throughout the Term to audit the financial and
business records of Developer or any Affiliate that relate to the Hotel and the Land
as well as any other documents necessary to evaluate Developer's compliance with
this Agreement or with the commitments set forth in this Agreement (collectively
"Records") during Developer's normal business hours. If Developer relies on
performance of any obligations hereunder by the Management Company,
Developer is solely responsible for supplying the City with access to the financial
and business records of the Management Company that are related to such
obligations, and any such financial and business records of the Management
Company shall be considered "Records" for purposes of this Agreement.
Developer must make all Records available to the City on the Land or at another
location in the City acceptable to both parties following reasonable advance written
notice by the City and will otherwise cooperate fully with the City during any audit.
The number of audits shall be limited to two (2) during each calendar year during
the Term.
5. CERTIFICATE OF COMPLETION.
Within ninety (90) calendar days following receipt by the City of the final
construction spending report for the Hotel submitted in accordance with Section 4.9.1.2,
and assessment by the City of the information contained therein pursuant to Sections 4.10
and 4.11,if the City is able to verify attainment of the Real Property Commitment set forth
in Section 4.1 (that is,that Developer expended or caused to be expended at least Fifty-six
Million Dollars ($56,000,000.00) in Development Costs for the Hotel by the Completion
Date, and that at least Thirty-six Million Dollars ($36,000,000.00) of such Development
Costs were Hard Construction Costs), and that the Completion Date occurred on or before
the Completion Deadline, the Director will issue Developer a certificate stating the total
amount of Development Costs and Hard Construction Costs expended for the Hotel, and
the amounts of such Hard Construction Costs expended specifically with Fort Worth
Companies and Certified M/WBE Companies (the "Certificate of Completion"). The
Certificate of Completion will also serve as the basis for determining the extent to which
the Fort Worth Construction Spending Commitment and the M/WBE Construction
Spending Commitment were met.
6. PERFORMANCE-BASED GRANTS.
As more specifically set forth herein, if both the Real Property Commitment set
forth in Section 4.1 was met and the Completion Date occurred on or before the Completion
Deadline,Developer will be entitled to receive up to ten(10) consecutive annual Program
Grants, calculated in accordance with this Section 6, payment of which will begin in the
Second Full Operating Year (or in the First Full Operating Year, if Developer so elects in
Page 13
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
accordance with Section 6.11 of this Agreement) (each a "Performance-Based Grant").
The amount of each Performance-Based Grant will equal a percentage of the Program
Source Funds, which percentage will be based on the extent to which the various
commitments set forth in Section 4 were met and, specifically, will equal the sum of the
Base Grant Percentage,the Fort Worth Construction Percentage,the M/WBE Construction
Percentage,the Overall Employment Percentage,the Fort Worth Employment Percentage,
the Central City Employment Percentage, the Fort Worth Supply and Service Percentage
and the M/WBE Supply and Service Percentage, as defined in Section 6.1, 6.2, 6.3, 6.4,
6.5, 6.6, 6.7, and 6.8. Notwithstanding anything to the contrary herein, no individual
annual Program Grant may equal an amount greater than fifty-eight percent (58%) of
the Program Source Funds available for that Grant, and aggregate Performance-Based
Grants payable under this Agreement will be subject to and cannot exceed the
Performance-Based Program Cap.
6.1. Attainment of Real Property Commitment(37%).
Provided that the City is able to verify both that the Real Property
Commitment set forth in Section 4.1 was met and that the Completion Date
occurred on or before the Completion Deadline, each annual Performance-Based
Grant will include thirty-seven percent (37%) of the Program Source Funds
available for that year's Performance-Based Grant (the "Base Grant
Percentage").
6.2. Fort Worth Construction Spending Commitment (Up to 3%).
A percentage of each Performance-Based Grant will be based on the extent
to which the Fort Worth Construction Spending Commitment, as outlined in
Section 4.5.1, was met (the "Fort Worth Construction Percentage"). The Fort
Worth Construction Percentage will equal the product of three percent (3%)
multiplied by the percentage by which the Fort Worth Construction Spending
Commitment was met, which will be calculated by dividing the actual Hard
Construction Costs expended for the Hotel by the Completion Date with Fort Worth
Companies by the number of dollars comprising the Fort Worth Construction
Spending Commitment, as determined in accordance with Section 4.5.1. For
example, if Developer expended or caused to be expended $40,000,000.00 in Hard
Construction Costs for the Hotel, the Fort Worth Construction Spending
Commitment would be $6,000,000.00 (15% of $40,000,000.00). If only
$4,800,000.00 in Hard Construction Costs for the Hotel were expended with Fort
Worth Companies by the Completion Date, the Fort Worth Construction
Percentage for each Performance-Based Grant would be 2.4%instead of 3%(or.08
x [$4.8 million/$6 million], or .03 x .80, or .024). If the Fort Worth Construction
Spending Commitment was met or exceeded, the Fort Worth Construction
Percentage for each Performance-Based Grant will be three percent (3%).
Page 14
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
6.3. M/WBE Construction Spending Commitment (Up to 3%).
A percentage of each Performance-Based Grant will be based on the extent
to which the M/WBE Construction Spending Commitment, as outlined in Section
4.5.2, was met (the "M/WBE Construction Percentage"). The M/WBE
Construction Percentage will equal the product of three percent(3%) multiplied by
the percentage by which the M/WBE Construction Spending Commitment was
met, which will be calculated by dividing the actual Hard Construction Costs
expended for the Hotel by the Completion Date with Certified M/WBE Companies
by the number of dollars comprising the M/WBE Construction Spending
Commitment, as determined in accordance with Section 4.5.2. If the M/WBE
Construction Spending Commitment was met or exceeded, the M/WBE
Construction Percentage for each Performance-Based Grant will be three percent
(3%).
6.4. Overall Employment Commitment (Up to 3%).
Each annual Performance-Based Grant will include a percentage of the
Program Source Funds available for that year's Performance-Based Grant that is
based on Developer's compliance with the Overall Employment Commitment in
the previous calendar year, as outlined in Section 4.6.1 (the"Overall Employment
Percentage"). The Overall Employment Percentage for each Performance-Based
Grant will equal the product of three percent(3%) multiplied by the percentage by
which the Overall Employment Commitment was met in the previous calendar
year, which will be calculated by dividing the actual number of Full-Time
Equivalent Jobs provided and filled in the Hotel in the previous calendar year by
the applicable number of Full-Time Equivalent Jobs constituting the Overall
Employment Commitment for the previous calendar year, as outlined in Section
4.6.1. For example, if only 27 Full-Time Equivalent Jobs were provided and filled
in the Hotel in a given year, the Overall Employment Percentage for the
Performance-Based Grant payable in the following year would be 2.7% instead of
3% (or .03 x [27/30]), or .03 x .90, or .027). If the Overall Employment
Commitment is met or exceeded in any given year, the Overall Employment
Percentage applicable the Performance-Based Grant payable in the following year
will equal three percent(3%).
6.5. Fort Worth Employment Commitment (Up to 3%).
Each annual Performance-Based Grant will include a percentage of the
Program Source Funds available for that year's Performance-Based Grant that is
based on Developer's compliance with the Fort Worth Employment Commitment
in the previous calendar year, as outlined in Section 4.6.2 (the "Fort Worth
Employment Percentage"). The Fort Worth Employment Percentage for each
Performance-Based Grant will equal the product of three percent (3%) multiplied
by the percentage by which the Fort Worth Employment Commitment was met in
Page 15
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
the previous calendar year, which will be calculated by dividing the actual number
of Full-Time Equivalent Jobs provided in the Hotel that were filled by Fort Worth
Residents in the previous calendar year by the applicable number of Full-Time
Equivalent Jobs constituting the Fort Worth Employment Commitment for the
previous calendar year, as outlined in Section 4.6.2. For example, if 40 Full-Time
Equivalent Jobs were provided and filled in the Hotel in a given year, under Section
4.6.2 the Fort Worth Employment Commitment for that year would be 24 Full-
Time Equivalent Jobs worked by Fort Worth Residents (60% of 40 Full-Time
Equivalent Jobs). However, if only 18 Full-Time Equivalent Jobs provided in the
Hotel in that year were filled with Fort Worth Residents, the Fort Worth
Employment Percentage for the Performance-Based Grant payable in the following
year would be 2.25% instead of 3% (or .03 x [18/24]), or .03 x .75, or .0225). If
the Fort Worth Employment Commitment is met or exceeded in any given year,the
Fort Worth Employment Percentage applicable the Performance-Based Grant
payable in the following year will equal three percent(3%).
6.6. Central City Employment Commitment (Up to 3%).
Each annual Performance-Based Grant will include a percentage of the
Program Source Funds available for that year's Performance-Based Grant that is
based on Developer's compliance with the Central City Employment Commitment
in the previous calendar year, as outlined in Section 4.6.3 (the "Central City
Employment Percentage"). The Central City Employment Percentage for each
Performance-Based Grant will equal the product of three percent (3%) multiplied
by the percentage by which the Central City Employment Commitment was met in
the previous calendar year, which will be calculated by dividing the actual number
of Full-Time Equivalent Jobs provided in the Hotel that were filled by Central City
Residents in the previous calendar year by the applicable number of Full-Time
Equivalent Jobs constituting the Central City Employment Commitment for the
previous calendar year,as outlined in Section 4.6.3. If the Central City Employment
Commitment is met or exceeded in any given year, the Central City Employment
Percentage applicable the Performance-Based Grant payable in the following year
will equal three percent (3%).
6.7. Fort Worth Supply and Service Spending (Up to 3%).
Each annual Performance-Based Grant will include a percentage of the
Program Source Funds available for that year's Performance-Based Grant that is
based on Developer's compliance with the Fort Worth Supply and Service
Spending Commitment in the previous calendar year, as outlined in Section 4.7.1
(the "Fort Worth Supply and Service Percentage"). The Fort Worth Supply and
Service Percentage for each Performance-Based Grant will equal the product of
three percent (3%) multiplied by the percentage by which the Fort Worth Supply
and Service Commitment was met in the previous calendar year, which will be
calculated by dividing the amount of Supply and Service Expenditures made with
Page 16
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
Fort Worth Companies in the previous calendar year by $50,000.00, which is the
Fort Worth Supply and Service Commitment for each year. For example, if
Developer made only $35,000.00 in Supply and Service Expenditures with Fort
Worth Companies in a given year, the Fort Worth Supply and Service Percentage
for the Performance-Based Grant payable in the following year would be 2.1%
instead of 3% (or .03 x [$35,000/$50,000]), or.03 x .70, or .021). If the Fort Worth
Supply and Service Commitment is met or exceeded in any given year, the Fort
Worth Supply and Service Percentage applicable to the Performance-Based Grant
payable in the following year will equal three percent(3%).
6.8. M/WBE Supply and Service Spending (Up to 3%).
Each annual Performance-Based Grant will include a percentage of the
Program Source Funds available for that year's Performance-Based Grant that is
based on Developer's compliance with the M/WBE Supply and Service Spending
Commitment in the previous calendar year, as outlined in Section 4.7.2 (the
"M/WBE Supply and Service Percentage"). The M/WBE Supply and Service
Percentage for each Performance-Based Grant will equal the product of three
percent (3%) multiplied by the percentage by which the M/WBE Supply and
Service Commitment was met in the previous calendar year, which will be
calculated by dividing the amount of Supply and Service Expenditures made with
Certified M/WBE Companies in the previous calendar year by $50,000.00, which
is the M/WBE Supply and Service Commitment for each year. If the M/WBE
Supply and Service Commitment is met or exceeded in any given year,the M/WBE
Supply and Service Percentage applicable the Performance-Based Grant payable in
the following year will equal three percent(3%).
6.9. No Offsets.
A deficiency in attainment of one commitment may not be offset by the
exceeding attainment of another commitment. For example, if in a given year the
Central City Employment Commitment failed to be met by six (6) Full-Time
Equivalent Jobs, but the Fort Worth Employment Commitment was exceeded by
six (6) Full-Time Equivalent Jobs, the Central City Employment Percentage
applicable to the Performance-Based Grant payable in the following year would
still be reduced in accordance with Section 6.6 on account of the failure to meet the
Central City Employment Commitment.
6.10. Excluded Tax Revenue Remains Property of the City.
Developer understands and agrees that, without limitation, any Excluded
Hotel Occupancy Tax Revenue will 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 as
Page 17
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
Program Source Funds available for inclusion in a Performance-Based Grant in a
subsequent year.
6.11. Deadline for Payments; Optional Election by Developer.
The first Performance-Based Grant payable hereunder will be paid by the
City on or before June 1 of the Second Full Operating Year. Notwithstanding the
foregoing, Developer may, at its option, elect to receive the first Performance-
Based Grant in the First Full Operating Year, which Performance-Based Grant will
be calculated, in part, on the extent to which Developer met the Overall
Employment Commitment,the Fort Worth Employment Commitment,Central City
Employment Commitment,Fort Worth Supply and Service Spending Commitment,
and M/WBE Supply and Service Spending Commitment in the Initial Operating
Year, as opposed to the First Full Operating Year;provided, however, that in order
to exercise this election, Developer must provide written notice of its decision to
the Director by not later than June 1 of the Initial Operating Year. After payment
of the initial Performance-Based Grant, each subsequent annual Performance-
Based Grant payment will be made by the City to Developer on or before June 1 of
the year in which such payment is due.
6.12. Sources of Performance-Based Grant Payments.
6.12.1 Scope.
It is understood and agreed that all Performance-Based Grants paid
pursuant to this Agreement shall, at the City's sole election, come either (i)
subject to applicable law, directly from Available Hotel Occupancy Tax
Revenues (that is, the hotel occupancy tax lawfully assessed and collected
by the City pursuant to Chapter 351 of the Texas Tax Code and Chapter 32
of the City Code at a rate of seven percent (7%) of the cost of a Hotel room
and that is derived from or attributable to the Hotel) or (ii) from any other
lawful source of funding. Developer understands and agrees that the City
has pledged or will pledge local hotel occupancy tax revenues to support
bonds issued for the planning, acquisition, establishment, development,
construction or renovation of the Dickies Multipurpose Arena and adjacent
support facilities, which have been designated as a venue project in
accordance with Chapter 334,Texas Local Government Code,as authorized
by the City Council pursuant to Resolution No. 4327-07-2014. Nothing in
this Agreement shall be deemed to give Developer or any successor or
assignee any lien on or right to receive all or any portion of a Performance-
Based Grant directly from any of the City's hotel occupancy tax revenues
collected pursuant to Chapter 351 of the Texas Tax Code and Chapter 32 of
the City Code. Notwithstanding the foregoing, in the event that the City
elects or is obligated to use Available Hotel Occupancy Tax Revenues for
a purpose other than payment of any Performance-Based Grant hereunder,
Page 18
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
the City will remain fully obligated to Developer to pay such Performance-
Based Grant from any other lawful source of funding in accordance with
the terms and conditions of this Agreement.
6.12.2. Authority to Use Hotel Occupancy Taxes as Funding Source.
As stated in Recital B,the City's payment of the Performance-Based
Grants hereunder are a necessary financial component for the Hotel
redevelopment project outlined in this Agreement, and Developer could not
proceed with the project but for the City's promise to pay such
Performance-Based Grants. Section 351.001(7) of the Texas Tax Code
classifies the City as an"eligible central municipality." Section 351.001(2)
of the Texas Tax Code defines "convention center facilities" in an eligible
central municipality to include a hotel either owned by or located on land
owned by an eligible central municipality. Section 351.101(a) of the Texas
Tax Code authorizes the City to use hotel occupancy tax revenues for the
construction, improvement, enlargement, equipping, repairing, operation,
and maintenance of convention center facilities, and, in accordance with the
preceding Texas Tax Code provisions, this includes the Hotel so long as it
is located on land owned by the City. The City's hotel occupancy tax rate
currently is nine percent (9%) of the cost of a room. However, Section
351.1065 of the Texas Tax Code restricts the City's use of revenue derived
from the application of the hotel occupancy tax rate of more than seven
percent (7%) only for construction of an expansion to an existing
convention center facility or for construction of a qualified project, as that
term is defined in Section 351.1015 of the Texas Tax Code. Accordingly,
Developer understands and agrees that Available Hotel Occupancy Tax
Revenue excludes any amount of hotel occupancy tax revenue from the
Hotel that is derived from the application of the hotel occupancy tax rate of
more than seven percent (7%) of the cost of a room.
7. LEASE-BASED GRANTS.
Subject to all other terms and conditions of this Agreement, in each year in which
rent is paid pursuant to Section 3.1 of the Ground Lease, the City will pay Developer a
Program Grant equal to the amount of the annual rental paid in the same calendar year to
the City by Developer pursuant to the Ground Lease less One Hundred Dollars ($100.00)
(each a "Lease-Based Grant"). Each Lease-Based Grant will be paid by the City to
Developer within twenty (20) business days following receipt by the City of all rent due
and payable to the City in that year. It is understood and agreed that all Lease-Based Grants
paid pursuant to this Agreement will come from then-currently available general revenues
of the City and not directly from any specific taxes or tax revenues of the City.
Page 19
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
8. SALE-BASED GRANT.
Subject to all other terms and conditions of this Agreement,if,pursuant to Sections
16.1 and 16.2 of the Ground Lease, Developer exercises its option (or PACE Capital
Provider, as that term defined in the Ground Lease, if PACE Capital Provider exercises the
option on behalf of Developer)to purchase the Land from the City or the City exercises its
option to put the Land to Developer, the City will pay Developer (or the PACE Capital
Provider, if PACE Capital Provider paid the Land Consideration, as that term is defined in
the Ground Lease) a Program Grant in an amount equal to the purchase price paid by
Developer (or the PACE Capital Provider, if PACE Capital Provider paid the Land
Consideration) for the Land less Ten Thousand Dollars ($10,000.00) (the "Sale-Based
Grant"). The Sale-Based Grant will be reflected in the closing statement and paid by the
City to Developer(or the PACE Capital Provider, if PACE Capital Provider paid the Land
Consideration) at the closing on the purchase of the Land. It is understood and agreed that
the Sale-Based Grant paid pursuant to this Agreement will come from then-currently
available general revenues of the City and not directly from any specific taxes or tax
revenues of the City.
9. DEFAULT, TERMINATION AND FAILURE BY DEVELOPER TO MEET
VARIOUS DEADLINES AND COMMITMENTS.
9.1. Failure to Complete Hotel.
Notwithstanding anything to the contrary herein, if the Real Property
Commitment, as outlined in Section 4.1, is not met or the Completion Date does
not occur on or before the Completion Deadline, the City, as its sole and exclusive
remedy, will have the right to terminate this Agreement immediately upon
provision of written notice to Developer, without further obligation to Developer
hereunder.
9.2. Termination of Ground Lease.
If the Ground Lease is lawfully terminated or expires, this Agreement will
automatically terminate on the effective date of such termination or expiration
without further obligation of the City hereunder.
9.3. Termination of Room Block Agreement.
If the Room Block Agreement is lawfully terminated or expires, this
Agreement will automatically terminate on the effective date of such termination
or expiration without further obligation of the City hereunder.
Page 20
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
9.4. Failure to Meet Minimum Hotel Operating Standards.
9.4.1. Notification Process.
If at any time during the Term of this Agreement the City believes
that an Operating Standards Breach has occurred, the City shall provide
written notice to Developer that specifically sets forth the basis of the City's
determination. If Developer agrees with the City's determination or fails to
respond to the City's notice within thirty (30) business days following
receipt of such notice, Developer shall have ninety (90) days from the date
of the City's notice to commence bringing the Hotel into operating
compliance with all Minimum Hotel Operating Standards and diligently
complete bringing the Hotel into operating compliance with all Minimum
Hotel Operating Standards. If Developer disagrees with the City's
determination, Developer must notify the City in writing within thirty (30)
business days following receipt of the City's notice, outlining in detail the
basis for Developer's disagreement. In such event, the parties agree to
negotiate promptly and in good faith to resolve this dispute. If mutually
agreed, the parties may submit the dispute for resolution through non-
binding mediation. In this case, if there ultimately is agreement by both
parties that an Operating Standards Breach has occurred, Developer shall
have ninety (90) days from the date that agreement was reached to
commence bringing the Hotel into operating compliance with all Minimum
Hotel Operating Standards and diligently complete bringing the Hotel into
operating compliance with all Minimum Hotel Operating Standards. If
ultimately there is not agreement by both parties as to whether an Operating
Standards Breach has occurred, Section 9.4.3 will apply.
9.4.2. Resumption of Minimum Hotel Operating Standards.
If there is agreement between the parties that an Operating Standards
Breach has occurred, Developer will promptly take all steps necessary to
resume compliance with all Minimum Hotel Operating Standards by the
applicable deadline established in Section 9.4.1. Once Developer
determines that the Hotel has resumed operating in accordance with all
Minimum Hotel Operating Standards, Developer will notify the City in
writing. If the City notifies Developer in writing of its agreement with
Developer's determination or fails to respond to Developer's notice within
thirty(30) business days following receipt of such notice,the matter will be
resolved in Developer's favor and the City will continue to pay all Program
Grants in accordance with this Agreement. If the City disagrees with
Developer's determination, the City must notify Developer within thirty
(30) business days following receipt of Developer's notice, outlining in
detail the basis for the City's disagreement. In such event,the parties agree
to negotiate promptly and in good faith to resolve this dispute. If mutually
Page 21
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
agreed, the parties may submit the dispute for resolution through non-
binding mediation. In this case, if ultimately there is agreement by both
parties that the Hotel has resumed operation in accordance with all
Minimum Hotel Operating Standards, the matter will be resolved in
Developer's favor. If ultimately there is not agreement by both parties that
the Hotel has resumed operation in accordance with all Minimum Hotel
Operating Standards, Section 9.4.3 will apply.
9.4.3. Failure to Resume Minimum Hotel Operating Standards.
If Developer fails to respond to the City's initial notice provided in
accordance with Section 9.4.1 that an Operating Standards Breach has
occurred, and the Hotel does not commence bringing the Hotel into
compliance with all Minimum Hotel Operating Standards within ninety(90)
days of the date of such notice, the City will have the right to terminate this
Agreement immediately upon provision of written notice to Developer. If
the City believes that an Operating Standards Breach has occurred, and the
parties cannot reach agreement on that issue in accordance with Section
9.4.1, or if the parties concur that an Operating Standards Breach has
occurred, but cannot reach agreement as to whether Developer has cured
such Breach in accordance with Section 9.4.2, the City will have the right
to terminate this Agreement immediately upon provision of written notice
to Developer, with the understanding that Developer will have the right to
exercise any available legal rights and remedies to contest such termination.
9.4.4. Effect of Termination for Operating Standards Breach.
If the City terminates this Agreement on account of an Operating
Standards Breach in accordance with this Section 9.4, it is understood and
agreed that the City will not have received the economic development
benefit that is the expressed basis for the City's entering into this
Agreement. Accordingly, upon termination on account of an Operating
Standards Breach, Developer will be obligated to repay the City the
aggregate amount of all Program Grants previously paid by the City within
thirty (30) calendar days following the effective date of termination. If
Developer fails to repay the full amount of such Program Grants within that
timeframe,the City will have the right to exercise any and all available legal
rights and remedies to collect this sum, including, but not limited to, the
right to deduct such sum from the amount of any Lease-Based Grant or Sale-
Based Grant payable pursuant to Sections 6 and 7, respectively.
9.5. Failure to Submit Reports.
If Developer fails to submit any report required by and in accordance with
Section 4.9,the City's obligation to pay any Performance-Based Grants and Lease-
Page 22
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
Based Grants at the time, if any,will be suspended until Developer has provided all
required reports; provided, however, that if any report required hereunder is
delinquent by more than one (1) year, the City, as its sole and exclusive remedy,
will have the right to terminate this Agreement following provision of notice and
opportunity to cure in accordance with Section 9.6.
9.6. General Breach.
Except to the extent stated elsewhere in this Agreement, Developer will be
in default under this Agreement if Developer breaches any term or condition of this
Agreement. In the event that such breach remains uncured after thirty(30)calendar
days following receipt of written notice from the City referencing this Agreement
(or, if Developer has diligently and continuously attempted to 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, as
its sole and exclusive remedy, will have the right to terminate this Agreement
immediately by providing written notice to Developer.
9.7. Knowing Employment of Undocumented Workers.
Developer acknowledges that the City is required to comply with Chapter
2264 of the Texas Government Code, enacted by House Bill 1196 (80th Texas
Legislature), which relates to restrictions on the use of certain public subsidies.
Developer hereby certifies that Developer, and any branches, divisions, or
departments of Developer, does not and will not knowingly employ an
undocumented worker, as that term is defined by Section 2264.00](4) of the Texas
Government Code. In the event that Developer, or any branch, division, or
department of Developer, is convicted of a violation under 8 U.S.C. Section
1324a(f) (relating to federal criminal penalties and injunctions for a pattern or
practice of employing unauthorized aliens):
• if such conviction occurs during the Term of this Agreement, this
Agreement will terminate contemporaneously upon such conviction
(subject to any appellate rights that may lawfully be available to and
exercised by Developer), and Developer must repay, within one hundred
twenty (120) calendar days following receipt of written demand from the
City, the aggregate amount of the Program Grants received by Developer
hereunder, if any,plus Simple Interest at a rate of four percent (4%)per
annum;or
• ifsuch conviction occurs after expiration or termination of thisAgreement,
subject to any appellate rights that may lawfully be available to and
exercised by Developer, Developer must repay, within one hundred twenty
(120) calendar days following receipt of written demand from the City, the
Page 23
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
aggregate amount of the Program Grants received by Developer hereunder,
if any,plus Simple Interest at a rate of four percent(4%)per annum.
For the purposes of this Section 9.7,"Simple Interest" is defined as a rate of interest
applied only to an original value,in this case the aggregate amount of Program Grants
paid hereunder. This rate of interest can be applied each year, but will only apply to
the aggregate amount of Program Grants paid hereunder and is not applied to interest
calculated. For example, if the aggregate amount of the Program Grants paid
hereunder is $10,000 and such amount is required to be paid back with four percent
(4%) interest five years later, the total amount would be $10,000 + [5 x ($10,000 x
0.04)], which is $12,000. This Section 9.7 does not apply to convictions of any
subsidiary or affiliate entity of Developer, by any franchisees of Developer, or by a
person or entity with whom Developer contracts. Notwithstanding anything to the
contrary herein, this Section 9.7 will survive the expiration or termination of this
Agreement.
9.8. No Default for Failure to Meet Fort Worth and M/WBE Construction
SpendinE Commitments, Employment Commitments or Supply and
Service Spending Commitments.
If the Fort Worth Construction Spending Commitment or the M/WBE
Construction Spending Commitment are not met, or the Overall Employment
Commitment, the Fort Worth Employment Commitment, the Central City
Employment Commitment, the Fort Worth Supply and Service Spending
Commitment, or the M/WBE Supply and Service Spending Commitment are not
met in any given year,such failure will not constitute a default hereunder or provide
the City with the right to terminate this Agreement, but, rather, will only cause the
amount of the Performance-Based Grant that the City is required to pay in the
following year to be reduced in accordance with this Agreement.
10. INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Developer will operate as an independent
contractor in each and every respect hereunder and not as an agent, representative or
employee of the City. Developer will have the exclusive right to control all details and
day-to-day operations relative to the Hotel and the Land and any improvements thereon
and will 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.
Page 24
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
11. INDEMNIFICATION.
DEVELOPER, AT NO COST TO THE CITY, AGREES TO DEFEND,
INDEMNIFY AND HOLD THE CITY, ITS OFFICERS,A GENTS SER PANTS 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 OF ANY OF THE TERMS OR PROVISIONS OF THIS
AGREEMENT OR (h)ANY NEGLIGENT ACT OR OMISSION OR INTENTIONAL
MISCONDUCT OF DEVELOPER, ITS OFFICERS, AGENTS, ASSOCIATES,
EMPLOYEES, CONTRACTORS (OTHER THAN THE CITI) OR
SUBCONTRACTORS, RELATED TO THE LAND, OR ANY IMPROVEMENTS
THEREON, INCLUDING THE HOTEL, OR OTHERWISE TO THE
PERFORMANCE OF THIS AGREEMENT.
12. NOTICES.
All written notices called for or required by this Agreement must 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:
City of Fort Worth 714 Main Real Estate Holdings, LLC
Attn: City Manager Attn: Gary Prosterman
200 Texas St. 40 S. Main, Suite 2200
Fort Worth, TX 76102 Memphis, TN 38103
with copies to: with a copy to:
the City Attorney and Michael B. Chance
Economic Development Department Baker Donelson
Director at the same address 6060 Poplar Avenue, Suite 440
Memphis, TN 38119
13. ASSIGNMENT AND SUCCESSORS.
Developer may at any time assign, transfer or otherwise convey any of its rights or
obligations under this Agreement to an Affiliate that is in good standing to do business in
Page 25
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
the State of Texas, as determined by the Texas Secretary of State, without the consent of
the City Council so long as Developer,the Affiliate and the City first execute an agreement
under which the Affiliate agrees to assume and be bound by all covenants and obligations
of Developer under this Agreement. In addition, Developer may assign its rights and
obligations under this Agreement to a financial institution or other lender for purposes of
granting a security interest in the Development and/or the Land without the consent of the
City Council, provided that Developer and the financial institution or other lender first
execute a written agreement with the City in substantially the same form as that attached
hereto as Exhibit "G", together with such other terms and conditions as may be agreed by
the City, Developer and the financial institution or other lender with respect to such security
interest(a"Consent to Collateral Assignment Agreement"). Otherwise, Developer may
not assign,transfer or otherwise convey any of its rights or obligations under this Agreement
to any other person or entity without the consent of the City Council,which consent shall not
be unreasonably withheld, conditioned on(i)the prior approval of the assignee or successor
and a finding by the City Council that the proposed assignee or successor is financially
capable of meeting the terms and conditions of this Agreement 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 and be bound by all covenants and
obligations of Developer under this Agreement. Any attempted assignment without the City
Council's prior consent shall constitute grounds for termination of this Agreement following
ten (10) calendar days of receipt of written notice from the City to Developer. Any lawful
assignee or successor in interest of Developer of all rights under this Agreement shall be
deemed"Developer" for all purposes under this Agreement.
14. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND
REGULATIONS.
This Agreement will be subject to all applicable federal, state and local laws,
ordinances, rules and regulations, including, but not limited to, all provisions of the City's
Charter and ordinances, as amended.
15. GOVERNMENTAL POWERS.
It is understood that by execution of this Agreement, the City does not waive or
surrender any of it governmental powers or immunities.
16. 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 will not constitute a waiver
of that party's right to insist upon appropriate performance or to assert any such right on
any future occasion.
Page 26
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
17. 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 will 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 will be construed in accordance with the laws of the State
of Texas.
18. 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.
19. FORCE MAJEURE.
It is expressly understood and agreed that if the performance of any obligations
hereunder is delayed by reason of war, civil commotion, acts of God, strike, inclement
weather, shortages or unavailability of labor or materials, unreasonable delays by the City
(based on the then-current workload of the City department(s) responsible for undertaking
the activity in question) in issuing any permits, consents, or certificates of occupancy or
conducting any inspections of or with respect to the Hotel, or other circumstances which
are reasonably beyond the control of the party obligated or permitted under the terms of
this Agreement to do or perform the same, regardless of whether any such circumstance is
similar to any of those enumerated or not, the party so obligated or permitted will be
excused from doing or performing the same during such period of delay, so that the time
period applicable to such design or construction requirement will be extended for a period
of time equal to the period such party was delayed. Notwithstanding anything to the
contrary herein, Developer's failure to obtain adequate financing in order to meet the Real
Property Commitment will not be deemed to be an event of force majeure and, in such an
event,this Section 19 will not operate to extend the Completion Deadline.
20. INTERPRETATION.
In the event of any dispute over the meaning or application of any provision of this
Agreement, this Agreement must be interpreted fairly and reasonably, and neither more
strongly for or against any party, regardless of the actual drafter of this Agreement.
Page 27
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
21. CAPTIONS.
Captions and headings used in this Agreement are for reference purposes only and
will not be deemed a part of this Agreement.
22. SEVERABILITY.
If any provision of this Agreement is held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions will not in any way be
affected or impaired.
23. 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.
Notwithstanding anything to the contrary herein, this Agreement may 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.
24. COUNTERPARTS.
This Agreement may be executed in multiple counterparts, each of which will be
considered an original, but all of which will constitute one instrument.
EXECUTED as of the last date indicated below:
Page 28
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
EXECUTED as of the last date indicated below:
CITY OF FORT WORTH: 714 MAIN REAL ESTATE HOLDINGS,
LLC, a Delaware limited liability company:
i
By:• 1r l�ti-- By:
usan Alanis Gary lVsterman
Assistant City Manager Authorized Person
Date: �0 Date:
APPROVED AS TO FORM AND LEGALITY:
By: AttMested b
i
Peter Vaky , /�` ��> 11
Deputy City Attorney
6•�
M&C: C-28913 10-30-18
Mary J. er, CiFy Secretary
Form 1295: 2018-394290
CONTRACT COMPLIANCE MANAGER:
By signing below, I hereby acknowledge that I
am the person responsible for the monitoring
and administration of this contract, including
ensuring all performance and reporting
requirements:
By:
Name of City Employee:
Title:
Page 29
Economic Development Program Agreement OFFICIAL RECORD
between City of Fort Worth and 714 Main Real Estate Holdings,LLC CITY SECRETARY
FT WORTH,TX
EXECUTED as of the last date indicated below:
CITY OF FORT WORTH: 714 MAIN REAL ESTATE HOLDINGS,
LLC,a Delaware limited liability company:
By: By: ,.ta
S(is4 Alanis Gary IVsterman
Assistant City Manager Authorized Person
Date: (9 `� �9-b I I Date:
APPROVED AS TO FORM AND LEGALITY:
By: ��?'� 0 /
Peter Vaky
Deputy City Attorney
M&C: C-28913 10-30-18
Form 1295: 2018-394290
CONTRACT COMPLIANCE MANAGER:
By signing below,I hereby acknowledge that I
am the person responsible for the monitoring
and administration of this contract,including
ensuring all performance and reporting
requirements: /
..ems" •
By: 7
72
Name of City Employee: —c
.46el
Page 29 OFFICIAL RECORD
Economic Development Program Agreement CITY SECRETARY
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
FT. WORTH,TX
EXHIBITS
"A"—Description and Map Depicting the Land
"B"—Map of Central City
"C"—Required Terms and Conditions of Conveyance of Land to the City
"D"—Form of Ground Lease
"E" —Form of Room Block Agreement
"F"—Minimum Hotel Operating Standards
"G"—Form of Consent to Collateral Assignment
"H" -- Permitted Exceptions
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
EXHIBIT "A"
DESCRIPTION AND MAP DEPICTING THE LAND
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
y Y
b
lw
7 }IL F r c
i i 5 / '� P
iv
y
r I;- CL E
Q
0
} - w
ub
•`
M
t y
L tir
` to
A
yF N
L =��a 9
Q O .� j
.2 . n
IWO r
LL
� ar
io ` 77
N
` 0A
q
h _ A
N Ny�
o
_C
IA
E.
E
IA
M W O
c N u
EXHIBIT "B"
MAP OF CENTRAL CITY
Richland
entral City Boundary ,.a HI=.... � �''
1+04t�m arty KKhwm
"Ift
. ��• w=ak.an
' 8erbroaR - ifu#m
vat
® 2017 Fort Worth Central City Boundary
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
EXHIBIT "C"
REQUIRED TERMS AND CONDITIONS
OF CONVENYANCE OF LAND TO THE CITY
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
SPECIAL WARRANTY DEED
DATE:
GRANTOR:
GRANTOR'S MAILING ADDRESS:
GRANTEE: City of Fort Worth
GRANTEE'S MAILING ADDRESS: 1000 Throckmorton,Fort Worth,Tarrant County,Texas
CONSIDERATION: Ten Dollars and and other good and valuable consideration.
PROPERTY(including any improvements):
See attached Exhibit"A",attached hereto and incorporated herein for all purposes
RESERVATIONS FROM CONVEYANCE:
For Grantor and Grantor's heirs,successors,and assigns forever,a reservation of all oil,gas,and other minerals
in and under and that may be produced from the Property,however Grantor hereby waives any and all rights to
conduct drilling, mining, exploratory and producing operations on the surface of the Property or to construct
houses, pits, tanks, pipelines, compressors or similar structures thereon. If the mineral estate is subject to
existing production or an existing lease,this reservation includes the production,the lease,and all benefits from
it, provided that the lessee under such existing lease waives all rights conduct drilling, mining, exploratory and
producing operations on the surface of the Property or to construct houses,pits,tanks,pipelines,compressors or
similar structures thereon. The right to produce the oil, gas, hydrocarbons and any other minerals under the
Property shall be exercised by conducting all such exploring,mining,drilling and producing operations on lands
other than the Property.
EXCEPTIONS TO CONVEYANCE AND WARRANTY:
This conveyance is expressly made by Grantor and accepted by Grantee subject to the permitted
encumbrances on the attached Exhibit`B",attached hereto and incorporated herein for all purposes.
Grantor, for the Consideration and subject to the Reservations from Conveyance and the Exceptions to
Conveyance and Warranty, grants, sells, and conveys to Grantee the Property, together with all and singular the
rights and appurtenances thereto in any way belonging, to have and to hold it to Grantee and Grantee's heirs,
successors, and assigns forever. Grantor binds Grantor and Grantor's heirs and successors to warrant and forever
defend all and singular the Property to Grantee and Grantee's heirs, successors, and assigns against every person
whomsoever lawfully claiming or to claim the same or any part thereof when the claim is by, through, or under
Grantor but not otherwise, except as to the Reservations from Conveyance and the Exceptions to Conveyance and
Warranty.
When the context requires,singular nouns and pronouns include the plural.
GRANTOR:
By:
By:
GRANTEE:
CITY OF FORT WORTH Approved as to Form and Legality
Assistant City Manager Assistant City Attorney
After recording please send to:
Property Management Department
c/o Laura Morales
1000 Throckmorton
Fort Worth,Texas 76102
2
THE STATE OF TEXAS §
COUNTY OF TARRANT§
BEFORE ME, the undersigned authority, on this day personally appeared , known to me
to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he
executed the same as the act and deed and on behalf of the City of Fort Worth, a municipal corporation of Tarrant
County,Texas, for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE,this day of
2019.
Notary Public
THE STATE OF TEXAS §
COUNTY OF TARRANT§
Before me,the undersigned authority,on this day personally appeared ,
of , known to me to be the person whose name
is subscribed to the foregoing instrument and acknowledged to me that the same is the act of
,and that he/she executed the same as its
and as the act of such limited partnership and for the purposes and considerations expressed in the foregoing
instrument.
GIVEN UNDER MY HAND AND SEAL OF OFFICE,this day of ,2019.
Notary Public
3
EXHIBIT"A"
PROPERTY DESCRIPTION
4
EXHIBIT"B"
PERMITTED ENCUMBRANCES
1. Any and all restrictions,existing easements,rights-of-way and prescriptive rights,whether of record or not;
2. All zoning laws,regulations,ordinances of municipal and other governmental authorities;
[INSERT AbFEED'ITEMS,FROM SELLER AND TITLE COMMITMENT]
5
EXHIBIT "D"
FORM OF GROUND LEASE
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
GROUND LEASE
WITH OPTION TO PURCHASE
BETWEEN CITY OF FORT WORTH AND
714 MAIN STREET HOTEL
This GROUND LEASE WITH OPTION TO PURCHASE (hereafter referred to as the
"Agreement" or "Lease", as applicable), is made and entered into this day of
, 2019 ("Effective Date"), by and between the CITY OF FORT WORTH, a
Texas home rule municipal corporation ("Landlord"), and , a
(hereafter referred to as "Tenant").
WITNESSETH:
WHEREAS, Landlord is the owner of real property generally located
at , as more specifically described in on Exhibit "A", attached hereto and
made apart hereof for all purposes("Land");
WHEREAS, in connection with economic incentives set forth in that certain Economic
Development Program Agreement between Landlord and Tenant dated (the "380
Agreement"), providing for a program of incentives in exchange for Tenant completing certain
improvements which will promote local economic development and stimulate business and
commercial activity within the City of Fort Worth;
WHEREAS, Tenant has or has caused to be constructed on the Land (i) a hotel with,
among other things, 220 Guest Rooms (as defined in the 380 Agreement) and 10,000 square feet
of combined meeting space (which include ballroom, conference room or board room space as
well as rooftop banquet space), and (ii) a full-service restaurant of at least 3,100 square feet
(collectively, the "Improvements");
WHEREAS, to support the fulfillment of the 380 Agreement, a ground lease under the
terms and conditions set forth herein is necessary to provide for the completion of the
construction of the Improvements and to provide for the conveyance of the Land to Tenant;
NOW THEREFORE, in consideration of the terms and conditions set forth herein, for
the rents to be paid and other good and valuable consideration, Landlord and Tenant covenant
and agree as follows:
I. Leased Premises
1.1 Lease. Landlord hereby leases, lets and demises to Tenant the Land (the "Leased
Premises").
Ground Lease and Option to Purchase
CFW and Tenant
Page 1 of 31
152261244.2
II. Lease Term
2.1 The initial term of this Agreement (the "Initial Term") shall begin on the
Effective Date and end on the earlier to occur of(i) the conveyance of the Leased Premises by
Landlord to Tenant as set forth in Article XVI, (ii) ninety-nine (99) years following the Effective
Date, or (iii) a termination pursuant to the terms herein. Landlord will tender possession of the
Leased Premises to Tenant not later than the Effective Date.
III. Rent
3.1 Rent. For the use and occupancy of the Leased Premises herein granted, Tenant
contracts to pay to Landlord, throughout the Term of this Agreement, a rental (collectively, the
"Rent") for the Leased Premises. Rent shall be paid annually in advance, due each year on or
before the anniversary of the Effective Date. The annual amount of Rent for the Option Period
(as hereinafter defined) shall be $ . Upon the anniversary of the Effective
Date following the expiration of the Option Period, and thereafter at five (5) year intervals, the
amount of Rent may, at Landlord's sole option, be adjusted in accordance with the Consumer
Price Index for all Urban Consumers, published by the Bureau of Labor Statistics of the United
States Department of Labor for Dallas-Fort Worth, Texas, All Items (1982-84=100) (the
"Consumer Price Index"), or any successor index thereto as hereinafter provided. If publication
of the Consumer Price Index is discontinued, or if the basis of calculating the Consumer Price
Index is materially changed, then Landlord will substitute for the Consumer Price Index
comparable statistics as computed by an agency of the United States Government or, if none, by
a substantial and responsible periodical or publication of recognized authority most closely
approximating the result which would have been achieved by the Consumer Price Index. The
adjustment will be determined by multiplying the dollar amount to be adjusted by a fraction, the
numerator of which is the level of the Consumer Price Index for the current calendar year (i.e.,
the calendar year preceding the adjustment year) (the "Current Index Number"), and the
denominator of which is the level of the Consumer Price Index for the calendar year in which the
effective date of this Lease occurs (the "Base Number Index"). Landlord acknowledges and
agrees that Landlord is bound by the 380 Agreement to make Lease-Based Grants (as defined in
the 380 Agreement)to Tenant in accordance with the terms thereof.
3.2 Special Option Consideration. Within five (5) days following the Effective Date,
Tenant agrees to pay to Landlord the sum of$100.00 as consideration for the Option set forth in
this Agreement.
IV. Use And Occupancy of Leased Premises
4.1 Permitted Uses. Tenant agrees that it shall use and occupy the Leased Premises
solely for the purposes of marketing, leasing, occupying and operating the Improvements,
pursuant to the terms and conditions of this Agreement ("Permitted Use"). The Permitted Use
also include purposes related and incidental to the Improvements (including, without limitation,
the operation of bar(s), gift shops, coffee shops, meeting facilities, catering services, fitness and
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 2 of 31
152261244.2
spa facilities and other supporting facilities commensurate with a full-service, convention-
oriented hotel), so long as the primary use of the Leased Premises is the Hotel. Tenant shall not
use the Leased Premises for any purpose other than expressly set forth in this Section 3.3 unless
Tenant has received Landlord's prior written consent.
4.2 Prohibited Uses. Tenant shall not use nor permit the use of the Leased Premises
for any other or additional purpose that is not, during the Term of this Agreement, a Permitted
Use, without first obtaining the prior written consent of Landlord, which consent may be granted,
withheld, conditioned or delayed in Landlord's sole and absolute discretion. Tenant
acknowledges that the use of the Leased Premises is subject to all statutes, laws, treaties, rules,
codes, ordinances, regulations, permits, interpretations, certificates or orders of any
governmental entity, or any judgments, decisions, decrees, injunctions, writs, orders or like
actions of any court, arbitrator, or other Federal, State, or local governmental entity (hereafter the
"Governmental Rules") at any time applicable to the Leased Premises and improvements
thereon and that nothing in this Article IV or elsewhere in this Agreement shall constitute or be
deemed to constitute a waiver by Landlord of the performance of its governmental functions or
of any such Governmental Rules or of the duty of Tenant to comply with such Governmental
Rules. Tenant will comply with the provisions of Article XIII with respect to Hazardous
Materials.
V. Improvements and Alterations
5.1 Ownership of Improvements and Alterations. Title to all buildings and permanent
improvements and alterations, including fixtures, constructed or installed on the Leased Premises
during the term of this Agreement will be the property of Tenant and will remain the property of
the Tenant after the termination or expiration of this Lease.
5.2 Alterations. Tenant shall not perform any alterations to the Improvements or on
the Leased Premises that do not substantially conform to the improvements in the 380
Agreement as the "Hotel" without first obtaining Landlord's written approval. For any
alterations performed pursuant to this Agreement, the parties agree as follows:
(a) Tenant may not perform any alterations that are estimated to cost more than One
Hundred Fifty Thousand Dollars ($150,000.00) unless it first submits all plans, specifications
and estimates for the costs of the proposed work ("Plans") in writing and also requests and
receives in writing approval from the Landlord for same, which approval shall not be
unreasonably withheld, conditioned or delayed. Landlord shall have thirty (30) days from the
date of submission of all required documentation to approve or disapprove Tenant's request to
perform alterations. The approval by Landlord of any plans or specifications shall not
constitute approval of the architectural or engineering design, and Landlord, by approving the
plans and specifications, assumes no liability or responsibility for the architectural or engineering
design or for any defect in any building or improvement constructed from the plans or
specifications.
(b) Landlord shall assist Tenant, in its capacity as landlord and property owner, with
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 3 of 31
152261244.2
obtaining necessary permits for the alterations, provided that this Agreement shall not constitute
a waiver or alteration of the City of Fort Worth's processes and requirements for permits as the
permitting authority.
(c) As soon as practicable following the completion of the alterations, Tenant shall
supply Landlord with:
(1) comprehensive sets of documentation relative to the alterations, including,
at a minimum, as-built drawings. As-built drawings shall be new drawings or redline
changes to drawings previously provided to Landlord;
(2) textual documentation in computer format as requested by Landlord;
(3) full lien releases for all contractors, subcontractors, and suppliers for the
alterations; and
(4) copies of all permits and warranties for the alterations.
Tenant shall diligently and without unreasonable delay perform the work necessary to reach
substantial and physical completion of the Improvements.
5.3 Maintenance of Leased Premises and Improvements. Tenant, at its sole cost and
expense, shall keep and maintain the Leased Premises and the Improvements thereon, including
the interior and exterior, structural and non-structural portions of the Improvements, in good
repair and in compliance with all applicable laws, regulations, orders and other governmental
requirements applicable to the Leased Premises from time to time. Landlord has no maintenance
and repair obligations under this Lease.
5.4 Compliance with Regulatory Requirements. Tenant agrees that all improvements
and alterations on or to the Leased Premises shall be constructed in accordance with the
Governmental Rules. Tenant shall, at its sole cost and expense, procure or cause to be procured
all necessary building permits, other permits, licenses and other authorizations required for the
lawful and proper construction, use, occupation, operation, and management of the Leased
Premises.
5.5 Taxes and Other Charges. It is understood and agreed that this Agreement is a
net lease, and that Rent and all other amounts due hereunder will be paid by Tenant on an
absolutely net basis. Tenant shall be responsible for the payment of all utilities, insurance, and
other operating and capital expenses associated with the possession, maintenance, use, alteration,
repair, rebuilding, ownership and operation of the Leased Premises. Without limiting the
generality of the foregoing, Tenant shall pay and discharge, prior to the delinquency thereof, all
lawful assessments, ad valorem taxes, sales taxes, business and occupation taxes, occupation
license taxes, water charges, or sewage disposal charges, and all other governmental taxes,
impositions, and charges of every kind and nature, and all applicable interest and penalties, if
any, which at any time during the Term becomes due and payable by Tenant because of its
rights or obligations under this Lease and which is lawfully levied, assessed or imposed on
Tenant, the Leased Premises or the Improvements under or by virtue of any present or future
law, statute, ordinance, regulation or other requirement of any governmental authority, whether
federal, state, county, city, municipal, school or otherwise (collectively, "Taxes") imposed on the
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 4 of 31
152261244.2
Leased Premises and the Improvements and Tenant's use and occupancy of the Leased Premises
and the Improvements or against personal property, furniture, or fixtures placed or situated in or
on the Leased Premises during the Term. Tenant, upon written notice to Landlord, may contest
in good faith any Taxes (other than water charges or sewage disposal charges), and in such event
may permit such Taxes (other than water charges or sewage disposal charges) to remain
unsatisfied during the period of such contest and any appeal.
5.6 Liens and Encumbrances. Tenant covenants and agrees that it will not create or
suffer to be created any lien, encumbrance, or charge upon the Leased Premises or Tenant's
interest in this Lease, except for mortgages and assessments permitted under Article IX, and any
other encumbrance expressly permitted under this Lease or the 380 Agreement or which is
necessary in order for Tenant to exercise its rights or perform its obligations under this Lease or
the 380 Agreement. Tenant shall satisfy or cause to be discharged, or will make adequate
provision to satisfy and discharge, within sixty (60) days after the same occurs, all claims and
demands for labor, materials, supplies or other items which, if not satisfied, might by law
become a lien upon the Leased Premises or any part thereof. If any such lien is filed or asserted
against Tenant or the Leased Premises by reason of work, labor, services or materials supplied or
claimed to have been supplied on or to Tenant or the Leased Premises at the request or with the
permission of Tenant or of anyone claiming under it, Tenant shall, within sixty (60) days after it
receives notice of the filing thereof or the assertion thereof against the Leased Premises, cause
the same to be discharged of record, or effectively prevent the enforcement or foreclosure
thereof, by contest, payment, deposit, bond, order of court, or otherwise. Tenant hereby agrees
to indemnify Landlord for, from, and against any damages that Landlord may suffer or
any liability imposed upon Landlord for any such claims, demands, or liens as set forth in
this Section 5.6.
5.7 Construction Requirements. The following requirements shall apply to all
construction on the Leased Premises:
(a) Tenant shall include in all Tenant general construction contracts for
Improvements the following provisions:
(1) CONTRACTOR DOES HEREBY CONTRACT TO WAIVE ALL CLAIMS,
RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS LANDLORD AND ALL
OF ITS OFFICIALS, OFFICERS, AGENTS AND EMPLOYEES, IN BOTH THEIR
PUBLIC AND PRIVATE CAPACITIES, FROM AND AGAINST ANY AND ALL
LIABILITY, CLAIMS, LOSSES, DAMAGES, SUITS, DEMANDS OR CAUSES OF
ACTION INCLUDING ALL EXPENSES OF LITIGATION AND/OR SETTLEMENT,
COURT COSTS AND ATTORNEY FEES WHICH MAY ARISE BY REASON OF
INJURY TO OR DEATH OF ANY PERSON OR FOR LOSS OF, DAMAGE TO, OR
LOSS OF USE OF ANY PROPERTY OCCASIONED BY ERROR, OMISSION OR
NEGLIGENT ACT OF CONTRACTOR, ITS OFFICERS, AGENTS, EMPLOYEES,
SUBCONTRACTORS, INVITEES OR ANY OTHER PERSONS, ARISING OUT OF OR
IN CONNECTION WITH THE PERFORMANCE OF THIS CONTRACT, AND
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 5 of 31
152261244.2
CONTRACTOR WILL AT ITS OWN COST AND EXPENSE DEFEND AND PROTECT
LANDLORD FROM ANY AND ALL SUCH CLAIMS AND DEMANDS.
(2) CONTRACTOR DOES HEREBY CONTRACT TO WAIVE ALL CLAIMS,
RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS LANDLORD AND ALL
OF ITS OFFICIALS, OFFICERS, AGENTS AND EMPLOYEES, FROM AND AGAINST
ANY AND ALL CLAIMS, LOSSES, DAMAGES, SUITS, DEMANDS OR CAUSES OF
ACTION, AND LIABILITY OF EVERY KIND INCLUDING ALL EXPENSES OF
LITIGATION AND/OR SETTLEMENT, COURT COSTS AND ATTORNEYS' FEES
FOR INJURY OR DEATH OF ANY PERSON OR FOR LOSS OF, DAMAGES TO, OR
LOSS OF USE OF ANY PROPERTY, ARISING OUT OF OR IN CONNECTION WITH
THE PERFORMANCE OF THIS CONTRACT. SUCH INDEMNITY SHALL APPLY
WHETHER THE CLAIMS, LOSSES, DAMAGES, SUITS, DEMANDS OR CAUSES OF
ACTION ARISE IN WHOLE OR IN PART FROM THE NEGLIGENCE OF
LANDLORD, ITS OFFICERS, OFFICIALS, AGENTS OR EMPLOYEES; PROVIDED,
HOWEVER, THAT IN NO EVENT SHALL SUCH INDEMNITY APPLY TO GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD, ITS OFFICERS,
OFFICIALS, AGENTS OR EMPLOYEES. IT IS THE EXPRESS INTENTION OF THE
PARTIES THERETO THAT THE INDEMNITY PROVIDED FOR IN THIS
PARAGRAPH IS INDEMNITY BY CONTRACTOR TO INDEMNIFY AND PROTECT
LANDLORD FROM THE CONSEQUENCES OF LANDLORD OWN NEGLIGENCE,
WHETHER THAT NEGLIGENCE IS A SOLE OR CONCURRING CAUSE OF THE
INJURY, DEATH OR DAMAGE.
(3) In any and all claims against any party indemnified hereunder by any employee of
the contractor, any subcontractor, anyone directly or indirectly employed by any of them or
anyone for whose acts any of them may be liable, the indemnification obligation herein provided
shall not be limited in any way by any limitation on the amount or for the contractor or any
subcontractor under workers' compensation or other employee benefit acts.
(b) Tenant agrees that all work to be performed by it or its contractor on the Leased
Premises, including all workmanship and materials, shall be of first-class quality, and such work
shall be subject to inspection during the performance thereof and after it is completed. Tenant
shall assume the risk of loss or damage to all such work prior to the completion thereof. Tenant
shall repair or replace any such loss or damage without cost to Landlord.
(c) Tenant shall deliver within five (5) business days of a request from Landlord,
written progress reports of the work performed and shall at all times during the term of this
Agreement keep construction reports and drawings current showing any changes or
modifications made in or to the improvements constructed on the Leased Premises.
(d) Nothing in this Agreement shall be construed as an agreement by Landlord to
waive any lien Landlord may have, constitutional, statutory or contractual, upon any leasehold
improvements on the Land.
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 6 of 31
152261244.2
VI. Acceptance, Care, Maintenance and Repair
6.1 As-Is, No Warranties. Tenant accepts the Leased Premises in their "as is"
condition. Landlord has not made and does not make and specifically disclaims any
representations, guarantees, promises, covenants, agreements, or warranties of any kind or
character whatsoever unless otherwise provided for herein, whether express or implied, oral or
written, past, present or future of, as to, concerning or with respect to the nature, quality or
condition of the Leased Premises, the income to be derived, the suitability of the Leased
Premises for uses allowed under this Agreement, or merchantability or fitness for a particular
purpose.
6.2 No Landlord Obli anion. Landlord shall not be required to maintain nor to make
any improvements, repairs or restorations upon or to the improvements located thereon.
Landlord shall never have any obligation to repair, maintain or restore, during the term of this
Agreement, any improvements on the Leased Premises.
6.3 Tenant Obli atg ion. Tenant, without limiting the generality hereof, shall keep at
all times, in a clean and orderly condition and appearance, the Leased Premises and
Improvements, and all of Tenant's fixtures, equipment, and personal property that are located on
any part of the Leased Premises and Improvements. Tenant shall repair any damage to the
Leased Premises.
6.4 Tenant Warranties. Tenant represents and warrants to Landlord as follows: (i)
Tenant does not intend to, and will not, use the Leased Premises for any purpose other than that
set forth in Section 4.1; and (ii) Tenant has undertaken and has reasonably and diligently
completed all appropriate investigations regarding the suitability of the Leased Premises for
Tenant's intended use. Tenant acknowledges and agrees that Landlord has no obligation with
respect to completion of the Improvements.
VII. Inspections by Landlord
7.1 in a manner so as to not unreasonably interfere with the development of the
Improvements, Landlord or its authorized agents may enter upon the Leased Premises, for any
purpose connected with the performance of Landlord's or Tenant's obligations hereunder, in
order to inspect the performance of Tenant's obligations under this Agreement, or to inspect
safety compliance or in order to determine compliance with all Governmental Rules. In case of
an emergency or if necessary to ensure the health, safety and welfare of the public, Landlord may
enter upon the Leased Premises at any time and without notice. This shall not constitute a
waiver by Landlord of the performance of its governmental functions and Tenant agrees that in
the performance of its governmental functions, Landlord representatives may enter onto the
Leased Premises at any time.
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 7 of 31
152261244.2
VIII. Subletting and Assignments
8.1 Except as provided in Article IX, Tenant may not assign, transfer, sublet, or
convey, or otherwise dispose of this Lease or the rights, title, or interest in or to the same or any
part thereof without the prior written consent of Landlord. Notwithstanding the foregoing,
Tenant, at Tenant's sole cost and expense, may sublet space in the Improvements to tenants
subject to the provisions of this Agreement. Any and all subletting shall be subordinate to this
Agreement and Tenant agrees, after written notice from Landlord, to resolve any issues arising
from subtenants' failure to comply with the applicable provisions of this Agreement. If this
Lease is assigned, such assignment shall be subject to City Council approval and shall be upon
and subject to all of the terms, covenants, and conditions contained in this Lease. Within thirty
(30) days after the execution and delivery of any such assignment, Tenant shall furnish to
Landlord a duplicate original of the assignment, which shall contain an assumption by the
assignee of all of the obligations of Tenant under this Lease. Any assignment prohibited hereby
shall be void.
IX. Leasehold Mortgages & PACE Assessment
9.1 Leasehold Mortgage & PACE Assessment. Tenant will be entitled, at any time
and from time to time, without Landlord's consent, and on terms and conditions determined by
Tenant to be appropriate, to mortgage, pledge, grant deed(s) of trust, or otherwise encumber all
or any portion of the leasehold estate created hereby and all or any portion of the right, title, and
interest of Tenant under this Agreement (including Tenant's interest in the Improvements), and to
assign, hypothecate, or pledge it as security for the payment of any debt to any holder of a
promissory note or other evidence of indebtedness (such notes, mortgages, deeds of trust, and
other documents evidencing and securing such loans hereinafter referred to as a "Leasehold
Mortgage" and a holder of a Leasehold Mortgage as a "Leasehold Mortgagee"), all of which
shall be subordinate to Landlord's interest under this Agreement. In addition to the Leasehold
Mortgage, Tenant will be entitled, at any time and from time to time, without Landlord's consent,
and on terms and conditions determined by Tenant to be appropriate, to approve, grant, or
otherwise encumber all or any portion of the leasehold estate created hereby and Tenant's interest
in the Improvements, with an assessment (the "PACE Assessment") pursuant to The Property
Assessed Clean Energy Act, Texas Local Government Code Chapter 399 ("PACE Act"). Except
for a PACE Assessment granted by Tenant pursuant to the PACE Act on or prior to the date of
this Lease, Tenant shall not encumber the fee estate, and there shall be no joinder of the fee
under any mortgage for the Improvements.
9.2 Notice. After the execution and recordation of any Leasehold Mortgage or PACE
Assessment, Tenant or the lender under the Pace Assessment(the "PACE Capital Provider") or
Leasehold Mortgagee, as the case may be, must notify Landlord in writing that a Leasehold
Mortgage or PACE Assessment has been given, as the case may be, and executed by Tenant and
must furnish Landlord with the address to which copies of notices should be mailed. Landlord
agrees that it will thereafter give to the Leasehold Mortgagee and or the PACE Capital Provider
at the address so given, duplicate copies of any and all notices in writing that Landlord may from
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 8 of 31
152261244.2
time to time give or serve upon Tenant under and pursuant to the terms and provisions of this
Agreement.
9.3 Default Procedures. Landlord agrees that upon the occurrence of any event of
default under the Leasehold Mortgage, Leasehold Mortgagee or the PACE Capital Provider may
(but shall not be obligated) to assume, or cause a new lessee or purchaser of the leasehold estate
created hereby to assume, all the interests, rights, and obligations of Tenant thereafter arising
under this Agreement; provided, however, that any new lessee or purchaser of the leasehold
estate is approved by Landlord's City Council, and that any defaults by Tenant must be cured
pursuant to this Agreement as herein provided. Landlord hereby agrees to provide notice of any
default by Tenant under this Agreement to each Leasehold Mortgagee and PACE Capital
Provider whose name and address has been provided to it and is designated as Leasehold
Mortgagee or PACE Capital Provider pursuant to this Article IX. In the event of any default by
Tenant (after exhaustion of the cure periods provided in Article XVII below), Landlord shall
refrain from exercising any remedy with respect to such default unless and until (i) with respect
to any default concerning the obligation to pay Rent, Landlord shall give a further written notice
thereof to Leasehold Mortgagee and PACE Capital Provider and such default remains uncured at
the expiration of ten (10) days after each of Leasehold Mortgagee's and PACE Capital Provider's
receipt of Landlord's written notice of such default; and (ii) with respect to any other default,
Landlord shall give a further written notice thereof to Leasehold Mortgagee and PACE Capital
Provider and such default remains uncured at the expiration of thirty (30) days after each of
Leasehold Mortgagee's and PACE Capital Provider's receipt of Landlord's written notice of such
default; provided, however, that if such non-monetary default cannot with diligent efforts be
cured within thirty (30) days, Leasehold Mortgagee shall have additional time to cure so long as
Leasehold Mortgagee commences action to remedy such failure promptly following such notice
and diligently prosecutes such action in good faith. Landlord agrees to accept performance by
Leasehold Mortgagee of any covenant, condition or agreement on Tenant's part to be performed
under this Agreement (whether prior to or after any default by Tenant) with the same force and
effect as though performed by Tenant. It is understood that Leasehold Mortgagee is not obligated
to cure defaults by Tenant under Section 17.1 of this Agreement.
9.4 New Ground Lease. Upon termination of this Agreement for any reason other
than expiration of the Term, Leasehold Mortgagee shall have the exclusive right and option,
exercisable by delivery of notice to Landlord within fifteen (15) days following receipt by
Leasehold Mortgagee of notice from Landlord of the termination hereof, to elect to receive, in its
own name or an affiliate, from Landlord a new lease (the "New Ground Lease") for the Leased
Premises for the unexpired balance of the term, provided, however, that such New Ground Lease
is approved by Landlord's City Council and must include a PACE Assessment in an amount and
on the same terms as recorded against the Leased Premises and/or the Improvements. The New
Ground Lease will be on the same terms and conditions as herein provided and executed to be
effective as of the date of termination of this Agreement by Leasehold Mortgagee and Landlord
within thirty (30) days of receipt by Leasehold Mortgagee of such notice from Landlord of the
termination hereof; provided, however, that in such event, Leasehold Mortgagee shall be entitled
to receive such a New Lease only if Leasehold Mortgagee shall cure any defaults by Tenant
hereunder prior to execution of such New Lease.
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 9 of 31
152261244.2
After any termination of this Agreement after which Leasehold Mortgagee has the right
to obtain a New Ground Lease as provided in this Section 9.4, for so long as Leasehold
Mortgagee has such right, Landlord shall not terminate any subleases or the rights of any
sublessee except in the case of a default under any such sublease.
9.5 Limit on Leasehold Mortgagee's Liability. After acquiring Tenant's rights by
foreclosure or transfer in lieu of foreclosure, Leasehold Mortgagee shall, subject to the
provisions of this Article IX, be liable to perform Tenant's obligations under this Agreement only
until Leasehold Mortgagee transfers or assigns the leasehold estate to a person which expressly
assumes the obligations of Tenant under this Agreement, and such liability of Leasehold
Mortgagee shall terminate upon such transfer or assignment for obligations first accruing from
and after the date of such transfer or assignment. No holder of a Leasehold Mortgage shall
acquire greater rights or interest than Tenant has under this Agreement.
9.6 No Voluntary Cancellation. No voluntary cancellation, termination, surrender,
amendment or modification of this Agreement by Tenant shall bind any Leasehold Mortgagee if
done without the prior written consent of such Leasehold Mortgagee, which consent shall not be
unreasonably withheld with respect to an amendment or modification of this Agreement.
9.7 Damage or Destruction. If the cost to restore Improvements exceeds the available
insurance proceeds, Tenant, Leasehold Mortgagee and Landlord (subject to necessary City
Council approvals) agree to use good faith efforts to arrive at a mutually agreeable solution to
addressing this additional cost; provided, however, no such good faith efforts shall negate or
diminish Tenant's obligations and liability to Landlord and Leasehold Mortgagee.
9.8 Amendment or Modification. This Agreement may not be modified or amended
without the prior written consent of the Leasehold Mortgagee.
X. Damage or Destruction
10.1 In the event of damage or destruction during the Term to any of the improvements
upon the Leased Premises, Tenant shall have the obligation to utilize insurance proceeds as and
when available to rebuild or repair the improvements unless otherwise agreed by Landlord.
Landlord shall have no obligation to repair or rebuild any improvements or any fixtures,
equipment or other personal property installed by Tenant; however, upon the failure of Tenant to
repair or rebuild as required by this Agreement, Landlord may either (i) terminate this
Agreement, subject to any rights of the Leasehold Mortgagee, or (ii), as agent of Tenant, repair
or rebuild such damage or destruction at the expense of Tenant, and such expense shall be due
and payable on demand.
10.2 Upon completion of all repair or rebuilding work as a result of damage or
destruction, Tenant shall certify by a responsible officer or authorized representative that such
rebuilding and repairs have been completed. Nothing herein contained shall be deemed to
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 10 of 31
152261244.2
release Tenant from any of its repair, maintenance, or rebuilding obligations under this
Agreement.
10.3 In no event shall Tenant be obligated to provide improvements, equipment, and
fixtures in excess of those existing prior to such damage or destruction or as required by City
Code, whichever is greater. Tenant agrees that it will promptly seek to adjust any insurance
claims and thereafter will promptly commence such work and proceed to completion with due
diligence.
10.4 Tenant shall not be entitled to any abatement, allowance, reduction, or suspension
of the rent payments as a result of or in connection with the partial or total destruction of the
improvements on the Leased Premises. No such damage or destruction shall affect in any way
the obligation of Tenant to pay Rent and any other charges contained herein.
XI. Insurance and Bonds
11.1 Tenant's Insurance. Tenant represents that it currently has in effect, and Tenant
further covenants that it shall maintain in effect at all times during the full Term of this Lease,
insurance coverages with limits not less than those set forth below with insurers licensed to do
business in the State of Texas and reasonably acceptable to Landlord and under forms of
policies reasonably satisfactory to Landlord. Tenant shall maintain such insurance coverages
at its sole cost and expense. Landlord shall be under no obligation to maintain any such
insurance coverage should Tenant be found to be in default under this Article XI. None of the
requirements contained herein as to types, limits or Landlord's approval of insurance coverage
to be maintained by Tenant are intended to and none shall in any manner limit, qualify or
quantify the liabilities and obligations assumed by Tenant under this Lease or otherwise provided
by law.
11.1.1. Schedule of Insurance Coverages.
COVERAGE MINIMUM AMOUNTS AND LIMITS
Workers' Compensation.
Workers' Compensation, Employers' Liability, or alternative work-place injury or non-
subscription plan as may be permitted under applicable law
Statutory Limits: $100,000
This policy shall include a waiver of subrogation in favor of the Indemnitees.
Commercial General Liability.
Bodily Injury/Property Damage (Occurrence Basis): $1,000,000 each occurrence
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 11 of 31
152261244.2
or equivalent; subject to a$2,000,000 aggregate
Such commercial general liability policy shall be on an occurrence form reasonably
acceptable to Landlord, endorsed to include the Indemnitees as additional insureds, contain
cross-liability and severability of interest endorsements, state that this insurance is primary
insurance as regards any other insurance carried by any Indemnitee, and shall include the
following coverages:
(a) Leased Premises/Operations;
(b) Independent Contractors;
(c) Broad Form Contractual Liability specifically in support of, but not
limited to,the Indemnification section of this Lease; and
(d) Personal Injury Liability with the employee and contractual exclusions removed.
Comprehensive Automobile Liability_
Bodily Injury/Property Damage: $1,000,000 combined single limit of liability
This policy shall be on a standard form written to cover all owned, hired and non-owned
automobiles.
Garagekeeper's Liability_
Physical Damage to Parked Vehicles: $100,000 combined single limit each occurrence
This policy shall be endorsed to include the Indemnitees as additional insureds and include
a waiver of subroi!ation in favor of the Indemnitees.
Umbrella Excess Liability Insurance.
Bodily Injury/Property Damage (Occurrence Basis): $10,000,000 per
occurrence,
$10,000,000 aggregate
This policy shall be written on a following form umbrella excess basis
above the coverages described in Sections 11.1.1.2, 11.1.1.3, and 11.1.1.4
above and shall include the Indemnitees as additional insureds.
Property Insurance. Such property insurance as Tenant, in its sole discretion, deems
appropriate.
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 12 of 31
152261244.2
11.2 Bonds. Prior to the commencement of any alterations on the Leased Premises,
Tenant shall provide a performance bond and payment bond, or alternative security as approved
by Landlord in Landlord's sole discretion, to Landlord in the full amount of the cost of all the
improvements and work to be performed on the Leased Premises. Each bond will be approved as
to form, substance and surety by Landlord.
11.3 TENANT HEREBY RELEASES, AND SHALL CAUSE ITS
CONTRACTORS AND THEIR SUBCONTRACTORS TO RELEASE, THE
INDEMNITEES (AS DEFINED IN SECTION 12.1) FROM ANY AND ALL CLAIMS OR
CAUSES OF ACTION WHATSOEVER THAT TENANT, ITS CONTRACTORS, AND
THEIR SUBCONTRACTORS MIGHT OTHERWISE POSSESS RESULTING IN OR
FROM OR IN ANY WAY CONNECTED WITH ANY LOSS COVERED OR WHICH
SHOULD HAVE BEEN COVERED BY INSURANCE, INCLUDING THE DEDUCTIBLE
PORTION THEREOF, MAINTAINED OR REQUIRED TO BE MAINTAINED BY
TENANT, ITS CONTRACTORS OR SUBCONTRACTORS PURSUANT TO THIS
AGREEMENT, EVEN IF SUCH CLAIMS OR CAUSES OF ACTION ARE CAUSED IN
WHOLE OR IN PART BY THE NEGLIGENCE OF ANY INDEMNITEE. THE
FOREGOING WAIVER, HOWEVER, WILL NOT APPLY TO ANY CLAIMS OR
CAUSES OF ACTION WHICH ARE CAUSED BY THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF ANY INDEMNITEE.
11.4 Survival; Right to Enforce. The provisions of Article XI shall survive the
termination of this Agreement. In the event that Tenant shall fail to maintain full insurance
coverage required by this Agreement and such failure continues for thirty (30) days after
Tenant's receipt of written notice from Landlord, Landlord may (but shall be under no obligation
to) take out the required policies of insurance, pay the required premiums or otherwise comply
with the covenants set forth in this Article XI. All amounts advanced by Landlord in payment of
the required premiums for such insurance or otherwise to comply with the covenants set forth in
this Article XI shall be paid by Tenant to Landlord, together with interest thereon at the prime
rate of interest charged its commercial customers from time to time by Chase Bank-Fort Worth.
XII. Liabilities and Indemnities
12.1 Indemnity. TENANT SHALL INDEMNIFY, PROTECT, DEFEND, AND
HOLD HARMLESS LANDLORD, LANDLORD'S OFFICERS, DIRECTORS,
AFFILIATES, EMPLOYEES, AGENTS, AND COUNCIL MEMBERS
(COLLECTIVELY, THE "INDEMNITEE" OR "INDEMNITEES") FOR, FROM, AND
AGAINST ANY AND ALL DAMAGES,LOSSES,LIABILITIES (JOINT OR SEVERAL),
PAYMENTS, OBLIGATIONS, PENALTIES, CLAIMS, LITIGATION, DEMANDS,
DEFENSES, JUDGMENTS, SUITS, PROCEEDINGS, COSTS, DISBURSEMENTS, OR
EXPENSES (INCLUDING, WITHOUT LIMITATION, FEES, DISBURSEMENTS AND
REASONABLE EXPENSES OF ATTORNEYS, ACCOUNTANTS, AND OTHER
PROFESSIONAL ADVISORS AND OF EXPERT WITNESSES AND COSTS OF
INVESTIGATION AND PREPARATION) OF ANY KIND OR NATURE
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 13 of 31
152261244.2
WHATSOEVER (COLLECTIVELY, THE "DAMAGES"), DIRECTLY OR
INDIRECTLY RESULTING FROM, RELATING TO OR ARISING OUT OF:
(a) THE DESIGN, INSTALLATION, CONSTRUCTION, DEVELOPMENT,
MAINTENANCE, OPERATION, USE, OCCUPANCY, OR OWNERSHIP OF THE
IMPROVEMENTS, INCLUDING, WITHOUT LIMITATION ANY DAMAGES WITH
RESPECT TO CONTRACTS OR ATTRIBUTABLE TO BODILY INJURY, SICKNESS,
DISEASE OR DEATH, TO PERSONAL INJURY, OR TO INJURY OR DESTRUCTION
OF PROPERTY, INCLUDING LOSS OF USE RESULTING THEREFROM;
(b) THE USE OR OCCUPANCY OF THE LEASED PREMISES, INCLUDING,
WITHOUT LIMITATION ANY DAMAGES WITH RESPECT TO CONTRACTS OR
ATTRIBUTABLE TO BODILY INJURY, SICKNESS, DISEASE OR DEATH, TO
PERSONAL INJURY, OR TO INJURY OR DESTRUCTION OF PROPERTY,
INCLUDING LOSS OF USE RESULTING THEREFROM;
(c) THE FORMATION, ORGANIZATION, AND OPERATION OF TENANT, OR
ANY SUBSIDIARIES OF TENANT;
(d) ANY BREACH OF OR INACCURACY IN ANY REPRESENTATION OR
WARRANTY MADE OR GIVEN BY TENANT OR ANY OF ITS AGENTS, OFFICERS,
OR EMPLOYEES CONTAINED IN THIS AGREEMENT; OR
(e) ANY BREACH OR NON-PERFORMANCE, PARTIAL OR TOTAL, BY TENANT
OF ANY COVENANT OR AGREEMENT OF TENANT CONTAINED IN THIS
AGREEMENT.
12.2 Negligence of Indemnitee. THIS INDEMNIFICATION REMAINS IN FULL
FORCE AND EFFECT EVEN IF ANY CLAIM DIRECTLY OR INDIRECTLY
RESULTS FROM, ARISES OUT OF, OR RELATES TO OR IS ASSERTED TO HAVE
RESULTED FROM, ARISEN OUT OF, OR RELATED TO THE SOLE NEGLIGENCE
OR CONCURRENT NEGLIGENCE OF AN INDEMNITEE. THE ONLY
CIRCUMSTANCES UNDER WHICH THIS INDEMNITY SHALL NOT APPLY SHALL
BE IN CONNECTION WITH LIABILITIES ATTRIBUTABLE TO THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF AN INDEMNITEE.
12.3 Survival: Right to Enforce. The provisions of this Article XII shall survive the
termination of this Agreement. In the event of failure by Tenant to observe the covenants,
conditions and agreements contained in this Article XII, any Indemnitee may take any action at
law or in equity to collect amounts then due and thereafter to become due, or to enforce
performance and observance of any obligation agreement or covenant of Tenant under this
Article XII. The obligations of Tenant under this Article XII shall not be affected by any
assignment or other transfer by Landlord of its rights, titles or interests under this Agreement and
will continue to inure to the benefit of the Indemnitees after any such transfer. The provisions of
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 14 of 31
152261244.2
this Article XII shall be cumulative with and in addition to any other agreement by Tenant to
indemnify any Indemnitee.
XIII. Environmental and Hazardous Materials
13.1 For purposes of this Agreement, the following terms shall have the following
meanings: (1) "Hazardous Materials" shall mean (i) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde
foam insulation, transformers, or other equipment that contains dielectric fluid containing
polychlorinated biphenyls in violation of Environmental Law, and radon gas; (ii) any chemicals
or substances now or hereafter defined as or included in the definition of"hazardous materials",
`hazardous wastes", "extremely hazardous wastes", "restricted hazardous wastes", "toxic
substances", "toxic pollutants", "contaminants" or "pollutants", or words of similar import,
under any applicable Environmental Law; and (iii) any other chemical, material, or substance,
exposure to which is now or hereafter prohibited, limited, or regulated, by any applicable
Environmental Law or governmental authority; (2) "Release" or "Released" means disposed,
discharged, injected, spilled, leaked, leached, migrated, dumped, emitted, escaped, emptied,
seeped, or placed in, on, or under any land, water, or air, or otherwise entered into the
environment, and as otherwise more broadly defined in applicable Environmental Law; and (3)
"Environmental Law" means all applicable Governmental Rules (whether now or hereafter in
effect), relating to the regulation of, imposing standards of conduct or liability regarding, or
protection of, human health, natural resources, conservation, the environment, or the storage,
treatment, disposal, transportation, handling or other management of Hazardous Materials.
Tenant hereby acknowledges and agrees that Landlord is not the Generator as defined by
Environmental Law of any Hazardous Materials which Tenant has allowed on the Leased
Premises.
13.2 Tenant covenants and agrees with Landlord as follows: (1) the construction and
installation of all improvements and alterations and the use and operation of the Leased Premises
shall at all times be in material compliance with applicable Environmental Law; (2) Tenant will
obtain all environmental permits, licenses, and approvals that are necessary or required by
applicable Environmental Law to conduct its business and operations on the Leased Premises,
and Tenant shall at all times comply with such environmental permits, licenses, and approvals;
(3) neither Tenant nor any person claiming by, through, or under Tenant shall bring onto, use,
store, generate, treat, process, dispose of, recycle, incinerate or transport any Hazardous
Materials in, on, or under the Leased Premises except in compliance with applicable
Environmental Law and in a reasonable and prudent manner so as to prevent the Release or
threat of Release of any Hazardous Material on, onto or from the Leased Premises; (4) Tenant
shall regularly inspect the Leased Premises to monitor and ensure that the Leased Premises are at
all times in material compliance with applicable Environmental Law; (5) Tenant shall use
commercially reasonable efforts to protect the Leased Premises against intentional or negligent
acts or omissions of third parties which might result, directly or indirectly, in the Release of
Hazardous Materials on the Leased Premises in violation of applicable Environmental Law; and
(6) if Tenant has actual knowledge that any Hazardous Materials are Released by Tenant or any
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 15 of 31
152261244.2
person other than by Landlord or Landlord's agents in, on, or under the Leased Premises in
violation of Environmental Law during the Term of this Agreement:
a. Tenant shall promptly notify Landlord of the occurrence of the Release of the
Hazardous Materials and shall promptly provide Landlord with Tenant's response action and/or
communication with any governmental agency to which Tenant is required by applicable laws to
report such Release. Tenant shall furnish or make available to Landlord such information,
documents, and other communications as Landlord shall reasonably request;
b. Tenant shall promptly and timely commence or cause to be commenced
appropriate actions required by applicable Environmental Law to clean up the Hazardous
Materials that have been Released on the Leased Premises (collectively referred to as "Response
Action") and shall conduct and perform or cause to be conducted or performed all appropriate
Response Action in accordance with applicable Environmental Law; and
C. Tenant, at its sole cost, shall contract for or perform all Response Action in the
Tenant's own name or cause the violator to do so in the violator's name.
13.3 TENANT HEREBY COVENANTS AND AGREES THAT IT SHALL BE
RESPONSIBLE FOR, AND WAIVES, RELEASES, AND FOREVER DISCHARGES
THE INDEMNITEES FROM, AND AGREES TO INDEMNIFY, DEFEND, AND HOLD
THE INDEMNITEES HARMLESS FROM AND AGAINST, ALL EXPENSES, COSTS
(INCLUDING REASONABLE ATTORNEYS' FEES AND COURT COSTS), LOSSES,
DAMAGES, PENALTIES, FINES, AND OTHER EXPENDITURES OF ANY NATURE
ARISING FROM OR IN CONNECTION WITH ANY CLAIMS, DEMANDS, LIENS,
INVESTIGATIONS, NOTICES OF VIOLATION, GOVERNMENTAL DIRECTIVES,
CAUSES OF ACTION, OR ANY OTHER ADMINISTRATIVE OR LEGAL
PROCEEDINGS OF ANY NATURE THAT RESULT FROM, RELATE TO, OR ARISE
OUT OF (1) THE BREACH OF ANY COVENANT OR AGREEMENT OF TENANT IN
THIS SECTION 13.3, (2) THE PRESENCE OR ALLEGED PRESENCE OF
HAZARDOUS MATERIALS IN, ON, OR UNDER THE LEASED PREMISES IN
VIOLATION OF ANY ENVIRONMENTAL LAW WHICH AROSE DURING THE
TERM OF THIS AGREEMENT, OR (3) THE VIOLATION OF ANY APPLICABLE
ENVIRONMENTAL LAW WITH RESPECT TO THE LEASED PREMISES DURING
THE TERM OF THIS AGREEMENT; SO LONG AS, IN EACH INSTANCE, THE
PRESENCE OF THE HAZARDOUS MATERIAL (TO EXCLUDE A RELEASE OF A
HAZARDOUS MATERIAL) WAS NOT CAUSED DIRECTLY OR INDIRECTLY BY
LANDLORD OR AN INDEMNITEE. THIS RELEASE AND INDEMNITY
SPECIFICALLY INCLUDES (A) ALL COSTS OF "REMOVAL" AND/OR "REMEDIAL
ACTION" AND ALL OTHER COSTS OF "RESPONSE", AS THOSE TERMS ARE
DEFINED AND USED IN APPLICABLE ENVIRONMENTAL LAW, AND (B) ALL
OTHER COSTS AND EXPENSES OF ANY NATURE INCURRED BY, ASSESSED
AGAINST, IMPOSED UPON, OR CHARGED TO THE INDEMNITEES RELATING TO
COMPLIANCE WITH OR ENFORCEMENT OF APPLICABLE ENVIRONMENTAL
LAW. IF ANY INDEMNITEE INCURS COSTS OR EXPENSES DESCRIBED IN THIS
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 16 of 31
152261244.2
INDEMNITY, TENANT SHALL REIMBURSE THE INDEMNITEE FOR THOSE
REASONABLE COSTS OR EXPENSES WITHIN THIRTY (30) DAYS OF THE DATE
OF RECEIPT BY TENANT OF NOTICE FROM THE INDEMNITEE, INCLUDING
COPIES OF INVOICES OR OTHER VERIFICATION, THAT THE COSTS OR
EXPENSES HAVE BEEN INCURRED. THE FOREGOING RELEASE AND
INDEMNITY SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS
AGREEMENT.
13.4 If(i) there exists any uncorrected violation by Tenant of an Environmental Law or
any condition, caused directly or indirectly by Tenant, which requires a cleanup, removal, or
other remedial action by Tenant under any Environmental Law, and such cleanup, removal, or
other remedial action is not initiated within the time period required by Environmental Law or
(ii) Landlord reasonably determines that (A) such uncorrected violation or condition poses an
imminent threat to the safety or wellbeing of any other users of the Leased Premises, the citizens
of the City of Fort Worth or the County, or other persons, or (B) the Leased Premises is likely to
be further damaged or contaminated or other land on or in the vicinity of the Leased Premises is
likely to be damaged or contaminated by virtue of the continued failure to correct such violation
or condition; and such cleanup, removal, or other remedial action is not initiated within ninety
(90) days from the date of written notice from Landlord to Tenant, and diligently pursued to
completion, the same shall, at the election of Landlord, constitute an Event of Default as
described in Section 17.1(c) hereof; and provided, further, that Landlord will not consider any
failure to initiate such cleanup, removal or other remedial action within the aforesaid ninety
(90) day period an Event of Default if such cleanup, removal or other remedial action is of such a
nature that it cannot readily be initiated within the ninety (90) days and so long as Tenant
commences in good faith to cure such uncorrected violation or condition and diligently pursues
the cure continuously thereafter.
13.5 Tenant hereby grants to Landlord, its agents, employees, consultants, contractors,
successors, and assigns, an irrevocable license and authorization, upon reasonable notice, to enter
upon and inspect the Leased Premises (but not any facilities or improvements thereon), and
perform such tests, including without limitation, subsurface testing, soils and groundwater
testing, and any other tests thereon, as Landlord, in its sole discretion, determines is necessary to
protect its interest in the Leased Premises, provided, however, that such access to the Leased
Premises shall not unreasonably interfere with Tenant or any tenant's use of the Leased
Premises.
13.6 During the term of this Agreement, Tenant agrees to provide Landlord with
copies of any environmental reports Tenant obtains (without Tenant being obligated to obtain
any such reports) relating to the Leased Premises.
13.7 At the termination or upon a transfer of this Lease, Landlord, at its sole discretion,
may require Tenant, at its sole cost and expense, to conduct an environmental testing of the
Leased Premises in a manner and by a consultant acceptable to Landlord, in Landlord's
discretion, which shall not be unreasonably withheld ("Exit Audit"). The Exit Audit shall be
performed and a complete copy of the results of the Exit Audit shall be provided to each party,
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 17 of 31
152261244.2
not more than one hundred and twenty (120) days, but not less than sixty (60) days, prior to the
actual termination or transfer date of this Lease. So long as completed at least thirty (30) days
before the termination or transfer date, either party shall have the right to conduct additional
environmental testing at its cost. Not less than thirty (30) days prior to the termination of the
Agreement, Landlord, at its sole cost and expense, may conduct a final inspection of the Leased
Premises to verify that there has been no visible change in the environmental condition of the
Facility since the Exit Audit. Landlord reserves the right from time to time, after reasonable
notice to Tenant, to inspect the Leased Premises to: (a) evaluate Tenant's management of
Hazardous Material; (b) conduct subsurface or stormwater sampling; (c) evaluate compliance
with Environmental Laws; and (d) to facilitate Landlord's compliance with Environmental Laws.
XIV. Utilities
14.1 Tenant will bear costs, expenses, and fees of extension connections and tapping
charges for all utilities, including water and sanitary sewer facilities in accordance with the
ordinances of Landlord on the Leased Premises. Tenant acknowledges that Landlord, as the
landlord, is not responsible for providing utility service to the Leased Premises, except for
utilities provided by Landlord in its governmental capacity as provider of certain utilities,
including water and sewer. Any construction performed by Tenant within any drainage or utility
easement area must meet utility company and Landlord criteria for design and construction in
such easement area. Any and all connections to water and sewer lines must occur at the existing
utility connection points, unless otherwise agreed to in writing by Landlord. All costs incurred
with any relocation of existing utility lines or facilities or installation of additional utility lines or
facilities on the Leased Premises shall be entirely at Tenant's expense, whether on or off the
Leased Premises. Tenant shall also provide Landlord legal descriptions for any required utility
easements and Landlord shall reasonably cooperate with Tenant on the granting of any necessary
easements, subject to all required City Council approvals.
XV. Non-Discrimination.
15.1 Tenant agrees that for itself, its personal representatives, successors in interest and
assigns, no person shall be excluded from participation in or denied the benefits of Tenant's use
of the Leased Premises on the basis of race, color, national origin, religion, handicap, gender,
sexual orientation, familial status, gender identity, gender expression, or transgender.
XVI. Option to Purchase and Put Option
16.1 Tenant's Option to Purchase. Landlord grants to Tenant an option (the
"Option"), pursuant to and subject to the conditions of this Article XVI, to purchase the Leased
Premises (excluding the Improvements thereon, which are owned by Tenant), from Landlord for
the Land Consideration (defined below), provided that Landlord does not first exercise the Put
Option set forth in Section 16.2 below. Tenant shall have the right to exercise the Option by
giving notice to Landlord at any time (including after a Default) until June 1 of the year in which
Tenant would receive the tenth-year payment of the Performance-Based Grant, as defined in and
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 18 of 31
152261244.2
provided by Section 6.10 of the 380 Agreement, whether or not the payment is actually earned
and received (the "Option Period"). However, if Tenant fails to exercise the Option within the
Option Period (and Landlord fails to exercise the Put Option), Landlord shall deliver written
notice to Tenant and PACE Capital Provider requesting that Tenant notify Landlord whether
Tenant will exercise the Option set forth in this Section 16.1, and Tenant or PACE Capital
Provider on behalf of Tenant will have ten (10) days after receipt of Landlord's notice to
exercise the Option, even though such ten (10) day period would extend beyond the Option
Period. If Tenant or Capital Provider on behalf of Tenant has exercised the Option, then Tenant
shall purchase the Leased Premises or PACE Capital Provider shall pay the Land Consideration
for Tenant's purchase of the Leased Premises within 60 days after the date of the exercise of the
Option.
16.2 Landlord's Put Option. Tenant hereby grants to Landlord an option to put the
Leased Premises to Tenant (the "Put Option") either (i) upon the termination of the 380
Agreement or (ii) during the Option Period for the Land Consideration, provided that Tenant
does not first exercise the Option. Upon the Landlord exercise of the Put Option, Tenant shall be
obligated to pay the Land Consideration to Landlord and accept the Leased Premises within sixty
(60) days thereafter (the "Put Option Closing Period"), or if Tenant fails to pay the Land
Consideration within the Put Option Closing Period, the PACE Capital Provider may pay the
Land Consideration to Landlord on behalf of Tenant within 30 days of the expiration of the Put
Option Closing Period. To exercise the Put Option, Landlord must give notice to Tenant and
PACE Capital Provider of its exercise within the Option Period; provided, however, if Landlord
fails to exercise the Put Option within the Option Period (and Tenant does not exercise the
Option), Tenant shall deliver written notice to Landlord requesting that Landlord notify Tenant
whether Landlord will exercise the Put Option set forth in this Section 16.2. Landlord will have
ten (10) days following receipt of Tenant's notice to exercise the Put Option, even though such
ten(10) day period would extend beyond the Option Period.
16.3 Consideration for Option and Land Conveyance. The purchase price for the Land
shall be the fair market value of the Land only as if it were unimproved and no improvements
were located thereon("Land Consideration"). The fair market value shall be determined by an
appraisal obtained by Landlord, at Tenant's sole cost and expense, performed by
independent third party appraiser approved by Landlord. Landlord acknowledges and agrees
that Landlord is bound by the 380 Agreement to make a Sale-Based Grant (as defined in the 380
Agreement) to Tenant in accordance with the terms thereof.
16.4 Terms and Conditions of Purchase/Put. In the event that the Leased Premises are
to be acquired by Tenant pursuant to Tenant's exercise of the Option or Landlord's exercise of
the Put Option: (a) the closing of such acquisition shall occur in such place as Landlord and
Tenant mutually determine; (b) the closing shall occur on a date designated by Tenant (by at
least ten (10) days' advance written notice to Landlord) not later than sixty (60) days after the
determination of the fair market value (the `Closing Date"); (c) the Leased Premises shall be
conveyed to Tenant pursuant to a special warranty deed, subject only to the permitted exceptions,
the form of which is attached hereto as Exhibit "C"; (d) any utility or right-of-way easements
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 19 of 31
152261244.2
required by Landlord, shall either be retained by Landlord or granted by Tenant to Landlord at
closing at no cost to Landlord; (e) Landlord and Tenant shall terminate this Agreement; (f)
Landlord shall execute and deliver such other documentation as shall be necessary to vest title to
the Leased Premises and all appurtenances owned by Landlord in Tenant; and (g) all expenses of
closing, including but not limited to any title policy premiums, survey costs, and recording fees
(but excluding attorneys' fees, which shall be borne by the party incurring such fees), shall be
borne solely by Tenant.
XVII. Default and Termination
17.1 The following events shall be deemed to be events of default by Tenant under this
Agreement:
(a) Tenant shall fail to pay any installment of Rent, and such failure shall continue for
a period of thirty (30) business days after written notice of such delinquency is delivered to
Tenant.
(b) Tenant shall fail to obtain and/or provide insurance in accordance with this
Agreement and such failure shall continue for a period of ten (10) business days after written
notice of such is delivered to Tenant.
(c) Tenant shall fail to comply with any term,provision, clause, sentence, covenant or
any other item of this Agreement, other than the payment of Rent or provision of insurance, and
shall not cure such failure within thirty (30) calendar days after written notice thereof to Tenant;
provided, however, that if such performance or observance cannot be reasonably accomplished
within such thirty (30) day period, then Tenant shall have up to an additional one hundred eighty
(180) days so long as Tenant is diligently pursuing such performance or observance; provided
further, that if Tenant is diligently pursuing the eviction of a subtenant due to the failure of the
subtenant to comply with the provisions hereof and the eviction process cannot be reasonably
accomplished within such one hundred eighty (180) day period, then Tenant shall have such
additional time as is needed for the eviction.
(d) The 380 Agreement is terminated due to the default of Tenant under any section
of the 380 Agreement, including any amendments thereto.
(e) Tenant shall desert or vacate any substantial portion of the Leased Premises. In
the event that Landlord believes a substantial portion of the Leased Premises has been vacated or
deserted, Landlord shall notify Tenant of such. If Tenant fails to respond within thirty (30)
calendar days to such notice and provide proof satisfactory to Landlord that Tenant has not
deserted or vacated the Leased Premises, Tenant shall be deemed to have deserted or vacated a
substantial portion of the Leased Premises under this Section.
(f) Tenant has repeated defaults, whether cured or not. In order to be in default under
this provision, Tenant must be given notice of default three (3) times over a consecutive 12
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 20 of 31
152261244.2
month period for the same event of default. In that event, Landlord shall have the right to pursue
the remedies in Section 17.2.
17.2 Upon the occurrence of any event of default specified above in Section 17.1,
Landlord shall have the option to pursue any one or more of the following remedies without any
notice or demand whatsoever:
(a) Exercise the Put Option, pursuant to Article XVI, upon which Tenant shall be
required to fulfill all Tenant's obligations set forth herein relative to the Put Option, including
but not limited to the payment of the Land Consideration and the acceptance of the Leased
Premises;
(b) Terminate this Agreement, provided that if the Put Option has not been exercised
or the closing of the property pursuant to the Put Option has not occurred, all terms of this
Agreement relative to the Put Option, including but not limited to Sections 16.2, 16.3, and 16.4,
shall survive the termination of this Agreement for a period up to twelve (12) months following
the date of the termination of this Agreement.
(c) If Tenant refuses or is unable to perform its obligations under the Put Option, then
Landlord shall have the right, upon thirty (30) day's written notice to Tenant, to enter upon and
take possession of the Leased Premises and expel or remove Tenant and any other person who
may be occupying the premises or any part thereof, by force if necessary, without being liable for
prosecution or any claim of damages therefor.
(d) Enter upon the Leased Premises, by force if necessary, without being liable for
prosecution or any claim of damages therefor and do whatever Tenant is obligated to do under
the terms of this Agreement; and Tenant agrees to reimburse Landlord on demand for any
expenses which Landlord may incur, thus effecting compliance with Tenant's obligations under
this Agreement; and Tenant further agrees that Landlord shall not be liable for any damages
resulting to Tenant from such action.
17.3 Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the
other remedies herein provided or any other remedies provided by law, nor shall the pursuit of
any remedy herein provided constitute a forfeiture or waiver of any payments due to Landlord
hereunder or of any damages accruing to Landlord by reason of the violation of any of the terms,
provisions and covenants herein contained. Landlord's acceptance of payments following an
event of default hereunder shall not be construed as Landlord's waiver of such event of default.
No waiver by Landlord of any violation or breach of any of the terms, provisions, and covenants
herein contained shall be deemed or constitute a waiver of any other violation or breach of any of
the terms, provisions, and covenants herein contained. Forbearance by Landlord to enforce one
or more of the remedies herein provided upon an event of default shall not be deemed or
construed to constitute a waiver of such default. The loss or damage that Landlord may suffer by
reason of termination of this Agreement or the deficiency from any reletting as provided for
above shall include the expense of repossession and any repairs or remodeling undertaken
following possession. Should Landlord at any time terminate this Agreement for any default, in
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 21 of 31
152261244.2
addition to any other remedy Landlord may have, Landlord may recover from Tenant all
damages Landlord may incur by reason of such default, including cost of recovering the
premises and reasonable attorney's fees expended by reason of default.
17.4 Landlord hereby agrees to provide notice of any default by Tenant under this
Agreement to Twain HTC Fund XV, LLC, a Missouri limited liability company ("Investor
Member"). In the event of any default by Tenant (after exhaustion of the cure periods provided
in this Article XVII), Landlord shall refrain from exercising any remedy with respect to such
default unless and until (i) with respect to any default concerning the obligation to pay Rent,
Landlord shall give a further written notice thereof to Investor Member and such default remains
uncured at the expiration of ten (10) days after delivery of Landlord's written notice of such
default; and (ii) with respect to any other default, Landlord shall give a further written notice
thereof to Investor Member and such default remains uncured at the expiration of thirty (30) days
after delivery of Landlord's written notice of such default; provided, however, that if such non-
monetary default cannot with diligent efforts be cured within thirty (30) days, Investor Member
shall have additional time to cure so long as Investor Member commences action to remedy such
failure promptly following such notice and diligently prosecutes such action in good faith.
Landlord agrees to accept performance by Investor Member of any covenant, condition or
agreement on Tenant's part to be performed under this Agreement (whether prior to or after any
default by Tenant) with the same force and effect as though performed by Tenant. It is
understood that Investor member is not obligated to cure defaults by Tenant under Section 17.1
of this Agreement.
XVIII. Landlord's Default
18.1 The occurrence of the following shall be an event of default by Landlord: The
failure of Landlord to substantially perform or substantially observe any of the obligations,
covenants or agreements to be performed or observed by Landlord under this Agreement within
sixty (60) days' notice after notice from Tenant of such failure; provided, however, that if such
performance or observance cannot be reasonably accomplished within such sixty (60) day
period,then no event of default shall occur unless Landlord fails to commence such performance
or observance within such sixty (60) day period and fails to diligently prosecute such
performance or observance within such sixty (60) day period and such performance or
observance is not completed within one hundred eighty(180) days of such notice of default.
18.2 Upon the occurrence of any event of default specified above in Section 18, Tenant
shall have the option to pursue any one or more of the following remedies:
(a) Exercise the Option; and
(b) Tenant may exercise any and all remedies available to Tenant at law or in equity.
18.3 The parties acknowledge that all references to "Landlord" herein shall refer only
to Landlord in its capacity as landlord and seller under this Agreement. The term "Landlord"
and the duties and rights assigned to it under this Agreement, thus exclude any action, omission,
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 22 of 31
152261244.2
or duty of Landlord when performing its governmental functions. Any action, omission, or
circumstance arising out of the performance of Landlord of its governmental functions may
prevent Landlord from performing its obligations under this Agreement and shall not cause or
constitute a default by Landlord under this Agreement or give rise to any rights or claims against
Landlord in its capacity as landlord, it being acknowledged that Tenant's remedies for any
injury, damage, or other claim resulting from any such action, omission, or circumstances arising
out of the governmental functions of Landlord shall be governed by the laws and regulations
concerning claims against Landlord as a charter city and a governmental authority. In addition,
no setoff, reduction, withholding, deduction, or recoupment shall be made in or against any
payment due by Tenant to Landlord under this Agreement as a result of any action or omission
of Landlord when performing its governmental functions.
XIX. Condemnation
19.1 If during the term of this Agreement, all of the Leased Premises and
Improvements should be taken for any public or quasi-public use under any governmental law or
by right of eminent domain, or should be sold to the condemning authority under threat of
condemnation, this Agreement shall terminate and Tenant, its heirs, successors and assignees
shall be fairly compensated for the fair market value of their leasehold interests. Rent shall be
abated during the unexpired portion of this Agreement effective as of the date of the taking of the
premises by the condemning authority. To the best of the knowledge of Landlord's signatory of
this Lease, no known condemnation action is planned for the Leased Premises.
19.2 Regardless of any other provision of this section, no condemning authority shall
be required to pay more than the then current fair market value of the Leased Premises.
XX. Surrender and Right of Re-entry
20.1 Upon the cancellation or termination of this Agreement (except for a termination
or cancellation made in connection with the closing of the Option or Put Option or for a
termination that is subject to the survival of the Put Option), Tenant agrees peaceably to
surrender the Leased Premises to Landlord in good condition and repair, ordinary wear and tear
excepted. Upon any such cancellation or termination, Landlord may re-enter the Leased Premises
together with all improvements and additions thereto at Landlord's election. So long as Tenant is
not in default, Tenant shall have a reasonable time thereafter(not exceeding thirty (30) days after
such cancellation or termination) to remove its personal property, and trade equipment which it
may have on the Leased Premises,provided the removal thereof does not impair, limit or destroy
the utility of said Leased Premises. Any damage caused by such removal will be repaired by
Tenant at its sole cost and expense.
20.2 If Tenant fails to remove its property within thirty (30) days after the termination
of or expiration of this Agreement, Landlord may remove such property to a public warehouse
for deposit or retain the same in its own possession. If Tenant fails to take possession and
remove such property, after paying any appropriate rental fees, within sixty (60) days after
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 23 of 31
152261244.2
termination of this Agreement, the property shall be deemed to be abandoned and Landlord may
sell the same at public auction.
XXI. Notices
21.1 All notices, consents and approvals required or desired to be given by the parties
hereto shall be sent in writing, and shall be deemed sufficiently given when same is hand
delivered or deposited in the United States mail, sufficient postage prepaid, registered or certified
mail, return receipt requested, addressed to the recipient at the address set forth below:
To Landlord:
Director of Economic Development
City of Fort Worth
1150 South Freeway
Fort Worth, Texas 76104
With a copy to:
City Attorney
City of Fort Worth
200 Texas Street
Fort Worth, Texas 76102
To Tenant:
with a copy to:
with a copy to:
Twain Financial Partners
1232 Washington Avenue, Suite 200
St. Louis, Missouri 63103
Attn: General Counsel
To Investor Member:
Twain HTC Fund XV, LLC
1232 Washington Avenue, Suite 200
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 24 of 31
152261244.2
St. Louis, MO 63103
Attn: General Counsel
With a copy to:
Stinson LLP
1299 Famam Street, Suite 1500
Omaha,NE 68102
Attn: David Lutz
XXII. Holding Over
22.1 A holding over by Tenant after the termination of this Agreement and after
written notice by Landlord to vacate such premises, and continued occupancy thereof by Tenant
shall constitute Tenant a trespasser.
22.2 Any holding over by Tenant beyond the thirty (30) day period permitted for
removal of property without the written consent of Landlord shall make Tenant liable to
Landlord for rent at one hundred fifty percent (150%) of the rent amount in effect at the time of
the holdover, and damages, costs and attorneys' fees which may arise due to Tenant holding
over.
22.3 All insurance coverage that Tenant is required to maintain shall continue in effect
for so long as Tenant, or any of Tenant's subtenants occupy the Leased Premises or any part of
the Leased Premises.
XXIII. Invalid Provisions
23.1 If any of the terms, sections, subsections, sentences, clauses, phrases, provisions,
covenants, conditions or any other portion of this Agreement are for any reason held to be
invalid, void or unenforceable, the remainder of the terms, sections, subsections, sentences,
clauses, phrases, provisions, covenants or conditions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated.
XXIV. Miscellaneous Provisions
24.1 All remedies provided in this Agreement shall be deemed cumulative and
additional and not in lieu of, or exclusive of, each other, or of any other remedy available to
Landlord, or Tenant, at law or in equity, and the exercise of any remedy, or the existence herein
of other remedies or indemnities shall not prevent the exercise of any other remedy.
24.2 No failure or delay by a party hereto in exercising any right, power, or remedy
under this Agreement, and no course of dealing between the parties hereto, will operate as a
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 25 of 31
152261244.2
waiver of any such right, power or remedy of the party. The terms and provisions of this
Agreement may be waived, or consent for the departure therefrom granted, only by written
document executed by the party entitled to the benefits of such terms or provisions.
24.3 Notwithstanding any other provision of this Agreement, Tenant shall not be
entitled to claim or receive any compensation as a result of or arising out of any delay,
hindrance, disruption, force majeure, impact, or interference, foreseen or unforeseen.
24.4 Tenant assumes the risk of all suspensions of or delays in performance of this
Agreement, regardless of length thereof, arising from all causes whatsoever, whether or not
relating to this Agreement, and Tenant shall bear the burden of all costs, expenses and liabilities
which it may incur in connection with such suspensions or delays, and all such suspensions,
delays, costs, expenses, and liabilities of any nature whatsoever, whether or not provided for in
this Agreement, shall conclusively be deemed to have been within the contemplation of the
parties.
24.5 Upon full execution of this Agreement, Landlord and Tenant will execute and
record in the Official Public Records of Tarrant County, Texas a Memorandum of Agreement in
a form acceptable to both parties. Tenant will pay all recording fees due upon recordation of the
Memorandum of Agreement.
24.6 Notwithstanding anything to the contrary set forth in this Agreement, Tenant
recognizes and agrees that any contracts, agreements, or amendments contemplated to be entered
into by Landlord under the terms of this Agreement which are entered into after the Effective
Date of this Agreement will be subject to the prior approval of the Fort Worth City Council other
than the approvals, consents, and confirmations expressly permitted in this Agreement.
XXV. General Provisions
25.1 This Agreement shall be performable and enforceable in the City of Fort Worth
and County of Tarrant, Texas, and shall be construed in accordance with the laws of the State of
Texas.
25.2 This Agreement is made for the sole and exclusive benefit of Landlord and
Tenant.
25.3 Subject to the limitations upon assignment herein contained, this Agreement shall
be binding upon and inure to the benefit of the parties hereto, their respective successors and
assigns.
25.4 In the event of any ambiguity in any of the terms of this Agreement, it shall not be
construed for or against any party hereto on the basis that such party did not author the same.
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 26 of 31
152261244.2
25.5 Nothing contained in this Agreement will be deemed or construed, either by the
parties hereto or by any third party, to create any partnership, joint venture, or other association
between Landlord and Tenant except that of lessor and lessee.
25.6 The titles of the sections of this Agreement are inserted herein for convenience
only, and are not intended and shall not be construed to affect in any manner the terms and
provisions hereof or the interpretation or construction thereof.
25.7 Landlord agrees that it shall not claim any exemption from the payment of taxes
for the purpose of prohibiting the collection or enforcement of the PACE Assessment (filed
against the Land and/or the Improvements).
XXVI. Amendments
26.1 This Agreement may not be changed, modified, discharged or extended except by
written instrument duly executed by Landlord and Tenant or as otherwise provided herein.
XXVII. Force Maieure
27.1 In the event that Landlord or Tenant shall be delayed, hindered in, or prevented
from the performance of any act required hereunder by reason of an act of God, strike, lockout,
labor trouble, inability to procure materials, unseasonable weather affecting construction or
operation, failure of power, riot, insurrection, or war, then performance of such act shall be
excused for the period of the delay and the period for the performance of any such act shall be
extended for a period equal to the period of such delay; provided, however,that this Section 27.1
shall have no application to Tenant's obligation to pay the Rent or any other monetary
obligations hereunder once Tenant begins to pay such amounts.
XXVIII. Agreements Co-Terminous
28.1 The 380 Agreement and this Agreement will be co-terminous and in the event that
either agreement is terminated or expires, the other shall terminate or expire on the same date.
[Signature Page to Follow.]
Ground Lease and Put/Purchase Option
CFW and Tenant
Page 27 of 31
152261244.2
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year written above.
LANDLORD/ CITY:
CITY OF FORT WORTH, TEXAS,
a Texas municipal corporation
By:
Attest: Jesus Chapa, Assistant City Manager
Mary J. Kayser, City Secretary
Approved as to form:
Assistant City Attorney
TENANT:
a limited partnership
By: ,
a
its general partner
By:
Name:
Its:
DAL:0 5 1 602 1/0008 1:2527660v3
152261244.2
Exhibit "A"
Leased Premises Legal Description
DAU 0 5 1 602 1/0008 1:25276600
152261244.2
Exhibit "B"
DAL:05 1 602 1/0008 1:25276600
152261244.2
Exhibit"C"
Special Warranty Deed
DAL:O 516021 l00081:2 52766Ov3
152261244.2
EXHIBIT "E"
FORM OF ROOM BLOCK AGREEMENT
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
ROOM BLOCK& MEETING SPACE AGREEMENT
Between
THE CITY OF FORT WORTH, TEXAS
"CITY"
and
K MAIN HOTEL, LLC
"OWNER"
DATED:
, 2019
ROOM BLOCK& MEETING SPACE AGREEMENT
THIS ROOM BLOCK & MEETING SPACE AGREEMENT (the "Agreement") is
made and entered into as of the day of , 2019 (the "Effective Date"),
by and between THE CITY OF FORT WORTH, TEXAS, a municipal corporation organized
and existing under the laws of the State of Texas (hereinafter called the "City") and K Main Hotel,
LLCa Delaware limited liability company(hereinafter called the"Owner").
RECITALS
WHEREAS, the City has recently redeveloped the community's convention assembly
venue, known as the Fort Worth Convention Center(hereinafter called the "Convention Center");
and
WHEREAS, to maximize the performance of the Convention Center and to encourage
convention and tourism business in the City, the City desires to facilitate the development of first
class, full service hotels in the vicinity of the Convention Center; and
WHEREAS, Owner desires to develop an upper upscale level hotel of approximately 226
guest rooms (the "Hotel") to be located near the Convention Center; and
WHEREAS, Owner has entered into a ground lease (the "Ground Lease") with the City
for the Hotel Site; and
WHEREAS,the City and Owner have entered into an Economic Development Agreement
(the"Economic Development Agreement")under which the parties agreed to, among other things,
enter into a Room Block Agreement pursuant to which specific percentages of the Hotel's standard
guest rooms and suites will be reserved for specific periods of time for attendees, participants and
planners of conventions and/or trade shows at the Convention Center, and
WHEREAS,the City and Owner intend for this Agreement to satisfy the above-referenced
obligation of the parties to the Economic Development Agreement; and
WHEREAS,Owner shall grant to any successor and to any party which operates the Hotel
on Owner's behalf (the "Operator") the authority and responsibility to administer, on behalf of
Owner and as the Owner's agent, this Agreement; and
WHEREAS, the City and the Owner desire to enter into this Agreement for their mutual
benefit;
NOW, THEREFORE:
AGREEMENT
For and in consideration of the foregoing recitals and of the mutual promises, obligations,
covenants and benefits herein contained, the City and the Owner contract and agree as follows:
- 1 -
ARTICLE I
TERMS AND DEFINITIONS
In addition to terms defined in the body of this Agreement, the following terms have the
meaning set forth in this Article I.
1.01 Agreement. As defined in the preamble to this Agreement.
1.02 Amended Offer. As defined in Section 2.01(d) of Exhibit "A" to this Agreement.
1.03 Binding Contract. The contract between Potential Convention Center Customer
and Owner and/or Operator that sets forth the terms and conditions under which the
Owner/Operator will make an Event Room Block available to the attendees of a specific Citywide
Event.
1.04 Business Days. Each day other than a Saturday, Sunday, or any legal holiday
recognized as such by the City.
1.05 City. As defined in the preamble to this Agreement(or its successor) acting by and
through its City Manager or any Assistant City Manager. Unless provided otherwise in this
Agreement, the interests of the City are represented by the Director in this Agreement.
1.06 City-Wide Event. A convention, trade show or other event held at the Convention
Center during which a Potential Convention Center Customer,in anticipation of the event,requests
that hotels in the City(including the Hotel) and the surrounding metropolitan areas provide, in the
aggregate, a minimum of 1100 guest rooms for one night or more while the event is being held.
1.07 Competing Convention Center Facilities. Competing State Convention Center
Facilities and Competing National Convention Center Facilities, collectively.
1.08 Competing State Convention Center Facilities. Other convention centers providing
convention center facilities in Texas that reasonably compete with the Convention Center from
time to time. For purposes of this Agreement, Competing State Convention Center Facilities
currently include the Dallas Convention Center, Austin Convention Center, San Antonio
Convention Center, and Houston Convention Center.
1.09 Competing National Convention Center Facilities. Other convention centers
outside of Texas that reasonably compete with the Convention Center from time to time. For
purposes of this Agreement, Competing National Convention Center Facilities currently include
the Charlotte Convention Center,Music City Center(Nashville) ,Kansas City Convention Center,
and Minneapolis Convention Center.
1.10 Convention Center. As defined in the preamble to this Agreement and better
defined as the convention center facility located at 1201 Houston Street in downtown Fort Worth,
Texas.
1.11 Convention Center Requirements. As defined in Section 4.02(A).
1.12 Current Offer. As defined in Section 2.01(e) of Exhibit"A"to this Agreement.
- 2 -
1.13 CVB. The Fort Worth Convention &Visitors Bureau or its successor.
1.14 Director. The senior executive of the Convention Center or that person's designee.
1.15 Economic Development Agreement. As defined in the Recitals of this Agreement.
1.16 Effective Date. The date set forth in the preamble of this Agreement.
1.17 Exhibit "A". Exhibit "A" is the first exhibit to this Agreement and specifies the
functional procedures for administering the day-to-day requirements under the Agreement.
1.18 Event Night. A night during a City-Wide Event when the out-of-town participants
of same would reasonably be staying overnight in the City.
1.19 Event Room Block. A block of guest rooms at the Hotel, offered to or reserved for
the planners/attendees of City-Wide Events.
1.20 Exempt Inventory. The difference between(i)the actual number of guest rooms at
the Hotel and (ii)the Maximum Event Room Block.
1.21 First Customer. As defined in Section 2.01(g) of Exhibit "A".
1.22 Ground Lease. As defined in the Recitals of this Agreement.
1.23 Hotel. As defined in the Recitals of this Agreement. '
1.24 Hotel Site. The tract or parcel, whether one or more, of real property upon which
the Hotel, or any part of it, is constructed.
1.25 Initial Offer. Initial Offer shall have the meaning ascribed to it in Section 2.01(b)
of Exhibit"A".
1.26 Initial Offer Date. The date upon which the Operator is required to make an Initial
Offer as described in Section 2.01(b) of Exhibit"A".
1.27 Managed Hotels. Full-service hotels that are generally comparable to the Hotel that
are managed by the Operator or Owner or any entity affiliated with, controlled by, under common
control with, or controlling Operator or Owner.
1.28 Management Agreement. The Agreement between Owner and Operator (if any)
that sets forth, among other things, their respective responsibilities relating to the day-to-day
operations of the Hotel and their respective responsibilities under this Agreement.
1.29 Maximum Event Room Block. The Maximum Event Room Block is as follows:
(i) for a City-Wide Event whose first Event Night is scheduled to occur 24 calendar months or
more from the Initial Offer Date, the Maximum Event Room Block shall be 10 rooms of the
inventory of Suites plus 90 rooms of the Standard Guest Rooms or 0 Suites and 100 rooms of the
Standard Guest Rooms.
- 3 -
1.30 Meeting Facilities. The rentable function space in the Hotel, together with all
circulation and support space.
1.31 Minimum Hotel Operating Standard. The operating criteria (i) meeting Kimpton
brand standards or(ii) necessary for a hotel property to receive either a Four Star rating by Forbes
Travel Guide, as more specifically outlined in Exhibit`B", attached hereto and made a part of this
Agreement for all purposes. Owner shall at no time be required to demonstrate receipt or
maintenance of such rating.
1.32 Negotiations Period. As defined in Section 2.01(g) of Exhibit "A" to this
Agreement.
1.33 Notice or notice. Each and every communication,request,reply, or advice required
or permitted to be given, made or accepted by any party to this Agreement to any other party to
this Agreement, each of which shall be given in writing, and deemed received by the intended
recipient, in accordance with Section 8.02 below.
1.34 Opening. The date upon which the Hotel opens to the public.
1.35 Operator. As defined in the Recitals of this Agreement. In the event Owner enters
into a Management Agreement, the Operator is the entity responsible for overseeing the day-to-
day management of the Hotel and for administering the Owner's responsibilities under this
Agreement.
1.36 Owner. Owner shall initially mean Owner as defined in the preamble to this
Agreement and any successor entity.
1.37 Party. Either the City or the Owner, the parties to this Agreement.
1.38 Parties. Both the City and the Owner,the parties to this Agreement.
1.39 Potential Convention Center Customer. A person, entity, group or association (or
any combination thereof) which is planning a City-Wide Event.
1.40 Rate Quote. Rate Quote shall have the meaning ascribed to it in Section 2.01(b) of
Exhibit"A".
1.41 Room Block Request Notice. Room Block Request Notice shall have the meaning
ascribed to it in Section 2.01(a) of Exhibit"A".
1.42 Sales Representative. Sales Representative shall have the meaning ascribed to it in
Section 2.01(a) of Exhibit"A".
1.43 Standard Guest Rooms. The Hotel's entire inventory of single-bay sleeping rooms.
As of the Effective Date, Owner expects the Hotel to contain 197 Standard Guest Rooms.
1.44 Suite. Any guest room comprised of multiple guest room bays. As of the Effective
Date, the Owner expects the Suite inventory to be comprised of29 Suites.
- 4 -
1.45 Term. The Term of this Agreement shall be consistent with that set forth in Article
V below.
ARTICLE II
REPRESENTATIONS
2.01 Representations of the City. The City hereby represents to the Owner that as of the
Effective Date:
(A) The City is a duly created and existing municipal corporation and authorized
to carry on the governmental functions and operations as contemplated by this Agreement.
(B) The City has the power, authority and legal right to enter into and perform
this Agreement and the execution, delivery and performance hereof (i) have been duly
authorized, will not, to the best of its knowledge, violate any applicable judgment, order,
law or regulation, and (ii) do not, to the best of its knowledge, constitute a default under,
or result in the creation of, any lien, charge, encumbrance or security interest upon any
assets of the City under any agreement or instrument to which the City is a party or by
which the City or its assets may be bound or affected.
(C) This Agreement has been duly authorized, executed and delivered by the
City and, constitutes a legal, valid and binding obligation of the City, enforceable in
accordance with its terms except to the extent that(i)the enforceability of such instruments
may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar
laws of general application in effect from time to time relating to or affecting the
enforcement of creditors' rights and (ii) certain equitable remedies including specific
performance may be unavailable.
(D) The execution, delivery and performance of this Agreement by the City
does not require the consent or approval of any person which has not been obtained.
2.02 Representations of the Owner. The Owner hereby represents to the City that as of
the Effective Date:
(A) The Owner is duly authorized and existing in good standing under the laws
of the State of Delaware, and is qualified to do business in the State of Texas.
(B) The Owner has the power,authority and legal right to enter into and perform
its obligations set forth in this Agreement, and the execution, delivery and performance
hereof have been duly authorized, and will not, to the best of its knowledge, violate any
judgment, order, law or regulation applicable to the Owner.
(C) In the event Owner enters into a Management Agreement, Owner shall
ensure that Operator has access to sufficient working capital to perform its obligations
under this Agreement at the time Operator needs to have access to sufficient capital.
(D) This Agreement has been duly authorized, executed and delivered and
constitutes a legal, valid and binding obligation of the Owner, enforceable in accordance
with its terms.
- 5 -
ARTICLE III
SPECIAL OBLIGATIONS OF CITY
3.01 Convention Center Requirements. The City shall own, operate and maintain the
Convention Center in a manner consistent with the operation and condition of Competing
Convention Center Facilities. If the City fails to maintain and operate the Convention Center in
accordance with the foregoing requirement, the remedies set forth in Article VI will be available
to Owner. City staff will request funding on an annual basis for the purpose of maintaining and
improving the facility. Improvements to the Convention Center will include, but not be limited to,
the purchase of new furnishings, fixtures and equipment as needed to keep the Convention Center
in a marketable condition. In order to maintain consistency and accountability, City shall not
assign this contract and the obligations listed herein to any other entity. The City agrees to price
the Convention Center space competitively with Competing Convention Center Facilities and, in
accordance with Section 8.09, the City further agrees to meet with the Owner from time-to-time
upon Owner's request to consider bids that are competitive with convention center facilities in the
non-public sector such as the Gaylord Texan Resort and Convention Center and the Sheraton Hotel
(Dallas).
3.02 Records. The City shall keep reasonable and accurate records relating to events
held at the Convention Center. Upon request of Owner,Director must submit to Owner a summary
of all applicable and actual potential bookings at the Convention Center in a manner that would
enable a reasonable person to readily determine the future demand for rooms inventory at the
Hotel.
3.03 Hotel Use of Convention Center Space. The parties acknowledge that the Hotel
may book certain events which are outside the scope of this Agreement but nevertheless require
the use of certain Convention Center space. In that regard, the City agrees to cooperate with the
Hotel in providing Convention Center space to the Hotel,when space is available,following City's
booking guidelines and at the established rates approved by the City Council.
ARTICLE IV
SPECIAL OBLIGATIONS OF OWNER AND OPERATOR
4.01 Records. Owner shall keep reasonable and accurate records relating to the
provision of services provided hereunder. Owner shall prepare and submit to the Director, with a
copy to the CVB, on a monthly basis, a summary of all applicable actual and potential bookings
at the Hotel under this Agreement in a manner that would enable a reasonable person to readily
determine the future rooms inventory at the Hotel available to the City under this Agreement.
4.02 Hotel Standards.
(A) To the extent Owner is operating the Hotel and this Agreement remains in
effect, Owner agrees to do so in accordance with the Minimum Hotel Operating Standard
for a period of ten(10) years from the date that Owner first opens the Hotel for business to
the public. After such 10-year period, Owner's obligation to operate and maintain the
Hotel in accordance with the Minimum Hotel Operating Standard shall continue only so
long as the Convention Center is operated and maintained at a level sufficient to support a
hotel operating in accordance with the Minimum Hotel Operating Standard and the City of
- 6 -
Fort Worth continues to be a desirable convention and business destination that makes it
economically feasible to operate the Hotel at the Minimum Hotel Operating Standard
(collectively, the "Convention Center Requirements"). If the City determines in its
reasonable judgment that the Hotel is not being operated in accordance with the Minimum
Hotel Operating Standard as required by this Section 4.02(a), the City shall deliver written
notice to Owner specifically setting forth the basis of the City's determination. If Owner
disagrees with the City's determination or, after the expiration of the 10-year period, if
Owner believes that the Convention Center Requirements have not been satisfied so as to
obviate the requirement that the Hotel be operated at the Minimum Hotel Operating
Standard, Owner shall submit the matter to arbitration for resolution in accordance with
Section 6.04 hereof. If Owner fails to respond to the City's notice within ten(10)days after
receipt, Owner will be deemed to have disagreed with the City's determination and the City
shall submit the matter to arbitration for resolution in accordance with Section 6.04. Owner
will have one (1) year after receipt of such notice (or after the arbitrator's final ruling, as
applicable) to bring the Hotel up to the standards required to meet the Minimum Hotel
Operating Standard. Owner shall deliver written notice to the City once Owner believes
the Hotel has resumed operations in accordance with the Minimum Hotel Operating
Standard. If the City does not agree with Owner's determination that Owner has resumed
operating the Hotel in accordance with the Minimum Hotel Operating Standard, the City
shall submit the matter to arbitration in accordance with Section 6.04 hereof within fifteen
(15) days after receipt of such written notice from Owner. If Owner does not bring the
Hotel to the Minimum Hotel Operating Standard within the required time period, then, as
the City's sole and exclusive remedy, (i) if Owner's failure to restune operations in
accordance with the Minimum Hotel Operating Standard occurs during the period the
Economic Development Agreement and the Tax Abatement Agreement are in force, the
City will have the rights available under the Economic Development Agreement and the
Tax Abatement Agreement, or (ii) if Owner's failure to resume operations in accordance
with the Minimum Hotel Operating Standard occurs after the Economic Development
Agreement and Tax Abatement Agreement have expired,the City will be entitled to actual
damages as determined by an arbitrator appointed in accordance with Section 6.04 hereof,
provided that the City must use its best efforts to mitigate any damages the City may suffer
as a result of the Hotel not being operated in accordance with the Minimum Hotel
Operating Standard. Notwithstanding anything to the contrary set forth in this Agreement,
Owner will not have any obligation(express or implied)to continuously operate the Hotel
during the Term.
(B) The Hotel shall be branded as the Kimpton Fort Worth Hotel so long as
Owner owns the Hotel. If Owner sells the Hotel, the Hotel may be branded as any other
hotel so long as it is operated in accordance with the terms of this Agreement.
(C) Notwithstanding the foregoing, for so long as Owner operates the Hotel in
accordance with Kimpton Brand Standards, as defined in the License Agreement (the
"Kimpton Agreement") between Owner and IHG Franchising, LLC, Owner shall be
deemed to meet the Minimum Hotel Operating Standard.
4.03 Designated Representative. At all times during the Term, Owner will ensure that
there is a designated representative available and authorized by Owner to perform the obligations
- 7 -
set forth in this Agreement.
4.04 Compliance with Obligations Set Forth in Exhibits. At all times during the Term,
Owner shall comply with and (if applicable) shall cause Operator to comply with all obligations
of Owner that are set forth in Exhibit"A" which is attached hereto and hereby made a part of this
Agreement for all purposes.
ARTICLE V
TERM AND TERMINATION
5.01 Commencement of the Term of this Agreement. The Term of this Agreement shall
commence on the Effective Date.
5.02 Expiration of the Term of this Agreement. The Term shall expire on the IOth
anniversary of the Hotel's opening date, as recognized under the Kimpton Agreement.
5.03 Periodic Renovation/Restoration of Hotel and Convention Center. Upon at least 24
months' written notice from one Party to the other, Owner shall determine a schedule by which
Owner may close portions of the Hotel as and when required or advisable under the Kimpton
Agreement, and City may close portions of the Convention Center for renovation and restoration.
Except in the event of a casualty loss or a hazard to the public health,the Convention Center shall
not be closed in its entirety and no more than three (3) floors of the Hotel shall be closed at one
time. The Parties agree that during renovation or restoration of the Hotel, the number of rooms
which are subject to this Agreement shall be proportionately reduced based on the number of
rooms being renovated or restored. During such renovation or restoration, all reasonable efforts
shall be made by each party to minimize disruption of events that are already booked at the
Convention Center or recurring events at the Convention Center that the Parties anticipate are
likely to be booked.
ARTICLE VI
EVENTS OF DEFAULT
6.01 Default. A default under the terms of this Agreement shall occur if any Party hereto
shall materially breach any of the terms, conditions or covenants contained in this Agreement to
be performed or observed by it, and such Party does not remedy such default within thirty (30)
days after Notice or, if the default is of such character as to require more than thirty (30) days to
remedy, then if such Party fails to commence to cure and correct the default within said thirty (30)
day period and thereafter prosecute such corrective action diligently and without interruption and
complete the cure thereof within ninety (90) days unless extended by mutual consent following
the original Notice of such default(an"Event of Default"). Any Notice of default shall be provided
to Owner (and to Operator) and shall also be given to Owner's mortgagee (provided such
mortgagee has provided Notice to the City and the Director of its name and address where Notices
to it hereunder are to be sent).
6.02 Remedies. If an Event of Default is not cured as provided in Section 6.01 hereof,
then the non-defaulting Party shall have the right, as its sole and exclusive remedies, to either (i)
initiate and thereafter prosecute an action in equity for the specific performance of any covenants
or obligations to be performed by the defaulting Party hereunder or(ii)recover from the defaulting
- 8
party for actual(but not punitive, special or consequential)damages. As to a Party's right to obtain
specific performance under this Agreement, each Party acknowledges and agrees that its
covenants, obligations and representations as set forth in this Agreement are a material and
fundamental inducement to the other Party's agreement to enter into this Agreement such that
actual damages may not be an adequate remedy at law for the breach hereof and each Party
recognizes and agrees that monetary damages could not be calculated to compensate the
non-defaulting Party for any material breach by the defaulting Party of the covenants and
agreements contained in this Agreement.
Owner agrees to include in each Management Agreement a provision similar to the
foregoing whereby the Operator makes such agreements to Owner with respect hereto and
specifically agrees that the terms and conditions of this Agreement shall be incorporated as part of
the terms and conditions of the Management Agreement; that the terms and conditions of this
Agreement shall control in the event that there are any conflicting provisions in such Management
Agreement; and that the City shall have the right to specifically enforce against the Operator the
provisions of this Agreement.
In addition, upon a finding by an arbitrator that Owner has committed a third Event of
Default relating to Owner's willful failure to set aside rooms, and provided Owner did not cure the
two prior Events of Default as provided in Section 6.01 above, then City will have the right to
terminate this Agreement and the Economic Development Agreement,whereupon all further rights
and obligations of the City and Owner under this Agreement and the Economic Development
Agreement shall cease and be of no further force or effect. For purposes of this paragraph, each
time Owner materially breaches any of the terms, conditions or covenants contained herein and
fails to remedy same as set forth in Section 6.01 above shall be deemed a separate Event of Default.
6.03 Owner's Reservation of Rights. Notwithstanding anything to the contrary
contained in this Agreement, this Agreement shall in no way limit Owner's or Operator's rights
and remedies against a Potential Convention Center Customer resulting from such Potential
Convention Center Customer's default under a Binding Contract with Owner or Operator.
6.04 Arbitration.
(A) If the parties are in disagreement regarding any provision of this Agreement,
the parties shall submit disputes to mandatory arbitration in accordance with the provisions
of this Section 6.04. Each of the City and Owner waives the right to commence an action
in connection with this Agreement in any court and expressly agrees to be bound by the
decision of the arbitrator determined in this Section 6.04,provided, however,the waiver in
this Section 6.04 will not prevent the City or Owner from commencing an action in any
court for the sole purposes of enforcing the obligation of the other party to submit to
binding arbitration or the enforcement of an award granted by arbitration herein. Any
dispute between the City and Owner as to the interpretation of any provision of this
Agreement or the rights and obligations of any party hereunder shall be resolved through
binding arbitration as hereinafter provided in Fort Worth, Texas. Notwithstanding the
foregoing, prior to submitting any dispute hereunder to arbitration, the City and Owner
shall first attempt in good faith, for thirty (30) days after the first notice given under this
Agreement regarding such dispute, to resolve any such dispute promptly by negotiation
- 9 -
between executives of each party who have authority to settle the dispute, which shall
include an in person meeting between such executives in Fort Worth, Texas.
(B) If arbitration is required to resolve a dispute between the City and Owner,
the City and Owner shall agree upon one(1)arbitrator to resolve the dispute. The arbitrator
must be a neutral party having at least five (5) years experience in commercial real estate
in general and hotel buildings in particular in the Fort Worth, Texas area and must be
mutually acceptable to both parties.
(C) The arbitrator selected pursuant to Section 6.04(B) above will establish the
rules for proceeding with the arbitration of the dispute, which will be binding upon all
parties to the arbitration proceeding. The arbitrator may use the rules of the American
Arbitration Association for commercial arbitration but is encouraged to adopt the rules the
arbitrator deems appropriate to accomplish the arbitration in the quickest and least
expensive manner possible. Accordingly, the arbitrator may (1) dispense with any formal
rules of evidence and allow hearsay testimony so as to limit the number of witnesses
required, (2) minimize discovery procedures as the arbitrator deems appropriate, and (3)
limit the time for presentation of any party's case as well as the amount of information or
number of witnesses to be presented in connection with any hearing. In any event, the
arbitrator (A) shall permit each side no more than two (2) depositions (including any
deposition of experts), which depositions may not exceed four (4) hours each, one set of
10 interrogatories (inclusive of sub-parts) and one set of five (5) document requests
(inclusive of sub-parts), (B) shall not permit any requests for admissions, (C) shall limit
the hearing, if any, to two (2) days, and (D) shall render his or her decision within sixty
(60) days of the filing of the arbitration.
(D) The arbitrator will have the exclusive authority to- determine and award
costs of arbitration and the costs incurred by any party for its attorneys, advisors and
consultants.
(E) Any award made by the arbitrator shall be binding on the City, Owner and
all parties to the arbitration and shall be enforceable to the fullest extent of the law.
(F) In reaching any determination or award, the arbitrator will apply the laws
of the state in which the Hotel is located. Except as permitted under Section 6.04(D)above,
the arbitrator's award will be limited to actual damages and will not include consequential,
special, punitive or exemplary damages. Nothing contained in this Agreement will be
deemed to give the arbitrator any authority,power or right to alter, change, amend,modify,
add to or subtract from any of the provisions of this Agreement. All privileges under state
and federal law, including, without limitation, attorney-client, work product and party
communication privileges,shall be preserved and protected. All experts engaged by a party
must be disclosed to the other party within fourteen (14) days after the date of notice and
demand for arbitration is given.
6.05 Injunctive/Ancillary/Emergency Relief. Notwithstanding any provision of Section
6.04 of this Agreement to the contrary, any party may seek injunctive relief or other form of
ancillary relief at any time from any court of competent jurisdiction in Tarrant County, Texas. In
the event that a dispute or controversy requires emergency relief before the matter may be resolved
- 10 -
under the arbitration procedures of Section 6.04 above, notwithstanding the fact that any court of
competent jurisdiction may enter an order providing for injunctive or other form of ancillary relief,
the parties expressly agree that such arbitration procedures will still govern the ultimate resolution
of that portion of the dispute or controversy not resolved pursuant to said court order.
ARTICLE VII
NO LIABILITY FOR POTENTIAL CONVENTION CENTER CUSTOMER;
OWNER RESPONSIBILITY TO CAUSE OPERATOR TO PERFORM
7.01 No Liability to City. In no event shall the City, CVB, or any other department or
bureau of the City be in any way responsible or liable for the performance by any Potential
Convention Center Customer of each customer's obligations under its Binding Contract with the
Owner or Operator or for any charges, liabilities or other sums owed by, or liabilities of, such
Potential Convention Center Customer(or for those for whom it blocks rooms)to either Owner or
Operator.
7.02 Owner and Operator Responsibility. In the event Owner has entered into a
Management Agreement, Owner shall cause Operator to perform all of the covenants and
agreements of the Operator under this Agreement, and to cause the Operator to observe all of the
covenants and agreements of Owner. Furthermore, Operator shall be directly responsible to the
City for the performance of the Operator's obligations hereunder, and all actions, consents,
decisions, elections, offers, and determinations made hereunder by the Operator shall be binding
upon both Owner and Operator for purposes of this Agreement.
Owner may have delegated the performance of its obligations and rights hereunder to the
Operator under the Management Agreement, but no such delegation shall release or relieve Owner
from its obligation to perform, or cause to be performed, all of its covenants and agreements set
forth herein. Furthermore, all consents, decisions and determinations to be made hereunder by the
City shall be made by the Director (or the Director's designee) and no inference to the contrary
shall be made because the word "City" is used in some places in this Agreement and the words
"Director" is used in others.
ARTICLE VIII
MISCELLANEOUS
8.01 Severability. If any provision of this Agreement or any application thereof is held
to be invalid or unenforceable by any court of competent jurisdiction for any reason,such provision
shall be fully severable, and the remainder of this Agreement shall remain in full force and effect.
This Agreement shall be construed and enforced as if such invalid or unenforceable provision had
never comprised a part of this Agreement.
8.02 Notice. Any notice or other communication required or permitted to be given
pursuant to this Agreement shall be given to the other Party at the following address:
CITY: City of Fort Worth
Attn: Director of Public Events
1201 Houston St.
Fort Worth, TX 76102
- 11 -
with copies to: both the City Manager and the City Attorney,
each at: City of Fort Worth
200 Texas St.
Fort Worth, TX 76102
OWNER: Gary Prosterman
K Main Hotel, LLC
40 S. Main Street
Suite 2200
Memphis, TN 38103
with copies to: Baker Donelson
Attn: Mary Ann Jackson
First Tennessee Building
165 Madison Avenue
Suite 2000
Memphis, Tennessee 38103
Any mortgagee, trustee or beneficiary under any mortgage or deed of trust on the Hotel
may, by Notice to the parties set forth hereinabove, designate an address to which notices to it
hereunder shall be sent. Any such party may from time to time by Notice as herein provided,
designate a different address to which Notices to it shall be sent.
Any such notice or communication shall be deemed given on the date so delivered or so
deposited in the mail, unless otherwise provided herein. Either Party may change the above
address by sending written notice of such change to the other Party in the manner provided above.
With the written consent of the receiving Party, notice may be given by facsimile transmission or
electronic mail.
8.03 Amendments. This Agreement may not be amended or modified unless such
amendment or modification is approved by the Fort Worth City Council and reflected in a written
document that is signed by the Parties hereto.
8.04 Successors and Assigns. All covenants and agreements contained by or on behalf
of the City in this Agreement shall bind its successors and assigns and shall inure to the benefit of
the Owner and its successors and assigns. Owner may assign its rights, duties and obligations
under this Agreement without the consent of the City so long as such assignee or successor to
Owner assumes all the covenants and obligations of Owner under this Agreement in writing, as
further provided in Section 8.11 of this Agreement. Upon any such assignment and assumption,
Owner shall be relieved from all liability under this Agreement.
8.05 Exhibits; Titles of Articles, Sections and Subsections. The exhibits attached to this
Agreement are incorporated herein and shall be considered a part of this Agreement for the
purposes stated herein, except that in the event of any conflict between any of the provisions of
such exhibits and the provisions of this Agreement,the provisions of this Agreement shall prevail.
All titles or headings are only for the convenience of the Parties and shall not be construed to have
any effect or meaning as to the agreement between the Parties hereto. Any reference herein to a
- 12 -
Section or Subsection shall be considered a reference to such Section or Subsection of this
Agreement unless otherwise stated. Any reference herein to an exhibit shall be considered a
reference to the applicable exhibit attached hereto unless otherwise stated.
The headings in this Agreement are for purposes of reference only and shall not limit or
define the meaning hereof. This Agreement may be executed in any number of counterparts, each
of which shall be an original,but all of which shall together constitute one and the same instrument.
8.06 Construction. This Agreement is a contract made under and shall be construed in
accordance with and governed by the laws of the United States of America and the State of Texas.
8.07 Nature and Extent of Agreement. This Agreement contains the complete agreement
of the Parties as to the matters contained herein. There are no oral or written conditions, terms,
understandings or other agreements pertaining to the booking policy obligations of Owner,
Operator and City that have not been incorporated herein. The laws of the State of Texas shall
govern the validity, interpretation, performance and enforcement of this Agreement, without
regard to conflicts of law principles. Tarrant County, Texas shall be the exclusive venue for all
suits or other legal actions arising out of this Agreement.
8.08 Approval by the Parties. Whenever this Agreement requires or permits approval or
consent to be hereafter given by any of the Parties, the Parties agree that such approval or consent
shall not be unreasonably withheld or delayed.
8.09 Additional Actions. The Parties agree to take such actions, including the execution
and delivery of such documents, instruments, petitions and certifications as may be necessary or
appropriate, from time to time, to carry out the terms, provisions and intent of this Agreement and
to aid and assist each other in carrying out said terms,provisions and intent. In addition,the Parties
acknowledge and agree that the successful operation of the Convention Center and the Hotel will
be greatly affected by the future cooperation between the City and Owner. As an example, in the
event the Super Bowl is awarded to the proposed Dallas Cowboys stadium in Arlington, City
acknowledges the potential need by Owner to block rooms for the event, and that any events held
in the Convention Center during that period would possibly need to be local in nature. The parties
hereby agree to maintain a course of dealing with one another based on a high level of cooperation,
integration and harmony between the Convention Center and the Hotel. In that regard, the Parties
agree that representatives of the Hotel,the Convention Center and the CVB will meet on a not less
than quarterly basis to share information with respect to the ongoing and future operation of the
Convention Center and the Hotel in an effort to provide the level of cooperation that will lead to
the success of both the Convention Center and Hotel. In addition, the parties acknowledge that
the rights and the obligations of the Parties under this Agreement may need to be modified from
time to time to conform to the then current industry standards. Each party agrees to be reasonable
in connection with any request by the other to revisit provisions of this Agreement which may no
longer comport with the then current industry standards, including pricing of both Hotel rooms
and Convention Center meeting space. City and Owner agree to deliver to each other on at least
an annual basis with their capital improvement plans for the Convention Center and Hotel,
respectively, and allow the other party to review and comment on same.
8.10 Enforcement. The City Attorney or his or her designee may enforce all legal rights
and obligations under this Agreement, on behalf of City. The Owner shall provide to the City
- 13 -
Attorney all documents and records that the City Attorney reasonably requests to assist in
determining the Owner's compliance with this Agreement, with the exception of those documents
made confidential by federal or state law or regulation, or obligations of Owner under the Kimpton
Agreement. Owner may seek and enforce a protective order against disclosure of privileged or
confidential information that would not be discoverable under applicable law.
8.11 Transfer of Owner's Interest. In the event of the sale, assignment or transfer by
Owner of its fee interest in the Hotel or Hotel Site (if any) (other than a collateral assignment to
secure a debt of Owner) to a successor in interest, any successor to Owner hereunder shall in all
respects be obligated to honor any contract or agreement previously executed with a Potential
Convention Center Customer and shall be bound by any outstanding Initial Offers or Amended
Offers, each Room Block Request Notice and the Event Rate then in effect.
8.12 Termination of Operator. In the event that Owner shall terminate the Operator for
any reason or should the rights of the Operator under the Management Agreement for the Hotel
expire for any reason, Owner shall be obligated to secure the written consent and agreement of any
replacement Operator to all of the terms,provisions and conditions set forth herein;provided,that,
a failure by the Owner to do so shall in no way release or relieve Owner or any Operator from
performing the obligations of the Owner and Operator hereunder.
8.13 Owner and Operator Responsibility under the Binding Contract. Nothing contained
in this Agreement shall relieve the Owner and/or Operator (or their respective successors) from
the contractual obligations to provide services to a Potential Convention Center Customer under a
Binding Contract, irrespective of whether this Agreement has been terminated at the time services
are to be rendered or whether this Agreement is terminated after the effective date of the Binding
Contract but before the time services are to be rendered.
8.14 Gender; Singular and Plural. As used herein, the neuter gender includes the
feminine and masculine,the masculine includes the feminine and neuter,and the feminine includes
the masculine and neuter, and each includes a corporation, partnership or other legal entity when
the context so requires. The singular number includes the plural, and vice versa, whenever the
context so requires.
8.15 Binding Effect. Subject to express provisions hereof to the contrary, this
Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their
respective heirs, successors and assigns during the Term hereof and during any extensions or
renewals of said Term.
8.16 Estoppel Certificate. Within twenty (20) days after receipt of written request
therefor by another Party hereto, the other Party shall execute and deliver to the requesting Party
(and to such other person as the requesting Party may designate) a statement reasonably
satisfactory to the requesting Party certifying any facts that this Agreement is unmodified and is
in full force and effect (or if there have been modifications, stating that this Agreement is in full
force and effect as modified), that the requesting Party is not in default hereunder (or stating the
nature of any alleged default), that there are no defenses or offsets to the Agreement claimed by
the other Party, and further certifying any matters reasonably requested by the requesting Party.
A failure by a Party to execute, acknowledge and deliver upon request the certified statement
described above within twenty (20) days from receipt of such request shall constitute
- 14 -
acknowledgment by the Party to whom the request is directed to all persons entitled to rely on the
statement that this Agreement is unmodified and in full force and effect and that no default by the
requesting Party exists hereunder. Notwithstanding anything to the contrary set forth in this
Section 8.16,neither Party will be required to execute such an estoppel certificate more often than
two (2)times in any twelve (12)-month period.
8.17 Superiority of Agreement. The provisions of this Agreement shall constitute a
restrictive covenant running with the Hotel Site binding upon each owner thereof, and any and all
Operators or managers of the improvements thereon, and each and every other person or entity
claiming or holding any interest in the Hotel Site, shall inure to the benefit of the City, and shall
apply to any hotel now or hereafter located on the Hotel Site, or any portion thereof, but only so
long as this Agreement is in effect.
8.18 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 herein shall not constitute a waiver
of Party's right to insist upon appropriate performance or to assert any such right on any future
occasion.
8.19 Casualty. In the event of a casualty loss to the Hotel which causes all or a portion
of the Hotel to close pending repair or reconstruction, any failure by Owner to perform its
obligations hereunder as a direct result thereof shall be waived until such time as the damage has
been repaired, provided Owner agrees to use commercially reasonable and diligent efforts to
effectuate such repair.
8.20 Memorandum of Agreement. Owner and City shall execute for recordation in the
Real Property Records of Tarrant County,Texas a memorandum of this Agreement in substantially
the form of Exhibit"C" attached hereto. At the request of either party, and provided the Term of
this Agreement has expired or this Agreement has otherwise terminated, the other party shall
execute and deliver for recordation in the Real Property Records of Tarrant County, Texas a
termination memorandum evidencing a release of the Hotel Site of any encumbrance under this
Agreement.
[EXECUTION PAGES FOLLOW]
- 15 -
EXECUTED as of the last date indicated below:
CITY OF FORT WORTH: 714 MAIN REAL ESTATE HOLDINGS,
LLC, a Delaware limited liability company
By: By:_
Susan Alanis Gary t6sterman
Assistant City Manager Authorized Person
Date:
APPROVED AS TO FORM AND LEGALITY:
By:
Peter Vaky
Deputy City Attorney
M&C: C-28913 10-30-18
- 16 -
STATE OF
COUNTY OF S�G ( §
BEFORE ME, the undersigned authority, a A otary Public in and for the State of
Tennessee, on this day personally appeared of 714 Main Real
Estate Holdings, LLC, the known to me to 6e tM person whose name is subscribed to the
foregoing instrument, and acknowledged to me that the same was the act of 714 Main Real
Estate Holdings, LLCand that s/he executed the same as the act of for the purposes and
consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAS AND SEAL OF OFFICE this, -/ lay of M old rc/
•�`�•p, Wye .
J:
Z; STATE
OF otary ublic in and for the State of
TENNESSEE
NOTARY
-.0'- PUBLIC
�p .4%j r OF S;r-. �o
STATE OF TEXAS
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas,
on this day personally appeared, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that the same was the act 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 day of
Notary Public in and for the State of Texas
- 17 -
STATE OF §
COUNTY OF §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas, on
this day personally appeared of K Main Hotel, LLC, the known
to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged
to me that the same was the act of K Main Hotel, LLC and that s/he executed the same as the act
of for the purposes and consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of
Notary Public in and for the State of
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME,the undersigned authority, a Notary Public in and for the State of Texas, on
this day personally appeared Susan Alanis, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that the same was the act of the
City of Fort Worth and that she 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 day of
Notary Public in and for the State of Texas
- 17 -
EXHIBIT "A"
SECTION I
SERVICES
1.01 Services. The Owner, shall provide convention room block services in accordance
with this Exhibit"A".
SECTION II
COMMITMENT TO PROVIDE CONVENTION ROOM BLOCK SERVICES
2.01 Booking Procedure. During the Term, the City, acting through the Director shall
require the Operator, as the Owner's representative, to offer an Event Room Block to Potential
Convention Center Customers in accordance with this Agreement. The right to require that the
Owner/Operator so offer the Event Room Block will be exercised in accordance with the
procedures outlined below.
(a) A management, sales or booking representative of the City, the Director or any of
their respective designees, including the CVB (each a "Sales Representative"), will notify the
Owner/Operator that a Potential Convention Center Customer is seeking offers from local hotels
to accommodate, among other needs, the guest room needs of the Potential Convention Center
Customer for a City-Wide Event (the "Room Block Request Notice"). The Room Block Request
Notice will: (i) identify the Potential Convention Center Customer, (ii) set forth a documented
history of the group's room block events for the most recent three year period including a
comparison of the number of rooms blocked and the actual number of rooms actually used
(provided the same is generally available to the City or CVB), (iii) specify each specific date for
which the Potential Convention Center Customer will require blocks of guest rooms (including
those dates commonly known as "move in"and "move out"dates); and(iv) specify the number of
guest rooms the Potential Convention Center Customer is seeking to block on each of the specific
dates. The Room Block Request Notice will be communicated to the Owner/Operator in the same
manner as such notifications are customarily communicated to other, hotels by the Sales
Representative.
(b) Unless the deadline is specifically extended in writing by the Sales Representative,
within ten (I O)Business Days after Owner/Operator's receipt of the Room Block Request Notice,
the Owner/Operator shall deliver to the Potential Convention Center Customer (with a copy to the
Sales Representative and the Director) an initial written offer in response to the Room Block
Request Notice(the"Initial Offer"). In the Initial Offer the Owner/Operator will (i)offer,for each
specific date that the Potential Convention Center Customer requires a block of guest rooms as
specified in the Room Block Request Notice, an Event Room Block equal to the actual number of
the guest rooms in the Room Block Request Notice for each specific date, less any previously
offered Event Room Blocks under this Agreement for other City-Wide Events covering such dates,
which offers have either been accepted or are still outstanding, and (ii) quote a specific room rate
for both a standard single and double room (the "Rate Quote"). The amount of the Rate Quote in
the Initial Offer will be at the Owner/Operator's sole discretion and Owner/Operator will make a
quote which is reasonably consistent with the then current economic climate,the demand for rooms
during the relevant Event Nights and the rates then being charged by other comparable downtown
Fort Worth hotels, taking into account reasonable differences in quality, amenities, location and
suitability. In all respects, the Initial Offer shall be structured in accordance with
Exhibit"A"—Page 1
Owner/Operator's normal booking policies as described in Section 2.01(e) below.
(c) After reviewing the Initial Offer, the Sales Representative may consult with the
Owner/Operator regarding the Rate Quote contained in the Initial Offer. If at any time within
ninety(90)calendar days from the date the Director receives the Initial Offer,the City,the Director
or the Director's designee (which may include the CVB) determine, in their sole discretion, that it
might be in the City's best interest to compel the Owner/Operator to offer the Potential Convention
Center Customer an alternative rate structure, the City or CVB may, after consultation with the
Owner/Operator and within the ninety (90) calendar day timeframe, elect to ask Owner/Operator
to consider(which election shall be communicated by Notice from the Director or the CVB to the
Owner/Operator) offering to the Potential Convention Center Customer a rate lower than the rate
in the Initial Offer. Within 3 business days following receipt by Owner/Operator of such notice
from the City or CVB,Owner/Operator shall provide the City and the CVB with a written response
to such a request, either agreeing or refusing to offer a rate to the Potential Convention Center
Customer that is lower than the rate in the Initial Offer, which response shall be in Owner's sole
and absolute discretion.
(d) If, pursuant to Section 2.01(c) of this Exhibit"A", Owner/Operator agrees to offer
the Potential Convention Center Customer a rate lower than the rate in the Initial Offer,
Owner/Operator shall amend the Initial Offer by substituting an alternative rate (the "Amended
Offer") and deliver such Amended Offer to the Potential Convention Center Customer (with a
copy to the Sales Representative and the Director) within two (2) Business Days following the
date of Owner/Operator's written response to the City's and/or the CVB's request under Section
2.01 c of this Exhibit"A".
(e) In negotiating a Binding Contract, Owner/Operator's customary booking policies,
including policies relating to acceptance deadlines, contracts, advance deposits and cancellation
shall be applied,provided that (i)these policies shall adhere in all material respects to the general
customs employed by the Owner/Operator at its Managed Hotels or otherwise be consistent with
local market practices and (ii) Operator has provided Director with such booking policies as
modified from time to time. Notwithstanding the foregoing, the Potential Convention Center
Customer shall have no more than(150) calendar days from the date the Current Offer is received
to (i) verbally accept the Current Offer and (ii) negotiate and execute a Binding Contract. (The
term"Current Offer"is defined as the most recent of either the Initial Offer or the Amended Offer.)
Upon verbal acceptance of the Current Offer, Owner/Operator shall promptly begin negotiating a
Binding Contract with the Potential Convention Center Customer.
(f) If a Potential Convention Center Customer has not (for any reason other than
Owner/Operator's breach of their obligations) executed a Binding Contract with the
Owner/Operator within one hundred fifty(150)days following the date of the receipt of the Current
Offer,then such offer will expire,whereupon the Owner/Operator shall have no further obligation
to the City or the Potential Convention Center Customer in regard to such City-Wide Event under
the Current Offer;provided,that, if such offer expires on a date that is more than twenty-four(24)
months in advance of the City-Wide Event's first Event Night, nothing in this Agreement shall
prohibit the City from issuing a new Room Block Request Notice for such City-Wide Event.
(g) During the "Negotiations Period" (defined as the date the Initial Offer is made until
the earlier of (i) the Current Offer expiration or (ii) the date the Potential Convention Center
Customer formally rejects/accepts the Current Offer)the Owner/Operator shall consider the Event
Exhibit"A"—Page 2
Room Block from an inventory management/reservations standpoint as if it were booked under a
Binding Contract and shall not agree to reserve any amount of guest rooms for other customers
that would impede the ability of the Hotel to accommodate the Event Room Block under the
Current Offer. Notwithstanding the foregoing, if another Potential Convention Center Customer
seeks, during the Negotiations Period, to reserve an Event Room Block on one or more of the
Event Nights being held for the first Potential Convention Center Customer ("First Customer")
pending the conclusion of the Negotiations Period, Owner/Operator shall be permitted to
accelerate the Current Offer expiration date of the First Customer to a date that is seven (7)
calendar days from the date that Owner/Operator notifies First Customer, in writing, of such
acceleration. Owner/Operator's ability to accelerate the Current Offer expiration date is
acknowledged by the parties to be part of the Owner/Operator's customary booking policies.
(h) If a Potential Convention Center Customer that has executed a Binding Contract
provides written notice to Owner/Operator that the Potential Convention Center Customer is
terminating the Binding Contract, and the date of receipt by Owner/Operator of such notice is less
than twenty-four (24) months from the first night reserved for the Potential Convention Center
Customer's Event Room Block, then, provided that Owner/Operator has provided the City with
advance written notice of such termination, Owner/Operator will have no further obligation to the
City in regard to such Event Room Block and Owner/Operator shall not be obligated to extend the
rooms to another Potential Convention Center Customer hereunder. If such notice of termination
is given on a date that is twenty-four (24) months or more before the first Event Night, the City
may require that Operator extend the rooms to another Potential Convention Center Customer in
accordance with the provisions hereof. The City recognizes that under the Owner/Operator's
contract with the Potential Convention Center Customer, Owner/Operator may be entitled to
collect cancellation fees from such Potential Convention Center Customer and the City hereby
acknowledges and agrees that such fees shall be the sole property of Owner/Operator. Similarly,
the Owner/Operator recognizes that under the City's contract with the Potential Convention Center
Customer, the City may be entitled to collect cancellation fees from such Potential Convention
Center Customer and the Owner/Operator hereby acknowledges that such fees shall be the sole
property of the City. In addition, Owner/Operator agrees that although this Agreement requires
Owner/Operator to offer and reserve Event Room Blocks to Potential Convention Center
Customers, the City, the CVB, and their officers and employees shall not be liable to Owner or
Operator for damages of any kind whatsoever, including, without limitation, damages for lost
profits or lost business, as a result of any breach or termination of a Binding Contract by a Potential
Convention Center Customer.
(i) Owner/Operator will reserve the inventory of rooms required in an Event Room
Block for purchase by the persons attending a given Potential Convention Center Customer's event
until the thirtieth(30th)calendar day preceding the first night reserved for the Potential Convention
Center Customer's Event Room Block, after which time any unbooked rooms will be released
from the obligations under this Agreement (but not necessarily from the obligations under the
Binding Contract) and may be rented without any restrictions imposed by this Agreement. If
within ninety (90) calendar days of the first night reserved for the Potential Convention Center
Customer's Event Room Block, the number of rooms actually booked is less than the number of
rooms blocked, Owner/Operator shall be permitted at any time to release some or all unbooked
rooms without the consent of the City,provided(A)that the Potential Convention Center Customer
has granted its written consent to do so and (B) in so doing, Owner/Operator shall not waive any
cancellation rights to which the Hotel may be entitled. (Under this Section 2.01 D, the term,
Exhibit"A"—Page 3
"booked,"means there is a room reservation on file that is guaranteed (i) by time of arrival, (ii)by
deposit or (iii) by credit card as required under the Hotel's normal reservation policy.)
Furthermore, if the group history of the Potential Convention Center Customer reflects a pattern
whereby the block of rooms reserved by such customer is greater than the actual number of rooms
used, then the Owner/Operator, shall have the right to only block such number or rooms which
Owner/Operator, in the exercise of its professional judgment and based on such history of the
customer, believes will be adequate to accommodate the number of rooms which will be actually
used by such customer;provided,that such decision shall not release or relieve the Owner/Operator
from, at Owner/Operator's own cost, providing other comparable guest accommodations if the
number of rooms so blocked by Owner/Operator actually is not adequate to satisfy the actual use
of rooms by the Potential Convention Center Customer.
(j) There are two categories of inventory that, under this Agreement, may be reserved
by Owner/Operator,without restrictions imposed by this Agreement. The first category is Exempt
Inventory. Exempt Inventory is free from any City-imposed booking restrictions under this
Agreement and the Owner/Operator may, at its discretion, take reservations for up to the amount
of the Exempt Inventory for any given day in the future. The Exempt Inventory is a total of 97
rooms and 29 suites.The second category is inventory that has not been reserved under this
Agreement as of any date that is less than) thirty-six (36) months from the start of any City-Wide
Event. Any room inventory meeting these criteria shall be available for rental by the
Owner/Operator without restrictions imposed by this Agreement.
(k) Notwithstanding anything to the contrary set forth in this Agreement
Owner/Operator shall have the right to request a reduction of the rooms required to be reserved by
Owner herein up to two (2) times per calendar year (that is to say, Owner/Operator may request
the right to book rooms during City-Wide Events in a manner which would not allow
Owner/Operator to satisfy the Maximum Event Room Block twice during any calendar year during
the term of this Agreement). Within ten (10) days after receipt of such written request from
Owner/Operator, the City shall either approve or disapprove such request, but the City's approval
shall not be unreasonably withheld, conditioned or delayed. If the City does not respond in writing
within such ten (10) day period, Owner shall send a second written notice to the City. If the City
fails to respond in writing within five (5) days after receipt of such second notice, the City will be
deemed to have approved such request. In addition, if Owner/Operator receives a request fora
room block from a prospective group more than thirty-six (36) calendar months prior to such
groups'first night stay at the Hotel, Owner/Operator shall have the right to request the City to grant
relief from this Agreement with respect to the Maximum Event Room Block and the City must be
reasonable in considering such request from Owner/Operator.
(1) Notwithstanding the foregoing, if a Potential Convention Center Customer has a
documented history of causing material property damage in connection with group events or of
poor credit, then Owner/Operator shall have the right to decline to accommodate such customer
hereunder upon provision of written notice to the Director given within five (5) Business Days
following the date of the Room Block Request Notice, which notice includes a reasonable and
specific basis for the Owner/Operator's conclusions, which conclusions are subject to the
Director's reasonable challenge and will be kept confidential to the full extent of the law, by the
Director.
2.02 Confidentiality. Subject to its obligations under applicable law, the City or CVB
will not disclose any Initial Offer or Amended Offer to any person or entity other than its
Exhibit"A"—Page 4
employees, counsel and other consultants, or in connection with any legal proceeding (or
alternative dispute resolution procedure), all of whom shall be advised of the confidentiality
provisions hereof and agree to the same. Confidentiality issues may be subject to Texas Open
Records laws.
SECTION III
OTHER COOPERATIVE PROGRAMS
3.01 Cooperative Advertising. The Owner, at no cost to the City, will cooperate with
the City and or the CVB in connection with joint marketing efforts directed by the City/CVB, at a
cost comparable to other hotels of similar size.
3.02 Site Selection Assistance. The Owner,at no cost to the City,will periodically assist
the City and CVB with its convention marketing efforts by providing, subject to availability,
mutually acceptable complimentary or discounted-to-cost rooms and facilities to event planners
conducting site visits and or participating in familiarization trips.
Exhibit"A"—Page 5
EXHIBIT "B"
Exhibit"B"—FORBES TRAVEL GUIDE FOUR-STAR RATING
TIFTI
2,,�.aithng Cr fteria.- Lodging
TI Star Rating Pracess
The Forbes Travel Guide process of rating each establishment includes:
Facility inspection: Every property is visited by a trained facility inspector,
who uses a checklist to evaluate cleanliness,physical condition and location.
This inspection is unannounced and results in a Forbes One, Two or Three Star
rating. Spas are the only exception--the minimum standard for a Forbes spa
rating is three stars.
Service evaluation: Based on the facility inspection,properties that might
qualify for a Forbes Four Star or Five Star Award certification will receive a
visit from a second,this time, incognito inspector.This inspector makes an
anonymous visit and performs an incognito evaluation based on more than
550 service standards. During service evaluations, inspectors behave as regular
guests and never reveal that they represent the Forbes Travel Guide. This
inspection largely focuses on the guest experience and the consistency in
service, not just the physical facilities and amenities.
Only facilities that meet the Forbes Travel Guides rigorous standards are rated and
listed in both the travel guides and on the website. Deteriorating, poorly managed
establishments are deleted.A Forbes Travel Guide listing and review constitutes a
positive quality recommendation; every listing is an accolade, recognition of
achievement.
S tar Definit ions
***Five Star Hotels: These exceptional properties provide a memorable
experience through virtually flawless service and the finest of amenities. Staff are
intuitive, engaging and passionate, and eagerly deliver service above and beyond the
guests' expectations. The hotel was designed with the guest's comfort in mind, with
particular attention paid to craftsmanship and quality of product. A Five Star property is a
destination unto itself.
****lour Star Hotels: These properties provide a distinctive setting, and the guest
will find many interesting and inviting elements to enjoy throughout the property.
Attention to detail is prominent throughout the property, from design concept to quality
of products provided. Staff are accommodating and take pride in catering to the guest's
specific needs throughout their stay.
***Three Star Hotels: These well-appointed establishments have enhanced amenities
that provide travelers with a strong sense of location, whether for style or function. They
may have a distinguishing style and ambience in both the public spaces and guest rooms;
or they may be more focused on functionality,providing guests with easy access to local
events,meetings or tourism highlights.
*Two Star Hotels: The Two Star hotel is considered a clean, comfortable and reliable
establishment that has expanded amenities, such as a full-service restaurant.
,'10ne Star Hotels: The One Star lodging is a limited-service hotel or inn that is
considered a clean, comfortable and reliable establishment.
Tarbes Star Rating Criteria &Expectations e Lodging
The following are suggested criteria of what a guest can expect at each star level. They
are not individually mandated and are a representative sampling of the hundreds of
points covered during our inspection process.Additionally, at each star level the
lodging establishment is required to meet or exceed the requirements of the previous
star rating. For example, a Three Star hotel meets the criteria expectations of a Three
Star hotel, a Two Star hotel and One Star hotel, and so forth.
*One Star Hotels: Clean, comfortable and reliable establishments providing travelers
with limited services and basic amenities. These properties focus on providing a value
experience while meeting traveler's expectations. Most hotels do not have a full-service
restaurant or dining room.Many Hampton Inns and Fairfield Inns consistently earn a
Forbes One Star rating.
Characteristics of a One Star Hotel,Motel or Inn include:
Services Detail
-Staff is well-groomed with professional, neat and well-maintained attire.
-All staff encountered are pleasant and professional in their demeanor.
- Coffee, hot tea and breakfast pastry are available on-site (could be in-room).
Facilities Detail
-Self parking area is free of debris, good condition; surfaces, curbs,paths.
-All outdoor walkways and approaches are well-maintained and cleaned.
-Outdoor awnings,signs,marquees,flags, and plantings are clean and in good
condition.
-Public spaces are free of obvious hazards.
-Lobby floors, walls and ceiling are free of debris,marks and damage.
-Elevator landings, cars and doors/tracks are clean and in good condition.
-Guest room corridor floors,walls and ceilings are free of debris, marks, and damage.
-Vending and/or ice machines are located within one floor of guest room.
-Vending and/or ice areas and equipment are clean, well-lit, and well-maintained.
-All furniture,fixtures and equipment are clean, neat and well-maintained.
-Ashtrays throughout public areas are well-maintained and free of excessive debris.
Temperature in all interior public areas are maintained in general comfort range.
-If public phonebook present,it is neat and in good condition.
-Public washrooms very hygienic and neat,with well-stocked paper and soap.
-Public washroom fixtures,walls and floors are in very good condition.
-Guest rooms are equipped with direct dial phones.
Guest Room Detail
-Hardware and hangings (door locks,racks, artwork, etc.) are secure and in good
condition.
-Carpet/floor is free of debris, stains,wear,loose threads, open seams,etc.
-Walls and ceilings are free of marks, stains and damage.
-Drapes are free of stains, damage; pull easily and hang properly.
-Furniture is free of dust,marks and damage.
-All printed material including collateral,phonebooks and stationery are neat, crisp and
current.
-Drawers and shelves are clean, free of dust and debris.
-All light bulbs operate; all light fixtures and lamps are in good condition, clean.
-Mirrors and windows are free of smudges and damage throughout.
-If safe is provided,it is clean, functional and convenient.
-Guest rooms are equipped with data ports (guest can connect laptop to the Internet).
-Room equipped with accurate, functional clock and radio/stereo.
-Color television works and is equipped with remote control.
-Televisions will feature basic cable or satellite channels.
-Telephones are available in each guest room.
-Ice bucket and glasses (may be molded plastic) are clean, hygienic.
-If minibar is present, it is hygienic, free of spills and damage, all products are sealed,
price list present.
-If coffeemaker is present, it is hygienic, contains ample, sealed supplies and cups.
-All bedding and linens are free of debris,hairs, damage and stains.
-Room heating and air conditioning is easily controlled by guest and is quiet.
-Air is fresh and clean, no stuffiness or odors.
-Sink,tub, shower,toilet,bidet are very clean,free of hairs, stains and discoloration.
-Bathroom tile and grouting is clean, not discolored, cracked or mildewed.
-Faucets and drains operate smoothly and easily.
-Hygienic soap and shampoo is provided.
-Minimum bath linen is present: one bathmat;two each of facecloth, hand towel and
bath towel.
-Towels are free of spots, stains,tears and obvious frays.
-If robes are provided, they are free of spots, stains and loose threads.
Specialized Facility Detail
-Pool/beach furniture is clean, hygienic and well-maintained.
- Pool deck or beach/sand is clean and free of excessive debris.
- Pool deck and tiling are in good condition, free of excessive damage or wear.
-Pool water is clean,free of debris and free of notable odors.
-Pool fittings and equipment(ladders, dive boards) are secure and in good condition.
-Tennis court surfaces are in good condition, free of damage and well-marked.
-Tennis courts and surrounding areas are clean and free of debris.
- Fixtures,nets,lights, and fences are well-maintained and good condition.
**Two Star Hotels: Comfortable establishment that is clean and reliable with
expanded amenities and services that include a full-service restaurant on site. The hotel
decor, furnishings, amenities,property grounds and guest room design will be moderately
enhanced in quality.Doubletree Hotels, Courtyard by Marriott and Four Points by
Sheraton are well-established names in the Forbes Two Star category.
A Two Star Hotel,Resort or Inn meets all the criteria expectations and all of the
qualities for a One Star Hotel,Resort or Inn plus the following characteristics:
Services Detail
-Front desk staff are articulate, smile and make eye contact.
-Staff is attired in well-fitting, consistent uniforms.
-Baggage assistance is available on request.
-The front desk is staffed twenty-four hours.
-Restaurant on-site serves three meals daily.
-If Inn, twenty-four hour guest service available on-call
Facilities Detail
-Lobby provides a comfortable seating area.
-Signs and notices are professional, matching decor, not "handwritten".
-Vending and/or ice machines are located on each guest floor.
-Service doors are clean,free of marks and damage,_and closed.
- Public phones are convenient, clean and well-maintained.
-A variety of different sized and appointed rooms are available in hotel.
-If available, meeting rooms are well-signed so that it is easy to find and arrive at a
specific room.
-If available, meeting room doors are in good condition, free of nicks and damage.
-If available, meeting room interiors are in generally good condition, including walls,
floors and ceiling.
Guest Room Detail
-Guest room door and frame are free of marks, scratches and scuffs.
-There is comfortable seating for two people (other than bed).
- Guest service directory,pad and pen/pencil present and conveniently placed.
- Enclosed closets (means closets must have doors).
-There are a minimum six non-captive hangers.
-There are three spacious drawers or enclosed shelves (inside closet).
-A Luggage rack or bench provided; and adequate space to leave suitcase.
-Extra clean and hygienic blanket and pillow are provided in room.
- Lighting throughout the room is adequate.
-The room can be fully darkened.
-A full-length mirror is present in room.
-A hairdryer present in room, clean and functional.
-Hygienic soap, shampoo and two other bath amenities are provided.
- Guest rooms are equipped with easily accessible data ports or Ethernet/ wireless
internet access.
Specialized Facility Detail
- Guest can pick up e-mail and access the Internet from a Business Center workstation.
-Business Center working areas are clean,tidy and professional.
-There are comfortable office-style chairs at the Business Center guest workstations.
-All fitness, treatment and relaxation areas are hygienic, neatly organized and
maintained.
- Fitness equipment is clean, in very good condition, and conveniently laid out.
- Fitness/workout area is well-ventilated,with comfortable temperature.
-Sound system or television is provided in fitness/workout areas.
-Towels are provided in locker and fitness areas.
- Grooming area is equipped with hairdryers; soap and shampoo conveniently placed
-All amenities are neatly and professionally presented, and are very hygienic.
-Locker room, showers, sauna and hot tub are extremely clean, and hygienic in
appearance.
- Floors throughout the casino are well-maintained and free of excessive debris.
-Air circulation in casino is adequate, not stuffy or smoky.
-Slot banks are free of excessive debris, soiled glassware, and soiled ashtrays.
-Slot chairs are in good condition, clean and free of rips and stains.
-Cashier and change booths are tidy,well-organized, and well-signed.
-Table game tops are well maintained,free of damage and wear.
�'hree Star Hotels: Well-appointed establishment with consistent service and
enhanced amenities providing travelers with an elevated level of comfort and
convenience.Hotels will provide such services as,room service, fitness center and
optional turndown service. Hotels will have a distinguishing style and ambience with
both the public space and guest rooms.Many Hyatt,Hilton, Marriott, Westin and
Fairmont hotels are established names with consistent service in the Forbes Three Star
category.
A Three Star Hotel,Resort or Inn meets all the criteria expectations and all of the
qualities for a Two Star Hotel,Resort or Inn plus the following characteristics:
Services Detail
- Confirmation number provided during reservation service.
-Reservationist can give clear and vivid description of hotel facility and style.
-Turndown service is available upon request.
-Valet parking is available.
-Baggage assistance is automatic.
-Same day laundry and dry cleaning available five days/week.
-Complimentary newspapers are delivered to room automatically.
-Complete room service is available.
-Workstation is available where guest can access Internet.
-Basic fitness equipment is provided, including treadmills and cycles.
-If Inn,restaurant on-site which serves full breakfast is available and one additional
meal service.
-If Resort, complimentary newspapers(or newsfaxes) are delivered to room
automatically.
Facilities Detail
-High quality,varied, and major brand sundry selections are available in an on-site
store.
-If public phonebook present, it is displayed in attractive cover.
- Pay-per-view movies are available.
-Suite accommodations (separate bedroom and living areas) are available.
Guest Room Detail
- Each guest room has two phones (one could be in the bathroom).
- Comfortable desk and chair are available for working, complete with telephone, data
port, and light.
-Guest rooms are equipped with Ethernet/wireless internet access.
-Insulated ice bucket,vinyl or better, as well as glass glassware; clean and hygienic are
present in room.
-Minibar is present (defined as selection several beverages and snacks).
-If Inn, refreshments present in room or readily available
-If coffeemaker is present, ceramic mugs and napkins are available.
-Pillows are plush and full, no foam.
-Framed artwork or interesting architectural features exist in room.
-Excellent lighting is provided in bathroom for makeup and shaving.
-hygienic soap, shampoo and four other bath amenities are provided.
-Amenities are presented attractively,thoughtfully(not simply lined up on counter).
-Towels are of absorbent quality,with soft nap and no discoloration.
-If Inn, Pay-per-view movies available or VCR/DVD is available.
-If Resort, guest room provides ample seating for more than two persons.
Specialized Facility Detail
-If Business Center is present, a semi-private working area with workstation and
telephone is available for guests.
-If tennis is available on site,water is available courtside.
-If pool or beach service is present, ample towels are available poolside or at the beach.
-Pro shop/clubhouse interiors are clean and well-maintained; displays and counters
neat and tidy.
-Pro shop/clubhouse and surrounding areas are clean with well-maintained appearance.
- Golf carts are clean,well-organized and maintained.
-Rental equipment is clean and good condition, including bags.
Forhes Four aimd Five Star Criteria and Expectations
At the Forbes Four and Five Star level,both a facility inspection and service evaluation
will be performed. For each property, more than 750 criteria including cleanliness,
physical facilities and employee attitude and courtesy, are measured and evaluated to
produce a mathematically derived score.At the Forbes Four and Five Star level, 25%
of the overall score is based on the facility inspection and 75%is based on the service
evaluation.
"Service" can seem pretty subjective, but the staff at Forbes Travel Guide use strict
standards and a good stopwatch to make their findings as accurate and objective as
possible. For hotel ratings,inspectors spend three days and two nights at the hotel,
interacting with staff, ordering room service,working out in the fitness center, making
requests with the concierge, dining in the restaurants and taking advantage of other
services that a standard guest would encounter.
Inspectors respond "yes" or "no"to standards that are classified in a way that assess
efficiency, graciousness and warmth,technical skill level as well as food quality,
housekeeping and concierge services,to name a few. For every"no" answer, a hotel loses
one point, and there's very little grey area. For example,upon arrival, luggage is
delivered to the guest's room in io minutes or guests are always asked permission before
being placed on or into a recording. It either happens or it doesn't,there's no middle
ground. Inspectors also write pages of commentary during the evaluations.
The Forbes Four and Five Star Hotel Incognito Service Evaluation
The hotel service evaluation is based on a three-day,two-night stay.The following
categories are evaluated during the stay by the Forbes incognito inspector:
Reservations
Arrival
Departure
Communications (PBX Operator)
Room Service (Dinner)
Breakfast Service (in Restaurant)
Bar/Lounge Service
Housekeeping Daily Service
Housekeeping Request and Turndown Service
Laundry Service
Business Center(if applicable)
Guest Services/Concierge (by phone and in-person)
Guest Room Conditions
Public Area Conditions
Fitness Room(if applicable)
Pool/Beach Service (if applicable)
Casino (if applicable)
Within each category, questions are "tagged"for certain qualities/classifications.
Classifications:
Courtesy/Manners
Graciousness/thoughtfulness and sense of personalized service
Efficiency
Guest comfort&convenience
Luxury
Technical execution skill and knowledge
Staff appearance
Food quality
Cleanliness&condition
Sample Service Questions from Hotel Incognito Evaluation
Note: All questions are answered with a YES or NO and then allow for
comments/remarks from the inspector. Also, each question has the applicable
classification tag in parentheses following the statement.
Reservations
Reservations agent can readily describe variety of rates and types; effectively enabling
choice. (Technical execution, skill &knowledge)
Staff exhibits the ability to anticipate needs; not always requiring prompting by guest.
(Graciousness/thoughtfulness and sense of personalized service)
Arrival
Arriving guests are greeted and assisted curbside within sixty seconds of arriving by car
or taxi. Exactly how long did it take? (Efficiency)Note: inspectors carry recorders that
can not only measure this particular exercise but the entire arrival process.
Orientation to the hotel is discreet and helpful, consisting of not more than four relevant
and important facts,but not delaying guests'arrival to room. (Guest comfort and
convenience)
Guest Services/Concierge
Staff maintains alert posture; no hands in pockets,folded arms; Staff avoids excessive
personal chatting amongst themselves; Staff does not smoke, drink or eat in guest view.
(Staff appearance)
When asked about restaurant recommendations, staff mentions at least three
appropriate options; describing cuisine, atmosphere and anticipates transportation and
dress code. (Technical execution skill and knowledge)
Guest Room. Conditions
Would you describe the bed to be plush and inviting?Linens of exceptional quality and
comfort?Use of oversized or numerous pillows? Bedcovers elegant and stylish? (Sense of
luxury)
Would you describe this room as being extremely well maintained? (nothing broken,
worn, damaged, slow plumbing etc.) (Cleanliness and condition)
Room Service
Staff is extremely well spoken,polite and clear, avoiding slang and phrase-fragments.
(Courtesy/manners).
Hot foods are hot when served(not warm); frozen items are firm at the time of
consumption (desserts adequately protected or offered as second course delivery). (Food
quality)
Forbes Four Star Criteria
***Four Star Hotels: Outstanding establishment in a distinctive setting that
provides travelers with exceptional service and a luxury experience. Service and
amenities are refined and sophisticated and may include automatic turndown service,
valet parking and 24-hour room service. Ritz-Carlton,Mandarin Oriental and Four
Seasons are prominent names in the Forbes Four Star category,known for personalized
service and hospitality,in addition to luxurious accommodations. Other notable Forbes
Four Stars include the Post Ranch Inn,Canoe Bay and the Windsor Court Hotel.
A Four Star Hotel,Resort or Inn meets all the criteria expectations and all of the
qualities for a Three Star Hotel,Resort or Inn plus the following characteristics:
Services Detail
-Written confirmation is automatic or offered, either by mail, fax or e-mail.
-Written confirmation is personalized,professional and accurate; it reflects the style and
image of the property.
-Guests name is used effectively,but discreetly, as a signal of recognition.
-The time from arriving at the reception area until registration is complete does not
exceed five minutes (includes queuing).
- Bed is plush and inviting with oversized or numerous pillows.
-Bedcovers are elegant and stylish and with linens of exceptional quality and comfort.
-All written information is provided on good quality paper or pads, custom-printed or
logoed.
-Bathroom presentation and placement of amenities and linens is thoughtful, careful,
and elegant.
- Fresh ice is provided during evening service or at another time during the day.
-Turndown service is automatically provided.
- During turndown service, guest clothing is neatly handled and guest toiletries are
neatly arranged and displayed on a cloth or shelf.
-Room service is delivered within 30 minutes.
-Room service order is delivered within five minutes of quoted time.
- One hour pressing is available.
-If resort, two hour pressing available
- Same day laundry and dry cleaning is available seven days/week.
- Staff arrives in guest room to pick up clothing within ten minutes of placing request.
-Wake-up call is personalized with guest's name and time of day.
-Wake-up call is delivered within two minutes of requested time.
-Wine by the glass service will include an offer of a tasting sample.
- Special service desk identified as concierge/guest service is situated apart from
reception/front desk.
-The final bill is offered to guest for review prior to printing final receipt.
-If Inn, choice of at least two complimentary newspapers are offered on-site.
-If Inn, restaurant on site serving a full breakfast plus two additional meal services.
-If casino services are present, when playing slots for more than 20 minutes, drink
service is offered.
-If casino services are present, when playing a table game for more than 15 minutes,
drink service is offered.
Facilities Detail
- Lobby areas feature elegant live plants and/or fresh floral displays.
-A dedicated and secure luggage storage area is available.
-Public phones are equipped with seats,privacy panels and pad/pens.
-Public washrooms are furnished with upgraded materials and appointments/luxurious
design.
-Televisions feature premium cable or satellite television.
- Guest room telephones have two lines.
Guest Room Detail
-Selection of at least 10 hangers including a variety of bars, clips and padded.
-Closet is very well lit and generously spacious.
-In-room safe is present.
-If Inn, in-room safe is present or readily accessible on-site.
-Minibar is present,is non auto-charge, and premium products are attractively
displayed.
-Bed is triple sheeted or features washable duvets.
- Live plants are present in guest rooms.
-Shaving/makeup, lighted magnifying mirror is present.
- Double sinks or separate vanity counter are present in the bathroom.
-Ample cosmetic and toiletry storage space exists for two persons.
- Hygienic soap,shampoo and five other bath amenities are provided.
-Bathroom amenities will be exceptionally luxurious in quality and variety.
-One robe per guest is provided; plus additional towels in the bathroom.
-Luxurious bath linens, oversized towels and a bath rug are all present in the bathroom,
no plastic shower curtains.
Specialized Facility Detail
- Fitness equipment is available with personal headphones/televisions
- Current newspapers and national-title magazines are provided in fitness and locker
areas.
Forbes Five Star Criteria
*****Five Star Hotels:Exceptionally distinctive luxury environment offering
consistently superlative,personalized service and the ultimate in amenities,make these
hotels and inns the best in the U.S. and Canada.Attention to detail and the anticipation of
every need are evident throughout this exclusive group of hotels. These hotels are
remarkable in every aspect from the plush and elegant guest room design to the
unforgettable culinary experiences. The Forbes Five Star category includes such
properties as the Peninsula Beverly Hills,the Four Seasons Hotel Chicago,the Ritz-
Carlton San.Francisco and the Mandarin Oriental New'York.
A Five Star Hotel,Resort or Inn meets all the criteria expectations and all of the
qualities for a Four Star Hotel,Resort or Inn plus the following characteristics:
Services][Detail
- Staff is extremely well spoken,polite and clear, avoids slang and phrase-fragments.
- Staff is extremely well informed about requirements within their department.
- Overall service is flawless from initial reservation call to departure service.
- Guests are offered an escort to their rooms unless they specifically decline.
-Choice of at least two complimentary newspapers is offered and distributed.
-Welcome gift or amenity provided by management during the visit.
-Twenty-four hour room service is available, including hot food.
-Wine by the glass is presented in bottle and poured in room,for room service.
- During turndown service, something noteworthy and thoughtful is included in the
presentation.
-At least two types of premium quality snacks are automatically offered and distinctly
presented during bar and lounge service.
-All mixed drinks are presented with modified or full club service.
-Any work undertaken by the staff is handled with complete professionalism, and
returned to guests neatly, in folders or envelopes.
-If Inn, restaurant on site serving a full breakfast and dinner plus one additional meal
service.
-If pool service is available, guests are proactively greeted and escorted to their chairs,
and set-up assistance is provided or offered.
-If pool service is available, during a go minute period and in warm conditions, some
sort of complimentary refreshment is offered (for example, mineral water, fresh fruit,
water spritz).
Facilities Detail
-Public washrooms feature well-maintained cloth towels, fresh plants or flowers.
Guest Room Detail
-Guest bathroom is equipped with a telephone.
- CD player/stereo is present and functional.
-Ice bucket and glasses are high quality(glass, metal, stone etc.), with tongs which are
clean and hygienic.
-Fresh flowers are present in guest rooms.
- Separate showers are present in bathroom.
EXHIBIT "C"
MEMORANDUM OF AGREEMENT
This Memorandum of Agreement(herein,the"Memorandum")is executed by and between
the CITY OF FORT WORTH, TEXAS, a Texas home-rule city (the "City") and KMain Hotel,
LLC., a limited liability company organized and existing under the laws of the State of Delaware
("Owner").
RECITALS:
A. The parties hereto have made and entered into that certain Room Block and Meeting
Space Agreement(as described and defined hereinbelow).
B. The parties desire to record a Memorandum of Agreement to provide notice to third
parties of the Room Block and Meeting Space Agreement.
AGREEMENTS:
NOW, THEREFORE, the City and Owner do hereby make and enter into this
Memorandum for the purposes described above:
1. Description of Agreement. The City and Owner have made and entered into that
certain Room Block and Meeting Space Agreement (as same may be hereafter renewed or
amended, the "Agreement") dated effective as of , 2019, which Agreement sets
forth certain covenants of the City relating to the City's operation of the Convention Center located
on the land described on Exhibit "A" attached hereto and certain covenants of Owner relating to
Owner's operation of the Hotel located on the land described on Exhibit `B" attached hereto.
2. Term of Agreement. The term of the Agreement commences on the Effective Date
of the Agreement, and continues until the ninety-ninth (99th) anniversary of the Hotel's opening
for business, unless sooner terminated as provided in the Agreement.
3. Amendments. The Agreement may not be orally amended.
4. General. Nothing contained in this Memorandum shall be deemed or construed to
amend, modify, change, alter, amplify, interrupt or supersede any of the terms or provisions of the
Agreement. In the event of a conflict between the terms of the Agreement and the terms of this
Memorandum, the terms of the Agreement shall prevail and be controlling. This Memorandum
may be executed in multiple counterparts,and each counterpart shall be deemed an original hereof.
Accordingly, this Memorandum shall become binding, notwithstanding the execution of separate
originals hereof, one by each of the parties hereto. Capitalized terms used but not defined in this
Memorandum will have the definitions ascribed to such terms in the Agreement.
[The remainder of this page is intentionally left blank]
Exhibit"C"—MEMORANDUM OF AGREEMENT—Page 1
IN WITNESS WHEREOF,the parties hereto have executed this Memorandum on the dates
set forth in the acknowledgments attached hereto, but to be effective as of the day of April,
2005.
CITY:
CITY OF FORT WORTH,
a Texas home-rule city
By:
Name:
Title: City Manager
OWNER:
KMain Hotel, LLC,
a Delaware limited liability company
By:
Name:
Title:
Exhibit"C"—MEMORANDUM OF AGREEMENT—Page 2
STATE OF TEXAS §
COUNTY OF TARRANT §
This instrument was acknowledged before me on the day of ,
2019 by , the City Manager of the CITY OF FORT WORTH, TEXAS,
a Texas home-rule city, on behalf of said city.
[ SEAL]
Notary Public, State of Texas
My Commission Expires:
(Printed Name of Notary Public)
STATE OF TEXAS §
COUNTY OF §
This instrument was acknowledged before me on the day of
2019 by the
of KMain Hotel, LLC, a Delaware limited liability
company, , on behalf of said limited liability company.
[ SEAL]
Notary Public, State of Texas
My Commission Expires:
(Printed Name of Notary Public)
Exhibit"C"—MEMORANDUM OF AGREEMENT—Page 3
EXHIBIT"A"
Legal Description of Convention Center Land
Lot 1, Block 1, Fort Worth Convention Center Addition, being a replat of Section 1-R, Tarrant
County Convention Center, according to the Plat and Dedication recorded in Cabinet A, Slide
7829, Plat Records, Tarrant County, Texas.
Exhibit"A to Exhibit C"—LEGAL DESCRIPTION OF CONVENTION CENTER LAND—Page 1
EXHIBIT`B"
Location of Hotel Land
Exhibit`B to Exhibit C"—LOCATION OF HOTEL LAND—Page 1
a3 Tj, 3.
v
',�J� 19Q-
_
C.
IF
M.
1
CL
A,
W �
CL
LL 03 eo
m
tp
13
fa
----" �'
N -s-+ N
i 6 in
'�_'� '\ p•_ and ��.- � v � � 6
r av I E
ra
Im
Ln
EXHIBIT "F"
MINIMUM HOTEL OPERATING STANDARDS
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
Rating Criteria: Lodging
The Star Rating Process
The Forbes Travel Guide process of rating each establishment includes:
• Facility inspection: Every property is visited by a trained facility inspector,
who uses a checklist to evaluate cleanliness, physical condition and location.
This inspection is unannounced and results in a Forbes One,Two or Three Star
rating. Spas are the only exception --the minimum standard for a Forbes spa
rating is three stars.
• Service evaluation: Based on the facility inspection, properties that might
qualify for a Forbes Four Star or Five Star Award certification will receive a
visit from a second, this time, incognito inspector.This inspector makes an
anonymous visit and performs an incognito evaluation based on more than
550 service standards. During service evaluations, inspectors behave as regular
guests and never reveal that they represent the Forbes Travel Guide. This
inspection largely focuses on the guest experience and the consistency in
service, not just the physical facilities and amenities.
Only facilities that meet the Forbes Travel Guides rigorous standards are rated and
listed in both the travel guides and on the website. Deteriorating, poorly managed
establishments are deleted.A Forbes Travel Guide listing and review constitutes a
positive quality recommendation; every listing is an accolade, recognition of
achievement.
Star Definitions
*****Five Star Hotels: These exceptional properties provide a memorable
experience through virtually flawless service and the finest of amenities. Staff are
intuitive, engaging and passionate, and eagerly deliver service above and beyond the
guests' expectations. The hotel was designed with the guest's comfort in mind, with
particular attention paid to craftsmanship and quality of product. A Five Star property is a
destination unto itself.
****Four Star Hotels: These properties provide a distinctive setting, and the guest
will find many interesting and inviting elements to enjoy throughout the property.
Attention to detail is prominent throughout the property, from design concept to quality
of products provided. Staff are accommodating and take pride in catering to the guest's
specific needs throughout their stay.
*-**Three Star Hotels: These well-appointed establishments have enhanced amenities
that provide travelers with a strong sense of location, whether for style or function. They
may have a distinguishing style and ambience in both the public spaces and guest rooms;
or they may be more focused on functionality, providing guests with easy access to local
events,meetings or tourism highlights.
**Two Star Hotels: The Two Star hotel is considered a clean, comfortable and reliable
establishment that has expanded amenities, such as a full-service restaurant.
:.-One Star Hotels: The One Star lodging is a limited-service hotel or inn that is
considered a clean, comfortable and reliable establishment.
Forbes Star Rating Criteria & Expectations - Lodging
The following are suggested criteria of what a guest can expect at each star level. They
are not individually mandated and are a representative sampling of the hundreds of
points covered during our inspection process.Additionally, at each star level the
lodging establishment is required to meet or exceed the requirements of the previous
star rating.For example, a Three Star hotel meets the criteria expectations of a Three
Star hotel, a Two Star hotel and One Star hotel,and so forth.
*One Star Hotels: Clean, comfortable and reliable establishments providing travelers
with limited services and basic amenities. These properties focus on providing a value
experience while meeting traveler's expectations. Most hotels do not have a full-service
restaurant or dining room. Many Hampton Inns and Fairfield Inns consistently earn a
Forbes One Star rating.
Characteristics of a One Star Hotel,Motel or Inn include:
Services Detail
-Staff is well-groomed with professional, neat and well-maintained attire.
-All staff encountered are pleasant and professional in their demeanor.
-Coffee,hot tea and breakfast pastry are available on-site(could be in-room).
Facilities Detail
-Self parking area is free of debris,good condition; surfaces,curbs,paths.
-All outdoor walkways and approaches are well-maintained and cleaned.
-Outdoor awnings,signs, marquees,flags, and plantings are clean and in good
condition.
-Public spaces are free of obvious hazards.
- Lobby floors,walls and ceiling are free of debris,marks and damage.
-Elevator landings, cars and doors/tracks are clean and in good condition.
-Guest room corridor floors,walls and ceilings are free of debris, marks, and damage.
-Vending and/or ice machines are located within one floor of guest room.
-Vending and/or ice areas and equipment are clean,well-lit, and well-maintained.
-All furniture,fixtures and equipment are clean, neat and well-maintained.
-Ashtrays throughout public areas are well-maintained and free of excessive debris.
-Temperature in all interior public areas are maintained in general comfort range.
-If public phonebook present,it is neat and in good condition.
- Public washrooms very hygienic and neat,with well-stocked paper and soap.
-Public washroom fixtures,walls and floors are in very good condition.
-Guest rooms are equipped with direct dial phones.
Guest Room Detail
- Hardware and hangings (door locks, racks, artwork, etc.) are secure and in good
condition.
- Carpet/floor is free of debris, stains,wear,loose threads, open seams, etc.
-Walls and ceilings are free of marks,stains and damage.
- Drapes are free of stains, damage; pull easily and hang properly.
- Furniture is free of dust, marks and damage.
-All printed material including collateral,phonebooks and stationery are neat, crisp and
current.
- Drawers and shelves are clean, free of dust and debris.
-All light bulbs operate; all light fixtures and lamps are in good condition, clean.
- Mirrors and windows are free of smudges and damage throughout.
-If safe is provided, it is clean,functional and convenient.
-Guest rooms are equipped with data ports (guest can connect laptop to the Internet).
- Room equipped with accurate, functional clock and radio/stereo.
- Color television works and is equipped with remote control.
-Televisions will feature basic cable or satellite channels.
-Telephones are available in each guest room.
-Ice bucket and glasses (may be molded plastic)are clean, hygienic.
- If minibar is present, it is hygienic,free of spills and damage, all products are sealed,
price list present.
-If coffeemaker is present, it is hygienic, contains ample, sealed supplies and cups.
-All bedding and linens are free of debris,hairs, damage and stains.
-Room heating and air conditioning is easily controlled by guest and is quiet.
-Air is fresh and clean, no stuffiness or odors.
- Sink,tub, shower,toilet,bidet are very clean,free of hairs,stains and discoloration.
-Bathroom tile and grouting is clean,not discolored, cracked or mildewed.
- Faucets and drains operate smoothly and easily.
-Hygienic soap and shampoo is provided.
- Minimum bath linen is present: one bathmat;two each of facecloth,hand towel and
bath towel.
-Towels are free of spots, stains,tears and obvious frays.
-If robes are provided, they are free of spots, stains and loose threads.
Specialized Facility Detail
-Pool/beach furniture is clean,hygienic and well-maintained.
- Pool deck or beach/sand is clean and free of excessive debris.
- Pool deck and tiling are in good condition, free of excessive damage or wear.
-Pool water is clean,free of debris and free of notable odors.
-Pool fittings and equipment (ladders, dive boards)are secure and in good condition.
-Tennis court surfaces are in good condition, free of damage and well-marked.
-Tennis courts and surrounding areas are clean and free of debris.
- Fixtures, nets, lights, and fences are well-maintained and good condition.
**Two Star Hotels: Comfortable establishment that is clean and reliable with
expanded amenities and services that include a full-service restaurant on site. The hotel
decor, furnishings, amenities, property grounds and guest room design will be moderately
enhanced in quality. Doubletree Hotels, Courtyard by Marriott and Four Points by
Sheraton are well-established names in the Forbes Two Star category.
A Two Star Hotel,Resort or Inn meets all the criteria expectations and all of the
qualities for a One Star Hotel,Resort or Inn plus the following characteristics:
Services Detail
- Front desk staff are articulate, smile and make eye contact.
- Staff is attired in well-fitting, consistent uniforms.
- Baggage assistance is available on request.
-The front desk is staffed twenty-four hours.
- Restaurant on-site serves three meals daily.
- If Inn,twenty-four hour guest service available on-call
Facilities Detail
- Lobby provides a comfortable seating area.
- Signs and notices are professional, matching decor, not "handwritten".
-Vending and/or ice machines are located on each guest floor.
- Service doors are clean,free of marks and damage, and closed.
- Public phones are convenient, clean and well-maintained.
-A variety of different sized and appointed rooms are available in hotel.
-If available, meeting rooms are well-signed so that it is easy to find and arrive at a
specific room.
- If available, meeting room doors are in good condition, free of nicks and damage.
-If available, meeting room interiors are in generally good condition, including walls,
floors and ceiling.
Guest Room Detail
-Guest room door and frame are free of marks, scratches and scuffs.
-There is comfortable seating for two people (other than bed).
- Guest service directory, pad and pen/pencil present and conveniently placed.
- Enclosed closets (means closets must have doors).
-There are a minimum six non-captive hangers.
-There are three spacious drawers or enclosed shelves (inside closet).
-A Luggage rack or bench provided; and adequate space to leave suitcase.
- Extra clean and hygienic blanket and pillow are provided in room.
- Lighting throughout the room is adequate.
-The room can be fully darkened.
-A full-length mirror is present in room.
-A hairdryer present in room, clean and functional.
- Hygienic soap, shampoo and two other bath amenities are provided.
- Guest rooms are equipped with easily accessible data ports or Ethernet/ wireless
internet access.
Specialized Facility Detail
-Guest can pick up e-mail and access the Internet from a Business Center workstation.
- Business Center working areas are clean,tidy and professional.
-There are comfortable office-style chairs at the Business Center guest workstations.
-All fitness,treatment and relaxation areas are hygienic, neatly organized and
maintained.
- Fitness equipment is clean, in very good condition, and conveniently laid out.
- Fitness/workout area is well-ventilated, with comfortable temperature.
-Sound system or television is provided in fitness/workout areas.
-Towels are provided in locker and fitness areas.
-Grooming area is equipped with hairdryers; soap and shampoo conveniently placed
-All amenities are neatly and professionally presented, and are very hygienic.
- Locker room, showers, sauna and hot tub are extremely clean, and hygienic in
appearance.
- Floors throughout the casino are well-maintained and free of excessive debris.
-Air circulation in casino is adequate, not stuffy or smoky.
- Slot banks are free of excessive debris, soiled glassware, and soiled ashtrays.
-Slot chairs are in good condition, clean and free of rips and stains.
- Cashier and change booths are tidy,well-organized, and well-signed.
-Table game tops are well maintained,free of damage and wear.
***Three Star Hotels: Well-appointed establishment with consistent service and
enhanced amenities providing travelers with an elevated level of comfort and
convenience. Hotels will provide such services as, room service, fitness center and
optional turndown service. Hotels will have a distinguishing style and ambience with
both the public space and guest rooms. Many Hyatt, Hilton, Marriott, Westin and
Fairmont hotels are established names with consistent service in the Forbes Three Star
category.
A Three Star Hotel,Resort or Inn meets all the criteria expectations and all of the
qualities for a Two Star Hotel,Resort or Inn plus the following characteristics:
Services Detail
-Confirmation number provided during reservation service.
-Reservationist can give clear and vivid description of hotel facility and style.
-Turndown service is available upon request.
-Valet parking is available.
- Baggage assistance is automatic.
-Same day laundry and dry cleaning available five days/week.
-Complimentary newspapers are delivered to room automatically.
- Complete room service is available.
-Workstation is available where guest can access Internet.
- Basic fitness equipment is provided, including treadmills and cycles.
-If Inn, restaurant on-site which serves full breakfast is available and one additional
meal service.
- If Resort, complimentary newspapers (or newsfaxes) are delivered to room
automatically.
Facilities Detail
- High quality,varied, and major brand sundry selections are available in an on-site
store.
-If public phonebook present, it is displayed in attractive cover.
- Pay-per-view movies are available.
- Suite accommodations (separate bedroom and living areas) are available.
Guest Room Detail
- Each guest room has two phones (one could be in the bathroom).
-Comfortable desk and chair are available for working, complete with telephone,data
port, and light.
-Guest rooms are equipped with Ethernet/wireless internet access.
-Insulated ice bucket,vinyl or better, as well as glass glassware; clean and hygienic are
present in room.
-Minibar is present (defined as selection several beverages and snacks).
-If Inn, refreshments present in room or readily available
-If coffeemaker is present, ceramic mugs and napkins are available.
- Pillows are plush and full, no foam.
-Framed artwork or interesting architectural features exist in room.
- Excellent lighting is provided in bathroom for makeup and shaving.
-Hygienic soap,shampoo and four other bath amenities are provided.
-Amenities are presented attractively,thoughtfully(not simply lined up on counter).
-Towels are of absorbent quality,with soft nap and no discoloration.
-If Inn, Pay-per-view movies available or VCR/DVD is available.
-If Resort,guest room provides ample seating for more than two persons.
Specialized Facility Detail
-If Business Center is present, a semi-private working area with workstation and
telephone is available for guests.
-If tennis is available on site,water is available courtside.
-If pool or beach service is present, ample towels are available poolside or at the beach.
-Pro shop/clubhouse interiors are clean and well-maintained; displays and counters
neat and tidy.
- Pro shop/clubhouse and surrounding areas are clean with well-maintained appearance.
-Golf carts are clean,well-organized and maintained.
- Rental equipment is clean and good condition, including bags.
Forbes Four and Five Star Criteria and Expectations
At the Forbes Four and Five Star level,both a facility inspection and service evaluation
will be performed. For each property,more than 750 criteria including cleanliness,
physical facilities and employee attitude and courtesy,are measured and evaluated to
produce a mathematically derived score.At the Forbes Four and Five Star level, 25%
of the overall score is based on the facility inspection and 75%is based on the service
evaluation.
"Service" can seem pretty subjective,but the staff at Forbes Travel Guide use strict
standards and a good stopwatch to make their findings as accurate and objective as
possible. For hotel ratings,inspectors spend three days and two nights at the hotel,
interacting with staff, ordering room service,working out in the fitness center, making
requests with the concierge,dining in the restaurants and taking advantage of other
services that a standard guest would encounter.
Inspectors respond"yes" or"no"to standards that are classified in a way that assess
efficiency,graciousness and warmth,technical skill level as well as food quality,
housekeeping and concierge services,to name a few. For every"no" answer, a hotel loses
one point, and there's very little grey area. For example, upon arrival,luggage is
delivered to the guest's room in 10 minutes or guests are always asked permission before
being placed on or into a recording. It either happens or it doesn't,there's no middle
ground. Inspectors also write pages of commentary during the evaluations.
The Forbes Four and Five Star Hotel Incognito Service Evaluation
The hotel service evaluation is based on a three-day, two-night stay.The following
categories are evaluated during the stay by the Forbes incognito inspector:
• Reservations
• Arrival
• Departure
• Communications (PBX Operator)
• Room Service (Dinner)
• Breakfast Service (in Restaurant)
• Bar/Lounge Service
• Housekeeping Daily Service
• Housekeeping Request and Turndown Service
• Laundry Service
• Business Center(if applicable)
• Guest Services/Concierge (by phone and in-person)
• Guest Room Conditions
• Public Area Conditions
• Fitness Room (if applicable)
• Pool/Beach Service (if applicable)
• Casino (if applicable)
Within each category, questions are"tagged"for certain qualities/classifications.
Classifications:
• Courtesy/Manners
• Graciousness/thoughtfulness and sense of personalized service
• Efficiency
• Guest comfort&convenience
• Luxury
• Technical execution skill and knowledge
• Staff appearance
• Food quality
• Cleanliness&condition
Sample Service Questions from Hotel Incognito Evaluation
Note: All questions are answered with a YES or NO and then allow for
comments/remarks from the inspector. Also, each question has the applicable
classification tag in parentheses following the statement.
Reservations
Reservations agent can readily describe variety of rates and types; effectively enabling
choice. (Technical execution, skill&knowledge)
Staff exhibits the ability to anticipate needs; not always requiring prompting by guest.
(Graciousness/thoughtfulness and sense of personalized service)
Arrival
Arriving guests are greeted and assisted curbside within sixty seconds of arriving by car
or taxi. Exactly how long did it take? (Efficiency)Note: inspectors carry recorders that
can not only measure this particular exercise but the entire arrival process.
Orientation to the hotel is discreet and helpful, consisting of not more than four relevant
and important facts,but not delaying guests' arrival to room. (Guest comfort and
convenience)
Guest Services/Concierge
Staff maintains alert posture; no hands in pockets,folded arms; Staff avoids excessive
personal chatting amongst themselves; Staff does not smoke, drink or eat in guest view.
(Staff appearance)
When asked about restaurant recommendations,staff mentions at least three
appropriate options; describing cuisine, atmosphere and anticipates transportation and
dress code. (Technical execution skill and knowledge)
Guest Room Conditions
Would you describe the bed to be plush and inviting? Linens of exceptional quality and
comfort? Use of oversized or numerous pillows? Bedcovers elegant and stylish? (Sense of
luxury)
Would you describe this room as being extremely well maintained? (nothing broken,
worn, damaged, slow plumbing etc.) (Cleanliness and condition)
Room Service
Staff is extremely well spoken, polite and clear, avoiding slang and phrase-fragments.
(Courtesy/manners).
Hot foods are hot when served(not warm); frozen items are firm at the time of
consumption (desserts adequately protected or offered as second course delivery). (Food
quality)
Forbes Four Star Criteria
****Four Star Hotels: Outstanding establishment in a distinctive setting that
provides travelers with exceptional service and a luxury experience. Service and
amenities are refined and sophisticated and may include automatic turndown service,
valet parking and 24-hour room service. Ritz-Carlton, Mandarin Oriental and Four
Seasons are prominent names in the Forbes Four Star category, known for personalized
service and hospitality, in addition to luxurious accommodations. Other notable Forbes
Four Stars include the Post Ranch Inn, Canoe Bay and the Windsor Court Hotel.
A Four Star Hotel,Resort or Inn meets all the criteria expectations and all of the
qualities for a Three Star Hotel,Resort or Inn plus the following characteristics:
Services Detail
-Written confirmation is automatic or offered, either by mail, fax or e-mail.
-Written confirmation is personalized, professional and accurate; it reflects the style and
image of the property.
-Guests name is used effectively,but discreetly, as a signal of recognition.
-The time from arriving at the reception area until registration is complete does not
exceed five minutes (includes queuing).
- Bed is plush and inviting with oversized or numerous pillows.
-Bedcovers are elegant and stylish and with linens of exceptional quality and comfort.
-All written information is provided on good quality paper or pads, custom-printed or
logoed.
- Bathroom presentation and placement of amenities and linens is thoughtful, careful,
and elegant.
-Fresh ice is provided during evening service or at another time during the day.
-Turndown service is automatically provided.
- During turndown service, guest clothing is neatly handled and guest toiletries are
neatly arranged and displayed on a cloth or shelf.
- Room service is delivered within 30 minutes.
- Room service order is delivered within five minutes of quoted time.
-One hour pressing is available.
-If resort, two hour pressing available
- Same day laundry and dry cleaning is available seven days/week.
-Staff arrives in guest room to pick up clothing within ten minutes of placing request.
-Wake-up call is personalized with guest's name and time of day.
-Wake-up call is delivered within two minutes of requested time.
-Wine by the glass service will include an offer of a tasting sample.
-Special service desk identified as concierge/guest service is situated apart from
reception/front desk.
-The final bill is offered to guest for review prior to printing final receipt.
-If Inn, choice of at least two complimentary newspapers are offered on-site.
-If Inn, restaurant on site serving a full breakfast plus two additional meal services.
-If casino services are present,when playing slots for more than 20 minutes, drink
service is offered.
-If casino services are present, when playing a table game for more than 15 minutes,
drink service is offered.
Facilities Detail
- Lobby areas feature elegant live plants and/or fresh floral displays.
-A dedicated and secure luggage storage area is available.
- Public phones are equipped with seats,privacy panels and pad/pens.
- Public washrooms are furnished with upgraded materials and appointments/luxurious
design.
-Televisions feature premium cable or satellite television.
- Guest room telephones have two lines.
Guest Room Detail
- Selection of at least io hangers including a variety of bars, clips and padded.
- Closet is very well lit and generously spacious.
-In-room safe is present.
-If Inn, in-room safe is present or readily accessible on-site.
-Minibar is present, is non auto-charge, and premium products are attractively
displayed.
- Bed is triple sheeted or features washable duvets.
- Live plants are present in guest rooms.
- Shaving/makeup,lighted magnifying mirror is present.
- Double sinks or separate vanity counter are present in the bathroom.
-Ample cosmetic and toiletry storage space exists for two persons.
- Hygienic soap, shampoo and five other bath amenities are provided.
- Bathroom amenities will be exceptionally luxurious in quality and variety.
-One robe per guest is provided; plus additional towels in the bathroom.
- Luxurious bath linens, oversized towels and a bath rug are all present in the bathroom,
no plastic shower curtains.
Specialized Facility Detail
- Fitness equipment is available with personal headphones/televisions
-Current newspapers and national-title magazines are provided in fitness and locker
areas.
Forbes Five Star Criteria
*Five Star Hotels: Exceptionally distinctive luxury environment offering
consistently superlative,personalized service and the ultimate in amenities, make these
hotels and inns the best in the U.S. and Canada. Attention to detail and the anticipation of
every need are evident throughout this exclusive group of hotels. These hotels are
remarkable in every aspect from the plush and elegant guest room design to the
unforgettable culinary experiences. The Forbes Five Star category includes such
properties as the Peninsula Beverly Hills, the Four Seasons Hotel Chicago, the Ritz-
Carlton San Francisco and the Mandarin Oriental New York.
A Five Star Hotel, Resort or Inn meets all the criteria expectations and all of the
qualities for a Four Star Hotel,Resort or Inn plus the following characteristics:
Services Detail
- Staff is extremely well spoken, polite and clear, avoids slang and phrase-fragments.
-Staff is extremely well informed about requirements within their department.
-Overall service is flawless from initial reservation call to departure service.
- Guests are offered an escort to their rooms unless they specifically decline.
- Choice of at least two complimentary newspapers is offered and distributed.
-Welcome gift or amenity provided by management during the visit.
-Twenty-four hour room service is available, including hot food.
-Wine by the glass is presented in bottle and poured in room,for room service.
- During turndown service, something noteworthy and thoughtful is included in the
presentation.
-At least two types of premium quality snacks are automatically offered and distinctly
presented during bar and lounge service.
-All mixed drinks are presented with modified or full club service.
-Any work undertaken by the staff is handled with complete professionalism, and
returned to guests neatly, in folders or envelopes.
-If Inn, restaurant on site serving a full breakfast and dinner plus one additional meal
service.
-If pool service is available, guests are proactively greeted and escorted to their chairs,
and set-up assistance is provided or offered.
- If pool service is available, during a go minute period and in warm conditions, some
sort of complimentary refreshment is offered(for example, mineral water, fresh fruit,
water spritz).
Facilities Detail
-Public washrooms feature well-maintained cloth towels, fresh plants or flowers.
Guest Room Detail
-Guest bathroom is equipped with a telephone.
- CD player/stereo is present and functional.
- Ice bucket and glasses are high quality(glass, metal, stone etc.),with tongs which are
clean and hygienic.
- Fresh flowers are present in guest rooms.
- Separate showers are present in bathroom.
EXHIBIT "G"
Form of Consent to Collateral Assignment
CONSENT TO ASSIGNMENT
FOR SECURITY PURPOSES OF
ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
BETWEEN CITY OF FORT WORTH AND
UNIVERSITY HOLDINGS, LLC
(CITY SECRETARY CONTRACT NO. )
This CONSENT TO ASSIGNMENT FOR SECURITY PURPOSES OF
ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Consent") 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 714 MAIN REAL
ESTATE HOLDINGS, LLC ("Developer"), a Delaware limited liability company; and
("Lender"), a
RECITALS
The City, Developer and Lender hereby agree that the following statements are true
and correct and constitute the basis upon which the parties have entered into this Consent:
A. The City and Developer previously entered into that certain Economic
Development Program Agreement, dated as of , 2018 (the "EDPA")
pursuant to which the City agreed to pay Developer certain Program Grants in return for
Developer's redevelopment of a historic office tower at 714 Main St. into a full-service
hotel, as more specifically outlined in the EDPA (the "Hotel"). The EDPA is a public
document on file in the City Secretary's Office as City Secretary Contract No
B. Section 13 of the EDPA allows Developer to assign its rights and
obligations under the EDPA to a financial institution or other lender for purposes of
granting a security interest in the Hotel without the approval of the City Council, provided
that Developer and the financial institution or other lender first execute a written agreement
with the City governing the rights and obligations of the City, Developer, and the financial
institution or other lender with respect to such security interest.
C. Developer wishes to obtain a loan from Lender in order to [state reason,for
loan] (the "Loan"). As security for the Loan, certain agreements between Developer and
Lender governing the Loan and dated , including, but not limited
to,that certain Loan Agreement and [list other related documents] (collectively,the"Loan
Documents") require that Developer assign, transfer and convey to Lender all of
Developer's rights, interest in and to the EDPA until such time as Developer has fully
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings, LLC
satisfied all duties and obligations set forth in the Loan Documents that are necessary to
discharge Lender's security interest in the EDPA (the "Assignment").
D. The City is willing to consent to this Assignment specifically in accordance
with the terms and conditions of this Consent.
AGREEMENT
1. The City, Developer and Lender hereby agree that the recitals set forth above are
true and correct and form the basis upon which the City has entered into this Consent.
2. The City hereby consents to the Assignment at the request of Developer and Lender
solely for the purpose of Lender's securing the Loan pursuant to and in accordance with
the Loan Documents. Notwithstanding such consent, the City does not adopt, ratify or
approve any of the particular provisions of the Loan Documents and, unless and to the
extent specifically acknowledged by the City in this Consent, does not grant any right or
privilege to Lender or any assignee or successor in interest thereto that is different from or
more extensive than any right or privilege granted to Developer under the EDPA.
3. In the event that the City is required by the EDPA to provide any kind of written
notice to Developer, including notice of breach or default by Developer,the City shall also
provide contemporaneously a copy of such written notice to Lender, addressed to the
following, or such other party or address as Lender designates in writing, by certified mail,
postage prepaid, or by hand delivery:
or such other address(es) as Lender may advise City from time to time.
4. If Developer fails to cure any default under the EDPA, the City agrees that Lender,
its agents or designees shall have an additional thirty (30) calendar days or such greater
time as may specifically be provided under the EDPA to perform any of the obligations or
requirements of Developer imposed by the EDPA and that the City will accept Lender's
performance of the same as if Developer had performed such obligations or requirements;
provided,however,that in the event such default cannot be cured within such time,Lender,
its agents or designees, shall have such additional time as may be reasonably necessary if
within such time period Lender has commenced and is diligently pursuing the remedies to
cure such default, including,without limitation, such time as may be required for lender to
gain possession of Developer's interest in the Developer property pursuant to the terms of
the Loan Documents.
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
5. If at any time Lender wishes to exercise any foreclosure rights under the Loan
Documents, before taking any foreclosure action Lender shall first provide written notice
to the City of such intent (a "Notice"). Lender shall copy Developer on the Notice and
deliver such Notice to Developer by both first class and certified mail return receipt
concurrent with its transmittal of the Notice to the City and represent in the Notice that it
has done so. Notwithstanding anything to the contrary herein, unless Lender enters into a
written agreement with the City to assume and be bound by all covenants and obligations
of Developer under the EDPA, Lender understands and agrees that the City shall not be
bound to pay Lender any Program Grants pursuant to the EDPA. In addition, Lender
understands and agrees that if Lender wishes to sell all or any portion of the Land or
improvements thereon to a third party following Lender's exercise of any foreclosure rights
under the Loan Documents,the City shall not be bound to pay such third party any Program
Grants pursuant to the EDPA unless Lender and such third party comply with the procedure
for assignment set forth in Section 13 of the EDPA, including the obligation of such third
party to enter into a written agreement with the City to assume and be bound by all
covenants and obligations of Developer under the EDPA. In the event that payment of any
Program Grants are withheld by the City pursuant to this Section 5, any rights to receipt of
those Program Grants are hereby waived, but the number and amount(s) of any such
Program Grant(s) shall nevertheless be counted for purposes of calculating the Term of the
EDPA, as set forth in Section 3 of the EDPA.
6. In the event of any conflict between this Consent and the EDPA or any of the Loan
Documents, this Consent shall control. In the event of any conflict between this Consent
and any of the Loan Documents, this Consent shall control. In the event of any conflict
between the EDPA and any of the Loan Documents, the EDPA shall control.
7. This Consent may not be amended or modified except by a written agreement
executed by all of the parties hereto. Notwithstanding anything to the contrary in the Loan
Documents, an amendment to any of the Loan Documents shall not constitute an
amendment to this Consent or the EDPA.
8. Once Developer has fully satisfied all duties and obligations set forth in the Loan
Documents that are necessary to discharge Lender's security interest in the EDPA and such
security interest is released, Lender shall provide written notice to the City that Lender has
released such security interest, in which case this Consent shall automatically terminate.
9. This Consent shall be construed in accordance with the laws of the State of Texas.
Venue for any action arising under the provisions of this Consent shall lie in state courts
located in Tarrant County, Texas or in the United States District Court for the Northern
District of Texas, Fort Worth Division.
10. Capitalized terms used but not specifically defined in this Consent shall have the
meanings ascribed to them in the EDPA.
11. This written instrument contains the entire understanding and agreement between
the City, Developer and Lender as to the matters contained herein. Any prior or
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings, LLC
contemporaneous oral or written agreement concerning such matters is hereby declared
null and void to the extent in conflict with this Consent.
12. This Consent shall be effective on the later date as of which all parties have
executed it. This Consent may be executed in any number of duplicate originals and each
duplicate original shall be deemed to be an original. The failure of any party hereto to
execute this Consent, or any counterpart hereof, shall not relieve the other signatories from
their obligations from their obligations hereunder.
EXECUTED as of the last date indicated below:
[SIGNATURES IMMEDIATELY FOLLOW ON NEXT PAGE]
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
CITY OF FORT WORTH: APPROVED AS TO FORM
AND LEGALITY:
By: By:
Name: Name.-
Assistant City Manager Assistant City Attorney
Date: M&C: none required
714 MAIN REAL ESTATE HOLDINGS, LLC,
a Delaware limited liability company:
By:
Name:
Title.-
Date:
[Lender]
By:
Name.-
Title:
Date:
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
EXHIBIT "H"
Permitted Encumbrances
1. PACE Lender Contract dated [ ], between the [City of Austin], Texas
and Twain Community Partners, II, LLC ("TCPII").
2. PACE Owner Contract dated [ ], between the [City of Austin], Texas
and Tenant.
3. Notice of Contractual Assessment dated [ ], from [City].
4. Financing Agreement dated [ ], between Tenant and TCPII.
S. Promissory Note dated [ ], made by Tenant to TCPII.
Economic Development Program Agreement
between City of Fort Worth and 714 Main Real Estate Holdings,LLC
6/10/2019 M&C Review
Official site of the City of Fort Worth,Texas
CITY COUNCIL AGENDA FORT�WURTH
COUNCIL ACTION: Approved on 10/30/2018
DATE: 10/30/2018REFERENCE NO.:C-28913 LOG NAME: 17ED714MAINEDPA
CODE: C TYPE: NON-CONSENT PUBLIC HEARING: NO
SUBJECT. Authorize Execution of Economic Development Program Agreement with Development
Services Group, Inc.,or an Affiliate for the Development of a Full Service Hotel to be
Located at 714 Main Street,Accept Dedication of Property at 714 Main Street to the City,
and Authorize Execution of a Ground Lease of Property at 714 Main Street by the City to
Development Services Group, Inc.,or an Affiliate,and Authorize Execution of a Related
Room Block Agreement(COUNCIL DISTRICT 9)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to execute an Economic Development Program Agreement with
Development Services Group, Inc.,or an affiliate related to the development of a full service hotel to be
located at 714 Main Street;
2. Find that the terms and conditions of the Agreement,as outlined below,constitute a custom-designed
Economic Development Program,as recommended by the 2018 Comprehensive Plan and authorized by
Chapter 380 of the Texas Local Government Code,
3.Accept dedication of the property at 714 Main Street to the City and authorize execution of any
necessary related documents;
4.Authorize execution of a Ground Lease of the property at 714 Main Street by the City to Development
Services Group, Inc.,or an affiliate,with an option and put-option for the sale of the property after a period
of 10 years;and
5.Authorize execution of a Room Block Agreement with Development Services Group, Inc.,or an affiliate to
provide event room blocks in the hotel to potential Convention Center customers for a period of at least 10
years after the opening of the hotel.
DISCUSSION:
Development Services Group, Inc.,or an affiliate(Developer)intends to convert the existing 190,000
square foot office tower located at 714 Main St.into a 232 room four star hotel.The hotel will contain
approximately 10,000 square feet of meeting space,including a main ballroom,conference,boardroom
space.The hotel will also include an approximate 3,100 square foot full service restaurant and a 3,100
square foot penthouse bar that can also be available for private events. Total investment will be at least
$56 million,not including land acquisition,of which at least$36 million will be hard construction costs.
In order to facilitate this development,the City of Fort Worth(City)proposes to provide 10 annual Economic
Development Program grants to the Developer,as authorized by Chapter 380,Texas Local Government
Code. The grants will be tied to the amount of investment made by the Developer and satisfaction of other
project and spending requirements,as follows:
Investment:
Failure to meet the following criteria is an event of default,which subject to commercially reasonable notice
and cure rights,will result in immediate termination of the Agreement.
Minimum investment of$56 million in total development costs(exclusive of land acquisition costs).
Of this,a minimum$36 million shall be hard construction costs;
Minimum 220 key hotel;
Must contain 10,000 square feet of meeting space,including a main ballroom and conference rooms;
Must be completed by June 30,2021;
Must operate at Kimpton brand standards at all times or operate and be marketed in a manner that is
consistent with the standards for a Four Star Hotel as defined by Forbes Travel Guide;
Utilization of Fort Worth Companies and Fort Worth Certified M/WBE Companies(Real Property
Improvements);
The Developer will be required to spend 15 percent of hard construction costs with contractors that are Fort
Worth companies. The Developer will also be required to spend 15 percent of hard construction costs with
contractors that are Fort Worth certified Minority/Women-Owned Business Enterprise(M/WBE)companies
(with the understanding that dollars spent with Fort Worth certified MMIBE companies will also count as
dollars spent with Fort Worth companies).
Employment Commitments:
The Developer will employ a minimum of 30 full-time employees on the property by December 31,
2021. The Developer will fill the greater of 18 full time positions or 60 percent of all full time positions with
Fort Worth residents and will fill the greater of 8 full time positions or 25 percent of all full time positions with
Fort Worth Central City residents(with the understanding that employment of Fort Worth Central City
residents will also count as employment of Fort Worth residents).
Utilization of Fort Worth Companies and Fort Worth Certified M/WBE Companies(Supply&
Services):
The Developer will spend a minimum of$50,000.00 of annual discretionary service and supply
apps.cfwnet.org/council_packet/mc_review.asp?I D=26267&councildate=l 0/30/2018 1/3
6/10/2019 M&C Review
expenditures with Fort Worth companies. The Developer will spend a minimum of$50,000.00 of annual
discretionary service and supply expenditures with Fort Worth certified MMIBE companies(with the
understanding that dollars spent with Fort Worth certified MMIBE companies will also count as dollars spent
with Fort Worth companies).
Supply and Service Expenditures means all expenditures by the company expended directly for the
operation and maintenance of the development,excluding amounts paid for electric,gas,water and any
other utility services(but not excluding cable,internet or television services).
City Commitments:
The funding source for the grants will be revenues generated by the City's 7 percent hotel occupancy taxes
from the hotel. The City will make up to 10 annual Economic Development Program grants to the
Developer subject to the following conditions. The maximum annual program grant will equal 58 percent of
City's 7 percent hotel occupancy tax revenue received from the hotel in the previous year,with the overall
incentive capped at$6,000,000.00 gross. Except for cases of default,failure to meet a commitment will
result in a reduction of the corresponding component of the grant for that year proportional to the amount
the commitment was not met,or for the duration of the Agreement in the case of construction commitments.
TABLE IV-1 Maximum Potential Grant with Corresponding Components:
Property Owner or Company Commitment Potential
Grant
Real Property Investment(Base Commitment) 37 percent
Fort Worth Contractors 3 percent
Fort Worth M/WBE Contractors 3 percent
Overall Employment 3 percent
Employment of Fort Worth Residents 3 percent
Employment of Fort Worth Central City Residents 3 percent
Utilization of Fort Worth Companies for Services and 3 percent
Supplies
Utilization of Fort Worth M/WBE Companies for Services 3 percent
and Supplies
TOTAL(all components of maximum 58% HOT grant) 58 percent
Conveyance of Hotel Property to City and City Ground Lease to Developer:
Under the Texas Tax Code,the City is authorized to use local hotel occupancy tax revenue to,among other
things, pay for the construction, improvement,equipping,operation and maintenance of convention center
facilities. For cities the size of Fort Worth,a convention center facility includes a hotel that is located on
land owned by the City and that is located within 1,000 feet of a convention center facility or a convention
center complex. The hotel property is located within 1,000 feet of the Fort Worth Convention Center,which
qualifies as a convention center facility under the Tax Code. Therefore, in order for hotel occupancy tax
revenue from the hotel to serve as the funding source for the grants,the City must own the real property on
which the hotel is constructed. The Developer has agreed to deed the land to City at no cost to the
City. The City will then enter into a ground lease with the Developer for a term of 25 years. The Developer
must pay fair market annual rent to the City. However, in turn,the City will pay the Developer a second
Economic Development Program grant equal to the rent payment,less$100.00. The lease will give the
Developer an option to purchase the land at the end of the 10-year incentive program for the then fair-
market value of the land without consideration of the improvements,with the understanding that the City will
pay the Developer a final Economic Development Program grant equal to the purchase price,less
$10,000.00. The City will also have an option to obligate the Developer to purchase the land under those
terms. If neither exercises these options,annual rent will increase to the then-market rate for the remainder
of the 10-year term.
Room Block Agreement:
The Developer and the City will enter into a separate Room Block Agreement at market rate terms for a 10
year period,with provisions mutually agreed upon.
This project is located in COUNCIL DISTRICT 9.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that upon approval,the grants provided under this agreement will be built
into the City's long-term financial forecast for the Hotel Occupancy Tax Special Revenue Fund with a
maximum grant award of$6,000,000.00.
TO
Fund Department Account Project Program Activity Budget Reference# Amount
ID ID Year Chartfield 2
FROM
Fund Department Account Project Program Activity Budget Reference# Amount
ID ID Year Chartfield 2
Submitted for City Manager's Office by_ Robert Sturns(2663)
Originating Department Head: Robert Sturns(2663)
apps.cfwnet.org/council_packet/mc_review.asp?I D=26267&councildate=l 0/30/2018 2/3
6/10/2019 M&C Review
Additional Information Contact: Michael Hennig(6024)
ATTACHMENTS
180820 LocationMap.pdf
Form 1295 Certificate 100408695.pdf
apps.cfwnet.org/council_packet/mc_review.asp?I D=26267&councildate=10/30/2018 3/3