HomeMy WebLinkAboutContract 62479CSC No. 62479
INTERLOCAL AGREEMENT BETWEEN CITY OF FORT WORTH
AND THE TEXAS A&M SYSTEM UNIVERSITY SYSTEM
This Interlocal Agreement ("Agreement") is made and entered into this &y day of
202 3 , between the CITY OF FORT WORTH, a Texas home rule municipality
("CITY") and THE TEXAS A&M UNIVERSITY SYSTEM, an agency of the State of Texas ("A&M
SYSTEM"). CITY and A&M SYSTEM may each be referred to herein as a "Party" and collectively
as the "Parties."
RECITALS:
WHEREAS, pursuant to the Interlocal Cooperation Act, Texas Government Code Chapter
791, as amended, cities, counties, special districts and other legally constituted political subdivisions
of the State of Texas are authorized to enter into interlocal contracts and agreements with each other
regarding governmental functions and services;
WHEREAS, CITY and A&M SYSTEM are entering into this Agreement for the purpose of
documenting the general agreement of the Parties with regard to the development of a proposed A&M
SYSTEM Fort Worth Campus and associated non-academic uses that will include construction of
three buildings on four blocks owned by A&M SYSTEM (the "Campus"); and
WHEREAS, CITY and A&M SYSTEM anticipate signing a Master Development
Agreement and one or more ground leases and other ancillary documents once more specific terns
have been negotiated and agreed upon between the Parties and approved by A&M SYSTEM's Board
of Regents.
NOW THEREFORE, in consideration of the mutual covenants contained herein and subject
to the conditions herein set forth, CITY and A&M SYSTEM hereby agree as follows.
I. MUTUAL AGREEMENTS
1. The Campus will include a Law and Education Building (`Building 1") that will be
exclusively designed and constructed by A&M SYSTEM.
2. The remainder of the Campus will be designed and constructed through a process
coordinated by CITY in collaboration with A&M SYSTEM and other stakeholders,
including the County and the community at -large. The process will include the selection
of a private developer ("Developer") to design and build a Research and Innovation
Building ("Building 2"), a Gateway Building ("Building 3"), and a campus plaza
(contingent upon the development of suitable parking located elsewhere for A&M
SYSTEM) (collectively, the "Project Property"), as depicted on the map attached hereto
as Exhibit "A".
3. The Project Property will be condominiumized. CITY will enable financing of the
portion of Building 2 and Building 3 that will be occupied by A&M SYSTEM academic
and agency users, and the Developer will finance the balance of each building that will
be occupied by related non-academic users, consistent with A&M SYSTEM's academic,
research and innovation missions.
4. CITY also intends to create a Local Government Corporation ("LGC") to issue bonds
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
and serve as a financing vehicle for the portion of Project Property that the LGC will own.
5. A&M SYSTEM will enter into one or more ground leases of the Project Property with the
LGC, and the LGC will in turn enter into one or more sub -ground leases of the Project
Property with the Developer, who will finance all construction costs for improvements
on the Project Property.
6. At the completion of construction, the Developer will retain ownership of Building 2
and Building 3, subject to condominium declarations.
7. A portion of the condominiumized space will be retained by Developer and the
remaining condominiumized space (the "A&M SYSTEM Units") will be conveyed to the
LGC.
8. The LGC will issue bonds in an amount necessary to cover the cost of purchasing the
condominium ownership interest in the A&M SYSTEM Units from the Developer.
9. The LGC will then lease the A&M SYSTEM Unit spaces (the "Space Leases") to A&M
SYSTEM, with the lease payments being equal to the bonds' debt service plus any other
pre -approved, reasonable and typical expenses incurred by the CITY or LGC.
10. The Space Leases will be coterminous with the maturity date of the bonds and will
provide that, in the event that A&M SYSTEM defaults on the Space Leases and fails to
cure the default after notice and opportunity to cure, A&M SYSTEM will pay back the
entirety of the remaining bonds.
11. Additionally, the Master Development Agreement will provide that the LGC will convey
its condominium ownership interest in the A&M SYSTEM Units to A&M SYSTEM at
the conclusion of the Space Leases.
The general terms of the Master Development Agreement and Ground Leases, and the commitments by
CITY and A&M SYSTEM, are outlined below:
II. CITY OF FORT WORTH AGREEMENTS
1. CITY, in consultation with A&M SYSTEM, has issued a Request for Proposals to
engage a Developer to lead the design, construction, financing, and development of
Building 2, Building 3, and the campus plaza (contingent upon the development of
suitable parking located elsewhere for A&M SYSTEM).
2. CITY will create an LGC to assist with the financing of the A&M SYSTEM Units by
issuing bonds to fund the purchase of the condominium ownership interest in the A&M
SYSTEM Units.
3. The LGC, in consultation with A&M SYSTEM, will enter into an agreement with the
Developer for the development of the Project Property. The Developer will be required
to comply with the A&M SYSTEM's Developer Project Guidelines.
4. The LGC will enter into one or more ground leases of the Project Property from A&M
SYSTEM, at a nominal rental rate (with consideration to A&M SYSTEM documented
in the Master Development Agreement), and enter into one or more sub -ground leases
of the Project Property with the Developer with any rent or other consideration received
from Developer under the sub -ground lease(s) being applied to parking infrastructure or
the overall Project to the benefit of A&M SYSTEM and all terms of the sub -ground
lease(s) consented to by A&M SYSTEM.
5. The sub -ground lease(s) will include a purchase option and right of first refusal in favor
of A&M System on all or any portion of the non-A&M System Units constituting the
Project Property. The Developer will also enter into a Recognition Agreement with the
LGC and A&M System that provides that if and when the ground lease(s) with the LGC
terminate, the sub -ground lease(s) to the Developer from the LGC will automatically be
recognized as direct ground lease(s) between the Developer and the A&M SYSTEM.
6. At the completion of construction of each of Building 2 and Building 3, the LGC will
issue bonds and purchase the condominium ownership interest in the A&M SYSTEM Units
from the Developer.
7. The LGC will then lease the A&M SYSTEM Units to A&M SYSTEM (via the Space
Leases) for a rental rate equal to the bonds' debt service plus any other agreed upon debt -
related Project and debt issuance expenses and any other pre -approved, reasonable and
typical expenses incurred by the CITY or LGC.
8. Upon the maturity date of the bonds issued for the purchase of the A&M SYSTEM Units
and the final lease payments made by A&M SYSTEM and used to retire the bonds, the
Space Leases to A&M SYSTEM of the A&M SYSTEM Units will be terminated and
the LGC will convey its condominium ownership interest in the A&M SYSTEM Units
to A&M SYSTEM.
9. Upon conveyance of the A&M SYSTEM Units to A&M SYSTEM, the ground lease(s)
with the LGC will terminate and the sub -ground lease(s) to the Developer from the LGC
will automatically be recognized as direct ground lease(s) between the Developer and
the A&M SYSTEM pursuant to a separate Recognition Agreement between A&M
SYSTEM and the Developer and, if necessary, the LGC.
10. CITY will provide an estimate or list of costs necessary to complete the Project,
including, but not limited to, the hiring of outside counsel, to be reimbursed by A&M
SYSTEM after A&M SYSTEM's approval of such costs.
III. A&M SYSTEM AGREEMENTS
1. A&M SYSTEM will design and construct the Law and Education Building (Building 1)
at A&M SYSTEM's expense.
2. A&M SYSTEM will participate in the CITY's/LGC's process to select a Developer and
consult with the LGC on the terms of the agreement with the Developer.
3. A&M SYSTEM will participate and collaborate in the overall design of the Project and
Developer will present to the City's Downtown Design Review Board or other boards and
commissions as necessary.
4. A&M SYSTEM will designate a local project program manager to coordinate with
Developer, Developer's consultants, A&M SYSTEM, CITY and LGC.
5. A&M SYSTEM will enter into one or more ground leases of the Project Property to
the LGC, at a nominal rental rate (with consideration to A&M SYSTEM documented
in a separate Master Development Agreement), with one or more mandatory sub -ground
leases from the LGC to the Developer with any rent or other consideration received from
Developer under the sub -ground lease(s) being applied to parking infrastructure or the
overall Project to the benefit of A&M SYSTEM and all terms of the sub -ground lease(s)
consented to by A&M SYSTEM.
6. A&M SYSTEM staff and consultants will coordinate with CITY, LGC, Developer, and
the Developer's consultants on design and construction of the facilities to be built by the
Developer to ensure compatibility from both aesthetic and functional perspectives and
to reduce costs and achieve operational efficiencies.
7. At the completion of each of Building 2 and Building 3, A&M SYSTEM will lease from
the LGC all space built in Building 2 and Building 3 for use by A&M SYSTEM as directed
by A&M SYSTEM throughout the design process (the A&M SYSTEM Units).
8. A&M SYSTEM's rental payments for the Space Leases from the LGC will be equal to
the bonds' debt service plus any other pre -approved reasonable and typical expenses
incurred by the CITY or LGC that are not otherwise paid by A&M SYSTEM.
9. A&M SYSTEM's Space Leases from the LGC will provide that A&M SYSTEM must
pay back the entirety of the remaining bonds should A&M SYSTEM default on the
Space Leases and fail to cure the default after notice and opportunity to cure.
10. A&M SYSTEM will take ownership of the LGC's A&M SYSTEM Units upon the
maturity of the bonds and final lease payments made by A&M SYSTEM, which will
coincide with the termination of the Space Leases to A&M SYSTEM of the A&M
SYSTEM Units.
11. A&M SYSTEM will have a purchase option and right of first refusal on all or any portion
of the non-A&M SYSTEM Units constituting the Project Property.
12. Upon the termination of the Space Leases to A&M SYSTEM of the A&M SYSTEM
Units, the LGC's ground lease(s) of the Project Property will terminate and the sub -
ground lease(s) to the Developer from the LGC will automatically be recognized as
direct ground lease(s) between the Developer and the A&M SYSTEM pursuant a
separate Recognition Agreement between A&M SYSTEM and the Developer and, if
necessary, the LGC.
13. Unless otherwise negotiated, A&M SYSTEM will reimburse the CITY and the LGC for
all other costs reasonably necessary to complete the Project, including, but not limited
to, the hiring of outside counsel, subject to A&M SYSTEM's approval of such costs.
A&M SYSTEM will have the ability to review and approve costs associated with
completing the Project and normal costs of debt issuance, and such approval shall not be
unreasonably withheld, conditioned, or delayed. It is the intention of A&M SYSTEM,
the CITY, and the LGC that the development of the Project Property will be at no cost
to the CITY or the LGC unless otherwise explicitly negotiated.
14. If necessary, A&M SYSTEM will negotiate and execute an agreement directly with the
Developer for the maintenance of A&M SYSTEM campus areas constructed by the
Developer including the plaza, if constructed.
15. A&M SYSTEM will be responsible for all common area expenses allocated to the A&M
SYSTEM Units, as set forth in the master condominium declarations.
This Agreement sets forth the general agreement of the Parties. Each Party paying for the
performance of governmental functions or services under this Agreement will make those payments
from current revenues available to the paying Party. The Parties anticipate signing a Master
Development Agreement and one or more ground leases once more specific terms have been
negotiated and agreed upon and approved by A&M SYSTEM's Board of Regents.
[SIGNATURE PAGES FOLLOW]
EXECUTED ja nUQrl-) , 2023 by A&M SYSTEM.
BOARD OF REGENTS OF THE TEXAS A&M
UNIVERSITY ITEM, an agency of the State of
Texnc ����
i I /
BILLY HAMOON
Executive Vice Chancellor and
Chief Financial Officer
The Texas A&M University System
APPROVED AS TO FORM:
GINA JOSEPH
Managing Counsel, Property & Construction
Office of General Counsel
The Texas A&M University System
CITY OF FORT WORTH
EXECUTED Nov. 19,202 4 by CITY OF FORT WORTH.
City:
By: Dana 9urgAdof: (tan 19. zo 15.53 �STy �
Name: Dana Burghdoff
Title: Assistant City Manager
Date. Jan 19, 2023
City Secretary:
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By oezonaa4a
Name: Jannette Goodall
Title: City Secretary
Approved as to Form and Legality:
By: Maffhow Murr-y for
Matthew Murray for (Jan 19, 2023 13 39 CST)
Name: John B. Strong
Title: Sr. Assistant City Attorney
Contract Authorization:
M&C: 23-0013
Contract Compliance Manager:
By signing I acknowledge that I am the person responsible for the
monitoring and administration of this contract, including ensuring all
performance and reporting requirements.
By. 5
Name: Roger Venables
Title: Aviation Director
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
Exhibit "A"
Campus Map
M&C Review
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CITY COUNCIL AGENDA
Create New From This M&C
official site of the City of Fort Worth, Texas
FORS If
Ir-
DATE: 1/10/2023 REFERENCE NO.: M&C 23-0013 LOG NAME: 55TAMUS FORT
WORTH CAMPUS
CODE: C TYPE: NON- PUBLIC CONSENT HEARING:
NO
SUBJECT: (CD 9) Authorize Execution of an Interlocal Agreement with the Texas A&M University
System Regarding the Development of the Texas A&M Fort Worth Campus Project
RECOMMENDATION:
It is recommended the City Council authorize the execution of an Interlocal Agreement with the Texas
A&M University System regarding the development of the Texas A&M Fort Worth Campus Project.
DISCUSSION:
The purpose of this M&C is to authorize execution of an Interlocal Agreement (Agreement) with thf
Texas A&M University System (A&M) for the purpose of documenting the general agreemen
regarding the development of the proposed A&M System Fort Worth Campus and to help accelerate it:
construction.
The campus includes the construction of three (3) buildings that will house the Texas A&M Universit.
School of Law and other A&M functions alongside private firms in a manner that encourage!
innovation, research, and entrepreneurship within an urban campus environment. Building 1, the Lav
and Education building, will be exclusively designed and constructed by A&M through their typice
construction procurement process. The remaining two (2) buildings - the Research and Innovatioi
Building (Building 2) and the Gateway Conference Center Building (Building 3) - and the campus plaz,,
will be designed and constructed through a process coordinated by the City of Fort Worth ii
collaboration with A&M and other stakeholders, including the County and the community at -large (th(
"Project").
The process includes the selection of a private developer (Developer) with an architectural desigi
team that will lead the development effort. Buildings 2 and 3 will be condominiumized, and the City
through a to -be -formed Local Government Corporation (LGC), will enable acquisition of units withil
Buildings 2 and 3 consisting of the areas that will be occupied by A&M for academic and university
uses (A&M System Units). The Developer will finance the balance of each building that will N
occupied by related non-academic uses.
Under the Agreement, the LGC would provide a financing vehicle for space to be occupied by A&%
within the planned Buildings 2 and 3, and for an envisioned campus plaza. A map identifying the
location of each building and campus plaza is attached. Financing for the A&M System Units would bE
realized through lease -backed revenue debt issued by the LGC. A&M's lease payments would be in ai
amount necessary to cover a[[ debt service and other pre -approved, reasonable and typical expense!
associated with the development of the portion of the Project to be occupied and controlled by A&M
including parking requirements tied to A&M's occupancy.
The general terms and commitments of the Agreement are as follows:
City Commitments (direct and via LGC):
To create a Local Government Corporation (LGC) to assist with the financing of the A&M System
Units and to issue debt and fund the purchase of the condominium ownership interest in the A&M
System Units;
City, in consultation with A&M, has issued a Request for Proposals to engage a Developer to lead
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the design, construction, financing, and development of Buildings 2 and 3, and the campus plaza
(contingent upon the development of suitable parking located elsewhere for A&M);
The LGC will enter into one or more ground leases of the Project property from A&M, at a nominal
rental rate (with consideration to A&M documented in a Master Development Agreement), and
enter into one or more sub -ground leases of the Project property with the Developer with any rent
or other consideration received from Developer under the sub -ground lease(s) being applied to
parking infrastructure or the overall Project to the benefit of A&M and all terms of the sub -ground
lease(s) consented to by A&M;
The sub -ground lease(s) will include a purchase option and right of first refusal in favor of A&M on
all or any portion of the non-A&M System Units constituting the Project property. The Developer
will also enter into a Recognition Agreement with A&M and, if necessary, the LGC that provides
that if and when the ground lease(s) with the LGC terminate, the sub -ground lease(s) to the
Developer from the LGC will automatically be recognized as direct ground lease(s) between the
Developer and A&M;
At the completion of construction of each of Buildings 2 and 3, the LGC will issue debt and
purchase the condominium ownership Interest in the A&M System Units from the Developer;
The LGC will lease the A&M System Units to A&M (via the Space Leases) for a rental rate equal to
the debt service plus any other Project and debt issuance expenses and any other pre -approved,
reasonable and typical expenses incurred by the City or LGC;
Upon the maturity date of the debt issued for the purchase of the A&M System Units and the final
lease payment made by A&M to retire the bonds, the Space Leases to A&M of the A&M System
Units will be terminated and the LGC will convey its condominium ownership interest in the A&M
System Units to A&M;
Upon conveyance of the A&M System Units to A&M, the ground lease(s) with the LGC will
terminate and the sub -ground lease(s) to the Developer from the LGC will automatically be
recognized as direct ground lease(s) between the Developer and the A&M pursuant to a separate
Recognition Agreement between, A&M and the Developer and, if necessary, the LGC; and
City will provide an estimate or list of costs necessary to complete the Project, including, but not
limited to, the hiring of outside counsel, to be reimbursed by A&M after A&M approval of such
costs.
A&M Commits to:
Design and construct the Law and Education Building (Building 1) at A&M's expense;
Participate in the City's/LGC's process to select a Developer and consult with the LGC on the terms
of the agreement with the Developer;
Participate and collaborate in the overall design of the Project and the Developer will present to the
City's Downtown Design Review Board or other boards and commissions as necessary;
Designate a local project program manager to coordinate with Developer, Developer's consultants,
A&M, City and the LGC;
A&M will enter into one or more ground leases of the Project properties to the LGC, at a nominal
rental rate (with consideration to A&M documented in a separate Master Development Agreement),
with one or more mandatory sub -ground leases from the LGC to the Developer with any rent or
other consideration received from Developer under the sub -ground lease(s) being applied to
parking infrastructure or the overall Project to the benefit of A&M and all terms of the sub -ground
lease(s) consented to by A&Mi
A&M staff and consultants will coordinate with City, LGC, Developer, and the Developer's
consultants on design and construction of the facilities to be built by the Developer to ensure
compatibility from both aesthetic and functional perspectives and to reduce costs and achieve
operational efficiencies;
At the completion of each of Building 2 and Building 3, A&M will lease from the LGC all space built
in Building 2 and Building 3 for use by A&M as directed by A&M throughout the design process (the
A&M System Units);
A&M's rental payments for the Space Leases from the LGC will be equal to the bonds' debt service
plus any other pre -approved reasonable and typical expenses incurred by the CITY or LGC that are
not otherwise paid by A&M;
A&M's Space Leases from the LGC will provide that A&M must pay back the entirety of the
remaining bonds should A&M default on the Space Leases and fail to cure the default after notice
and opportunity to cure;
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A&M will take ownership of the LGC's A&M System Units upon the maturity of the bonds and final
payments made by A&M, which will coincide with the termination of the Space Leases to A&M of
the A&M System Units;
A&M will have a purchase option and right of first refusal on all or any portion of the non-A&M
System Units constituting the Project properties;
Upon the termination of the Space Leases to A&M of the A&M System Units, the LGC's ground
lease(s) of the Project properties will terminate and the sub -ground lease(s) to the Developer from
the LGC will automatically be recognized as direct ground lease(s) between the Developer and the
A&M pursuant a separate Recognition Agreement between A&M and the Developer and, if
necessary, the LGC;
Unless otherwise negotiated, A&M will reimburse the CITY and the LGC for all other costs
reasonably necessary to complete the Project, including, but not limited to, the hiring of outside
counsel, subject to A&M's approval of such costs. A&M will have the ability to review and approve
costs associated with completing the Project and normal costs of debt issuance, and such approval
shall not be unreasonably withheld, conditioned, or delayed. It is the intention of A&M, the CITY,
and the LGC that the development of the Project Properties will be at no cost to the CITY or the
LGC unless otherwise explicitly negotiated;
If necessary, negotiate and execute an agreement directly with the Developer for the maintenance
of A&M campus areas constructed by the Developer including the plaza, if constructed: and
A&M will be responsible for all common area expenses allocated to the A&M System Units, as set
forth in the master condominium declarations.
The City and A&M anticipate signing a Master Development Agreement and one or more ground
leases once more specific terms have been negotiated and agreed upon and approved by A&M
SYSTEM's Board of Regents.
In June of this year, the City entered into a professional services agreement with U3 Advisors, Ltd. to
assist with development and completion of a Request for Proposals (RFP) to select a best -in -class
private sector development partner with design team to develop and manage the Project and help to
realize the City, Tarrant County, and Texas A&M University System's shared vision to create a hub
for collaboration between key Fort Worth industries and top research, education, and workforce
training assets of the Texas A&M University System. The RFP was issued by the City in
collaboration with A&M on September 22, 2022. The goal is to have selected the best qualified
developer by February 2023 and begin negotiating terms for the design and development of the
Project.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that approval of this recommendation will have no material effect on
City funds.
TO
Fund Department Account Project Program Activity Budget I Reference # Amount
ID I I ID I I I Year I (Chartfield 2)
FROM
Fund Department Account Project Program Activity Budget I Reference # Amount
I I I ID I I Year I (Chartfield 2)
Submitted for Citv Manager's Office bv: Dana Burghdoff (8018)
Oriqinatinq Department Head: Roger Venables (6334)
Additional Information Contact:
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ATTACHMENTS
TAMUS Fort Worth CamnuS.Ddf (Public)
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=30641 &councildate=l / l 0/2023 1 /5/2023