Loading...
HomeMy WebLinkAboutContract 33870-A6 MY SECRRTiART LL coNTRACT W, AMENDMENT NO. 6 TO ECONOMIC DEVELOPMENT PROGRAM AGREEMENT (CITY SECRETARY CONTRACT NO. 33870) This AMENDMENT NO. 6 TO ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Amendment") is made and 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 1701 COMMERCE ACQUISITION LLC, a Delaware limited liability company authorized to do business in the State of Texas as 1701 Fort Worth Hotel LLC ("Developer"). The following introductory provisions are true and correct and form the basis of this Amendment: A. As of August 14, 2006 the City and Presidio Hotel Fort Worth, L.P. ("Presidio") entered into that certain Economic Development Program Agreement on file in the City Secretary's Office as City Secretary Contract No. 33870, as subsequently amended by City Secretary Contract Nos. 34442, 35075, 36660, 33870-A4 and 33870-A5 (collectively, the "Agreement"). Under the Agreement, Presidio agreed, among other things, to construct certain improvements to the Hotel owned by Presidio and located at 1701 Commerce Street in the City, which is now generally known as the Sheraton Fort Worth Hotel and Spa. In return, the City agreed to pay Presidio certain Program Grants as authorized by Chapter 380 of the Texas Local Government Code and outlined in the Agreement. B. The Hotel and Hotel Property were subsequently sold by Presidio to 1701 Commerce, LLC. Pursuant to an order of the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division, in the case styled In re 1701 Commerce, LLC, Case No. 12-41748-DML-11, 1701 Commerce, LLC has sold the Hotel and Hotel Property to Developer. Pursuant to City Secretary Contract No. 33870-CA2, the City has consented to an assignment of the Agreement by Presidio to Developer, effective upon execution of this Amendment. C. The City and Developer wish to amend the Agreement to allow assignments of the Agreement by Developer as collateral for security purposes, with the understanding that a subsequent purchaser of the Hotel and Hotel Property following foreclosure or a subsequent owner who acquires the Hotel and Hotel Property by deed in lieu of m foreclosure must be approved by the City Council in order for the City's obligation to pay Cn Program Grants to remain in effect, to provide that Program Grants may only be paid by m the City to the owner of the Hotel and Hotel Property at the time such payment is due, and to further amend the Agreement to clarify that in order the terms and conditions of Ole- the Room Block Agreement must fully be met by any party that own 7 Hotel, whether by Developer or another person or entity. OFFICIAL RECORD CITY SECRETARY Page 1 Amendment No. 6 to CSC No.33870, as previously amended FT.WORTH,TX Economic Development Program Agreement%vith 1701 Commerce Acquisition LLC&b/al NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the City and Developer hereby agree as follows: 1. Section 4 of the Agreement (Developer's Obligations) is hereby amended to add the following sentence to the end of Section 4.1 (Redevelopment of Hotel): Developer must be the record owner of the Hotel and the Hotel Property at all times unless the City consents to an assignment of this Agreement pursuant to and in accordance with Sections 12.1 or 12.2. 2. Section 6.4 of the Agreement (Cessation or Pro-rated Payment of Program Grants) is hereby amended to read as follows: 6.4. Cessation or Pro-rated Pav ment of Program Grants. 6.4.1. Loss of Star Rating and/or Competitive Name Brand and/or Breach of Room Block Agreement for Full Year. If(i) the Hotel does not for any full calendar year have its Minimum Star Rating, as required by Section 4.5 of this Agreement (but subject to Section 6.4.3), or (ii) the Hotel does not for any full calendar year operate and market itself under a First Tier Flag brand name, as required by Section 4.6 of this Agreement, or (iii) at any time during the Term of this Agreement Developer or another person or entity that is deemed to be "Owner" under the Room Block Agreement is in breach of the Room Block Agreement for any full calendar year and the City has not exercised its right to terminate the Room Block Agreement, then Developer shall waive, and the City will not be required to pay, the Program Grant in the following year that the City would otherwise have been required to pay. In such an event, (i) such waiver shall be counted as a Program Grant payment for purposes of calculating the Term of this Agreement; (ii) the Term of this Agreement shall not be extended; and (iii) the revenue comprising the Program Grant that the City would otherwise have been required to pay shall instead be treated as Excluded Hotel Occupancy Tax Revenue, as provided in Section 6.6 of this Agreement, and will be retained by the City and shall not be carried over to any Program Grant paid by the City in a subsequent year. Page 2 Amendment No. 6 to CSC No. 33870,as previously amended Economic Development Program Agreement with 1701 Commerce Acquisition LLC d/b/a 1701 Fort Worth Hotel LLC 6.4.2. Loss of Star Rating and/or Competitive Name Brand and/or Breach of Room Block Agreement for Partial Year. If(i) the Hotel does not for a portion of any calendar year have its Minimum Star Rating, as required by Section 4.5 of this Agreement (but subject to Section 6.4.3), or (ii) the Hotel does not for a portion of any calendar year operate and market itself under a First Tier Flag brand name, as required by Section 4.6 of this Agreement, or (iii) at any time during the Term of this Agreement Developer or another person or entity that is deemed to be "Owner" under the Room Block Agreement is in breach of the Room Block Agreement for a portion of any calendar year and the City has not exercised its right to terminate the Room Block Agreement, the Program Grant payable for the following year, as may be reduced pursuant to Section 6.2, shall additionally be reduced by a fraction, to be expressed as a percentage, where (i) the numerator is the number of days in that year in which Developer or another person or entity that is deemed to be "Owner" under the Room Block Agreement was in full compliance with the Room Block Agreement and the Hotel had both its Minimum Star Rating, as required by Section 4.5 of this Agreement, and operated and marketed itself under a First Tier Flag brand name, as required by Section 4.6 of this Agreement, and (ii) the denominator is three hundred sixty-five (365). In such an event, the revenue comprising the difference between the Program Grant actually made in that year and the Program Grant that the City would otherwise have been required to pay shall be treated as Excluded Hotel Occupancy Tax Revenue, as provided in Section 6.6 of this Agreement, and will be retained by the City and shall not be carried over to any Program Grant paid by the City in a subsequent year. Notwithstanding anything to the contrary herein, if Developer, in accordance with Section 4.8.6, selects the first full calendar year following the Completion Date as Program Year 1 and the City has not received verification by August 1 of that year that the Hotel achieved the Minimum Star Rating, the City will hold the Program Grant payable in Program Year 1 in escrow, without any obligation to pay Developer interest on such amount, until the City has received verification that the Hotel achieved the Minimum Star Rating during that year (and with the understanding that (i) the City will pay the Program Grant due in Program Year 1 within thirty (30) calendar days following receipt of verification that the Hotel achieved the Minimum Star Rating during that year and (ii) if the City has not received verification that the Hotel achieved the Minimum Star Rating by January 31 of Program Year 2, Section 6.4.1 of this Agreement shall apply). Page 3 Amendment No. 6 to CSC No. 33870,as previously amended Economic Development Program Agreement with 1701 Commerce Acquisition LLC d/b/a 1701 Fort Worth Hotel LLC 3. Section 12 of the Agreement (Assignment and Successors) is hereby amended to read as follows: 12. ASSIGNMENT AND SUCCESSORS. 12.1. Assignment of Agreement. Developer may not assign, transfer or otherwise convey any of its rights and obligations under this Agreement to another party (an "Assignee") without the advance written consent of the City, which consent shall not unreasonably be withheld or delayed, provided that (i) the Assignee owns the Hotel and the Hotel Property as of the effective date of the City's written consent; (ii) the City Council makes a prior finding, based on sufficient documentation provided by Developer or the Assignee, that the Assignee will operate and market the Hotel under a First Tier Flag brand name and is financially capable of operating the Hotel in compliance with the Minimum Star Rating; and (iii) prior execution by the Assignee of a written agreement with the City under which the Assignee agrees to assume all covenants and obligations of Developer under this Agreement. 12.2. Collateral Assignment. Notwithstanding Section 12.1, 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 Hotel or Hotel Property 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 in substantially the same form as that attached hereto as Exhibit "F", which is hereby made a part of this Agreement for all purposes. 4. All terms in this Amendment that are capitalized but not defined shall have the meanings assigned to them in the Agreement. 5. All terms and conditions of the Agreement that are not expressly amended pursuant to this Amendment shall remain in full force and effect. 6. This Amendment shall take effect as of the last date indicated below. EXECUTED as of the later date indicated below: Page 4 Amendment No.6 to CSC No. 33870,as previously amended Economic Development Program Agreement with 1701 Commerce Acquisition LLC d,,b/a 1701 Fort Worth Hotel LLC CITY OF FORT WORTH: By: 5 a*t a/*�� Afteftd by: Fernando Costa Assistant City Manager Maty J. Karr, City gemlary Date: APPROVED AS TO FORM AND LEGALITY: �Q 000 0 ao o$ s By: Peter Vaky )h, Deputy City Attorney � M&C: C-26147 03-19-13 1701 COMMERCE ACQUISITION LLC, a Delaware limited liability company doing business as 1701 Fort Worth Hotel LLC: By: Name: Title: Date: OFFICIAL RECORD CITY SECRETARY FT.WORTH,TX Page 5 Amendment No. 6 to CSC No. 33870,as previously amended Economic Development Program Agreement with 1701 Commerce Acquisition LLC db/'a 1701 Fort Worth Hotel LLC CITY OF FORT WORTH: By: Fernando Costa Assistant City Manager Date: APPROVED AS TO FORM AND LEGALITY: By: Peter V aky Deputy City Attorney M&C: 1701 COMMERCE ACQUISITION LLC, a Delaware limited lia 'lity company doing business as 1701 F t Worth Hotel LLC: By: Name: i-f Title: ;�,aaw1� Date: ::E OFFICIAL RECORD CITY SECRETARY FT.WORTH,TX PaL,e 5 Amendment No. 6 to CSC No. 33870,as prev iuusl) amended Economic Dewlopment Program A-reement �Oh 1701 Commerce Aryuisition LLC d/b/a 1701 Fort Worth Hotel LLC Exhibit "F" Form of Consent to Collateral Assignment CONSENT TO ASSIGNMENT FOR SECURITY PURPOSES OF ECONOMIC DEVELOPMENT PROGRAM AGREEMENT BETWEEN CITY OF FORT WORTH AND 1701 COMMERCE ACQUISITION LLC D/B/A 1701 FORT WORTH HOTEL, LLC (CITY SECRETARY CONTRACT NO. 33870, AS AMENDED) 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; 1701 COMMERCE ACQUISITION LLC, a Delaware limited liability company authorized to do business in the State of Texas as 1701 Fort Worth Hotel LLC ("Developer"), a Delaware limited partnership; and ("Lender"), 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 have entered into that certain Economic Development Program Agreement on file in the City Secretary's Office as City Secretary Contract No. 33870, as previously amended by City Secretary Contract Nos. 34442, 35075, 36660, 33870-A4, 33870-A5, and 33870-A6, and as previously assigned by Presidio Hotel Fort Worth, L.P. to Developer with the City's consent pursuant to City Secretary Contract No. 33870-CA2 (collectively, the "EDPA"). B. Section 12.2 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 and Hotel Property 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. Amendment No. 6 to CSC No. 33870,as previousl} amended Economic Development Program Agreement%%ith 1701 Commerce Acquisition LLC dib/a 1701 Fort Worth Hotel LLC 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 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 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 Amendment No.6 to CSC No. 33870. as previously amended Economic Development Program Agreement with 1701 Commerce Acquisition LLC d/b/a 1701 Fort Worth Flotel LLC 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 the Hotel and Hotel Property pursuant to the terms of the Loan Documents. 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 as well as by all covenants and obligations of"Owner" under that certain Room Block & Meeting Space Agreement between the City and Developer (City Secretary Contract No. 33998, as assigned) (the "RBA"), 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 Hotel or the Hotel Property 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 12.1 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, and such party also enters into a written agreement with the City to assume and be bound by all covenants and obligations of"Owner" under the RBA. 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, 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 Amendment No.6 to CSC No. 33870.as previously amended Economic Development Program Agreement with 1701 Commerce Acquisition LLC d/b/a 1701 Fort Worth Flotel LLC 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 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] Amendment No. 6 to CSC No. 33870.as previously amended Economic Development Program Agreement with 1701 Commerce Acquisition LLC d/b/a 1701 Fort Worth Hotel 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 1701 COMMERCE ACQUISITION LLC, a Delaware limited liability company doing business as 1701 Fort Worth Hotel LLC: By: Name: Title: Date: [LENDER]: By: Name: Title: Date: Amendment No.6 to CSC No. 33870,as previously amended Economic Development Program Agreement"ith 1701 Commerce Acquisition LLC d/b/a 1701 Fort Worth Hotel LLC