HomeMy WebLinkAboutOrdinance 16107z.~
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Ordinance No.
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND
APPROPRIATIONS IN THE LCOAL DEVELOPEMENT CORPORATION FUND IN
THE AMOUNT OF $1,300,000 FROM AVAILABLE FUNDS FOR THE PURPOSE
OF FUNDING THE CONSTRUCTION OF THE FORT WORTH MERCADO
BUILDING LOCATED AT 1500 NORTH MAIN STREET MAKING THIS
ORDINANCE CUMULATIVE OF PRIOR ORDINANCES IN CONFLICT
HEREWITH; AND PROVIDING AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH,
TEXAS:
SECTION 1
That in addition to those amounts allocated to the various City departments for Fiscal Year 2003-
2004 and in the Budget of the City Manager there shall also be increased estimated receipts and
appropriations in the Local Development Corporation Fund in the amount of $1,300,000 from
available funds for the purpose of funding the construction of the Fort Worth Mercado building
located at 1500 North Main Street.
SECTION 2.
That should any portion, section or part of a section of this ordinance be declared invalid,
inoperative or void for any reason by a court of competent jurisdiction, such decision, opinion or
judgment shall in no way impair the remaining portions, sections, or parts of sections of this
ordinance, which said remaining provisions shall be and remain in full force and effect.
SECTION 3
That this ordinance shall be cumulative of Ordinance No. 15636 and all other ordinances and
appropria#ions amending the same except in those instances where the provisions of this ordinance
are in direct conflict with such other ordinances and appropriations, in which instance said
conflicting provisions of said prior ordinances and appropriations are hereby expressly repealed.
SECTION 4
This ordinance shall take effect upon adoption.
APPRO D AS '6 FORM AND LEGALITY
A istant ity Attorney
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ADOPTED AND EFFECTIVE. ~ - C~-~J
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION Approved on 8/31/2004 Ordinance No 16107
DATE Tuesday August 31 2004
LOG NAME 17FWMERCADO
REFERENCE NO C-20251
SUBJECT
Appropriation Ordinance and Acceptance of Grant from Fort Worth Local Development Corporation
and Assignment of Contract between Fort Worth Mercado I L.P and Muckelroy and Falls for
Construction of the Fort Worth Mercado
RECOMMENDATION
It is recommended that the City Council.
1 Approve the assignment and transfer of all rights, title and interest of Fort Worth Mercado 1 L.P in the
contract between Fort Worth Mercado I L.P and Muckelroy & Falls for the construction of the Fort Worth
Mercado to the City of Fort Worth and
2. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
Local Development Corporation Fund by $1 300 000 from available funds and
3 Authorize the City Manager to execute a contract agreement accepting the amount of $1 300 000 from
the Fort Worth Local Development Corporation (LDC) to complete the construction of the Fort Worth
Mercado building located at 1500 North Main Street.
DISCUSSION
The City and Fort Worth Mercado I L.P began discussions in September 2001 regarding the development
of a "Mercado style building in the 1500 block of North Main Street. An agreement to construct the building.
was finalized in August 2003 and work began in October 2003 At the time of 'the construction agreement,
the developer had a letter of intent from Northwest Bank to fund the estimated construction gap of $300 000
on the project with all remaining costs in the project to be covered by cash from the developer
In February 2004 the developer informed the City that she was not able to provide the required 20% equity
in the project. The funding from Northwest Bank had fallen through and another lender had not been
secured The construction was continued using available Section 108 loan funds designated for the project
while the developer sought third party financing to complete the building Several meetings were held with
the developer the contractor and the City staff to try and resolve the funding issues When a funding.
source failed to materialize the contractor Muckelroy & Falls, informed the City that work on the building
would be shut down if the developer was not able to secure additional financing
The developer attempted to bring in an equity partner as an alternative as well as to secure a collateralized
loan with a local bank to secure the funds to complete the project. These efforts by the developer also
failed to secure financing for the project, so in order to complete the construction of the building• City staff
proposes that the City take over the project. The developer has assigned its interest in the contract to the
City which will allow for the completion of the 58 000 square foot building which has space for retail, office
and a meeting facility This recommendation to take over the project and complete the building is superior
to closing down the project at this time The building- is approximately 60% complete and the current
Lo~name 17FWMERCADO Page 1 of 2
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construction contract is at favorable terms To close down the project would likely expose the building to
the elements and be subject to theft and vandalism as well as a liability risk. The start-up costs and a rebid
of the construction contract to continue the project at a later time would make the project much more costly
and likely economically impractical.
City staff plans to complete the construction of the building at a cost of approximately $1 300 000 and then
place it on the market for immediate sale The funds to complete the project will consist of $700 000 from
the LDC Mercado repayment account and $600 000 from LDC revenue received from the lease of property
at Blue Mound Road Both of these funding sources are from Non-General Fund sources. The $700 000
from the LDC Mercado repayment account will need to be returned to the account within 1 year Staff
expects that this will be possible once a sale is completed on the building
City staff expects to bring a future M&C to Council after the required public comment period to allocate up to
an additional $300 000 in CDBG funds to complete tenant finish-out for the building if these funds are
determined to be needed
FISCAL INFORMATION/CERTIFICATION
The Finance Director certifies that upon approval of the above recommendations receipt of the grant, and
adoption of the attached appropriation ordinance funds will be available in the current operating budget, as
appropriated of the Local Development Corporation Fund
TO Fund/Account/Centers FROM Fund/Account/Centers
R106 441060.013106003000 $600.000.00 R106 539120.013106003000 $700.000.00
R106 441060 013106003000 $700.000.00 R106 539120 013106003000 $600.000.00
Submitted for City Manager's Office bv• Joe Paniagua (6191)
Originating Department Head Tom Higgins (6192)
Additional Information Contact: Robert Sturns (8634)
Logname 17FWMERCAI~(~ Pa ~ of ~