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RES 2014-17" •Itell I LeI1 WHEREAS, the Town Council of the Town of Trophy Club, Texas, recognizes the need to attract and retain economic development projects, and WHEREAS, the construction of commercial properties such as the restaurants proposed by Old Town Development (hereinafter "Project") will promote new and expanded business development and create jobs, which will be beneficial to the Town, and will also increase the sales tax revenue to the Town and the EDC4B; and WHEREAS, OTD is currently in negotiations with various restaurants on a proposed Project on the site identified as 2.900 Block of ST HWWY 114; and WHEREAS, the EDC413 currently has funds available and will continue to have funds sufficient to meet the obligations requested for EDC4B's participation in the Project as specified in the proposed Term Sheet, a copy of which is attached hereto and incorporated herein as Exhibit "A"; and WHEREAS, the Town of Trophy Club believes it to be in the best interests of the Town of Trophy Club and its' residents to pursue the Project with funding specified in Exhibit "A"; and WHEREAS, because the Project has been determined to serve the best interests of the Town, this Resolution shall be read at the regular meeting of the Trophy Club Town Council held on May 5, 2014 and at the regular meeting of the Town Councilheld on May 19, 2014; and WHEREAS, at the May 19, 2014 Town Council meeting, should the Council vote to adapt this Resolution, the EDC413 will then be authorized' to take all necessary actions to undertake the Project; and NOiJ1ur, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF TROPHY CLUB, TEXAS: Section ?. That the facts and recitations contained in the preamble of this Resolution are hereby found and declared to be true and correct and are adopted as part of this Resolution for all purposes. Section 2. That the Town Council of the Town of Trophy Club having had two separate readings of Resolution No. 2014-17, and having allowed the public opportunity to comment on the proposed Project as specified in Exhibit "A", finds that the Project serves the best interests of the Town and therefore should' be authorized. Section 3. That upon EDC413's acceptance of the Project, an agreement memorializing, the terms specified in Exhibit "A" between Old Town, Development and EDC4B, may be developed and executed. Section 4. That a substantial copy of the proposed Term Sheet for the Project is attached hereto and incorporated herein as Exhibit "A". Section 5. That the passage of this Resolution is only an expression of the authorization of the Town for the EDC41B to enter into an agreement with Old Town Development and does not evidence a binding obligation on EDC413 or the Town to enter into an agreement to provide funding for the Project unless the nature and quality of such Project is approved for economic development incentives and the terms of such agreement are approved by EDC413 and the Town Council. Section 6. That this Resolution shall become effective from and after its date of passage in accordance with law, and it is so resolved', PASSED AND APPROVED by the Town Council of the Town of Trophy Club, Texas, this 1 9th day of May, 2014, Connie White, Mayor Town of Trophy Club, own Secretary iy Club, Texas Patricia A. Adams, Town Attorney Town of Trophy Club, Texas EXHIBIT A TERM SHEET FOR A PUBLIC-PRIVATE PARTNERSHIP Between THE TOWN OF TROPHY CLUB, TEXAS ("TOWN"), TAX INCREMENT FINANCING DISTRICT #1 (TIRZ #1) And OLD TOWN DEVELOPMENT OTD") Background: OTD seeks to purchase an approximately 5.4 acre tract of land generally located in the Town between the Baylor Medical Center and Trophy Wood Drive and proposes to construct development consisting of 3 — 4 restaurants which will generate ad valorem and sales tax revenue to the Town. 2. Proposed Development and Obligations: OTD proposes to develop the Property in accordance with PD -34 and all other Town ordinances and to timely comply with each of the following development standards for the project (the "Development"): a. Purchase approximately 5.4 acres to develop 3 — 4 high quality restaurants as specified below. b. For incentive purposes, the price per acre for the land shall not exceed, $7.25/ft for a maximum total purchase price of $1,705,374. c. Make all public and private improvements which shall exceed $3,,0010,000 appraised value in accordance with, the time frames set forth, below. d. Each restaurant must sign, at minimum, a lease with a 10 year initial term. e. Construct two restaurants and obtain a Certificate of Occupancy for both! within 24 months of Town approval of the final Developer's Agreement, Construct a third' restaurant and obtain a Certificate of Occupancy within 36 months of Town approval of the final Developer Agreement. f. Comply with all other requirements set forth below. 3. Estimated Appraised Value and Gross Sales Generation: The eventual Estimated Appraised Value and Gross Sales production of the Proposed Development is anticipated to be at least $12.8 Million per year within 5 years of receiving their first two Certificates of Occupancy. The estimated property tax and sales tax generation to the Town is estimated to be $250,000, per year within 5 years of receiving both of their first two Certificates of Occupancy. 4. EDC Obligations: Pursuant to a Chapter 380 sales tax reimbursement agreement, the EDC will designate a portion of their annual budget to pay OTD an amount not to exceed $1,705,374 (purchase price, excluding interest) upon OTD's compliance with all conditions set forth in this section. EDC shall have the rights and remedies set forth below, and all payments shall be contingent upon OTD's compliance with each of the following conditions: a. Upon OTD's closing on the purchase of the Property and execution of a Developer's Agreement, EDC shall pay OTD monthly payments in the amount of $11,731.08, for a periodof twenty-four (24) months with a total annual payment not to exceed $140,773 to OTD for a period of twenty (20) years, which amount is the equivalent of principle and interest for the property purchased by OTD at a price of $7.251SF for lump sum payment in an amouint not to exceed $1,705,374 purchase price for approximately 5.4 acres (the "Property"). OTD is solely responsible for any purchase price that exceeds either the $7.,25/ft or $1,705,374. OTD and Town, at the sole discretion of Town, shalll structure the purchase agreement for the Property such that Town has the right to step into OTD"s shoes as the purchaser of the Property and/or OTD is required to transfer title to the Property to Town if upon EDC"s payment of $281,546, OTD has failed to obtain two (2) Certificates of Occupancy for two separate restaurant sites. All payments made by Town to OTD shall be paid directly to the mortgage holder for satisfaction of OTD's loan to purchase the Property. b, The ED,C has the right to pay the total principle amount to OTD at any time during the agreement term without penalty, as well as make additional principle payments without penalty, c. The EDC shall have the Right of First Refusal if OTD desires to sell the Property with or without infrastructure improvements during the term of the Developer Agreement. Additionally, should OTD desire to sell the Property, the EDC shall have the right to approve any and all future purchasers of property during the term of the Developer Agreement. d. The EDC shall have I" lien status until a construction loan is obtainedby OTD and then the EDC shall retain 2nd lien status, e. If OTD fails to obtain, a Certificate of Occupancy for a third restaurant site within 36 months after the approval of the Developer Agreement, all obligations of EDC hereunder shall terminate. All time periods to obtain Certificates of Occupancy begin when the Developer Agreement is approved by the Town Council. The Developer Agreement will terminate with no further payment of any kind by EDC to OTD, if at the expiration of 36 months after the date of Town Council approval, OTD has failed to timely comply with every term of the Developer Agreement and/or has failed to obtain at least three (3) Certificates of Occupancy for three restaurant sites within thirty-six (36) months after approval of the Developer Agreement. Town's right to purchase or require transfer of the Property shall also be available at the end of the thirty-six (36) month period if OTD fails to comply. f. If OTD ceases to exist or files for bankruptcy, the EDC shall be excused from making any future payments to OTD, and all agreements shall terminate as allowed by law. g. OTD shall ensure that a minimum of 100 Full Time Employees (FTE) are maintained or 192,000 work hours are maintained annually for the restaurant sites continuously. This standard shall be met by OTD within forty eight (48) months from the date of the approval of the Developer's Agreement and shall continue until the date of termination of the Developer's Agreement. h. OTD may request additional time for compliance of its obligations hereunder based upon good cause for force majeure or other causes of delay as determined acceptable by Town. 5. TIRZ #1 Obligations: The TIRZ shall reimburse eligible expenses contingent upon the following conditions; a. OTD shall be eligible for up to $1,500,000, for eligible public improvements including, but not limited to, curb and gutter, concrete parking, site fighting, landscaping, public utilities, permit fees, sidewalks, site preparation, engineering and: interest carry. b. OTD shall' have "first priority" of revenue and payment from TIRZ #1 at a percentage rate not to exceed 73% of total increment revenue generated from the entire TIRZ #1. c. No TIRZ payment shall be made to OTD until such time as a Certificates of Occupancy for two (2) separate restaurants have been obtained by OTD and payment will only be made, if both Certificates of Occupancy are issued within 24 months following the date of Town approval of the Developer's Agreement. Subsequent payments are contingent upon receiving a third restaurant Certificate of Obligation with 36 months of the date of date of Town approval of the Developer's Agreement, The Agreement will terminate with no obligation to TIRZ if 24 months have passed from the date of the Developer's Agreement andl a Certificate of Occupancy for two (2) separate restaurants has not been issued. Likewise, TIRZ shall have no additional obligations if 36 months have passed from, the date of the Developer's Agreement, and a Certificate of Occupancy for a third restaurant site has not been obtained by OTD. d. If OTD ceases to exist or files for bankruptcy, the TIRZ shall be excused from making any future payments to OTD, and all agreements shall terminate as allowed by law. e. During years 6-20 after the date of Town approval of the Developer's Agreement, if a restaurant is vacant for a period of twelve (12) months + one (1) day without either one or a combination of the following occurrences: Letter Of Intent, Building Permit, or Certificate of Occupancy, the TIRZ payment shalll be reduced by the total proportional contribution to the TIRZ (ad valorem, & sales tax) by the former restaurant's highest incremental value generated. For Example, if the restaurant generated $10,000 to the TIRZ and the total TIRZ payment due to OTD was $20,000, then the $,20,0010 payment would be reduced by $10,000. f. Upon issuance of a Certificate of Occupancy for two restaurant sites within 24 months, OTD shall be entitled to a $400,000 payment from the Town, as part of the total $1,500,000 TIRZ incentive. The TIRZ shall repay the Town $400,000 from 27% of the total increment revenue generatedby the TIRZ, including interest if desired by the Town. The Town shall share "first priority" of revenue and payment with OTD at the designated percentage rates. g. TIRZ reimbursement shall occur annually on a date agreed upon by the parties.