M&C Review


COUNCIL ACTION:  Approved on 8/6/2013 

DATE: 8/6/2013 REFERENCE NO.: C-26384 LOG NAME: 17CASINO BEACH EDPA NEW
CODE: C TYPE: NON-CONSENT PUBLIC HEARING: NO
SUBJECT:  

Rescind Mayor and Council Communication C-25661 and Authorize Execution of a Twenty-Year Economic Development Program Agreement with Casino Beach Properties, Inc., or Any Affiliated Entity in the Amount Not to Exceed $10,000,000.00 Plus Interest for the Redevelopment of Casino Beach and Adjacent City-Owned Park and Lake Property Along Lake Worth (COUNCIL DISTRICT 7)


RECOMMENDATION:

It is recommended that the City Council:

1.  Rescind Mayor and Council Communication C-25661, which authorized execution of an Economic Development Program Agreement with Patterson Equity Partners, LLC, or any affiliated entity for the redevelopment of Casino Beach;  

2.  Authorize the execution of a twenty-year Economic Development Program Agreement with Casino Beach Properties, Inc., an affilitate of Patterson Equity Partners, LLC, or any affiliated entity in the amount not to exceed $10,000,000.00 plus interest, as authorized by Chapter 380 of the Texas Local Government Code, conditioned on the redevelopment of vacant land at Casino Beach into an entertainment destination through a variety of public and private improvements; and  

3.  Waive the Financial Management Policy associated with Gas Lease Revenues to allow for Lake Worth mineral lease revenues to serve as the primary source of funding for this Agreement.  

 
DISCUSSION:

On June 12, 2012, (M&C C-25661) the City Council approved a Chapter 380 Economic Development Program Agreement (EDPA) with Patterson Equity Partners, LLC, or any affiliated entity (Patterson), for the redevelopment of Casino Beach.  At the time, the project was anticipated to move forward in a single phase.  However, due to market conditions, Patterson has informed the City that the project will need to be completed in two phases.  As a result, Staff recommends that the City Council rescind Mayor and Council Communication (M&C) C-25661 and authorize execution of an EDPA with Casino Beach Properties, Inc. (an affiliate of Patterson) or any affiliate (Developer), in accordance with the terms and conditions in this M&C.

Project:  
The Developer plans to design and construct all public and private improvements associated with the redevelopment of Casino Beach.

Phase I:  
As part of the EDPA, the Developer will be required to complete Phase I by December 31, 2015.  Phase I requires Developer to spend at least $7.9 million in construction costs, excluding land acquisition costs, for improvements consisting of not less than 20,000 square feet of any combination of restaurant, movie theater, entertainment facilities and/or other retail development (including any associated outdoor dining or entertainment area) and marina facilities (e.g., boat slips, courtesy slips, on-water fueling) as Developer elects provided that Developer first obtains the written approval of the Director of the City's Water Department with respect to improvements on the lake property.  Developer will also have the option to complete public improvements on City-owned park property provided that Developer first obtains the written approvals of the Director of the City's Housing and Economic Development Department and the Director of the City's Parks and Community Services Department.  Additionally, Developer may dedicate other improvements at the Casino Beach site to the City if the Director of the City's Housing and Economic Development Department consents and the City accepts those improvements.

If Developer completes Phase I by December 31, 2015, Developer will be entitled to 20 annual Program Grants in the amount equal to 1/20 of the lesser of (i) the actual cost of the improvements constructed on the park property and other public improvements dedicated to and accepted by the City, if any, or (ii) $4 million, plus 8 percent inflation interest.

Phase II:
Under the EDPA, the Developer will have the option to construct additional improvements beyond those required under Phase I.  Developer will be eligible for increased Program Grants, if Developer spends another $6 million in construction costs to complete additional improvements consisting of not less than 20,000 square feet of any combination of restaurant, movie theater, entertainment facilities and/or other retail development (including any associated outdoor dining or entertainment areas) and marina facilities (e.g.,  boat slips, courtesy slips, on-water fueling), as Developer elects, by December 31, 2017 (Phase II) provided that Developer first obtains the written approval of the Director of the City's Water Department with respect to improvements on the lake property.

In this event, if Developer has also constructed additional public improvements on the park property, the remaining Program Grants will be recalculated so that each annual payment is a fraction based on the number of years remaining in the term of (i) the actual cost of all public improvements constructed on the park property, including those constructed during Phase I and other public improvements dedicated to and accepted by the City, if any, or (ii) $10 million, plus 8 percent inflation interest.

Utilization of Fort Worth Companies and Fort Worth M/WBE Companies:
Developer will establish a goal to:

  • Expend a minimum of 30 percent of all hard construction costs for the total development with Fort Worth Companies;
  • Expend a minimum of 25 percent of all hard construction costs for the total development with Fort Worth Certified M/WBE Companies (with dollars spent with Fort Worth Certified M/WBE Companies also counting as dollars spent with Fort Worth Companies);
  • Expend a minimum amount of $100,000.00 annually with Fort Worth Companies for supplies and services directly related to the operation of the development; and
  • Expend a minimum amount of $50,000.00 annually with Fort Worth Certified M/WBE Companies for supplies and services directly related to the operation of the development (with dollars spent with Fort Worth Certified M/WBE Companies also counting as dollars spent with Fort Worth Companies);

Employment Commitments:
Developer will establish a goal of creating a minimum of 25 new full-time jobs throughout the term of the EDPA.

Licenses of Park Property and Lake Property:
Developer will enter into a License Agreement with the City that governs the Developer's and any Affiliate's use of the Park Property.  The Park License Agreement will have an initial term of 20 years with options to renew the Park License Agreement for two consecutive renewal terms, the first of which will be 15 years and the second and final of which will be 10 years.

Developer will enter into a License Agreement with the City that governs the Developer's and any Affiliate's use of the Lake Property.  The Lake License Agreement will have an initial term of 20 years with options to renew the Lake License Agreement for two consecutive renewal terms, the first of which will be 15 years and the second and final of which will be 10 years.

Non-Park Property:
Pursuant to M&C L-15528, Developer and the City entered into a Contract of Sale and Purchase dated effective as of June 28, 2013, pursuant to which Developer will purchase the non-park property to construct the private improvements that are not located on the lake property.

Additional Agreements:
The City and Developer will cooperate with one another in good faith to negotiate and execute any additional Agreements they deem reasonably necessary to implement the terms and conditions of the Chapter 380.

These commitments apply to all years in which the City participates in the Project.  Each Agreement described above, with the exception of the Lake License, will contain a cross-default provision meaning that a default by the Developer under one of the Agreements will constitute a default under all the other Agreements.  The Lake License attaches to the adjacent property to be purchased by the Developer.  The benefit of the Lake License must run to the owner of the property.

The Project is located in COUNCIL DISTRICT 7.

 
FISCAL INFORMATION/CERTIFICATION:

The Financial Management Services Director certifies that this action will have no material effect on City Funds.

 
TO Fund/Account/Centers
 
FROM Fund/Account/Centers

Submitted for City Manager's Office by:
Fernando Costa (6122)
Originating Department Head:
Cynthia Garcia (8187)
Robert Sturns (8003)
Additional Information Contact:
Sarah Odle  (7316)

 
 
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