HomeMy WebLinkAboutC2016-478 - 9/27/2016 - NA DOWNTOWN DEVELOPMENT REIMBURSEMENT AGREEMENT
This Downtown Development Reimbursement Agreement(the"Agreement")is entered into between the
City of Corpus Christi, Texas (the "City"), as the agent of the Corpus Christi Tax Increment Reinvestment
Zone#3 ("TIRZ#3"), and CT Corpus 149 Ltd.,a Texas limited partnership (the "Developer").
Recita Is
WHEREAS on December 16, 2008, the City Council of the City (the "City Council") approved Ordinance
027996,which established the TIRZ#3 in accordance with Texas Tax Code Chapter 311.TIRZ#3 promotes
economic development and stimulates business and commercial activity in its downtown Corpus Christi
area (the "Zone");
WHEREAS on August 25,2015,the City Council approved a Project and Financing Plan (the"Plan")for TIRZ
#3;
WHEREAS the Board of Directors of TIRZ#3 (the "Board") includes members of the City Council in a non-
public-official capacity, as well as a representative from each Nueces County and Del Mar College, who
have committed to contribute to TIRZ#3 through Interlocal Agreements created in 2009 and amended in
2012 and 2016;
WHEREAS the Corpus Christi Downtown Management District ("DMD") assists the City with
administration of TIRZ#3, recommends projects and recommends a DMD representative to be appointed
to the Board through an Interlocal Agreement;
WHEREAS on November 10, 2015, the City Council approved Ordinance 030680, which amended
Ordinance 027996 and authorized the Board to approve agreements in this form, to be entered into by
the City, as the Board considers necessary or convenient to implement the Plan and achieve its purpose;
WHEREAS the Plan contained certain programs designed to improve conditions and increase commerce
within the Zone;
WHEREAS the Developer has proposed a development plan (the "Development") for the certain
improvements listed on attached Exhibit A (each, an "Improvement" and, collectively, the
"Improvements"). The Improvements are planned to be constructed on the property located at 605
Furman Ave., with such property being more fully described on attached Exhibit B (the "Property"). The
Property is located within the Zone, and the Improvements fall within one of the programs approved in
the Plan;
WHEREAS the Development concept has been refined through cooperation between the Developer,the
City and the DMD to meet the desired goals of revitalization within the Zone and serve a public benefit;
WHEREAS any reference to"City"or"City Staff," is entirely in agency capacity for TIRZ#3, and further the
City as a home-rule municipal corporation is not a party to this agreement; and
WHEREAS the Developer desires to be reimbursed for certain future costs incurred pursuant to the
Development, and TIRZ #3 desires to reimburse the Developer for these costs in accordance with this
Agreement;
2016-478
9/27/16 1
CT Corpus 149 Ltd
INDEXED
Agreement
Now therefore, in consideration of the mutual covenants and obligations,the parties agree as follows:
Section 1. Reimbursement Obligations.
The City shall reimburse the Developer from available TIRZ #3 funds in an amount up to the estimated
project cost listed next to each Improvement in attached Exhibit C(the"Estimated Project Costs"),except
that (a) the total amount of all such reimbursements for the Development may not exceed $1,870,000
(the "Cap") and (b) if the Developer actually incurs a cost for an Improvement less than that
Improvement's Estimated Project Cost,the City shall reimburse the Developer for only the amount of the
cost that the Developer actually incurred for that Improvement. Based on qualifications of the
Development,the Program reimbursement structure is as follows:
(1) Downtown Living Initiative (minimum of 10 units must be built in order to qualify):
(1) $10,000 Per Unit for 37 units. Payment to be made over two (2) consecutive years beginning
the year that the Developer receives a Certificate of Occupancy ("C of 0") for the
Improvements from the City's Development Services Department. The payment in the first
year shall be $180,000 for 18 units.The payment in the second year shall be $190,000 for 19
units.
(2) Project Specific Development Agreement:
(1) Beginning the year after the Developer receives a C of 0 for the Improvements,the City shall
reimburse annually 75%of the property taxes paid on the Improvements to the participating
taxing entities in TIRZ#3, up to a total cap of$1,500,000,for a maximum of ten (10)years. In
the event that reimbursement of 75% of the property taxes paid on the Improvements in a
given year will cause the total reimbursement to exceed$1,500,000,only the amount needed
to reach the reimbursement of$1,500,000 will be reimbursed.
(2) Each such payment shall be made no later than 30 days following the Developer's submittal
of a valid Request for Reimbursement
(3) Actual reimbursement is based on the amount paid on the assessed value of the
Development, as determined by the Nueces County Appraisal District. Once the City has
reimbursed an amount equal to$1,500,000 or has reimbursed 75%of the property taxes paid
on the Improvements to the participating taxing entities in TIRZ#3 for ten years, whichever
comes first, the City shall have no obligation to pay any amount to the Developer as part of
the Project Specific Development Agreement.
(4) No interest shall accrue on any amount of unreimbursed Project Costs, and City shall not be
obligated to pay Developer any interest whatsoever under this Agreement.
Section 2. Closing Statement Required.
Within 30 days of closing,and prior to beginning any work,the Developer shall provide to the appropriate
City Staff a certified closing or settlement statement (such as a HUD-1) for the mortgage or loan used to
finance the Development.
(a) The City shall maintain the confidentiality of this information to the fullest extent possible under the
law. The City and TIRZ#3 are governmental entities subject to the Texas Public Information Act (the
"Act"). In the event that the City or TIRZ#3 determines that this information is responsive to a valid
request under the Act,the City shall timely request an opinion from the Office of the Attorney General
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of Texas (the "Attorney General") and argue that the information is confidential and not subject to
release under the Act.The City shall timely notify the Developer of any such request and provide the
Developer with the opportunity to make arguments to the Attorney General regarding the
confidentiality of the information.
(b) In the event the loan is less than what had been stated in the application, and as a result the equity
requirement shown in the closing statement is lower than the Cap listed in Section 1 of this
Agreement, the Cap shall be automatically reduced so that the total amount of TIRZ #3
Reimbursement does not exceed the equity provided by the Developer.
Section 3. Conditions for Reimbursement.
The City shall reimburse Developer in accordance with Section 1 only if the following conditions are
fulfilled:
(a) The Developer constructs all of the Improvements on the Property on or before December 31, 2018
(the"Completion Date") in accordance with Exhibit A and the City's building codes and policies.
(b) The City's Development Services Department issues a C of 0 for the Improvements.
(c) Within 60 days of the issuance of C of 0, the Developer submits a Request for Reimbursement for
actual Project Costs, in the form contained in Exhibit D, including:
(i.) C of 0;
(ii.) specific improvements completed under the Project and the amount of money that Developer
paid for completion of such work and that Developer claims as actual Project Costs;
(iii.) supporting documents demonstrating that such amounts were actually paid by Developer,
including but not limited to invoices, receipts and final lien waivers signed by the general
contractor;
(iv.) a final, certified closing statement for the closing of the mortgage that is to be obtained for
the Development.
(d) Appropriate City Staff has inspected the Improvements and certifies that the Improvements are
complete, acceptable, and comport to the terms of this Agreement.
(e) Upon acceptance by City Staff, Request for Reimbursement form is reviewed and approved by the
Board.
(f) If the Developer fails to pay the required taxes on the property or files an appeal to the Nueces
County Appraisal District or any state or federal court of the assessed value of Property for ad
valorem tax purposes,the City and TIRZ#3 shall be under no obligation to make any payments
under this agreement until such time as the appeal is resolved and all taxes are paid in full.Any late
fees,fines, or interest assessed as a result of the failure to pay taxes or the appeal process shall not
be reimbursed to the Developer under this agreement. Reimbursement is limited to the actual
amount of property tax paid on the Improvements.
Section 4. Audit
Developer will also make available for inspection by designated City Staff during regular business hours
and upon five (5) days' written notice to the Developer, all financial and business records of Developer
that relate to the Project, in order to assist City Staff in verifying the Developer's compliance with the
terms and conditions of this Agreement. TIRZ#3 shall have the right to have these records audited.
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Section 5. Maintenance of Improvements.
If the Developer constructs the Improvements,the Developer shall maintain the Improvements,premises,
and adjacent public right of way in good condition so as to not contribute to blight in the Zone. The
Developer's obligation to maintain the Improvements and public right of way adjacent to the Property,
includes without limitation, maintaining the landscaping,sidewalks,aesthetics,and general cleanliness of
the premises.
Section 6. Termination.
Unless sooner terminated in accordance with this Section,this Agreement shall survive the expiration of
TIRZ#3 and shall continue in force and effect until the date which is two (2) years following the date of
the last payment made by the City to the Developer under this Agreement. If the Developer has not fully
complied with Section 2 Conditions for Reimbursement by the Completion Date, this Agreement shall
terminate immediately, unless mutually agreed to in writing in accordance with Section 17.
Section 7. Warranties.
Developer warrants and represents to City the following:
(a) Developer, if a corporation or partnership, is duly organized, validly existing, and in good standing
under the laws of the State of Texas, and further has all corporate power and authority to carry on its
business as presently conducted in Corpus Christi,Texas.
(b) Developer has the authority to enter into and perform,and will perform,the terms of this Agreement.
(c) Developer has timely filed and will timely file all local, State, and Federal tax reports and returns
required by law to be filed, and has timely paid and will timely pay all assessments, fees, and other
governmental charges, including applicable ad valorem taxes, subject to Developer's right to protest
same,during the term of this Agreement.
(d) If an audit determines that the request for funds was defective under the law or the terms of this
agreement, Developer agrees to reimburse the City for the sums of money not authorized by law or
this Agreement within 30 days of written notice from the City requesting reimbursement.
(e) The parties executing this Agreement on behalf of Developer are duly authorized to execute this
Agreement on behalf of Developer.
(f) Developer does not and agrees that it will not knowingly employ an undocumented worker. If, after
receiving payments under this Agreement, Developer is convicted of a violation under 8 U.S.C.Section
1324a(f), Developer shall repay the payments at the rate and according to the terms as specified by
City Ordinance, as amended, not later than the 120th day after the date Developer has been notified
of the violation.
Section 8. Force Majeure.
If the City or Developer are prevented, wholly or in part, from fulfilling its obligations under this
Agreement by reason of any act of God,unavoidable accident,acts of enemies,fires,floods,governmental
restraint or regulation, other causes of force majeure, or by reason of circumstances beyond its control,
then the obligations of the City or Developer are temporarily suspended during continuation of the force
majeure. If either party's obligation is affected by any of the causes of force majeure,the party affected
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shall promptly notify the other party in writing, giving full particulars of the force majeure as soon as
possible after the occurrence of the cause or causes relied upon.
Section 9. Assignment.
Developer may not assign all or any part of its rights, privileges, or duties under this Agreement without
the prior written approval of the Board. Any attempted assignment without such approval is void, and
constitutes a breach of this Agreement.Assignment can only be requested for multi-year reimbursements,
after completion of obligations by Developer. If the Developer wishes to sell the property after the
Development is complete and the property will continue to be used as an apartment complex, then the
Developer may assign all or any part of its rights, privileges, or duties under this Agreement to the new
owner with the written approval of the Board. Such approval shall not be withheld unreasonably.
Section 10. Indemnity.
Developer covenants to fully indemnify, save, and hold harmless the TIRZ#3, the City, their respective
officers, employees, and agents ("Indemnitees") against all liability, damage, loss, claims, demands,
and actions of any kind on account of personal injuries (including, without limiting the foregoing,
workers'compensation and death claims),or property loss or damage of any kind, which arise out of or
are in any manner connected with, or are claimed to arise out of or be in any manner connected with
Developer activities conducted under or incidental to this Agreement, including any injury, loss or
damage caused by the sole or contributory negligence of any or all of the Indemnitees. Developer must,
at its own expense, investigate all those claims and demands, attend to their settlement or other
disposition, defend all actions based on those claims and demands with counsel satisfactory to
Indemnitees, and pay all charges of attorneys and all other cost and expenses of any kind arising from
the liability,damage,loss, claims, demands, or actions.
Section 11. Events of Default.
The following events constitute a default of this Agreement:
(a) Failure of Developer to timely, fully, and completely comply with any one or more of the
requirements, obligations, duties,terms, conditions, or warranties of this Agreement.
(b) TIRZ#3,the Board or City Staff determines that any representation or warranty on behalf of Developer
contained in this Agreement or in any financial statement,certificate, report,or opinion submitted to
the TIRZ #3 in connection with this Agreement was incorrect or misleading in any material respect
when made.
(c) Developer makes an assignment for the benefit of creditors.
(d) Developer files a petition in bankruptcy, or is adjudicated insolvent or bankrupt.
Section 12. Notice of Default.
Should the City determine that Developer is in default according to the terms of this Agreement,the City
shall notify Developer in writing of the event of default and provide 60 days from the date of the notice
("Cure Period")for Developer to cure the event of default.
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Section 13. Results of Uncured Default.
After exhausting good faith attempts to address any default during the cure Period, and taking into
account any extenuating circumstances that might have occurred through no fault of Developer, as
determined by the City, the following actions must be taken for any default that remains uncured after
the Cure Period.
(a) Developer shall immediately repay all funds paid from TIRZ#3 funds under this Agreement.
(b) Developer shall pay reasonable attorney fees and costs of court.
(c) The City and TIRZ#3 shall have no further obligations to Developer under this Agreement.
(d) Neither the City nor the TIRZ#3 may be held liable for any consequential damages.
(e) The City may pursue all remedies available under law.
Section 14. No Waiver.
(a) No waiver of any covenant or condition,or the breach of any covenant or condition of this Agreement,
constitutes a waiver of any subsequent breach of the covenant or condition of the Agreement.
(b) No waiver of any covenant or condition,or the breach of any covenant or condition of this Agreement,
justifies or authorizes the nonobservance on any other occasion of the covenant or condition or any
other covenant or condition of this Agreement.
(c) Any waiver or indulgence of Developer's default may not be considered an estoppel against the City
or TIRZ#3.
(d) It is expressly understood that if at any time Developer is in default in any of its conditions or
covenants of this Agreement, the failure on the part of the City to promptly avail itself of the rights
and remedies that the City may have, will not be considered a waiver on the part of the City, but City
may at any time avail itself of the rights or remedies or elect to terminate this Agreement on account
of the default.
Section 15. Available Funds.
Developer specifically agrees that City and the TIRZ #3 shall only be liable to Developer for the actual
amount of the money due Developer under this Agreement from TIRZ#3 funds, and shall not be liable to
Developer for any actual or consequential damages, direct or indirect, interest, attorney fees, or cost of
court for any act of default by City or the TIRZ#3 under the terms of this Agreement. Payment by City is
strictly limited to the total amount of increment funds for TIRZ #3. City shall use its best efforts to
anticipate economic conditions and to budget accordingly. However, it is further understood and agreed
that, should the actual tax increment funds available for disbursement under the Downtown Living
Initiative during a given year be less than the total amount to be paid to all contracting parties at the time,
then in that event,all contracting parties shall receive only their pro rata share of the available increment
funds for that year,as compared to each contracting parties'grant amount for that year,and City and the
TIRZ#3 shall not be liable for any deficiency at that time or at any time in the future. In this event, City
will provide all supporting documentation,as requested. Reimbursements paid to Developer shall require
a written request from Developer accompanied by all necessary supporting documentation, as outlined
in Section 2.
Section 16. Notices.
Any required written notices shall be sent by certified mail, postage prepaid,addressed as follows:
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Developer:
CT Corpus 149 Ltd.
Attn: Fred Morgan
4801 Woodway Dr.
Suite 306W
Houston,TX 77056
City:
City of Corpus Christi
Attn.: City Manager's Office
Tax Increment Reinvestment Zone#3
P.O. Box 9277
Corpus Christi,Texas 78469-9277
Notice is effective upon deposit in the United States mail in the manner provided above.
Section 17. Amendments or Modifications.
No amendments or modifications to this Agreement may be made, nor any provision waived, unless in
writing signed by a person duly authorized to sign agreements on behalf of each party.
Section 18. Captions.
The captions in this Agreement are for convenience only and are not a part of this Agreement. The
captions do not in any way limit or amplify the terms and provisions of this Agreement.
Section 19. Severability.
If for any reason,any section, paragraph,subdivision,clause, provision, phrase or word of this Agreement
or the application of this Agreement to any person or circumstance is, to any extent, held illegal, invalid,
or unenforceable under present or future law or by a final judgment of a court of competent jurisdiction,
then the remainder of this Agreement, or the application of the term or provision to persons or
circumstances other than those as to which it is held illegal, invalid,or unenforceable,will not be affected
by the law or judgment, for it is the definite intent of the parties to this Agreement that every section,
paragraph,subdivision,clause, provision, phrase, or word of this Agreement be given full force and effect
for its purpose.
To the extent that any clause or provision is held illegal, invalid,or unenforceable under present or future
law effective during the term of this Agreement,then the remainder of this Agreement is not affected by
the law, and in lieu of any illegal, invalid, or unenforceable clause or provision, a clause or provision, as
similar in terms to the illegal,invalid,or unenforceable clause or provision as may be possible and be legal,
valid,and enforceable, will be added to this Agreement automatically.
Section 20. Venue.
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Venue for any legal action related to this Agreement is in Nueces County,Texas.
Section 21. Sole Agreement.
This Agreement constitutes the sole agreement between City and Developer. Any prior agreements,
promises, negotiations, or representations, verbal or otherwise, not expressly stated in this Agreement,
are of no force and effect.
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APPROVED AS TO FORM: Zle day of SeficPAlaa.,- , 2016.
Lk), ace<AAA___.-nat)
Assistant City Attorney
For City Attorney
By: 41)Tt/t.-U
C .
City Manager/Designee
Date: I D /S / C
City of Corpus Christi on behalf of Tax Increment Reinvestment Zone #3
Attest:
By: �C�'� C� ti^ 7I i2 2.. '43
AUT$UKut�
Rebecca Huerta -- 1-/2:7
City Secretary 21F
SECILIKer (2
Developer
BYE
Fred Forrest Morgan Jr., Manager of CT Corpus 49 GP LLC, General partner
Date: 9 L 'L - j(s;
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Exhibit A—Project Description
Exhibit B—Property Description
Exhibit C—Estimated Project Costs
Exhibit D—TIRZ#3 Reimbursement Request Form
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Exhibit A— Project Description
The Clock Tower Apartments will be a Class A apartment community containing 150 apartment units,
with 118 one-bedroom units and 32 two-bedroom units. The units will be constructed on 4 stories
wrapped around a structured garage. The exterior of the apartment buildings will be a combination of
Hardi-plank siding and stone and the facade of the garage will integrate design elements of the
residential structures in an attempt to create a consistent expression.The fitness center and a resident
relaxation area will be located on the top floor of the parking garage providing residents with
unparalleled views of the City and Corpus Christi Bay. The roofs will be pitched with composition
shingles. The interiors of the units will contain kitchens with all electric appliances including built-in
microwaves, side-by-side refrigerators, and upscale cabinetry and fixtures. Other interior amenities will
include 9 foot ceilings,ceiling fans, 2" blinds,garden tubs, and washer/dryers.
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Exhibit B—Property Description
HAM PIONS LTS 1 thru 6 and POR LTS 7 thru 12 BLK 2
1.58 Acres, being all of Lots 1-5, and a portion of Lots 6-12, Block 2, Hampton Addition, a map of which is
recorded in Volume A, Page 23, Map Records of Nueces County,Texas; and being the same lands
described in Special Warranty Deed with Vendor's Lien from HOUSING 2000, Inc., a Texas corporation,
to HHSBV3 LLC,a Texas limited liability company, recorded in Document No. 2008016565, Official Public
Records of Nueces County,Texas.
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Exhibit C—Project Costs
Improvement Estimated Cost Category
1) Structured Parking Garage $3,095,000 Structured Parking
Total Possible Reimbursement: *$3,095,000
*Total Possible Reimbursement identifies the Project Costs that make the Development eligible under
the Incentive Guidelines.The Actual Reimbursement is identified in Section 1 of the Agreement.
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Exhibit D—Request for Reimbursement Form
Cit'of Corpus Chnstt-cm?Managers Office
Corpus Ciwist Downtavm Management District
Tax Increment Reinvestment Zone #3
Request for Reimbursement
Prose_: lame:— --_-- --
Grant Program:_
Type of Reimbursement. DOne Time [JRe-Cccurrirng iFirst Payment)
Requestor: Date Requested:
Improvement ; Esurroted Cast TACDIaI Cost Invoice
¢�savesscew�i:eq per mrcraa.mr r --4 Reference
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I 31
i TOTAL
Attached is the Following:
1) Executed TIRZ#3 Reimbursement Agreement El
2) Certificate of Occupancy Date:
31 Documentation of Expenses T
Signatures for Submittal:
Authorized Developer: Date:
Authorized Genera!Contractor: Cate
An inwinolete Request for Reimbursement will nor be processed. Submit a nerd copy and combined PDF
version to r .- upon receipt of Requ -t final rnspecoeri will be srneduied
Signatures for Approval Proces.
Request Recd By City: Date:
Documentation Complete: inspection of Project:
Notes:
Reimbursement Approved by T!RZ#3 Board: Date:
Tax IRtremert Reiwestmern zone x3 aequest fir Reimbursement
Updated October 7C.5
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