HomeMy WebLinkAboutC2019-220 - 4/23/2019 - NA DOWNTOWN DEVELOPMENT REIMBURSEMENT AGREEMENT-Ward Building
This Downtown Development Reimbursement Agreement (the "Agreement") is entered into by and
between the City of Corpus Christi, Texas (the "City"), as the agent of the Corpus Christi Tax Increment
Reinvestment Zone#3 ("TIRZ#3"),and Peoples Street Project, LLC(the"Developer").
Recitals
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 541 N
Chaparral, 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;
C2019-220
4/23/19
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Peoples Street Project LLC
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 Proiect Costs"),except
that(a)the total amount of all such reimbursements for the Development may not exceed $390,000.00
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:
A. Chaparral Street Property Improvement Grant Program up to$190,000:
(1) 50/50 Match of Approved Expenses(Up to 70/30 may be considered on case-by case basis)
(2) Improvements must be permanent
(3) This incentive will be paid over two years. The first payment of$100,000 will be paid after
receipt of a Request for Reimbursement showing the completion of all the requirements in
Section 3 below. The second payment of$90,000 will be paid the following year, no earlier
than the anniversary date of the first payment. Developer must submit a Request for
Reimbursement for the second payment.
B. Project Specific Development Agreement:
(1) Beginning the year after the Developer receives a Certificate of Occupancy("C of 0")for the
Improvements from the City's Development Services Department, the City shall reimburse
annually up to 75%of the property taxes paid on the Improvements to the participating taxing
entities in TIRZ#3, for the 10 years or until the termination of increment collection for the
TIRZ#3,which is currently set to expire in 2028,whichever comes first.The maximum amount
of incentive under this subsection B is$200,000.Once the City has reimbursed$200,000,this
Agreement will terminate and the City and the TIRZ#3 will have no further obligation to the
Developer.
(2) Each payment shall be made no later than 30 days following the Developer's submittal of a
valid Request for Reimbursement
(3) After City has paid to Developer an amount equal to all of the Project Costs,or the maximum
of$200,000,City shall have no further obligation to pay any amount to Developer.
(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.
This Section 2 is only applicable to a Developer who is in the process of purchasing the Property, but has
not completed the purchase as of the date this agreement is executed by the Developer. 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.
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(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
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 August 28,2020(the
"Completion Date")in accordance with Exhibit A and the City's building codes and policies.
(b) Developer obtains all required building permits from the City and commences construction of the
Improvements within six(6) months of the date this Agreement is signed by the City. Any extensions
of this deadline must be requested by Developer in writing and approved by the Board.
(c) The completed Improvements must include all elements (including but not limited to: all design,
structural, architectural, lighting, landscaping, etc.) which are shown or referenced in the
Development Plan attached hereto as Exhibit A. Any amendments to the Development Plan must be
submitted in writing and be approved by all parties to this Agreement.
(d) The City's Development Services Department issues a C of 0 for the Improvements.
(e) 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;
(f) Appropriate City Staff has inspected the Improvements and certifies that the Improvements are
complete,acceptable,and comport to the terms of this Agreement.
(g) Upon acceptance by City Staff, Request for Reimbursement form is reviewed and approved by the
Board.
(h) 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
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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 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.
Section 5. Maintenance of Property and Improvements.
Developer must maintain the property for the entirety of the Agreement in accordance with the City's
Property Maintenance requirements. Citations from the Code Enforcement for property maintenance
issues will initiate termination provision (Section 6).
If the Developer constructs the Improvements,the Developer shall maintain the Improvements,premises,
and adjacent public right of way in good condition and 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. 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.
Three citations from the City's Code Enforcement Division for property maintenance violations and/or
one Code Enforcement citation that results in the City abating the property will initiate a review process
by the TIRZ#3 Board,at which time the Board may elect to terminate the Agreement.
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,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.
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(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
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.
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.
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(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.
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 be less than the total amount 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 to for any deficiency at that time or at any time in the future. In
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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:
Developer:
Peoples Street Project LL
Attn: William Hoover
Manager
3636 S Alameda St,Suite B
Corpus Christi,Texas 75411
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
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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.
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.
[Signature Page Follows]
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APPROVED AS TO FORM: Z3 day of NyNA , 2011
OUIL4ALd
Assistant City Attorney
For City Attorney
By: ,/ //
City Manager/Des. nee
Date: Z-4419
City of Corpus Christi on behalf of Tax Increment Reinvestment Zone#3
Attest:
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Rebecca Huerta
City Secretary
Developer
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By: ^ f �"� 1 �.vu YY COUNCIL Z
William Hoover, Manager ids
Date: `C c 2$ (L ... RFr,Rrrr.Q"
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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 proposed redevelopment of the Ward Building will be a three-story mixed-use building.The first
floor will be built out to accommodate one or more of the following concepts: Restaurant,Art Gallery,
Co-working space, or Retail.The second floor will consist of approximately 14 leasable artist workspaces.
The third floor will be approximately eight (8) apartment loft units.
The project will consist of asbestos remediation, structural repairs, roof replacement, floor replacement,
stairwell repair, all new mechanical, electrical, and plumbing, and facade work including windows,
doors, awning, and lighting. Since the developer will be utilizing state and federal historic tax credits,the
project will be in compliance with the Secretary of Interior's Standards.
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Exhibit B—Property Description
Property ID: 191695
Geographic ID: 0540-0011-0030
Legal Description: BEACH N70'OF E105'OF LOTS 3&4 BLOCK 11
Property Address: 541 N Chaparral Street,Corpus Christi,TX 78401
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14'
Exhibit C—Project Costs
Work Estimated Cost Category
1) Roof Replacement $128,331 Chaparral Street Property
2) HVAC, Electrical, Plumbing $290,087 Improvement Grant Program
3) Structural Upgrades $376,616 Project Specific Development
Agreement—Code
Compliance
Total Reimbursement Basis $795,034
*Total Possible Reimbursement Basis 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
City of Corpus Christi-Cay Manager's Office
Corpus Christi OoWf t*wn Management OntriCt
Tax Increment Reinvestment Zone #3
Request for Reimbursement
Pro)ect Name:
Grant Program:
Type of Reimbursement: DOne Time ❑Re-Occurring(First Payment)
Requester: Date Requested:
Improvement Estimated Cost Actual Cast Invoice
(Per rye c Amaea Oso. w) Reference
1)
2)
3)
4)
TWAt
Attached is the Following:
1) Executed T1R2 R3 Reimbursement Agreement ❑
2) Certificate of Occupancy Date: ❑
3) Documentation of Expenses ❑
Signatures for Submittal:
Authorized Developer: Dice:
=uthor=zed Ge-era':Contractor Date:
M imam pfeer Request/or ireimbursemere tui not be processed subnsa hard copy and coati ned PO
version triAiysso5F=was c_-.upon receipt of Raped.final rapectian mil be scheduled.
Signatures for Approval Process
Request Recd By City: Date:
Documentation Complete: Inspection of Project:
Notes:
Reimbursement Approved by T)RZ*3 Board: Date:
Tax increment Reinvestment zone Ira Request for Reimbursement
updated October 2015
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