HomeMy WebLinkAboutPR 14560: EDC/REDWINE FAMILY PARTNERS, LTDinteroffice.
MEMORANDUM
To: Mayor, City Council, and City Manager
From: Floyd Batiste, CEO of EDC
Date: February 7, 2008
Subject: P. R. No. 14560; Council Meeting February 12, 2008
Attached is P. R. No. 14560 approving First Amendment to
Economic. Development Conditional Grant Agreement between the City
of Port Arthur Section 4A Economic Development Corporation and
Redwine Family Partners, Ltd.
Attachment
z.pr14560 memo
P. R. No. 14560-
" 02/07/08
RESOLUTION NO.
RESOLUTION APPROVING FIRST AMENDMENT TO
ECONOMIC DEVELOPMENT CONDITIONAL GRANT
AGREEMENT BETWEEN THE CITY OF PORT ARTHUR
SECTION 4A ECONOMIC DEVELOPMENT CORPORATION
AND REDWINE FAMILY PARTNERS, LTD.
WHEREAS, Redwine Family Partners, Ltd. ("Redwine°), a Texas limited partnership,
has planned to construct roadway improvements along Anchor Drive (the `'Anchor Drive
Extension") and to undertake construction of hotels and adjacent commercial property for
business enterprises within the City of Port Arthur, Texas; and
WI~:'REAS, the City. of Port Arthur Section 4A Economic Development Corporation
("PAEDC} has agreed to provide a .$285,000 conditional Qiant to offset a portion of the
construction costs for the Anchor Drive Extension. Said conditional grant to be funded in two
phases based upon [he,completion by Redwine of construction of the Anchor Drive Extension,
construction of a hotel aleng the Anchor Drive Extension and satisfaction of certain reporting
requirements; and.
WHEREAS, Redwine was to be reimbursed one-half of the conditional Brant or
$142;500 upon completion of construction of the Anchor Drive Extension, and the balance. of
the conditional grant or $142,500 once one hotel was fully constructed and open for business
along the Anchor Drive Extension, said constnuction to be completed as of September 30,
2007; and
WHEREAS, due to delays in the completion of construction of the Anchor Drive
Extension, the hotel has not been constructed and open for business as of September 30, 2007;
and
WI-IEREAS, Redwine has requested that its Economic Development Conditional Grant
Agreement (the "Original Agreement") be amended to provide that the PAEDC fund the entire
conditional grant of $285,000 after the completion of construction of the Anchor Drive
Extension and the opening of the hotel adjacent to Anchor Drive now planned as of September
30, 2008; and
WHEREAS, Redwine has provided the status reports on its project as required by the
Original Agreement; and
WHEREAS, PAEDC has authorized an amendment to the Original Agreement to
provide that no .payment shall be due under the conditional grant until Redwine has not only
completed constmction of the Anchor Drive Extension, but has one hotel adjacent to Anchor
Drive fully constructed and open for business as of September 30, 2008, at which time the
PAEDC would reimburse Redwine the total conditional grant of $285,000; and
WHEREAS, the Original Agreement was approved by the PAEDC on January 8, 2007;
and
WHEREAS, this First Amendment to the Original Agreement is being presented to the
Port Arthur City Council for approval. (attached as Exhibit "A")
NOW, THEREFORE, BE TT RESOLVED BY THE CITY COUNCIL OF THE QTY OF
PORT ARTHUR:
Section 1. That the facts and opinions in the preamble are true and correct.
A605975 Page 2
Secfion 2. -That the City of Port Arthur Section 4A Economic Development
Corporation is herein authorized to enter into the Firs[ Amendment to Economic Development
Conditional Grant Agreement with Redwine Family Partners, Ltd.
Section 3: That a copy of the caption of the Resolution be spread upon the Minutes of
the City Council.
READ, ADOPTED AND APPROVED on this day of A.D.,
2008, at a Meeting of the Ciry Council of the City of Port Arthur, Texas, by the following
vote: AYES:
Mayor
Councilmembers
NOES:
Delores "Bobbie' Prince, Mayor
ATTEST:
ACTING CITY SECRETARY
APPROVED:
Floyd Batiste, PAEDC CEO
Rfi~5915 - - Page
APPROVED AS TO FORM:
v~~
Mark T. Sokolow, Attorney
C v~ bQ~U~~ v~~.
APPROVED AS TO THE AVAILABILITY OF FUNDS:
~l
Rebecca Underhill, Director f Finance
asosv~s
_ Page 4
EXHIBIT i°A"
FIRST AMENDMENT
TO ECONOMIC DEVELOPMENT CONDITIONAL GRANT AGREEMENT .
BETWEEN
THE CITY OF PORT ARTIIDR SECTION 4A ECONOMIC DEVELOPMENT CORP.
REDWINE FAMILY PARTNERS, LTD..
The Economic Development Conditional Grant Agreement (the "Original Agreement") between
the City of Port Arthur Section 4A Economic Development Corporation ("PAEDC") and Redwine Family
Partners, Ltd. ("Redwine") dated January 8; 2007 is hereby amended to revise the promised performance
by Redwine, to revise the Performance Milestone Schedule and to revise the reimbursement commitment
of PAEDC.
The Original Agreement is modified and amended by this First Amendment to Economic
Development Conditional Grant Agreement (the "First Amendment''); and except as specified herein, all
terms, conditions, performance obligations, covenants and agreements of Redwine or PAEDC as
specified in the Original Agreement are ratified and affirmed, and each party covenants and represents
that there are no defaults in the Original Agreement.
1. The Executive Summary is amended and restated to read as follows:
EXECUTIVE SUMMARY
Redwine. Family Partners, Ltd. ("Redwine") is a Texas limited partnership whose general partner
is Redwine Enterprises-1, .LLC, a Texas limited liability company which has undertaken to construct
hotels on property owned by Redwine. The planned hotels and adjacent commercial properties for
business enterprises is dependent upon the extension of Anchor Drive in Port Arthur, Texas to a distance
sufficient to serve the hotels with said extension referred to as the "Anchor Drive Extension".
PAEDC agreed to a $285,000 conditional grant to offset a portion of the construction costs for the
Anchor Drive Extension. The conditional grant was to be funded in two phases based upon Redwine's
completion of construction of Anchor Drive Extension and satisfaction of certain reporting requirements,
and the PAEDC would reimburse Redwine half of the conditional grant or $142,500. PAEDC further
agreed that if one hotel was fully constructed and open .for business as of September 30, 2007, the
PAEDC would reimburse Redwine the remaining Fifty (50%) percent of the conditional grant or
$]42,500.00-based upon certain limitations in the Original Agreement relative to the construction costs
for the Anchor Drive Extension.
If Redwine breached or defaulted on the Original Agreement including the providing of
guarantees as provided in the Original Agreement, then all funds granted by PAEDC would automatically
convert to a three (3) year loan at an interest rate often (10%) percent per annum.
Further, Redwine agreed to provide PAEDC reports quarterly or otherwise as required reporting
on the construction status of the Anchor Drive Extension and the two hotels. Due to construction and'
other related issues, Redwine has been able to complete the construction of the Anchor Drive Extension
and has provided invoices confirming that the cost was $400,819.59. Therefore, the conditional grant
from the PAEDC at eighty (80%) percent of the cost to extend;Anchor Drive up to but not to exceed
$285,000 has been affirmed.
Redwine has agreed to forego any requests for reimbursement from PAEDC of. fifty (50%)
percent of the conditional grant or $142,500.00 until such time as one hotel is fully constructed and open
for business at which time Redwine will request that the PAEDC reimburse.Redwine the total conditional
grant of $285;000.00.
Redwine has provided all reports required under its Performance Milestone Schedule.
Redwine has agreed to amendments to -its promised performance and revisions to the
Performance Milestone Schedule and agrees to a revised reimbursement commitment by the PAEDC.
2. The following sections of the Original Agreement are amended and restated to read as
follows:
(a) Secfion 6(a)(3): PAEDC will reimburse Redwine One Hundred (100%) percent of the
conditional grant up to 285,000.00 once the following conditions are met:
(i) the extension of Anchor Drive is constructed to the specifications of the City of
Port Arthur with a one (1) year contractor's warranty provided;
(ii) Redwine provides a copy of an executed construction contract for the hotel;
(iii) Redwine provides a copy of permits for the construction of the hotel;
(iv) the designs necessary to construct the hotel are filed and approved by the City of
Port Arthur, Texas; and
(v) the hotel along the Anchor Drive Extension is fully constructed and open for
business on or before September 30, 2008.
(b) Section 6(a)(4): This section is deleted.
(c) Section 6(b)(1)(a): Once started, the Anchor Drive Extension must be completed and
dedicated to the City of Port Arthur by December 31, 2008.
(d) Section 6(b)(2): Redwine guarantees. at least one hoteLwill be built fronting. the Anchor
Drive Extension by September 30, 2008.
(e) Performance Milestone Schedule: The Performance Milestone Schedule is amended as
included below:
REDWINE'S AMENDED PERFORMANCE MILESTONE SCHEDULE
Deadline Milestone
(a) November 30, 2006 Review Anchor Drive extension construction. plans and projected costs and
schedule with the EDC Staff
(b) December 31, 2006. Issue a status report) to PAEDC's Chief Executive Officer ("CEO") for
the period from the effective date of this contract to December 1, 2006
{c) February 28, 2007 Status reportz for January 1, 2006 to December 31, 2006
(d) March 31; 2007 Foundations of both hotels completed -
(e) April 30, 2007 Status report for January 1, 2007 to March 31, 2007
(f) July 31, 2007 Status re~rt for April 1, 2007 to June 30, 2007
~ Status reports shall include, but are not limited to spending for the construction of the Anchor Drive extension; the status of
construction against the plan presented to the PAEDC; Port ARhur residents' involvement in the Anchor Drive extension
construdion; and Southeast Texas business participation in Anchor~Drive extension design and construdion.
2 February 5'" status reports shall also include the identity of all Redwine partners or.owners owning more than 5% of Redwine.
X602284 ~ ~ Page 2
(g) October 31, 2007 Status report for July 1, 2007 to September 30, 2007
(h) March 31, 2008 Statute for September 30, 2007 to February 28, 2008
(i) July 1, 2008 Status report for February 28, 2008 to May 31, 2008
~) September 30, 2008 Hotel constructed and open for business
(k) October 31, 2008 Close out reyor{for June 1, 2008 to September 30, 2008 to the PAEDC Board
to compare actual economic development results against expectations as
presented to the Board on March 22, 2006.
3. Paragraph 6 of the Original Agreement is modified to include a reference to the
EXECUTfVE SUMMARY as a part of the Original Agreement for all purposes and constitutes promise
performance by Redwine and/or PAEDC as the case may be in accordance with the Original Agreement.
ATTORNEY APPROVALS
APPROVED AS TO FORM:
Guy N. Goodson
General Counsel for PAEDC
VERIFIED AS CONSISTENT
WITH CITY COUNCIL RESOLUTION:
Resolution Number:
Mark T. Sokolow, City Attorney
#602284 _ Page3
AMENDMENT EXECUTION
CITY OF PORT ARThIUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
SIGNED AND AGREED TO on the day of
President, Keith Daws, Sr.
2008.
Secretary, Kerry Thomas
Witness Witness
REDWINE FAMILY PARTNERS, LTD.
SIGNED AND AGREED TO on the _ day of .2008.
REDWINE FAMILY PARTNERS, LTD.,
a Texas limited partnership
By: Redwine Enterprises-I, L.L.C.,
General Partner
By:
Pat Redwine; Manager
Witness
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