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HomeMy WebLinkAboutPO 5898: OAKMONT PROPERTIES & STONE CREEK APTS. - DEVELOPER PARTICIPATION CONTRACTj interoffice MEMOItANDUI~ To: Mayor, City Council, and City Manager From: Mark T. Sokolow, City Attorney ~/-Z~„~ ~~„p~, -Date: June 10, 2008 Subject: P. O. No..5898; Council Meeting June 17, 2008 , Attached is P. O. No. 5898 as it pertains to a new Developer .Participation Contract-with Oakmont Properties,-Inc. and Stone Creek Apartments, Ltd. as to extend Anchor Drive, which will provide an incentive for a new 246 unit;. up-scale, market-rate apartment complex. A Developer Participation. Contract with Oakmont Properties, Inc. and Stone Creek Apartments; Ltd. was approved by Ordinance No. OS-36 at the April 8, 2008 Council Meeting: Because of unexpected delays in financing, Stone Creek was unable to meet the deadlines outlined in the Contract. Therefore, P. R. No: 5898 is rescinding Ordinance No. 08-36'and entering into a new Developer Participation Contract with Oakmont-- Properties, Inc. and Stone Creek Apartments, Ltd. with new timelines as outlined in the contract: A provision (Section 21) has also been added pertaining~to not hiring undocumented ' workers. MTS:ts .Attachment cc: VIA FACSIMILE (409) 895-0047 Jim Hendricks JIM HENDRICICS PROPERTIES VIA FACSIMILE (713) 681-7774 William M. Burney, III President OAICMONT PROPERTIES, INC. + z.po5898_memo ORDINANCE NO. P. O. No. 5898 06/10/08 is AN ORDINANCE AS IT PERTAINS TO A DEVELOPER PARTICIPATION CONTRACT WITH OAKMONT PROPERTIES, INC. AS TO E%TEND ANCHOR DRIVE AS TO PROVIDE AN INCENTIVE FOR A NEW 246 IINIT IIP- SCALE, MARKET-RATE APARTMENT COMPEER WHEREAS, on April S, 2008, per Ordinance No. OS-36, the City Council authorized a Developer Participation Contract with Oakmont Properties, Inc. and Stone Creek Apartments, Ltd. as to extend Anchor Drive as to provide an incentive for a new 246 unit up- scale, market-rate apartment complex; and WHEREAS, due to unexpected delays in getting financing in place, Stone Creek Apartments, Ltd.'s was unable to comply with the timelines as established in the original Developer Participation Contract; and WHEREAS, it is deemed in the pubic interest. to enter into a new Developer Participation Contract with Oakmont Properties, Inc. and Stone Creek Apartments, Ltd, in substantially the same form as attached hereto as Exhibit "A" NOW THEREFORE, BE IT ORDAINED BY THE CITY COIINCIL OF THE CITY OF PORT ARTHIIR: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That Ordinance No. 08-36 is herein rescinded. Section 3. That the City Manager is herein authorized to enter into a new Developer Participation Agreement with Oakmont z.po5898 Properties, Inc. and Stone Creek Apartments; Ltd. as to extend Anchor Drive as to.provide an incentive. fora new 246 unit up- scale, market-rate apartment complex, in substantially the same form as attached hereto as Exhibit "A". Section 4. That a copy of the caption of this Ordinance be spread upon the 'Minutes of the City Council: (READ, ADOPTED AND APPROVED on this day of , A.D., 2008, at a Council Meeting of the. City Council of the City of Port Arthur, Texas, by-the following vote: AYES: Mayor City Council NOES: MAYOR u~ ATTESTS ACTING CITY SECRETARY APPROVED AS TO FORM• CITY ATTORNEY z.po5898 APPROVED FOR ADMINISTRATION: CITY MANAGER APPROVED AS TO THS AVAILABILITY OF FIINDS: DIRECTOR OF FINANCE z.po5898 EX~I I B I'I' "A°` STATE OF TEXAS ~ COUNTY OF JEFFERSON 5 DEVELOPER PARTICIPATION CONTRACT WHEREAS, the City of Port Arthur, Oakmont Properties, Inc. and Stone Creek Apartments, Ltd. desire enter into a Developer Participation Contract, pursuant to Sections 212.071 to 212.074 Local Government Code, V.T.C.A.; and WHEREAS, Oakmont Properties, Inc. has indicated that it or an affiliated limited partnership, Stone Creek Apartments, Ltd. will purchase a tract of land adjacent to Lake Arthur, as denoted in Exhibit "A", as to construct a 246 unit, up-scale, market-rate apartment complex that will stay on the tax rolls; and WHEREAS, Oakmont Properties, Inc. and the affiliated limited partnership, Stone Creek Apartments, Ltd. are herein referred to as the Developer; and WHEREAS, the improvements to be constructed by Developer will be the extension of Anchor Drive, with the ancillary extension of sidewalks, water, drainage, and sewer as is required by City Code and professional engineering analysis; and WHEREAS, once these improvements are constructed to City specifications, they will be deeded to the City of Port Arthur as public improvements without any liens or encumbrances; and z.developer participation contract.anchor drive_updated2.1 ~ 1 y WHEREAS, Developer•is requesting the City participate in the cost of some of the improvements as to develop this tract so that at least a 246 unit up-scale, market-rate apartment complex will be built in the area, as denoted in Exhibit "A", with a deadline of October 31, 2009. NOW THEREFORE, the City of Port Arthur, Oakmont Properties, Inc., and Stone Creek Apartments, Ltd. agree to the following: Section 1. The facts and opinions in the preamble are true and correct. Section 2. Timetable for purchase of the tract for development: • Developer will provide documentation that it has purchased the land, as described in Exhibit "A", by ~ay~5--x&98 August 15, 2008. As a part of said purchase, any and all delinquent taxes, if any, on said property will be paid by the original owner, or by Developer. Section 3. Once the developer purchases the property, the developer will immediately commence construction and immediately clear and grub the site. The developer will also take such action as to maintain the progress of the construction without delay and stoppages. , Section 4. Developer will execute a performance bond for the construction of the improvements (extension of Anchor Drive and ancillary sidewalks, water, drainage, and sewer improvements) to ensure completion of the project. The z.developer participation contract anchor drive_updated2.1 2 z performance bond will be in the amount of the construction contract for said. public improvements which is estimated at $700,000. The bond must be executed by a corporate surety in accordance with Chapter 2253 of the Government Code. The City will be a beneficiary of said performance bond. -Developer will have liability insurance of $1,000,000, and hold the City harmless from its construction activities. Section 5. The City of Port Arthur will pay for 29% of the following costs, with the total reimbursement by the City not to exceed $200,000 out of a projected cost for the public improvements of $700,000 on the following: • Engineering design and construction of an extension of Anchor Drive, sewer. lines, water lines, and drainage lines and ancillary improvements as. described in Exhibit "A" The City's share of these costs of up to $100,000 will be paid within thirty (30) days after the completion of these improvements, in accordance with the City's Code of Ordinances and the public improvements have been accepted by the City. The City will receive a copy of all of the engineering and geo- technical studies. Developer will complete these improvements by ~ar~2-8~~ May 28, 2009. The City will pay its remaining share of these public improvement costs up to $100,000 when the apartment complex-has been substantially completed and has received a certificate of occupancy. , z.developer participation contract.anchor drive_updateo2.1 ~ 3 3 Section 6. .Developer will enter into construction agreements to perform the improvements delineated in this agreement. If Developer uses its own resources or a related construction company, it must provide information and documentation that the costs thereof are equal to or less than if it was bid out, as to avoid the undue loading of costs, collusion, or fraud, as prohibited by Section 212.074 Local Government Code. Also, all plans and specifications for public improvements will need to be approved by the City as is required of other developers. The City has the option to construct the public improvements, with Developer reimbursing the City for its share of the costs. Section 7. If 'Developer does not build (construction completed and certificate of occupancy issued) at least a 246 unit, up-scale, market-rate apartment complex on the tract, as denoted in Exhibit "A", by October 31, 2009, then Oakmont Properties, Inc. and Stone Creek Apartments, Ltd: will repay the City as follows: "Amount to be repaid equals the number of apartment units not built divided by 246 times the amount of moneys that the City has paid for improvements." Section 8. Pursuant to Section 212.072 Local Government Code, the total cash participation~of the City shall not exceed thirty percent (30°s) of the total contract price for the proposed public improvements, as described in Exhibit "A", and z.developer participation contract anchor drive_updated2.1 ~ a 4 this agreement provides a total incentive of less than 30%. Developer estimates the total contract price for the proposed public improvements to be over $700,000. Notwithstanding, the City's total reimbursement shall not exceed $200,000 in cash reimbursements. Section 9. All of Developer's books and other records, as they pertain to this project and public improvements that the City participates in, shall be available for inspection by the City, all as provided for` by Section 212.074 (b) Local Government Code. Section 10. This agreement will be construed in accordance with the laws of Texas, as well as the Ordinances of the City of Port Arthur. Section 11. The venue of all causes of action will be in Jefferson County, Texas. Section 12. The apartment units to be built shall be 'leased to renters without regard to race, religion or national origin, and Developer will comply with the fair housing laws, as delineated under Chapter 46 of the Code of Ordinances of the City of Port Arthur and as described by State and Federal Law. Section 13. Reasonable delays (not to exceed thirty(30) days) in the performance of this agreement may be approved by the City Manager, so long as the delays are not caused by the acts or omissions of Developer. z.developez participation contract.anchor drive_updated2.1 9 s Section 14: Notice to the parties shall be as follows: TO: CITY OF PORT ARTHUR ATTN: Stephen Fitzgibbons City Manager 444 Fourth Street P. O. Box 1089 Port Arthur, TX 77641-1089 TO: DEVELOPER ATTN: William M. Burney, III 109 North Post Oak Lane, Suite 400 Houston, TX 77024 (713) 681-5566 (713) 681-7774 (FAX) Section 15. The City makes no representation as to the marketability of said tract or the suitability 'of them as an apartment complex. Developer has relied on its own feasibility studies thereon and its"own inspection'as to the condition and existence of the utilities on or adjacent to the property. Section 16. If the City does not comply with the terms of this Agreement, then Developer may terminate this agreement with thirty (30) days written notice. If Developer does not comply with the terms of this Agreement, then the City may terminate this agreement with thirty (30) days written notice. Section 17. It is an essential term of this agreement that the apartment complex shall stay on the tax rolls ,f or a period of twenty (20) years from the date that the apartment complex receives its certificate of occupancy from the City of Port Arthur and a covenant thereon shall be filed in the deed records by the Developer. If this Section is violated, the z.developer participation contract.anchor drive_updated2.1 6 6 Developer or his assignee shall return the $200,000 in incentives to the City of Port Arthur within thirty (30) days. Section 18. The Developer further agrees to provide opportunities to Port Arthur contractors to bid'on or to provide quotes for the, building of the public improvements Section 19. .The Developer further agrees to provide opportunities to Port Arthur subcontractors to bid on or to provide quotes for the building of the apartment complex since the Developer plans to use Camden Builders as the general contractor who has experience in building the type of up-scale apartment .complex that will be built. Section 20. The Developer, with thirty (30) days written notice to the City may, prior to commencement of construction of the improvements described in Section 5, terminate this agreement with the City. Section 21. The Developer certifies that they have not and will not knowingly employ an "undocumented worker" which means an individual who, at the time of employment, is not lawfully admitted for permanent residence to the United States or authorized under law to be employed in that manner in the United States. The Developer acknowledges that it has reviewed Chapter 2264, Texas Government Code, and hereby affirmatively agrees to repay the amount of any incentive with interest at the rate of ten percent (10$) per annum, not later than the 120th day z.deveioper participation contract.anchoz drive_updated2.1 ~ v after the date the City notifies the Developer of a violation. The Developer acknowledges the City may bring a civil action as to recover any amounts owed under this Chapter, and further acknowledges that the City may recover court costs and reasonable attorney's fees incurred in bringing an action under Section 2264.101, Texas Government Code. z.developer participation contract anchor drive_updated2.1 8 0 SIGNED AND AGREED TO on this the day of 2008. OARMONT PROPERTIES, INC. "DEVELOPER" By: (Printed Name) ACKNOWLEDGMENT ' STATE OF TEXAS ~ COUNTY OF ~ BEFORE ME, the undersigned Notary Public, on this day, , personally appeared known to me to ,be the person whose name is described in the foregoing instrument, and acknowledged to me that he/she executed the same~as the act and deed of Oakmont Properties, Inc., for the purposes and considerations therein expressed, and the capacities therein. stated GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of 2008. Notary Public, State of Texas z.developer participation contract.anchor drive_updated2.1 9 9 STONE CREEK APARTMENTS, LTD "DEVELOPER" By: (Printed Name) ACKNOWLEDGMENT STATE OF TEXAS ~ - ~ COUNTY OF ~ BEFORE ME, the undersigned. Notary Public, on this day, personally appeared known to me to be the person whose name is described in the foregoing instrument, and acknowledged to me that he/she executed the same as the act and deed of Stone Creek Apartments, Ltd., for the purposes and cohsiderations therein expressed, and the capacities therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of 2008. Notary Public, State of Texas z. developer participation contra ct.anchor dzive_npdated2.1 io io P SIGNED AND AGREED TO on this the day of , 2008. CITY OF PORT ARTHUR By: STEPHEN FITZGIBBONS, CITY MANAGER ACKNOWLEDGMENT STATE OF TEXAS ~ COUNTY OF JEFFERSON ~ BEFORE ME, the undersigned Notary Public,- on this day, personally appeared Stephen ,Fitzgibbons, City Manager, known to me to be the person whose name is described in the foregoing instrument, and acknowledged to me that he/she executed the same as the act and deed of the City of Port Arthur, for the purposes and considerations therein expressed, and the capacities therein stated. GIVEN UNDER MY HAND AND-SEAL OF OFFICE, this the day of 2008. Notary Public, State of Texas z.develoner participation cont ract.anchor drive_upda ted2 .1 11 ii EX~II~IT "A" TO THE AGREEMENT Anchor Drive Extension Presented by Jim Hendricks Jim. Hendricks Properties Anchor Drive Extension Complete access Jimmy Johnson ~Ivd~to Lake Arthur Dr What do we want to do? Extend Anchor Drive • ..Improve Access to Lake Arthur Drive • Improve safety in the area (U-Turns on 69) • Improve School Access (age 4 to 18 yrs) • Return on investment to Port Arthur by way of new development • Immediate up Scale Apartment Complex ~• ~iPY ~ ~+~ t.~,.4~~ wit. ~~l~/ . a ;~i' _'~ .` N `` ~ ~'~~. c` ~ ~. ~'- `~ •~~5~ .~ ~_ ;, __ R. ~_ ~ -- ~ ._ .tY ~'~'~~~ .~ ~ ffl ~~ .. 4R. 1 ~ r1{ b+4 -TS. ~ r S ~' ~ _ f Y ~: -~ ~ _ -. ~ , '__- L~ a _ ~' fi ~ 'c( ~''r~ gg ~~' ~ ~~J~ S ~~~X ice' ' ~ ~' ~ ~: f ~` '` !t f ~ .,:, G a~!"'I ~Iool ~! II!M ~~uM What will it look like ? ^, ~ Y ~ 1 A 1 %qy.., ~ • ~ • :a' ' f ' s: ~,~ J i ~ . J. - ~ y `~L' J r k \ ~ rte-. r ~ ,r r ~~ ~~' ! t. . ;~,. ~ ~~ 'fit., ~ '4 y, ta ~_ ~~ ~ '~'+ fir` ~ Y -~ -r ,._.~- ~~ - y ~, ~ ~~ . -,~ .~ ~ ° - 4 ' f `~ ~ - t "~~`~ ~}-.,~ - ~~g~.~l(~~~ !1~'i 1 ll li .~ il~i~,l~~~t~ .v, ~t--_,' .~ , s r-`~~ - ~ ~~ -- _ ~~_ Up Scale Market Rent Apartment complex ~: fZ ~ ~ ~~.r t .-~- ^ ~i~ ~~ /° .~...~.+r".- ?~ ~' ";~ nawR+C ~! i 1 •~ -; A -f .~ ~_ .; ;,, ~~ t ~'. ~ ~t d j 1~ r ~,~, -~ - ~ .- -- ;,.~ - _; ~ ~~---s E .:.. ~+a:~ ~;~ C` -:. .~. ',.. •'R . a.; _ , T ,u~~ ~! ^7r i - ~ ~ - - ~ r ~ ~i ~ T Immediate Impact • Improved Area access & Safety • New up scale Market Rate Apartment Complex with 246 Units _ • - $11 million to Tax rolls + More in Future • -$85,000+ per year to Port Arthur o Proven History for. Additional Development Overview. • Total Cost to extend Anchor Dr $700,000 ( includes road with sidewalks, water, drainage ~ sewer). • Apartment Development project brings $500,000 of that cost • Requesting from Port Arthur $200,.000 to Extend Anchor Dr to Lake Arthur Dr. Return on Investment ® X200,000 Pay hack Less Than Three Yrs. ® Improved .safety Improved Community Access