HomeMy WebLinkAboutPR 14764: EDC/CAMELLIA PLAZAinteroffice
MEMORANDUM
To: Mayor, City Council, and City Manager ~~~
From: Valecia R. Tizeno, First .Assistant City Attorney ~~
Date: June 13,-2008
Subject: P. R. No. 14764; Council Meeting June 17, 2008
Attached is P. R. No. 14764 approving a First Amendment to
Economic Development Conditional Grant Agreement between the City. _
of Port Arthur Section 4A Economic Development Corporation and
Camellia Plaza, L.P.
VRT:gt
Attachment
z.pr14764_mem0
P.R. No. 14764
06/13/08
RESOLUTION NO.
RESOLUTION APPROVING FIRST AMENDMENT TO
ECONOMIC DEVELOPMENT CONDITIONAL GRANT
AGREEMENT BETWEEN THE CTTY OF PORT ARTHUR
SECTION 4A ECONOMIC DEVELOPMENT
CORPORATION AND CAMELLIA PLAZA, L.P.
WHEREAS, Camellia Plaza, L.P. ("Camellia"), a Texas limited partnership, has
planned to construct utility and drainage improvements along West Port Arthur Road (the
"Improvements") and to promote and/or develop a hotel and businesses on its adjacent
commercial property within the City of Port Arthur, Texas; and
WHEREAS, the City of Port Arthur Section 4A Economic Development Corporation
("PAEDC) has agreed to provide up to $1,044,400.00 as a conditional grant to offset a portion
of the construction costs for the Improvements. Said conditional grant to be funded in phases
based upon the construction of the Improvements, construction of the hotel, development of
additional businesses and satisfaction of certain reporting requirements by Camellia; and
WHEREAS, Camellia was to be paid an initial payment by the PAEDC of the
conditional grant on October 1, 2007 'upon completion of construction of certain of the
Improvements; and
WHEREAS, due to delays in construction of the Improvements, Camellia did not reach
its first milestone; and
WHEREAS, Camellia has requested that its Economic Development Conditional Grant
Agreement (the "Original Agreement") be amended to provide (i) a revised Performance
Milestone Schedule, (ii) an amendment in the PAEDC payment schedule and (iii) an
amendment to the collateral requirements; and
WHEREAS, Camellia has provided the status reports on its project as required by the
Original Agreement; and
WHEREAS, the Board of Directors for the PAEDC authorized a first amendment to
the Original Agreement to (i) revised Milestones, (ii) an amended PAEDC payment schedule
and (iii) an amended collateral requirement in substantially the same form as attached hereto as
Exhibit "A°; and
WHEREAS, the Original Agreement was approved by the PAEDC on December 18,
2006; and
WHEREAS, [his First Amendment to the Original Agreement is being presented to the
Port Arthur City Council for approval.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF PORT ARTHUR:
Section 1. That the facts and opinions in the preamble are true and correct.
Section 2. That the City of Port Arthur Section 4A Economic Development
Corporation is herein authorized to enter into the First Amendment to Economic Development
Conditional Grant Agreement with Camellia Plaza, L.P., in substantially the same form as
attached hereto as Exhibit "A".
Section 3. That a copy of the caption of the Resolution be spread upon the Minutes of
the Ciry Council.
p629892 Page 2
READ, ADOPTED AND APPROVED on this _ day of A.D.,
2008, at a Meeting of the City Council of the City of Port Arthur, Texas, by the following
vote: AYES:
Mayor
Councilmembers
NOES:
Deloris "Bobbie" Prince, Mayor
ATTEST:
Terri Hanks, Acting City Secretary
APPROVED:
Floyd Batiste, PAEDC CEO
APPR^ QVED AS TO FORM:
~lJ~-
ark T. Sokolo City Attorney
(opt ~ehat~r oF~
APPROVED AS TO THE AVAILABILITY OF FUNDS:
Rebecca Underhill, Director of Finance
g629S92 Page 3
EXHIBIT ~~A"
FIRST AMENDMENT
TO ECONO,~'HC DEVELOPMENT CONDTTIONAL GRANT AGREEMENT
BETWEEN
THE CITY OF PORT ARTHUR SECTION 4A ECONONIIC DEVELOPMENT CORP.
CAMELLIA PLAZA, L.P.
The Economic Development Conditional Grant Agreement (the "Original Agreement's between
the City of Port Arthur Section 4A Economic Development Corporation ("PAEDC") and Camellia Plaza,
L.P. ("Camellia's dated 2006 is hereby amended to revise the promised performance by
Camellia, to revise the Performance Milestone Schedule and to revise the reimbursement commitment of
PAEDC. W
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 Camellia or PAIDC as
specified in the Original Agreement aze ratified and affirmed, and each party covenants and represents
that there are no defaults in the Original Agreement.
I. The Executive Summary is amended and restated to read as follows:
EXECUTIVE SUMMARY
Camellia Plaza, L.P. ("Camellia") is a Texas limited partnership whose general partner is
Camellia Management LLC, a Texas limited liability company which has undertaken to construct utility
and drainage improvements (the "Improvements") on property owned by Camellia. A planned hotel and
adjacent commercial sites for business enterprises (the "Project's is dependent upon construction of the
Lnprovements. '
PAEDC agreed to a $1,044,400.00 conditional grant to offset a portion of the construction costs
far the Improvements. The conditional grant was to be funded in phases based upon Camellia's
completion of construction of the Improvements, the opening of a hotel and businesses at the Project and
satisfaction of certain reporting requirements, and the PAEDC would reimburse Camellia with scheduled
payments. Camellia agreed to construct a hotel to be owned or franchised by a national chain with said
construction [o be completed by December 30, 2008, and by December 30, 2009, the hotel project would
completed, at least Filly (50%) percent of the eligible infrastructure to be completed, and two businesses
to be opened.
Although Camellia experienced delays in initiating work, as of April, 2008, approximately sixty-
five (65%) percent of the Improvements in the project were complete, and $950,000 had been expended
for the wnstruction of Improvements. Camellia anticipates completion of the Improvements by eazly
Summer, 2008.
Camellia further anticipates the completion of the hotel to be owned and operated by a national
chain by August, 2008, and a convenient store and gas station together with a fast food restaurant to be
completed by late December, 2008.
PAEDC has agreed to amend Camellia's performance milestone schedules in the Original
Agreement and to amend the initial payments under the incentive agreement to Camellia and make
modifications in the conditions precedent to the distribution of the incentive payments as set forth in this
First Amendment.
If Camellia breached or defaulted on the Original Agreement including the providing of
guarantees as provided in the Original Ageement, then all funds granted by PAEDC would automatically
convert to a three (3) year loan at an interest rate often (10%) percem per amzum.
Camellia has provided all reports required under its Performance Milestone Schedule.
Camellia 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 aze amended and restated to read as
follows:
(a) St:ction 6(al(21: PAEDC will pay up to $1,044,400.00 according to the following
schedule provided Camellia performs its contractual obligations and meets the conditions
precedent for each payment.
------
--------------- --- -------------CONDITIONS PRECEDENT ------
-- -Minimum Minimum
Payment Cumulative Cumulative Eligible
Date By PAEDC Collateral Infrastructure SuendinE
(b) Section 6(a)(31: If Camellia cannot document, with paid invoices, the required minimum
spending on eligible infrastructure then the payment will be delayed until it can document the
spending.
(c) Section 6(al(41: Once Camellia completes the following obligations, no additional
collateral will be required and all prior collateral will be released:
i. 100% of the Plaza's water, sewer, and drainage improvements aze complete;
ii. Four (4) separate businesses are fully constructed and open for business, one of
which must be a hotel owned or franchised by a national chain; and
iii. At least $1,492.000.00 has been expended on eligible infrastructure.
These are PAEDC's only obligations.
(d) Section 7: Although failure to achieve a performance milestone is not a breach of
contract, a failure is grounds for PAEDC to demand reasonable assurancest from Camellia that it
can and will fully perform its contractual obligations. Failure to provide demanded assurances is
a breach of contract.
t Emmples of reasonable assmanras, which the PAEDC may Demand. InUUtle bul ere not Ilmited W coPlaa ~ Pe^ding wnlraUs anD commlbnent
letters.
Poge 2
p62989E
(e) Section 8 -Performance Milestone Schedule: The Performance Milestone Schedule is
amended as included below:
CAMELLIA'S AMENDED PERFORMANCE MILESTONE SCHEDULE
D~dl~e Sone
(a) Oct. 31, 2006 ~ Issue a status re ortz to PAEDC's Chief Executive Officer ("CEO's for the
period from the effective date of this contract to September 30, 2006
(b) Feb. 28, 2007 Status repor'tf for January 1, 2006 to December 31, 2006
(c) Apri130, 2007 Status report for January 1, 2007 to March 31, 2007
(d) July 31, 2007 Status report for April 1, 2007 to June 30, 2007
(e) Aug. 15, 2007 Construction of eligible Plaza infrastructure started.
(~ Sept., 2007 Review Plaza construction status, places, and projected costs and schedule with
PAEDC Board at one of its September 2007 Board meetings.
(~ Sept. 30, 2007 Engineering complete; contractor bids reviewed; contract signed with selected
contractor.
(]~) Oct. 31, 2007 Status report far July 1, 2007 to September 30, 2007
(i) Feb. 28, 2008 Status report for January 1, 2007 to December 31, 2007
(j) Apri130, 2008 Status report far January 1, 2008 to March 31, 2008; at least sixty five percent
(65%) of the water sewer, drainage and site preparation ("dirt work") completed.
(k) July 31, 2008 Status report for April 1, 2008 to June 30, 2008; 100% of the water, sewer,
drainage and site preparation ("dirt work") completed.
(1) Oct. 31, 2008 Status report for July 1, 2008 to September 3Q, 2008; hotel completed and
convenience storelgas station and fast food restaurant under construction.
(m) Dec. 30, 2008 Start construction of hotel owned or franchised by national chain.
(n) Feb. 28, 2009 Status report for January 1, 2008 to December 31, 2008; completion of
construction of convenience storelgas station and fast food restaurant.
(o) ~ Apri130, 2009 Status report for January 1, 2009 to March 31, 2009; convenience store/gas
station and fast food restaurant operating.
(p) July 31, 2009 Status report for April 1, 2009 to June 30, 2009
(~ Oct. 31, 2009 Status report for July 1, 2009 to September 30, 2009
s ataots reports shall Indutle, hul ere not limited to: spending for the crostrucllon of the Plata; the status of consUucUon against tFe plan presented to
the PAEDC; Pal Arthur resideMS' Inwlwmva in ttx Plaza constructlon; and Soutlteast Terns huslness partldpalion ~o ehiecaw Isalognclude
co~huctlon.Odwfe license information is epproprlete for lntertm reporting of PodAr~hur residents hired. The @g rs'
documentatlon necessary for PAEOC to y4aty CamNl la's reports without further outside InQUIry.
~ rehruary gas' Status reports shag also Ndude the iderdtryd ell CameAla Plain, LP. paMers owning more than 5% M tlua parmershlp. end ell
Camellia Management. LLC. membare ownln9 mare than 5%of tlu mnpeny.
Page 3
fatp89a
(r) Dec. 30, 2009 Construction of the hotel completed; At least fifty percent (50%) of eligible
infrastructure completed; Two (2) businesses fully constructed and open for
business in the Plaza.
3. Paragraph 6 of the Original Agreement is modified to include a reference to the
EXECUTIVE SUMMARY as a part of the Original Agreement for all purposes and constitutes promise
performance by Camellia and/or PAEDC as the case maybe in accordance with the Original Agreement.
ATTORNEY APPROVALS
APPROVED AS TO FORM:
Guy N. Goodson
General Counsel for PAEDC
VERIFIED AS CONSISTENT
WTIT3 CITY COUNCII, RESOLUTION:
Resolution Number:
Mark T. Sokolow, City Attorney
Page 4
p6r9898
AMENDMENT EXECUTION
CTTY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
SIGNED AND AGREED TO on the _ day of , 2008•
President
witness
Secretary
CAMELLIA PLAZA, L.P.
SIGNED AND AGREED TO on the _ day of , 2008.
CAMELLIA PLAZA, L.P.,
a Texas limited partnership
By: Camellia Management, L.L.C.,
Its General Partner
Douglas Lam, Manager
witness
Page 5
g6]9g9g