HomeMy WebLinkAboutPR 15017: EDC/REDWINE FAMILY PARTNERSinteroffice
MEMORANDUM
To: Mayor, City Council, and City Manager
From: Floyd Batiste, CEO of EDC __-
Date: January 9, 2009 _.
Subject: P. R. No. 15017; Council Meeting January 13, 2009 =... __
Attached is P. R. No. 150317 approving a Second Amendment to
Economic Development Conditional Grant Agreement between the City
of Port Arthur Section 4A Economic Development Corporation and
Redwine Family Partners, LTD.
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Attachment
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z.pr1501'! memo
P.R. No. 15017
01/09/09 fb
RESOLUTION NO.
A RESOLUTION APPROVING A SECOND 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
WHEREAS, the City of Port Arthur Section 4A Economic Development Corporation
("PAEDC) has agreed to provide a $285,000 conditional grant to offset a portion of the
construction costs for the Anchor Drive Extension. Said conditional grant to be funded in two
phases based upon the completion by Redwine of construction of the Anchor Drive Extension,
construction of a hotel along the Anchor Drive Extension and satisfaction of certain reporting
requirements; and
WHEREAS, Redwine was to be reimbursed one-half of the conditional grant 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 construction to be completed as of September 30,
2008; 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, 2008;
and
WHEREAS, Redwine has requested that its Economic Development Conditional Grant
Agreement (the "Original Agreement°) as previously amended, be amended to reflect new
Performance Milestones and 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 on or before March 31, 2009; and
WHEREAS, Redwine has provided the status reports on its project as required by the
Original Agreement, as amended; and
WHEREAS, PAEDC has authorized the second amendment to the Original Agreement
to provide that no payment shall be due under the conditional grant until Redwine has not only
completed construction of the Anchor Drive Extension, but has one hotel adjacent to Anchor
Drive fully constructed and open for business on or before March 31, 2009, 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, the First Amendment to the Original Agreement was approved by
ResolutionNo. 08-053 on February 12, 2008; and
WHEREAS, this Second Amendment to the Original Agreement is being presented to
the Port Arthur Ciry Council for approval.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF PORT ARTHUR:
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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 Second 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.,
2009, at a Meeting of the City Council of the City of Port Arthur, Texas, by the following
vote: AYES:
Mayor
Councilmembers
NOES:
ATTEST:
Terri Hanks, Acting City Secretary
APPROVED:
Floyd Batiste, PAEDC CEO
Deloris "Bobbie" Prince, Mayor
z.pr15017 PaSe 3
APPROVED AS TO FORM:
U~c ~
Mark T. Sokolow, ity Attorney /' d~ ~„ A~ y{
PROVED AS TO THE AVAILABILITY OF FUNDS:
....
Rebecca Underhill, Director of Finance
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EXHIBIT ~~A"
,.
' SECOND AMENDMENT
TO ECONOMIC DEVELOPMENT CONDITIONAL GRANT AGREEMENT
BETWEEN
THE CITY OF PORT ARTHUR 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.
The Original Agreement was previously modified by the First Amendment to the Original
Agreement to revise the Performance Milestone Schedule. Redwine has requested an additional
amendment to the Performance Milestone Schedule as stated in this Second Amendment to Economic
Development Conditional Grant Agreement (the "Second Amendment"), and except as specified herein,
all terms, conditions, performance obligations, covenants and agreements of Redwine or PAEDC as
specified in the Original Agreement, as amended, are ratified and affumed, and each party covenants and
represents that there are no defaults in the Original Agreement, as amended.
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-I, 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 Athur, 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 constmction 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
ageed that if one hotel was fully constructed and open for business as of September 30, 2007, the
PAEDC would reimburse Redwine the remaining Fifry (50%) percent of the conditional grant or
$142,500.00 based upon certain limitations in the Original Agreement relative to the construction costs
for the Anchor Drive Extension. The First Amendment modified the PAEDC reimbursement obligation
to Redwine, and the hotel was to be open for business as of September 30, 2008.
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 ageed 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 $40Q,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) Section 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 (I) year contractor's warranty provided;
(ii) Redwine provides a copy of an executed constmction contract for the hotel;
(iii) Redwine provides a copy of pemuts 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 Mazch 31; 2009.
(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 hotel will be built fronting the Anchor
Drive Extension on or before March 31, 2009.
(e) Performance Milestone Schedule: The Performance Milestone Schedule is amended as
included below:
REDR'INE'S AMENDED PERFORMANCE MILESTONE SCHEDULE
Deadline Milestone
I _ _ _
I (a) November 30, 2006 Revtew Anchor Drive extension construction plans and projected costs and
i schedule with the EDC Staff
I (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 report for January 1, 2006 to December 31, 2006
- ------ -
(d) March 31, 2007 Foundations of both hotels completed
~ Status reports shall include, but are not limited to spending for the wnstruction of the Anchor Drive extension; the status of
construction against the plan presented to the PAEDC; Port Arthur residents' involvement in the Anchor Drive extension
construction; and Southeast Texas business participation in Anchor Drive extension design-and consWction.
z February 5'" status reports shall also incude the identity of all Redwine partners or owners owning more than 5% of Redwine.
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(e) ;April 30, 2007 ,Status report for January 1, 2007 to Mazch 31 2007
-- - -- ..
(~ July 31, 2007 Status report for April 1, 2007 to June 3Q, 2007
(g) ,October 31, 2007 .Status report for July 1, 2007 to September 30, 2007 _ __
(h) March 31, 2008 ~ Status re~rt for September 3Q, 2007 to February 28, 2008
j (i) :July 1, 2008 Status report for February 28, 2008 to May 31, 2008
(j) March 31, 2009 'Hotel constmcted and open for business
(k) ; Apri13Q, 2009 ' Clase out report for June 1, 2008 to March 30, 2009 to the PAEDC Board to
compare actual economic development results against expectations as
;presented to the Board on Mazch 22, 2006.
3. Pazagraph 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 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
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AMENDMENT EXECUTION
CTTY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
SIGNED AND AGREED TO on the day of
President, Keith Daws, Sr.
Witness
Secretary, Doris Cruse Green
2009.
Witness
REDWINE FAMILY PARTNERS, LTD.
REDWINE FAMILY PARTNERS, LTD.,
a Texas limited partnership
By: Redwine Enterprises-I, L.L.C.,
General Partner
By:
SIGNED AND AGREED TO on the _ day of 2009.
Pat Redwine, Manager
Witness
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