The URL can be used to link to this page

Home My WebLink AboutPR 15240: EDC/REDWINE FAMILY PARTNERS, LTD.interoffice MEMORANDUM To: Mayor, City Council, City Manager From: Floyd Batiste, CEO Date: April 29, 2009 Subject: P. R. No. 15240; Council Meeting of May 5, 2009 Attached is P. R. No. 15240 as it pertains to approving a Third Amendment to the Economic Development Conditional Grant Agreement between the City of Port Arthur Section 4A Economic Development Corporation and Redwine Family Partners, Ltd. FB:cv:ts Attachment cc: VIA FACSIMILE (409) 721-9718 David Redwine REDWINE FAMILY PARTNERS, LLC VIA FACSIMILE (409) 835-2115 Guy Goodson GERMER GERTZ z.pr15290_memo_edc_zedwine 3`a amendment P. R. No.15240 4/29/09 cv/ts RESOLUTION NO. A RESOLUTION APPROVING A THIRD 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) had originally 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 z.px'15240_edc 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, the City Council approved a new completion date of the hotel until March 31, 2009, as delineated in Resolution No. 09-007; 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 June 30, 2009, as delineated in Exhibit "A" attached hereto; 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 Third 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 z.pr1524o_edc on or before June 30, 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 Resolution No. 08-053 on February 12, 2008; and WHEREAS, the Second Amendment to the Original Agreement was approved by Resolution No. 09-007 on January 13, 2009; and WHEREAS, this Third Amendment to the Original Agreement, attached hereto as Exhibit "B" is 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 Third 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. z.pr15240_edc 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: Mayor Delores "Bobbie" Prince ATTEST: Terri Hanks, City Secretary APPROVED: Floyd Batiste, PAEDC CEO APPROVED/AS TO ~FQOR~M~:~ Mark T. Sokolow, City Attorney APPROVED AS TO THE AVAILABILITY OF FUNDS: Rebecca Underhill, Director of Finance z.pr15240 edc EXHIBIT "A" OCT-16-2097 19:51 From: ro:962 4445 P.2~2 REDWINE FA1vnLY PARTNERS, T,LC 2114 LEE STREET NEDERLAND, TEXAS 77627 OFF 409-722-8373 FAX 409-721-9718 Attn: Board ofPAEDC Directors RECEIVED APR 012009 Due to .hurricane Ike the expected date of September 30, 2008 for opening ofthe hotel adjacent to Anchor Drive has been delayed. Pre Resolution Ob- 424 the City Council of. the City of port Arthw approved an :Economic Incentive Agreement Contract between Redwine Family and the Port Arthur Economic Development Corporation. With Resolution 08-052 the city Council approved 12edwine Family request that the economic conditional grant agreement be amended to provide that PAEDC fund the entire conditional grant of $285,000 after the completion of Anchor Drive and the opening of the hotel adjacent to Anchor Drive, planned for September 30, 2008, Resolution 09-007 the council approval amendment to the contractual performance milestones for PAEDC to fund the entire conditional grant of $285,000 after the completion of construction of the Anchor Drive Extension and the opening ofthe hate) adjacent to Anchor:Drive now planned as on/or before March 3I, 2009. Due to the delay in the completion or the repairs needed that was cause by I3un'icane Ike, Redwine Family is requesting pAEDC to fund the entire conditions! grant of $285,000 after the opening of the hotel adjacent to Anchor Drive with a date on/or before ,tune 30, 2009. Sincerely, ~ ~ David Redwine EXHIBIT "B" THIRD AMENDMENT TO ECONOMIC DEVELOPMENT CONDITIONAL GRANT AGREEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORP. REDWINE FAivIILY PARTNERS, LTD. The Economic Development Conditonal Grant Agreement (the "Original Agreement") between the City of Port Arthur Section 4A Economic Development Corporation ("PAEDC") and Redwine Family Parhrers, 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 and Second Amendments to the Original Agreement to revise the Performance Milestone Schedule. Redwine has requested an additiona] amendment to the Performance Milestone Schedule as stated in this Third Amendment to Economic Development Conditional Grani Agreement (the "Third 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,'aze ratified and affirmed, and each party covenants and represents that there are no defaults in the Original Agreement, as amended. The Executive Summary is amended and restated to read as follows: EXECUTIVE SUMMARY Redwine Family Partners, Ltd. ("Redwine") is a Texas limited paztnership 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 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 $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. The Second Amendment modified the PAEDC reimbursement obligation to Redwine, and the hotel was to be open for business as of March 31, 2009. Redwine has now submitted correspondence to the PAEDC noting that delays resulting following the landfall of Hurricane Ilse that required more time than anticipated to complete, and the Redwine requested an amendment to the Performance Milestone Schedule for the release of the conditional grant of $285,000 at the opening of the hotel adjacent to Anchor Drive on or before Tune 30, 2009. 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 of ten (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 (SO%) 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 condifional 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 (al] amendments to the Original Agreement as set forth in the First and Second Amendments aze ratified and affirmed except as modified) 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 (1) year contractor's waranty 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 [o 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 June 30, 2009. (b) Section 6(a)(4): This section is deleted. (c) Section 6(b)(11(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 June 30, 2009. (e) Performance Milestone Schedule: The Performance Milestone Schedule is amended as follows: REDWINE'S AMENDED PERFORMANCE MILESTONE SCHEDULE ea e ~ Milestone i ~- ~ - -1 (a) ~ November 30, 2006 Review Anchor Drive extension construction plans and projected costs and schedule with the EDC Staff ,,ro) ' ~ i 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 i i (c) I February 28, 2007 Status report for 3aruary 1, 2006 to December 31, 2006 _ _ _~ --= -- - ~ Status reports shall include, bul are not limited to spending for the ronsWclion of the Anchor Drive extension; the status of ronstrucfron against the plan presented to the PAEDC; Port Arthur residents' involvement in the Anchor Drive extension consWCtlon; and Southeast Texas business participation in Anchor Drive extension design and construction. 8689845 Page 2 (d) March 31, 2007 ~ Foundations of both hotels completed (e) ~ Apri130, 2007 ~- !Status report for January ], 2007 to March 31, 2007 (f) j July 31, 2007 t-- ~ Status report for April 1, 2007 to June 3Q, 2007 (g) October 3I, 2007 --- ,Status report for July I, 2007 to September 3Q, 2007 (h) March 31, 2008 - ~ Status report for September 30, 2007 to February 28, 2008 (i) ;July 1, 2008 ;Status report for February 28, 2008 to May 31, 2008 (j) ~ June 30, 2009 ;Hotel constructed and open for business (k) ;July 31; 2009 .Close out report for June 1, 2008 to March 3Q, 2009 to the PAEDC Board to I 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 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 COUNCII. RESOLUTION: Resolution Number: Mark T. Sokolow, City Attorney Z February 5'" status reports shall also include the identity of all Redwine partners or owners owning more than 5% of Redwine. N6898G5 Page 3 CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION SIGNED AND AGREED TO on the _ day of , 2009. President, Keith Daws, Secretary, Doris Cruse Green Witness REDWINE FAMILY PARTNERS, LTD. SIGNED AND AGREED TO on the _ day of , 2009. REDWINE F?,irIILY PARTNERS, LTD., a Texas limited partnership By: Redwine Enterprises-I, L.L.C., General Partner Pat Redwine, Manager Witness #689845 PzS~4