HomeMy WebLinkAboutResolution No. 2014-035 CITY OF THE COLONY,TEXAS
RESOLUTION NO. 2014-jaT1
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF THE
COLONY, TEXAS, AUTHORIZING AND APPROVING THE
EXECUTION OF A FIRST AMENDMENT TO AGREEMENT OF SALE
AND PURCHASE BY AND BETWEEN THE COLONY COMMUNITY
DEVELOPMENT CORPORATION, THE COLONY ECONOMIC
DEVELOPMENT CORPORATION, THE COLONY LOCAL
DEVELOPMENT CORPORATION, AND ATLANTIC HOTELS LTD,
CONCERNING THE CONVEYANCE OF AN APPROXIMATELY 5.46-
ACRE TRACT OF LAND TO ATLANTIC HOTELS, LTD.; PROVIDING A
SEVERABILITY CLAUSE; AND PROVIDING FOR AN IMMEDIATE
EFFECTIVE DATE.
WHEREAS, The Colony Community Development Corporation (the "CDC") is a Type
B economic development corporation, and a Texas non-profit corporation, operating pursuant to
Chapter 505 of the Texas Local Government Code, as amended; and
WHEREAS, The Colony Economic Development Corporation (the "EDC") is a Type A
economic development corporation, and a Texas non-profit corporation, operating pursuant to
Chapter 504 of the Texas Local Government Code, as amended; and
WHEREAS, The Colony Local Development Corporation (the "LDC") has been created
and organized as a public, nonprofit local government corporation incorporated pursuant to
Subchapter D of Chapter 431, Texas Transportation Code, as amended to aid, assist and act on
behalf of the City of The Colony, Texas (the "City") in the performance of the City's
governmental functions; and
WHEREAS, on or about December 26, 2013, the CDC, EDC, LDC, and Atlantic Hotels,
Ltd, a Texas limited partnership entered into the Agreement of Sale and Purchase (the
"Contract") concerning the conveyance of an approximately 238,048 square feet of land owned
by the LDC, CDC, and EDC in undivided interests; and
WHEREAS, on or about April 8, 2014, Instrument Numbers 2014-30675, 2014-30676,
and 2014-30677 were filed and recorded in the Real Property Records of Denton County, Texas,
making the LDC the sole owner of the approximately 238,048 square feet of land subject to the
Contract; and
WHEREAS, LDC and Atlantic Hotels, Ltd., desire to amend the Contract to extend
certain deadlines and to correct the identity of the seller, as more particularly set forth within the
First Amendment to the Agreement of Sale and Purchase, a copy of which is attached hereto as
Exhibit A.
•
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF THE COLONY,TEXAS,THAT:
SECTION 1. The findings set forth above are hereby found to be true and correct findings
of the City and are incorporated into the body of this Resolution as if fully set forth herein.
SECTION 2. The City Council of the City of The Colony, Texas, does hereby approve
and authorize the Mayor of the City, and Presidents or Vice-Presidents of the LDC, EDC, and
CDC to execute the First Amendment to Agreement of Sale and Purchase with Atlantic Hotels
Ltd., a copy of which is attached hereto as Exhibit A, and is incorporated herein for all purposes.
SECTION 3. The City Council of the City of The Colony, Texas, authorizes the
proceeds from the sale of the Property pursuant to the Contract and this First Amendment to
Agreement of Sale and Purchase to be deposited into the tax increment fund for Reinvestment
Zone Number One, City of The Colony, Texas, Account 667-1015 Sales Tax Collections —
BHAC, in accordance with section 311.014(a) of the Texas Tax Code, as amended.
SECTION 4. If any section, article paragraph, sentence, clause, phrase or word in this
Resolution, or application thereto to any persons or circumstances, is held invalid or
unconstitutional by a Court of competent jurisdiction, such holding shall not affect the validity of
the remaining portions of this Resolution; and the City Council hereby declares it would have
passed such remaining portions of this Resolution despite such invalidity,which remaining portions
shall remain in full force and effect.
SECTION 5. This Resolution shall become effective immediately upon passage.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF THE
COLONY,TEXAS,THIS THE 3rd day of JUNE,2014.
Jo- McCourry,Mayor
ATTE :
JA:t4t9D
Christie Wilson, City Secretary
APPROVED AS TO FORM:
Jeff Moor;, City Attorney
Page 2
Exhibit A
First Amendment to
Agreement of Sale and Purchase
Motrif
FIRST AMENDMENT TO AGREEMENT OF SALE AND PURCHASE
THIS FIRST AMENDMENT TO AGREEMENT OF SALE AND PURCHASE (this
"Amendment") is made effective June 3, 2014 (the "Effective Date"), by and between THE
COLONY LOCAL DEVELOPMENT CORPORATION, a Texas non-profit corporation
("LDC"), THE COLONY ECONOMIC DEVELOPMENT CORPORATION, a Texas non-
profit corporation ("EDC"), and THE COLONY COMMUNITY DEVELOPMENT
CORPORATION, a Texas non-profit corporation ("CDC") (LDC, EDC and CDC shall be
collectively referred to herein as "Seller"), and ATLANTIC HOTELS LTD., a Texas
corporation ("Purchaser"). Seller and Purchaser are sometimes collectively referred to herein as
the "Parties" and each of the Parties is sometimes singularly referred to herein as a "Party."
RECITALS
A. Purchaser and Seller entered into that certain Agreement of Sale and Purchase on
December 26, 2013 (the "Contract").
B. On December 26, 2013, the Contract applied to an approximately 238,048 square
feet of land owned by the LDC, CDC, and EDC in undivided interests.
C. On April 8, 2014, Instrument Numbers 2014-30675, 2014-30676, and 2014-
30677 were filed and recorded in the Real Property Records of Denton County, Texas, making
the LDC the sole owner of the approximately 238,048 square feet of land subject to this
Contract.
D. Purchaser and Seller desire to amend the Contract to extend certain deadlines and
to correct the identity of Seller, as more particularly set forth below.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Contract is hereby amended as follows:
SECTION 1. FINDINGS INCORPORATED.
The foregoing recitals are hereby incorporated into the body of this Amendment and shall
be considered part of the mutual covenants, consideration and promises that bind the parties.
SECTION 2. AMENDMENTS TO CONTRACT.
(a) Amendment to Contract. Purchaser and Seller agree that the Inspection Period is
deemed to have expired concurrent with the execution hereof. The Master Declaration is
approved in the form sent by Paul Downey to Cliff Friedman by e-mail on May 12, 2014.
Notwithstanding the expiration of the Inspection Period, Purchaser's obligations are
contingent upon Purchaser obtaining final approval from Hampton Inn and the
"Declarant" under said Master Declaration as to certain plans (as required by the Master
Declaration) for the First Hotel. Specifically, Purchaser agrees to work in good faith to
obtain final approval of Purchaser's site plan, colored elevation, landscaping, site lighting
and signage plans (the "Plans") from both the Declarant and Hampton Inn as soon as
possible following the full execution of this Amendment. Purchaser agrees to keep Seller
apprised throughout the design process, and to provide copies of design materials as they
are submitted to Hampton Inn. In any event, Purchaser shall provide the Plans to
Declarant for approval on or before June 30, 2014. If the Plans for the First Hotel have
not been approved by both Declarant and Hampton Inn by August 31, 2014, Purchaser
shall have the right to terminate the Agreement by giving written notice to Seller on or
before 5:00p.m., Dallas, Texas, time on September 7, 2014, whereupon all of the
provisions of the Agreement (except Sections 5.3 and 6.4) shall terminate. Upon such
termination, neither Seller nor Purchaser shall have any further obligation or liability to
the other under the Agreement, except as provided in Sections 5.3 and 6.4 thereof, and
the Earnest Money shall be returned to Purchaser (less the Independent Consideration,
which shall be paid to Seller). If Purchaser fails to timely and properly terminate the
Agreement (in strict accordance with the terns of this Section), Purchaser shall have
waived any rights to terminate pursuant to the right of termination granted in this Section.
Regarding the construction of the Second Hotel, if Seller owns or controls vacant land
adjacent thereto, and so long as doing so will not interfere with any sale thereof, Seller
agrees to allow Purchaser to utilize on a temporary basis a reasonable portion thereof for
construction staging purposes within an area reasonably approved by Seller, subject to
Purchaser entering into a customary access agreement.
(b) Amendment to Contract. That Section 5.3(c) of the Contract is hereby amended to read
as follows:
"(c) Purchaser provided Seller with written confirmation that Purchaser has applied for
a franchise agreement with, and paid the applicable deposit to, at least one of the
following limited service business hotels: Element by Westin, Hampton Inn,
Hilton Garden Inn, Homewood Suites, Hyatt House, Hyatt Place and Staybridge
Suites (each an "Approved Hotel"). Such application will be subject to approval
by the applicable hotel chain. On April 11, 2014, Purchaser delivered to Seller
evidence of the Approved Hotel's commitment to move forward with the
development of the hotel on the Property (the "Hotel Commitment")."
(c) Amendment to Contract. That Section 6.1 of the Contract is hereby amended to read as
follows:
"Section 6.1 Closing Date. The Closing shall be held in the offices of Closing Agent, or
such other location as may be mutually agreed upon by Seller and Purchaser or before the
date that is the later of (i) October 1, 2014, and (ii) thirty (30) days following the
completion of the Infrastructure Improvements (the "Closing Date"), or at such other
time as mutually agreed by Seller and Purchaser. Notwithstanding the foregoing, in no
event shall the Closing Date be extended beyond December 31, 2014."
(d) Amendment to Contract. That Section 10.15 of the Contract is hereby amended to read
as follows:
"Section 10.15 Right of Repurchase. Purchaser covenants and agrees to construct and
operate two (2) limited service hotels upon the Property with a combined room count of
not less than two hundred eighteen (218) rooms, each to be operated as a Holiday Inn
Express or other Approved Hotel, and to construct all related parking, drive aisles,
lighting, improvements and amenities, in accordance with plans and specifications
approved in writing by Seller and in compliance with all applicable governmental
ordinances and requirements and all applicable requirements of the Master Declaration
(hereinafter defined) and all Permitted Exceptions, and further subject to the terms of this
Agreement. The first such hotel shall have no fewer than one hundred (100) rooms and
shall not be a "suites" style hotel (the "First Hotel"), and the second such hotel shall
have no fewer than one hundred (100) rooms and may be a "suites" style hotel (the
"Second Hotel"). Purchaser covenants and agrees to open the First Hotel on or before
fifteen (15) months after the Closing Date (the "Opening Deadline"). Purchaser
covenants and agrees to commence actual and bona fide construction on and/or
development of the Second Hotel within twelve (12) months from the date that the First
Hotel opens for business to the public (the "Commencement Deadline"). In the event
Purchaser fails: (i) to construct and open the First Hotel on or before the Opening
Deadline, or (ii) to commence actual and bona fide construction on and/or development
of the Second Hotel on or before the Commencement Deadline, Seller shall have the right
to repurchase such undeveloped portions of the Property (a "Development Repurchase")
at a purchase price of Nine and No/100 Dollars ($9.00) per square foot, plus any third-
party due diligence costs expended in connection with Purchaser's acquisition of the
applicable portion(s) of the Property, such third-party costs not to exceed Fifty Thousand
and No/100 Dollars ($50,000.00), plus as to the First Hotel if it is at least fifty percent
(50%) complete, Purchaser's actual third party hard and soft construction costs with
respect to construction and design work to date. The foregoing provisions contained in
this Section 10.15 shall no longer apply with respect to the First Hotel after it opens for
business to the public and, with respect to the Second Hotel, upon the commencement of
actual and bona fide construction of the Second Hotel, provided Purchaser diligently
pursues completion of construction of the Second Hotel. Additionally, in the event one
or more hotels are constructed and opened upon the Property as required under this
Agreement and such hotel(s) subsequently cease(s) to operate as a hotel for a period
exceeding one hundred eighty (180) consecutive days (excluding reasonable periods of
remodeling, rebranding and reconstruction after a casualty), Seller shall have the right to
repurchase the portion of the Property that has discontinued its operations (an
"Operating Repurchase"), at a purchase price equal to ninety percent (90%) of the
appraised value of the portion of the Property that has ceased to operate. The appraised
value shall be based on an average determination of three (3) separate third-party licensed
appraisers having not less than seven (7) years' experience appraising commercial real
estate in the greater Dallas area that are each acceptable to Seller and Purchaser. In the
event of any repurchase as contemplated in this Section 10.15, the repurchase deed shall
contain the same warranties of title and shall be subject to the Permitted Exceptions but
no liens, encumbrances or other additional exceptions to title, other than any additional
matters approved by Seller and necessary for construction, and shall be free and clear of
any and all mortgage liens or other evidence of indebtedness. Seller shall have all rights
and remedies available at law and in equity to enforce its rights and Purchaser's
obligations with respect to this right of repurchase, including, without limitation, the right
of specific performance. Seller shall also have the right to recover from Purchaser all
attorneys' and paralegal fees and related costs and expenses incurred by Seller in the
enforcement of its rights and Purchaser's obligations with respect to this right of
repurchase. Seller agrees to enter into a commercially reasonable subordination
agreement with Purchaser's lender(s) to facilitate any construction or permanent financing
applicable to the Property. All time frames set forth above are subject to force majeure
delays and shall be extended day by day for each day of force majeure delay. The
provisions herein shall survive the Closing and delivery of the Deed and shall be included
in a recorded document at Closing and shall run with the land and be binding on
Purchaser's successors and assigns. A draft of such document shall be provided to
Purchaser within thirty (30) days following the Effective Date and shall be agreed upon
between Purchaser and Seller prior to the expiration of the Inspection Period. As used in
this agreement, "actual and bona fide construction" shall mean that all permits required
for construction shall have been obtained by Purchaser, and Purchaser shall have, at
minimum, constructed the foundation and footings in accordance with site development
plans approved in writing by Seller."
(e) Amendment to Contract. That Section 10.16 of the Contract is hereby amended to read
as follows:
"Section 10.16 Right of First Refusal. Provided Purchaser commences construction of
the First Hotel within six (6) months after Closing, Seller shall not contract to sell any
portion of the Development designated on the Site Plan as the "West NFM Restricted
Area" for use as a business class/limited service hotel (with no restaurant) or extended
stay or all-suite hotel until the earlier to occur of: (i) March 31, 2017, or (ii) the date
Purchaser opens the Second Hotel for business to the public; provided, however, the
foregoing restriction shall not preclude the sale or development of one or more full
service and/or boutique hotels within the West NFM Restricted Area. Thereafter,
provided Purchaser has commenced construction of the Second Hotel, if Seller receives
and intends to accept a bona fide offer for the purchase of any portion of the West NFM
Restricted Area for use as a limited service hotel or extended stay or all-suite hotel, Seller
shall send written notice to Purchaser (such notice, the "Notice of Offer") that Seller
intends to accept such offer. Such notice shall include a description of the portion of the
West NFM Restricted Area that is the subject of the notice (the "Offered Land"), the
offer price that Seller is willing to accept, the proposed terms and conditions of sale, and
any other pertinent terms and conditions applicable to the proposed transaction (the
"Terms"). If Purchaser elects to exercise its right of First Refusal, it must respond to
Seller with a written notice of acceptance ("Notice of Acceptance") of the Terms within
fifteen (15) days after its receipt of the Notice of Offer. If Purchaser does not give a
Notice of Acceptance, or delivers a Notice of Acceptance after the 15-day period has
expired, or attempts to give a Notice of Acceptance but in so doing requests or attempts
to change any material term of the Terms and Seller is not willing to accept such change,
then Purchaser shall be deemed to have waived its right of first refusal as to the presented
transaction (any such circumstance being a "Waiver of ROFR"), and Seller shall be free
to sell the applicable Offered Land to whomever it chooses, and for whatever purpose
and upon the Terms. If Seller shall desire to sell the applicable Offered Land on Terms
substantially more favorable to a purchaser than the Terms presented to Purchaser, Seller
shall provide Purchaser with a new Notice of Offer with respect to the more favorable
Terms. If Purchaser timely and properly exercises its right of first refusal, then Seller and
Purchaser shall in good faith negotiate the terms of a contract of sale ("Contract of
Sale") for the sale of the Offered Land to Purchaser(and/or assigns) upon the Terms. The
right of first refusal contemplated herein is a personal agreement between Seller and
Purchaser only, but is binding on Seller's affiliates who may acquire Seller's interest in
the West NFM Restricted Area or any other party acquiring any interest in the West NFM
Area other than pursuant to a Waiver of ROFR, and inures to the benefit of Purchaser and
Purchaser's assignee(s) of this Agreement who take(s) title to the Property on the Closing
Date. This right of first refusal shall run with the land, shall be made the subject of a
memorandum of record, applies only with respect to any actual offer by a third-party for
the purchase of any of the West NFM Restricted Area for use as a limited service hotel,
and shall automatically terminate and be of no force and effect as to any applicable
portion of the West NFM Area upon the occurrence of(i) a Waiver of ROFR, (ii) at such
time as Seller conveys or transfers record title to any purchaser under circumstances in
which the right of first refusal contemplated herein does not apply, or (iii) Seller has
given a Notice of Offer to which Purchaser has timely and properly given a Notice of
Acceptance and Seller and Purchaser, despite good faith efforts to do so, have been
unable to enter into a Contract of Sale upon the agreed Terms within forty-five (45) days
after the date of Purchaser's Notice of Acceptance. The provisions of this Section 10.16
are expressly intended to and shall survive the Closing and delivery of the Deed."
SECTION 3. MISCELLANEOUS PROVISIONS.
The following miscellaneous provisions are a part of this Amendment:
(a) Capitalized Terms. All capitalized terms used, but not defined, in this Amendment shall
have the same meanings ascribed to them in the Contract.
(b) Identity of Seller. The Parties understand that Seller filed a correction deed (the
"Correction Deed") in the Real Property Records of Denton County, Texas, Instrument
No. 2014-30675, which reflects that LDC is the fee owner of the Property. Upon the
Effective Date of this Amendment, the Contract shall automatically be amended to reflect
the following:
(1) "Seller" shall mean LDC; and
(2) EDC and CDC shall not be parties to the Contract, as amended, and shall be
released from all liability thereunder.
The Parties further agree to execute any and all documents necessary or desirable to
reflect the foregoing.
(c) Ratification and Confirmation. Except as provided herein, all terms and provisions of
the Contract and the rights of the Parties thereunder shall remain unchanged and in full
force and effect. The Contract, as modified and amended hereby, is hereby ratified and
confirmed in all respects. In the event of a conflict between the terms of the Contract and
the terms of this Amendment, the terms of this Amendment shall control. From and after
the date hereof, all references to the Contract shall be deemed references thereto as
amended hereby.
(d) Successors and Assigns. The provisions of this Amendment shall inure to the benefit of
and shall be binding upon the Parties hereto and their respective permitted successors and
assigns.
(e) Recitals. The recitals set forth above are true and correct and are by this reference
incorporated herein.
(f) Authority. Each of the Parties represents and warrants to the other that it has full right,
power, and authority to enter into this Amendment.
(g) Counterparts, Facsimile, Email. This Amendment may be executed in any number of
counterparts with the same effect as if all Parties hereto had signed the same document.
All such counterparts shall be construed together and shall constitute one instrument. For
purposes of this Amendment, any signature transmitted by facsimile or e-mail (in .pdf or
comparable format) shall be considered to have the same legal and binding effect as any
original signature.
[Remainder of page intentionally blank]
IN WITNESS WHEREOF, Seller and Purchaser have executed this Amendment
effective as of the Effective Date.
SELLER:
THE COLONY ECONOMIC DEVELOPMENT
CORPORATION,
a Texas non-profit corporation
By:
Tom Tvardzik,President
ATTEST:
Femi Omonije, Secretary
Date: , 2014
THE COLONY COMMUNITY
DEVELOPMENT CORPORATION,
a Texas non-profit corporation
, _By: _ . told 41.
Steve :loll" ice-President
ATTEST:
Lisa e ry, Secretar
Date: �'`'� g , 2014
0
IN WITNESS WHEREOF, Seller and Purchaser have executed this Amendment
effective as of the Effective Date.
SELLER:
THE COLONY ECONOMIC DEVELOPMENT
CORPORATION,
a Texas non-profit corporation
By:
To Tvardzik,President
ATTEST:
fti,,,v,.„14,
Feriii Omonije,/ Secretary
Date_ b ( // , 2014
THE COLONY COMMUNITY
DEVELOPMENT CORPORATION,
a Texas non-profit corporation
By:
Steve Sohn, Vice-President
ATTEST:
Lisa Leary, Secretary
Date: , 2014
THE COLONY LOCAL DEVELOPMENT
CORPORATION,
a Texas non-profit corporation
By: � G
oe McCo,rry, President
ATTEST:
Perry c it.g, Secretary'
Date: mak_.. 3 , 2014
PURCHASER:
ATLANTIC HOTELS LTD.,
a Texas corporation
By:
Name: — M.k5'Q
Title:
Date: fo\VA , 2014