HomeMy WebLinkAboutItem 05 - Gaylord ITEM
MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: BRUNO RUMBELOW, CITY MANAGER GR.
MEETING DATE: MAY 5, 2009
SUBJECT: GAYLORD CONVENTION DEVELOPMENT & MARKETING
AGREEMENT THIRD ADDENDUM
RECOMMENDATION:
City Council consider approving the Third Addendum to the Convention Development &
Marketing Agreement with Opryland Hotel Texas Limited Partnership to:
• extend the required commencement date for the hotel expansion from September
12, 2009 to September 12, 2012,
• extend the renewal date of the option for Parcels 5 & 7 to September 12, 2012,
authorize the City Manager to execute said Third Addendum, and take any
necessary action.
•
BACKGROUND:
Gaylord staff has briefed the City Council on the impact of the economic downturn on
the hospitality industry. In these economic times, financing for the planned
improvements to the hotel complex, including convention center expansion, new 500+
room hotel tower &water experience facility, is unavailable.
In the presentation to the City Council, Bennett Westbrook asked the City to consider
extending the commencement date for a period of 3 years. Council understood the
situation that Gaylord was in and agreed to their request.
The attached addendum formalizes the relief sought by Gaylord.
Staff recommends approval.
0:\agenda\2009\5-5-09\Gaylord 3rd Addendum CD&Mrkting Agmt Memo
April 30,2009(3:14PM)
THIRD ADDENDUM TO CONVENTION DEVELOPMENT
AND MARKETING AGREEMENT
This Third Addendum to Convention Development and Marketing Agreement (the
"Third Addendum") is entered into by and between the City of Grapevine, Texas (the "City"),
and Opryland Hotel—Texas Limited Partnership, a Delaware limited partnership ("Gaylord"), on
this day of , 2009.
RECITALS:
A. The City and Gaylord have entered into that certain Convention Development and
Marketing Agreement, dated March 24, 1999 (the "Original Agreement"), which was amended
by an Addendum to Convention Development and Marketing Agreement, and the Second
Addendum to Convention Development and Marketing Agreement, dated September 12, 2007
(the "Second Addendum") (the Original Agreement, as amended, is referred to herein as the
"Subject Agreement");
B. The parties desire to amend the Subject Agreement as set forth herein;
C. This Third Addendum and the incentives provided for herein are authorized by,
and in accordance with, the City's Policy on Economic Development and Chapter 380 of the
Texas Local Government Code; and
D. All legal prerequisites for the approval and execution of this Third Addendum
have been met, including but not limited to the requirements of the Texas Open Meetings Act
and the City Charter;
NOW, THEREFORE, in consideration of $10.00, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, the
parties do hereby agree as follows:
1. The first sentence of Section 4 of the Second Addendum is deleted and is replaced
by the following sentence:
"In order for Gaylord to obtain the benefit of the revised definition of"Available
CVB Funds" (as set forth in Section 2 of the Second Addendum), Gaylord must
commence construction on both the new hotel building and convention center expansion
by September 12, 2012."
2. The second, third, fourth and fifth sentences of paragraph A of Section 4.10 (as
added by Section 6.h. of the Second Addendum) are hereby deleted and replaced by the
following sentences:
"City Property Taxes" means the amount determined by multiplying the City ad
valorem tax rate for the year in question (the first year being the year in which
construction of the Expansion commences (the "Expansion Year")), times the
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"Incremental Increase." The "Incremental Increase" shall mean the positive difference
between: (i) the final net taxable value of the "Project Property" for the year in question
(the first year being the Expansion Year), minus (ii) the net taxable value of the Project
Property for the tax year preceding the Expansion Year (the "Base Year") (for the
purpose of this clause (ii), the Project Property shall not include the value of the Lease
Property). With respect to clause (i) of the preceding sentence, the final net taxable value
of the Project Property shall be determined each year, commencing with the Expansion
Year, and re-determined each succeeding year. Such payment shall be made to Gaylord
annually for a ten year period, on or before June 15th of each year, with the first payment
due on June 15 of the year following the Expansion Year."
3. The second, third, fourth and fifth sentences of paragraph B of Section 4.10 (as
added by Section 6.h. of the Second Addendum) are hereby deleted and replaced by the
following sentences:
"Tax Increments" means the amount determined by multiplying the GCISD maintenance
and operation ("M&O") tax rate for the year in question (the first year being the
Expansion Year), times the "Incremental Increase of the Property Within the TIF." The
"Incremental Increase of the Property Within the TIF" shall mean the positive difference
between: (i)the final net taxable value of the "TIF Property" for the year in question (the
first year being the Expansion Year), minus (ii) the net taxable value of the TIF Property
for the Base Year (for the purpose of this clause (ii), the TIF Property shall not include
the value of the Lease Property). With respect to clause (i) of the preceding sentence, the
final net taxable value of the TIF Property shall be determined each year, commencing
with the Expansion Year, and re-determined each succeeding year. Such payment shall be
made to Gaylord annually for a ten year period, on or before June 15th of each year, with
the first payment due on June 15 of the year following the Expansion Year."
4. As provided for in Section 10 of the Second Addendum, Gaylord exercised the
Option Election and paid the sum of$54,000 to the City; accordingly, Gaylord currently has the
option to lease the Western Amenity Parcel. Section 10 of the Second Addendum is hereby
amended to provide that, for no additional charge, Gaylord's option to lease the Western
Amenity Parcel shall remain in effect until the earlier of (i) September 12, 2012, or (ii) the
commencement of construction of the new hotel building or convention center expansion. At
such time, if Gaylord wishes to keep the lease option in effect, Gaylord must pay annual rent at
the rate of three percent(3%) of the appraised value of the Western Amenity Parcel.
5. All provisions of the Subject Agreement not specifically amended herein shall
remain in full force and effect and are hereby confirmed, ratified and approved. Capitalized
terms which are not defined herein shall have the same meaning as set forth in the Subject
Agreement.
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THE CITY OF GRAPEVINE, TEXAS
By:
Bruno Rumbelow, City Manager
OPRYLAND HOTEL—TEXAS
LIMITED PARTNERSHIP
By: Opryland Hospitality, LLC,
General Partner
By:
Name:
Title:
AGREED:
The undersigned agrees to the provisions of Sections 2 and 3 above.
Tax Increment Financing Reinvestment Zone Number Two, City of Grapevine, Texas, as
established by that certain Ordinance No. 98-140 of the City of Grapevine
By:
Name:
Title:
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ACKNOWLEDGEMENT:
THE STATE OF TEXAS
COUNTY OF TARRANT
Before me, the undersigned, on this day personally appeared Bruno Rumbelow, the City
Manager of the City of Grapevine, Texas, proved to me through the presentation of a valid Texas
driver's license to be the person whose name is subscribed to the foregoing instrument and
acknowledged to me that he executed the same for the purposes and consideration therein
expressed. Mr. Rumbelow furthermore attested that he is signing this agreement in his capacity
as City Manager of the City of Grapevine, Texas, and that such capacity makes his signature
valid to bind the City of Grapevine, Texas.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this day of
2009.
(Notary Seal)
Notary Public in and for the State of Texas
Print Name:
My Commission Expires:
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ACKNOWLEDGEMENT:
THE STATE OF TENNESSEE
COUNTY OF DAVIDSON
Before me, the undersigned, on this day personally appeared
the of Opryland Hospitality, LLC, in its capacity as the
general partner of OPRYLAND HOTEL — TEXAS LIMITED PARTNERSHIP, a
limited partnership, proved to me through the presentation of a valid
Tennessee driver's license to be the person whose name is subscribed to the foregoing instrument
and acknowledged to me that he/she executed the same for the purposes and consideration
therein expressed. Mr./Ms. furthermore attested that he/she is signing
this agreement in his/her capacity as the of Opryland Hospitality, LLC, in its
capacity as the general partner of OPRYLAND HOTEL — TEXAS LIMITED PARTNERSHIP,
and that such capacity makes his signature valid to bind the partnership.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this day of
2009.
(Notary Seal)
Notary Public in and for the State of Tennessee
Print Name:
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ACKNOWLEDGEMENT:
THE STATE OF TEXAS
COUNTY OF TARRANT
Before me, the undersigned, on this day personally appeared
the of Tax Increment Financing Reinvestment Zone Number
Two, City of Grapevine, Texas, as established by that certain Ordinance No. 98-140 of the City
of Grapevine, proved to me through the presentation of a valid Texas driver's license to be the
person whose name is subscribed to the foregoing instrument and acknowledged to me that
he/she executed the same for the purposes and consideration therein expressed. Mr./Ms.
furthermore attested that he/she is signing this agreement in his/her
capacity as of the Tax Increment Financing Reinvestment Zone Number Two,
City of Grapevine, Texas, and that such capacity makes his signature valid to bind the Tax
Increment.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this day of
2009.
(Notary Seal)
Notary Public in and for the State of Texas
Print Name:
My Commission Expires:
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