02-10-2017 (WEDC) Agenda Packet NOTICE OF MEETING
Wylie EconomC io Re DevePoRloApT I o mentN
Special Meeting Agenda
February 10, 2017 —6:30 A.M.
WEDC Offices—Conference Room
250 South Highway 78 —Wylie, Texas
Marvin Fuller President
Todd Wintters Vice President
John Yeager Secretary
Demond Dawkins Treasurer
Bryan Brokaw Board Member
Mayor Eric Hogue Ex-Officio Member
Mindy Manson,City Manager Ex-Officio Member
Samuel Satterwhite Executive Director
Jason Greiner Assistant Director
Angel Wygant Senior Assistant
In accordance with Section 551.042 of the Texas Government Code, this agenda has been posted at the Wylie
Municipal Complex, distributed to the appropriate news media, and posted on the City Website:
www.wylietexas.gov within the required time frame.
CALL TO ORDER
Announce the presence of a Quorum.
CITIZEN PARTICIPATION
Residents may address the WEDC Board regarding an item that is or is not listed on the agenda. Residents must
provide their name and address. The WEDC Board requests that comments be limited to three (3) minutes. In
addition, the WEDC Board is not allowed to converse, deliberate or take action on any matter presented during
citizen participation.
ACTION ITEMS
I. Consider and act upon approval of the January 20, 2017 Minutes of the Wylie Economic
Development Corporation (WEDC) Board of Directors Meeting.
II. Consider and act upon a Second Amendment to a Performance Agreement between the
WEDC and REVA Hospitality Wylie, LLC.
EXECUTIVE SESSION
Recess into Closed Session in compliance with Section 551.001, et.seq. Texas Government Code,
to wit:
Section 551.071. CONSULTATION WITH ATTORNEY; CLOSED MEETING. A
governmental body may not conduct a private consultation with its attorney except:
(1) when the government body seeks advice of its attorney about:
a. pending or contemplated litigation; or
b. a settlement offer, or
WEDC—Agenda
February 10, 2017
Page 2 of 2
(2) of a matter in which the duty of the attorney to the governmental body
under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly
conflicts with this chapter.
• Receipt of a complaint from Mark Winnubst and Latrice Andrews of
Sheils Winnubst, PC.
RECONVENE INTO OPEN MEETING
Take any action as a result from Executive Session.
ADJOURNMENT
CERTIFICATION
I certify that this Notice of Meeting was posted on this 6th day of February 2017 at 5:00 p.m. as required by law in
accordance with Section 551.042 of the Texas Government Code and that the appropriate news media was
contacted. As a courtesy, this agenda is also posted on the City of Wylie website: www.wylietexas.gov.
Carole Ehrlich,City Secretary Date Notice Removed
Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Friday, January 20, 2017—6:30 A.M.
WEDC Offices—Conference Room
250 South Highway 78—Wylie, Texas
CALL TO ORDER______
Announce the presence of a Quorum
President Marvin Fuller called the meeting to order at 6:33 a.m. Board Members present were John
Yeager, Todd Wintters, and Demond Dawkins.
Ex-officio member Mindy Manson, City Manager was present.
WEDC staff present was Executive Director Sam Satterwhite, Assistant Director Jason Greiner and
Senior Assistant Angel Wygant.
CITIZEN PARTICIPATION
With no citizen participation, President Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the January 9, 2017 Minutes of the Wylie
Economic Development Corporation (WEDC) Board of Directors Meeting.
MOTION: A motion was made by Todd Wintters and seconded by
John Yeager to approve the January 9, 2017 Minutes of the Wylie Economic
Development Corporation. The WEDC Board voted 4 —FOR and 0 —AGAINST
in favor of the motion.
ITEM NO. 2—Consider and act upon approval of the December 2016 Treasurers Report.
An updated Balance Sheet that reflected the handwritten entries provided in the original Board Packet
was distributed to Board Members. Clarified items included Inventory, Deferred Outflows, and
Deposits. Staff reviewed key items within the December 2016 Treasurers Report.
MOTION: A motion was made by Demond Dawkins and seconded by
John Yeager to approve the December 2016 Treasurers Report for the Wylie
Economic Development Corporation as amended. The WEDC Board voted 4 —
FOR and 0—AGAINST in favor of the motion.
ITEM NO. 3—Consider and act upon issues surrounding the WEDC 2016 Annual Report.
As per the By-laws, the WEDC must present an annual report to the Wylie City Council no later than
January 31 St of each year. The report must include, but is not limited to, a review of all expenditures
WEDC—Minutes
January 20, 2017
Page 2 of 7
made by the Board, a review of accomplishments, and a review of other than direct economic
development. Staff presented that the report provided to the Board met the intent of the requirements of
the By-laws with the same being presented to the Wylie City Council on January 24, 2017.
Staff recommended that the WEDC Board of Directors approve the 2016 WEDC Annual Report as
presented by staff and recommended it be presented to the Wylie City Council.
MOTION: A motion was made by John Yeager and seconded by
Todd Wintters to approve the 2016 WEDC Annual Report as presented by staff for
presentation to the Wylie City Council on January 24, 2017. The WEDC Board
voted 4—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 4 — Consider and act upon a Performance Agreement between KREA, LLC and the
WEDC.
Staff reminded the Board that it had reported multiple times that it did not appear that KREA would
complete the La Quinta Inn& Suites by March 31,2017 as required within the Performance Agreement.
Mr.Kash Parbhu,Manager of KREA,has requested a 30-day extension of the deadline to April 30,2017.
As with the REVA Hospitality amendment considered earlier by the Board, staff recommended that the
Board amend the deadline an additional 30 days from the requested date to May 31st to allow for any
other unforeseen delays. If approved, staff will convey to Mr. Parbhu that any further request for
extension may be viewed as `beyond reasonable' as the Performance Agreement was executed on July
29, 2015.
Staff recommended that the WEDC Board of Directors approve the First Amendment to a Performance
Agreement extending the date by which KREA,LLC must complete improvements associated with a La
Quinta Inn& Suites to May 31, 2017.
President Fuller inquired as to the timing of the funding for the KREA Agreement. Staff responded that
an amount equal to the occupancy taxes generated by the project will be reimbursed to KREA beginning
six months from the issuance of a certificate of occupancy as the Start Date within Section 1 (b) of the
Agreement. The six-month delay was put in place originally to allow for a lag in sales associated with
the startup of any business. Mr. Fuller suggested that the Start Date be reduced to four months to allow
for the delay and requested extension. The general consensus of the Board agreed with Mr. Fuller.
MOTION: A motion was made by Todd Wintters and seconded by
Demond Dawkins to approve the First Amendment to a Performance Agreement
extending the date by which KREA, LLC must complete improvements associated
with a La Quinta Inn& Suites to May 31,2017,and further amending the Start Date
to four months after the issuance of a certificate of occupancy. The WEDC Board
voted 4—FOR and 0—AGAINST in favor of the motion.
WEDC—Minutes
January 20, 2017
Page 3 of 7
ITEM NO. 5—Consider and act upon a Performance Agreement between the WEDC and Ronald
P. and Carole A. Trout.
Mr. Trout initially came to the WEDC in an attempt to evaluate options surrounding the construction of
a 4,944 square foot commercial building near N. Highway 78 and Eubanks Lane. Mr. Trout plans to
construct a new building for a tenant on land behind an existing car wash. Following direction from the
WEDC Board in Executive Session and an oral commitment by the WEDC staff for assistance, Mr.
Trout moved forward with design and engineering plans.
Trout has an estimated construction budget of$340,000 for Phase I (4,944 square feet). Future plans
may include a Phase II of approximately 5,700 additional square feet. Helmberger Associates has been
working with Mr. Trout to develop construction plans and an overall construction budget. Should the
project move forward, construction will begin within the first quarter of 2017 with an estimated
completion date in the third quarter of 2017.
The attached Agreement proposed a total maximum incentive of $15,000 which is broken down as
follows:
Incentive No. 1 .......,.<........................................................... $15,000
➢ Construction of 4,944 square feet
➢ Expenditures verified at $340,000
➢ Proof of Certificate of Occupancy by December 31, 2017
Staff commented that based upon approximately $7,500 in new revenue generated from the project in
City and ISD taxes, the project will have a two-year return on investment. Further, should Ronald P.
and Carole A. Trout fail to meet the Performance Measures for Incentive No. 1,the entire Performance
Agreement is voided in advance. Further,no partial incentive payments will be provided.
Staff recommended that the WEDC Board of Directors approve a Performance Agreement between
WEDC and Ronald P. and Carole A. Trout providing for a maximum incentive of$15,000 and further
authorizing the WEDC Executive Director to execute said Agreement.
MOTION: A motion was made by John Yeager and seconded by
Todd Wintters approving a Performance Agreement between the WEDC and
Ronald P. and Carole A. Trout. The WEDC Board voted 4 — FOR and 0 —
AGAINST in favor of the motion.
ITEM NO. 6 — Consider and act upon issues surrounding the construction of parking
improvements on WEDC property located at 111 N. Ballard.
The WEDC purchased a 0.2-acre tract from First Baptist Wylie (FBW) in June of 2016. As previously
discussed, the best short-term use for this property would be to create a parking lot for visitors to
Downtown. The first option would be to utilize an exit into the FBW parking lot. FBW is agreeable
with the understanding that they would be able to utilize the public parking for their congregation.
WEDC—Minutes
January 20, 2017
Page 4 of 7
The second option would be to pave the alley that runs behind Mr. Conkle's metal building. This option
would require relocating the utility poles and 3 transformers to the back of the property which staff
previously believed to be a 6-figure proposition. However, staff has received a verbal quote from Oncor
in the amount of$25,000. This number does not include relocating phone lines attached to the utility
poles which would be an additional cost. Tentative cost estimates for Option 1 utilizing the FBW parking
lot exit would be $105,000, and Option 2 with a dedicated entrance via the alleyway is estimated at
$140,000.
The WEDC Board indicated that it preferred relocating the utility poles and transformers to the back of
the property and paving the alleyway which would provide improved ingress/egress and not take away
parking spaces in the FBC lot. Further,while the second design option is more expensive,it does correct
a poor utility design and location of poles. Staff requested that this item be tabled until the next Regular
Meeting of the WEDC to provide time to gather the appropriate bids and cost estimates to present to the
Board.
MOTION: A motion was made by John Yeager and seconded by
Demond Dawkins to TABLE this item for consideration at the next Regular
Meeting of the WEDC Board of Directors. The WEDC Board voted 4—FOR and
0—AGAINST in favor of the motion.
DISCUSSION ITEMS
ITEM NO. 7— Staff report: review issues surrounding WEDC Performance Agreement Summary, the
Wedge Corporation, Environmental Activity Summary, REVA Hospitality, Highway 78 WEDC Pad
Sites, Peddicord Center, WEDC Lease Properties, Promotional Activities, and regional housing starts.
WEDC Performance Agreement Summary
Attached for the Board's review was a summary of all outstanding Performance Agreements including:
ACG Texas LP, Ascend Custom Extrusion, All State Fire Equipment, B&B Theatres Operating
Company, Clark Street Development, Dank Real Estate, Exco Extrusion Dies, FLM Development,
Freudiger Holdings, Getset, KREA Acquisition, McClure Partners, Patna Properties, VIAA Properties,
Von Runnen Holdings, Wedge Corporation, Woodbridge Crossing, and Wylie Flower& Gift.
Woodbridge Crossing
Attached for the Board's review was the Sales Tax Reimbursement Report which identifies all sales
taxes received through December 2016 within Woodbridge Crossing for the City General Fund, the
WEDC, and the 4B. As a reminder, the City and WEDC reimbursed 85% of all sales tax generated
within Woodbridge Crossing through September 2013 with the reimbursement percentage reduced to
65% thereafter. Due to the default under the Amended and Restated Performance Agreement,
Woodbridge Crossing is only eligible to receive up to $6 million in sales tax reimbursement through
September 2021 as opposed to the maximum reimbursement of$12 million originally contemplated.
$3,962,373 in reimbursement has been earned through December 2016 with net receipts of$3,186,843
after reimbursements. As well, it is estimated that$4.1 mm has been paid in ad valorem taxes to the City
WEDC—Minutes
January 20, 2017
Page 5 of 7
of Wylie (excluding the WISD). As shown on the Sales Tax Reimbursement Report, $104,436 was
generated in sales tax in October 2016 versus $97,528 in October 2015. This represents 7.08%increase
over 2015 receipts.
The Wedge Corporation
The Wedge Corporation qualified for a second Performance Credit under its Performance Agreement
with the WEDC. A loan was entered into between The Wedge and WEDC under which Economic
Incentives were provided for the completion of qualified infrastructure associated with the development
and ongoing operation of The Rock Wood Fired Kitchen. The Loan was also secured by Guaranty
Agreements from The Wedge Principals, Jay Gigandet and Don Bellis, which were previously released
under the terms of the Agreement.
W&MActivity Report
Attached for the Board's review was a spreadsheet tracking all activities with W&M Environmental for
FY 2014-15 and FY 2015-16. W&M has prepared Phase I&II reports for Mann Made,K&M,Business
Way, 111 N. Ballard, 908 Kirby, 201 Industrial Court, is processing the VCP application for the
Commerce property, and processing the Municipal Setting Designation through the City.
REVA Hospitality—Holiday Inn Express
The Feasibility Period for the property acquisition on Sanden expired on 1-17-17 with closing still set
for February 1st. As well, civil and site plans along with a preliminary plat has been submitted to the
City of Wylie and is attached for your review.
Highway 78 WEDC Pad Sites
Helmberger Associates is evaluating bids for median and driveway improvements which should be
finalized by January 27th. Staff is also working closely with Oncor Electric to determine the most
effective way to serve the site. The current goal is to secure an overhead utility easement from the
adjacent Baylor property to the west. Staffs goal is to secure the easement by January 27th as well.
Peddicord Center
The Wylie City Council has determined that it will not continue its lease of the Bart Peddicord Center
from the WEDC. Staff sought direction for the Board in terms of information needed to make a decision
on the future use, if any, of the structure.
The WEDC is in receipt of$61,924 from TML in insurance proceeds from the hail claim. An additional
$43,960 is available in depreciation and code upgrades should the WEDC choose to repair the building.
Damages to the building included paint, ceiling tiles, insulation, dry wall, roofing, HVAC, windows,
lighting fixtures, and ductwork. If the building is demolished now or in the future, those costs are
estimated at $28,000.
WEDC —Minutes
January 20, 2017
Page 6 of 7
The Board requested information regarding the expiration of the time frame to claim depreciation should
the Board choose to repair the building and wish to claim depreciation funds. Staff committed to research
and report to the Board at the next meeting.
Promotional Activities
As reported regularly,the WEDC has a 'A interest in Maverick's Season tickets for the 2016-17 Season.
A spreadsheet tracking the use of those tickets was attached for the Board's review.
Regional Housing Starts
Thirty-nine homes were permitted in Wylie for the month of December 2016 bringing the annual total
to four hundred nine. Sachse, Lavon, Murphy permitted a combined twelve over the same period.
Inspiration permitted two homes in December and one hundred sixty-four for the year.
No action was requested by staff for this item.
EXECUTIVE SESSION
Recessed into Closed Session at 7:41 a.m. in compliance with Section 551.001, et.seq. Texas Government
Code, to wit:
Section 551.072 (Real Estate) of the Local Government Code, Vernon's Texas Code Annotated (Open
Meetings Act). Consider the sale or acquisition of properties located near the intersection of:
• Highway 78 & Cooper
• Cooper& F.M. 544
Section 551.087 (Economic Development) of the Local Government Code, Vernon's Texas Code
Annotated(Open Meetings Act),
• Project 2015-12a
• Project 2016-6a
• Project 2016-10a
• Project 2017-la
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 8:35 a.m. and took no action.
WEDC — Minutes
January 20, 2017
Page 7 of 7
ADJOURNMENT
With no further business, President Fuller adjourned the WEDC Board meeting at 8:35 a.m.
Marvin Fuller,President
ATTEST:
Samuel Satterwhite, Director
Wylie Economic Development Corporation
MEMORANDUM
TO: WEDC Board of Directors
FROM: Samuel Satterwhite, Executive Director
SUBJECT: Reva Hospitality Performance Agreement
DATE: January 6, 2017
Issue
Consider and act upon a Second Amendment to a Performance Agreement between the WEDC
and REVA Hospitality Wylie, LLC.
Analysis
On January 9, 2017, the WEDC approved a First Amendment to the Performance Agreement
between REVA and the WEDC for the development of a Holiday Inn Express & Suites. The
amendment extended the date by which REVA would acquire the 2.4 acres necessary to develop
the project to February 10, 2017. Among other recent changes to the project, REVA is going to
miss the required closing date now scheduled for February 13tn
As referenced above, additional changes have been presented in this fast-paced project. The 98-
room development was only approved for 82 rooms by IHG(Holliday Inn Express&Suites parent
company). While construction cost has decreased by $1,280,000 ($80,000 per room), the
appraised value used in the WEDC cost-benefit analysis determining new property taxes generated
has not. The Appraisal District utilizes an income approach for hotels with similar sized projects
in Allen($4.3 mm),Frisco ($5.3 mm), and McKinney($3.1 mm at 53,000 square feet)utilized for
comparison. Staff utilized a $4,000,000 new tax value figure when calculating taxes generated
which remains a constant. The square footage of the project has not changed from the first
presentation.
Based upon annual sales projections developed by IHG,$2,000,000 is still being utilized even with
16 less rooms. The only variation from the original calculations is a reduction in thoroughfare
impact fees of$11,520 based upon a per room fee of$720. Based upon that change the breakeven
point moves from 1.6 years to less than 1.7 years. Staff believes all other assumptions still hold
true except for Real Property Improvements now being $6,560,000 opposed to $7,840,000 which
do not impact appraised value.
Even with the amount of time which has now been lost from when the project was originally
scheduled to close,REVA is not requesting an extension of the time required to receive a certificate
of occupancy which is December 31, 2017. The maximum incentive of$450,000 will be reduced
to $350,000 should REVA finish the project after December 31St but before June 30, 2018 when
no incentive will be paid.
WEDC- RE VA
A.
February 7, 2017
Page 2 of 2
Recommendation
Staff recommends that the WEDC Board of Directors approve a Second Amendment to
Performance Agreement extending the date by which Reva Hospitality Wylie, LLC must acquire
title to property in Wylie to February 13, 2017 and further amending the number of rooms
referenced in the RECITALS to 82 and project cost to $7.92 mm.
Attachments
Performance Agreement
PERFORMANCE AGREEMENT
Between
Wylie Economic Development Corporation
And
Reva Hospitality Wylie LLC, a Texas limited liability company
This Performance Agreement (the "Agreement") is made and entered into by and
between the Wylie Economic Development Corporation ("WEDC"), a Texas corporation
organized and existing under Chapter 501 of the Texas Local Government Code, known as the
Development Corporation Act, as amended from time to time (the "Act") and Reva Hospitality
Wylie LLC, a Texas limited liability company ("Company").
RECITALS
WHEREAS, Company proposed to acquire title to that certain tract of property located
within the corporate limits of the City of Wylie, Texas (the "City"), consisting of approximately
2.4 acres, located in Wylie, Texas, as more fully described in the attached Exhibit A (the
"Property");
WHEREAS, the Company plans to construct a $9.2 Million Dollar Hampton Inn &
Suites or a Holiday Inn Express & Suites hotel on the Property that will have four (4) stories,
contain approximately 60,000 square feet with not less than 98 hotel rooms (the
"Improvements");
WHEREAS, Company has requested financial and/or economic assistance from the
WEDC to plan and construct certain infrastructure improvements to assist in the development of
the Property, consisting of economic assistance for all hard and soft costs relating to the
construction of public and site improvements on or adjacent to the Property;
WHEREAS, Section 501.103 of the Act states that the WEDC may provide funding for
expenditures that are found by the Board of Directors to be required or suitable for infrastructure
necessary to promote or develop new or expanded business enterprises, limited to streets and
roads, rail spurs, water and sewer utilities, electric utilities, or gas utilities, drainage, site
improvements, and related improvements (the"Qualified Infrastructure"); and
WHEREAS, Company proposes to use the economic incentives for the construction of
the Qualified Infrastructure which will include approved public infrastructure improvements and
site improvements as may be amended from time to time, necessary for the development of the
Property and which will benefit the surrounding properties, as generally described in the attached
Exhibit B; and
WHEREAS, the WEDC has found that the Qualified Infrastructure is necessary to
promote or develop new or expanded business enterprises in the City and the WEDC has
concluded that the Qualified Infrastructure constitutes a "project", as that term is defined in the
Act, and is willing to provide Company with economic assistance as hereinafter set forth on the
terms and subject to the conditions as stated herein and Company is willing to accept the same
subject to all terms and conditions contained in this Agreement; and
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WHEREAS, the WEDC has determined that it is in the best interest of the public and the
City and promotes the purposes authorized by the voters of the City of Wylie for which the
WEDC was established to encourage the development and use of commercial properties within
the City; and
WHEREAS, the WEDC is willing to provide the Company with economic assistance
hereinafter set forth on the terms and subject to the conditions as stated herein and Company is
willing to accept the same subject to all terms and conditions contained in this Agreement.
NOW, THEREFORE, for and in consideration of the above recitals and the terms,
conditions and requirements hereinafter set forth,the parties hereto agree as follows:
1. Economic Assistance. Subject to the terms of this Agreement and provided
Company is not in default, the WEDC will provide Company economic assistance in the form of
quarterly performance reimbursement incentives ("Reimbursement Incentives")upon completion
of the Performance Criteria set forth below.
The WEDC will provide the following Reimbursement Incentives:
a. The WEDC shall provide an economic incentive to the Company equal to
the sum of$100,000, upon the issuance of a permanent Certificate of Occupancy for the
Improvements and satisfaction of all of the Performance Criteria (the "Initial Incentive").
The WEDC shall provide additional economic incentives to the Company in an amount
equal to fifty percent (50%) of the Local Hotel Occupancy Taxes ("Hotel Taxes")paid by
the Company and received by the City generated from the Property for the period
beginning on the Start Date (as defined below in Paragraph b) and ending on the day
prior to the six (6) year anniversary of the Start Date. The total Reimbursement
Incentives to be paid to the Company, including the Initial Incentive, shall not exceed the
cumulative sum of$450,000.
b. The "Start Date", as used herein, shall be the date that is six (6) months
after the City issues a permanent Certificate of Occupancy for the Improvements being
constructed on the Property. The Certificate of Occupancy shall be issued not later than
December 31, 2017;
c. The payment of the Reimbursement Incentives shall take place on a
quarterly basis and shall be supported by a written report provided by the City, or other
written statement in a form reasonably acceptable by the WEDC, verifying the collection
and the amount of the Hotel Taxes received by the City relative to the Project.
2. Performance Obligations. The WEDC's obligation to pay Company the
Reimbursement Incentives stipulated above is expressly contingent upon Company completing
the following items (the "Performance Criteria") by the due dates set forth below:
a. The Company acquiring title to the Property by no later than January 31,
2017; and
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b. The Improvements for the hotel shall be completed (as evidenced by a
permanent Certificate of Occupancy) no later than December 31, 2017. The Company
may not change the franchisor of the hotel unless approved in writing by the WEDC;
c. Company, at its cost, shall have completed the Qualified Infrastructure by
the Start Date with a minimum cost of Four Hundred Fifty Thousand Dollars
($450,000.00); and
d. Company shall supply documentation that the Company is complying with
the Separated Building Materials Contracts requirements set forth herein.
Notwithstanding the foregoing, in the event the Company fails to obtain a permanent Certificate
of Occupancy for the Improvements by December 31, 2017, but does obtain such Certificate of
Occupancy by June 30, 2018, the Reimbursement Incentives will be reduced by $100,000.00,
making the total eligible Reimbursement Incentive the sum of $350,000.00. In the event
Company fails to obtain the permanent Certificate of Occupancy for the Improvements by June
30, 2018, or fails to meet the balance of the Performance Obligations in this Section 2, none of
the Reimbursement Incentives shall be paid to the Company and this Agreement shall terminate.
3. Transfer of Property. The WEDC acknowledges and agrees that in connection
with the development of the Project and Improvements, certain portions of the Property may be
sold to third parties. Notwithstanding the foregoing, no third-party purchaser of any portion of
the Property shall be deemed an assignee or successor under this Agreement (unless this
Agreement is specifically assigned to such third party by Company), nor shall any such third
party have the right to receive the Reimbursement Incentives unless such Reimbursement
Incentives are assigned in writing by the Company to such third party, and approved in writing
prior to such assignment, with approval of said assignment at the sole and absolute discretion of
the WEDC. The WEDC further acknowledges and agrees that whether or not Company owns all
of the Property, the Reimbursement Incentives payable to Company shall be calculated based on
the Hotel Taxes received by the City from the Property.
4. WEDC Payment of Reimbursement Incentives.
a. Subject to the terms and conditions of this Agreement, except for the
Initial Incentive which shall be paid by WEDC to the Company within thirty (30) days of
the issuance of the Certificate of Occupancy for the Improvements, the WEDC will pay
the Reimbursement Incentives to Company on a quarterly basis as set forth in paragraph
4(b) below, beginning on the earlier of the month of March, June, September, and
December following the date Company meets the qualifications set forth in Paragraph 2
above and continuing each quarter thereafter on the months set forth above, provided
Company meets the qualifications set forth in Paragraph 2 above until the Company fails
to meet any future requirements,the Term ends, or this Agreement is earlier terminated.
b. The parties agree that the dollar amount of Hotel Taxes eligible for the
Reimbursement Incentives payable to Company will be derived from hotel tax
information furnished by the City each quarter. The WEDC shall pay Company a portion
of the Reimbursement Incentive each quarter of the calendar year equal to the Hotel
Taxes received by the City from the Property during the previous quarter, within forty-
2039075v2 3
five (45) days of receipt of the City's share of the Hotel Taxes revenue from the
Company for the Property. Company agrees to allow the WEDC to obtain hotel tax
information collected from the hotel on the Property.
c. In the event the State of Texas determines that the City erroneously
received hotel tax receipts, or that the amount of Hotel Taxes paid the City exceeds the
correct amount of the Hotel Taxes for a previous taxable year for which Company has
received any Reimbursement Incentives payment, Company shall reimburse such
overpayment to the WEDC within thirty (30) days following such determination for such
incorrect amount accordingly.
d. In the event additional Hotel Taxes are due and owing by such occupant,
as determined by or as approved by the City for a previous tax year and such additional
taxes are paid and received by the City, then the Reimbursement Incentives for the
succeeding tax year shall be adjusted upward to reflect such additional taxes payable by
the Company.
e. In the event of any legislative or judicial interpretation that limits or
restricts the WEDC's ability to fund the Reimbursement Incentives provided or otherwise
extracts, imposes any penalty, or other restriction, the WEDC and Company will agree to
work together in good faith to provide the Company with a reasonably equivalent value,
to the extent permitted by law, and to otherwise accomplish the purpose of this
Agreement.
5. Default; Opportunity to Cure. The WEDC's obligation to pay any portion of
the Reimbursement Incentives to Company will terminate or be reduced if Company defaults by
not completing the Performance Criteria as set forth in Section 2 of this Agreement. With the
exception of the Performance Obligations in Section 2, a default as provided herein will only
occur if a defaulting party fails to cure a failure to comply with the terms of this Agreement
within thirty (30) days after written notice from the non-defaulting party describing such failure,
or if such failure cannot be cured within such thirty (30) days, if the defaulting party fails to
commence such cure within such thirty (30) day period and fails to continuously thereafter
diligently pursue such cure. In the event Company fails to comply with the terms of this
Agreement, except as otherwise provided herein, the WEDC shall have the right to terminate this
Agreement. In any legal proceeding brought to enforce the terms of this Agreement, the
prevailing party to any dispute arising out of the enforcement of this Agreement shall be entitled
to recover the losing party reasonable attorney's fees, expenses and permitted by Section
271.159 of the Texas Local Governmental Code.
6. Termination of Agreement. This Agreement may be terminated by mutual
written consent of the parties or by either party, upon the failure of the other party to fulfill an
obligation as set forth in this Agreement, subject to the rights of the parties to cure any failure as
set forth in Section 5 above.
7. Mortgage Protection. This Agreement shall not prevent or limit Company (or
any third-party owner of any portion of the Property), in any manner, at Company's sole
discretion, from encumbering the Property or any portion thereof or any improvement thereon by
any mortgage, deed of trust or other security device. Any Mortgagee shall also be entitled to the
following rights and privileges:
2039075v2 4
a. Neither entering into this Agreement nor breach of this Agreement shall
defeat, render invalid, diminish or impair the lien of any mortgage, deed of trust or other
security device made in good faith and for value, unless otherwise required by law.
b. Any Mortgagee who comes into possession of the Property, or any part
thereof, pursuant to foreclosure of the mortgage or deed of trust, or deed in lieu of such
foreclosure, shall take the Land and any improvements constructed thereon, or part
thereof, subject to the terms of this Agreement. Notwithstanding any other provision of
this Agreement to the contrary, no Mortgagee shall have any obligation or duty under this
Agreement to perform any of Company's obligations or other affirmative covenants of
Company hereunder, or to guarantee such performance; provided, however, that to the
extent that any covenant to be performed by Company is a condition precedent to the
performance of a covenant by the WEDC, the performance thereof shall continue to be a
condition precedent to the WEDC's performance hereunder.
8. Economic Assistance Termination. Notwithstanding the terms of this
Agreement, the WEDC's obligation to pay a portion or all of the Reimbursement Incentive to
Company will expire upon the earlier of(i) the full payment of the Reimbursement Incentives, or
(ii) six (6)years from the Start Date.
9. Separated Building Materials Contracts. The Company agrees that any and all
contracts for the construction of the Qualified Infrastructure or Improvements on the Property
("Separated Building Materials Contracts") in the case where the Company is an owner and that
have a value of$50,000 or more, will (i) separately identify labor and materials components for
purposes of determining sales and use tax pursuant to Section 151.056(b) of the Texas Tax Code
resulting in the value of the materials being separately identified from other costs and (ii) state
that the situs of any sales and use tax paid and related thereto will be Wylie, Texas. The
WEDC's remedy for a violation of this section is to deduct from each applicable Economic
Incentive an amount equal to the sales and use tax which would have ultimately been paid to the
City of Wylie based upon a local sales and use tax rate of two percent (2%). The WEDC shall
have the right from time to time to require the Company to deliver copies of all construction
contracts and periodic billings/payments related to the Infrastructure or Improvements in the case
where the Company is an owner, to the WEDC within 15 days after receipt of such written
request from WEDC. The Company agrees to make a good faith effort to inform all contractors
both prime and sub and any other buyers of the Property owned by the Company that the WEDC
desires the situs of sales and use taxes to be Wylie, Texas.
10. Miscellaneous.
a. This Agreement shall be construed according to the laws of the State of
Texas and is subject to all provisions of the Act, which are incorporated herein by
reference for all purposes. In the event any provision of the Agreement is in conflict with
the Act,the Act shall prevail.
b. This Agreement shall be governed by the laws of the State of Texas and is
specifically performable in Collin County, Texas.
c. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their permitted successors and assigns. This Agreement shall not be
2039075v2 5
assignable by Company without the prior written consent of the WEDC, which consent
will be at the sole and absolute discretion of the WEDC.
d. Any notice required or permitted to be given under this Agreement shall
be deemed delivered by hand delivery or depositing the same in the United States mail,
certified with return receipt requested, postage prepaid, addressed to the appropriate party
at the following addresses, or at such other address as any party hereto might specify in
writing:
WEDC: Mr. Samuel D. R. Satterwhite
Executive Director
Wylie Economic Development Corporation
250 South Highway 78
Wylie, TX 75098
With copy to: Abernathy, Roeder, Boyd and Joplin, P.C.
1700 Redbud Blvd., Suite 300
McKinney, Texas 75069
Attention: Mr. G. Randal Hullett
COMPANY: Reva Hospitality LLC
Mehul Gajera, Member
2591 Dallas Parkway, Ste 300
Frisco, Texas 75034
e. This Agreement contains the entire agreement of the parties regarding the
within subject matter and may only be amended or revoked by the written agreement
executed by all the parties hereto.
f. Notwithstanding the foregoing, Company shall have such additional time
to complete any obligations hereunder, including without limitation those set forth in
Section 2, as may be required in the event of "force majeure" so long as Company is
diligently and faithfully pursuing completion of the facility. For purposes of this
Agreement, "force majeure" shall mean any contingency or cause beyond the reasonable
control of Company including, without limitation, acts of God, acts of the public enemy,
hostile action, war, riot, civil commotion, insurrection, governmental or de facto
governmental actions (unless caused by acts or omissions of Company) or restrictions,
fires, explosions, or other casualty, condemnation proceedings, any strike(s), walkout(s),
or labor dispute(s), the ability (other than financial ability) to obtain labor or materials or
reasonable substitutes therefore, floods, strikes, and action of the elements including,
without limitation, inappropriate temperature conditions, rainfall or other interfering
precipitation or weather conditions.
g. This Agreement may be executed in a number of identical counterparts,
each of which shall be deemed an original for all purposes.
h. In case any one or more of the provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any respect, such
2039075v2 6
invalidity, illegality or unenforceability shall not affect any other provision thereof, and
this Agreement shall be construed as if such invalid, illegal or unenforceable provision
had never been contained herein.
i. Each signatory represents this Agreement has been read by the party for
which this Agreement is executed and that such party has had an opportunity to confer
with its counsel.
j. Time is of the essence in this Agreement.
k. The parties agree this Agreement has been drafted jointly by the parties
and their legal representatives.
By the execution hereof, each signatory hereto represents and affirms that he is acting on behalf
of the party indicated, that such party has taken all action necessary to authorize the execution
and delivery of the Agreement and that the same is a binding obligation on such party.
2039075v2 7
M
i
i
PROPERTY DESCRIPTION:
BEING1475 L:of or-W-4 str.,srxd€n.t e Data rieklnsd Surety,A Nc.8A1,Collie 4 my.Tessa.end being part of s called 34.412 acre tract of land
b'4+`„ €Last gni l(seept a 2=753 se:c Treat eta a3,244 mad Trent 2.tea-vistas rwesander tares of28.3777 ocrcth elca.zettee in deed to Parker/Scholz Propeniea,LTD,recorded
_ -- est -e No.200E 1290014 H40, eaied Mk Recoil Csdlln icy.Tr=.(OPReCrxerel besot wee particularly described ea follows:
BEGINNING It■In"iron watt yrltow pis,lte cap� 'R Hawed s 3"rowel f tamer t s in n c welt right-of-wry line of Sander Boulevard(110'ROW)
se see at the southwest comer ofecalled 0476 noel desclitl coed IS l$kraiS€NOlz LTD. as IneWmenl No.20081209001400130,OPRCCT,
_y ,rr, common to the southeast corn aFas€d28.377 u .sold peeslalan A.mgthe nnettt of Les I.BtxSk A of Boyce Addition,an addition to the City of
{ Wylie,Collin County,Texas,rooareW in Cabinet Q.Paw 471 ache Plea ids of Cutlet Coady,Team; I110,
a
THENCE South 86°35'29"West,,along the common line of said 28.377 acre tract and said Bayco Addition,■distance of438.63 feel,to a 1/2"iron rod with hi•.
is a yellow plutic cap stamped"RPLS 3963"found for comer at the southwet comer of a 2.452 acre tract described in a deed to Ranna Hotels,LLC.,recorded as 'RR
' Instrument 20151215001557690,OPRCC'T;
t --_ _
THENCE North along the tut line of said 2,452 acre tract,at 227.96 feet,passing a l/2"iron rod with a yellow plastic cap stamped"RPLS 3963"found for comer at 50 0 50 100
the most southerly northeast corner thereof,and continuing fora total distance of 263.96 feet to a 5/8"iron rod with a yellow plastic cep slumped"RPLS 3963"set for mats
comer;
SCALE IN FEET
THENCE East,■distance of 420.73 feet to a 5/8"iron rod with a yellow plutic cap clamped"RPLS 3963"set for corner in the common line of mid 28377 acre tract 1" = 50'
and said 0.476 acre tract and said future west right-of-way line of Sander Boulevard;
THENCE South 04°07'04"East,sloog bait mentioned common line,s distance of 23850 feet to the Place of Beginning and containing 2.475 acres of land, y r 0(a
NOTES; tE 1
r. Bearings are based on Texas State Plane Coordinates Projection:State Plane NAD83 Texas North ?.
Central Zone 420Z Lambert Conformal Canis Feet(7X83-NCf). )
i
2. This survey wasprcpared with the benefits/Title Commitment OF No.
i3
NrSS 555 De A CALLED JI.4rC AC MDT
LT-19135-1913502863-BC,effective date of November 13,2016,issued on BUM BTR C T NO.SURVEY411
(1E33'27a1 A AC zee AND A as44 AC ABSTRACT NO.g411 November22,2016.No research of record easements has been performed on xwa�LFANVa A ZaJ77 AC.APACr) r
P ., 000t.mrOPENTE4 LIO
these tracts since the effective dates ofrhepoliry mentioned above. Ns .Pax alaoaaai40ar4a I
n9RCCT
3. By graphical plotting rlris parcel lies within Zone X and no part o(rheparcel gar -
described hereon lies within Special Flood Hazard Area(SPHA)Zone AE" i------ C. ----- 11 T 4 `73 -- ! 1as delineated on the Collin County,Texas and lncorporared Areas,Flood
Insurance Rare Map,Map Number48085C0420j,datedlune Z 2009.as
published by the Federal Emergency Management Agenry,and revised by +o'oattTR t4ft Y-' S '
Letter of Map Revision(LOMR)Case No 10-06-1838P,effective dare s ear +so1 I II
y 31l
eX.201tm Thos...yormm&r rhea ce €enc ediloedplain ! _)'t''. SWOP a s _
6ddr7 iorr furth.irdelernuru sr An s€rmrcecm5y that �....,
rettset. `,Meos000rxel has erh non bur - byctmo Federal �-:.
Emergency Management Agency or some other source. I 0 €
I it S 1 ,'0 1
4. Aube time afsurveynobuildings were located on subject property. 1 It i C
m 1 'sue
i .
en
I 0 i t
to
TITLE COMMICMENT NOTES.
DE 2.475 ACRES OR s i
xAwA rams to (107,830 SQ. FT.) ' - i
,- The subject tract of lands not affected by the following; eas1R.a orsrlrssela77noa
20ExplorerP�hne Cameos Vol.770,Pg.456(100 nmecr ^A _ _
20'Enserrh Corp.Easement Vol.1256 Pg.735(10g) SE
I
Temporay.Unli y Fasemem.Vol 2693,Pg.956(10h) i
Temporary Unliry Easement Vol 288a Pg.301(10i) Z 0 `
Temporary Drainage&semen&Vol 3088,Pg.656(10j) ) -.. i
Temporary Utility Easement,Vol.3326,Pg 330(10k) ( 1
20 Sanitary Sewer Hsonem Vol 3255,Pg.180(100 I kg' 1
Boundary line Agreement Vol.512a Pg.3002(10m) )
15'Saniary SewerEasemeot lnsrr.20121206001556620(10p)
15'Drarnage Easement km:20121206001556630(10 q) 1I
Sanitary Selmer fasemenc lose 20150429000488780(10s) I ( I
5aniary Sewer&asemells bran.20150505000521050(100 I 1
2. The wblecrrrauafland tact%credByrne following
- 1f.t' ii�- r.A� i
CAt
M ealRighrs.brut IOOB910901014W770(10n) fy`2 r I - kc • -- _-. ( J _
10OnmrElettrcDellve9.Company,LLCEasem nc Incur. r -_�,_ $.i __6 —_ ��—ma --
-a e� f}[NT OF
ZO1Z07250t10B99560(700)shown
T ter --_ BEGINNING
I Lame Tp its..d
---
#ayt c ofine news.t 14;°1, Pg. vial (LOT) re'mowNa Milder s�5 a1 ride has aeon mores r4 to the et t(s)evidenced by A srz
We ntsinoraitt ono Ma Cowpony nannies no E .xax on to the sea-€.r
axrrc tN el neider of such hrteaaal(s _....
-- -- Las I,♦ A I STORY bY.aaNrO
C Robert Atgrr4.R€gr r profe>-x+ozlaf:$a d E ieEpp
de v ' dtazrlut CAL PC cmli 471
CALL 4PG 41I
pio east eresutoofe sonny moue avrthz�dt r.rpo rvi +
LEGEND MRCCT
during month ofL)rremmirr: 6 annd4°. ttamiaer5ycnp,$rsarh rise rimer rotes ---- IRS Sill'IRON ROD SETWfrH YELL OW
Xiy�Pro al an t• _ -Ands•`•": _four IA CAP STAMPED'YLPLS 3963"
Candxwn(f.€triney IRE 1/7'IRON ROD FOUND . s- __ '
IRFYC ,h IRON ROD FOUNDWITH YELLOW R.C. MYERS SURVEYING LLC CATEGORY 1A,rt.
CM STAMPED'RPL539E3" t
` _� a CONTROL MONUMENT 1 CONDITION II SURVEY r..' "' FH FIRE HYDRANT
"Registered Professional Lend Surveyors"
OF
PP POWER 488 ARROYO COURT (214)532-0636 Volce
53�: SUNNYVALE,TEM 75182 (972)4124675Fax 2.475 ACRES _
PRELIMINARY FOR REVIEW ONLY,NOT TO BE ..6 '' MRCCT MAP RECORDS,COLLIN CoUNTY,TEXAS Robert"CeIWn"Myers,RPLS 3963 Cr
RECORDED FOR ANY PURPOSE-RELEASED 12-05-16 _ rrmeurveying®gmalicom Finn NO 10192300 SITUATED TLl `'
OPRCCI OFFICIAL PUBLIC RECORDS, IN THE ^s
ROBERT C.MYERS R.P.L.S.N0.3963 COLLIN COUNTY,TEXAS Client: PARKERlSHOLT2
—E— OVERHEAD ELECTRIC LINE DUKE STRICKLAND SURVEY,ASST.NO.841, >
—%— FENCE I Job No.:314E Blown by:JDY I Date:12-03-16 IReNeed: 1 CITY OF WYLIE,COLI..IN COUNTY,TEXAS
EXHIBIT B
rIL
WEDC Board approved this day of :12‘? ;All r 2016, the
Effective Date.
WEDC:
WYLIE ECONOMIC DEVELOPMENT
CORPORATION, a Texas Corporation
ki
6 ,1"1, t
By:
Marvin Fuller, President
COMPANY:
Reva Hospitality Wylie LLC, a Texas
Limited Liability Company
By:
Mehul Fifer Member
Exhibits:
Exhibit A - Legal Description of the Property
Exhibit B - Project Description
2039075v2 8