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MARCH 14, 2006
06-11 0
RESOLUTION
(CARRIED 4-2
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LAID OVER
WITHDRAWN
PURPOSE:
AMEND TERM SHEET FOR DEVELOPMENT AGREEMENT I
FIVE RIVERS INVESTMENT LLC
INITIATED BY:
DEPARTMENT OF COMMUNITY DEVELOPMENT
BE IT RESOLVED by the Common Council of the City of Oshkosh that the term
sheet for Development Agreement with Five Rivers Investment LLC for construction of a
condominium I hotel resort facility within the Marion Road I Pearl Avenue
Redevelopment Project Area, is hereby amended relative to dates of commencement of
construction, lender commitments and financing, and developer assistance grant, with
substantially the same terms as attached hereto, and the proper City officials are hereby
authorized and directed to enter into an appropriate agreement and to carry out all
actions necessary to implement the City's obligations under the Agreement.
TERM SHEET FOR DEVELOPMENT AGREEMENT
BY AND AMONG
CITY OF OSHKOSH, WISCONSIN,
CITY OF OSHKOSH REDEVELOPMENT AUTHORITY AND
FIVE RIVERS, LLC. .
MARIAN ROAD/PEARL AVENUE REDEVELOPMENT AREA
I.
Project
(March, 2006 Revision)
A.
Development Sites (defined by phases of Development) - See attached Exhibit A
B.
Development - Multiphased
1.
b.
2.
MADI_586911.2
Phase I
a.
Condoslhotel resort facility with approximately 312 condominium
units divisible into approximately 312 hotel rooms.
Approximately 58,764 square foot conference facility.
c.
Indoor/outdoor water feature (15,289 square feet indoor facility).
d.
Food and beverage facilities covering approximately 16,710 square
feet.
e.
Commercial marina - with approximately 100 slips, support
facilities and yacht club.
f.
Parking structure with approximately 100 spaces within main
condo/hotel building, and a 350-400 space surface parking lot
north of Marion Road.
g.
Lobby retail and common space of hotel.
Phase II
a.
Approximately 180 condominium units divisible into
approximately 180 hotel units.
b.
Expansion of commercial marina, with an added 100 slips and
support facilities.
c.
Possible construction of exhibit hall and parking deck on north side
of Marion Road where Phase I surface parking lot is located.
D.
MADI_586911.2
C.
4.
5.
3.
Phase III
a.
New commercial bui1ding(s). Development Agreement to specify
a minimum square footage for the structure(s).
b.
In TIP District #13.
Public Improvements and Activities
1.
Developed in phases - See attached Exhibit B.
2.
Land acquisition and associated costs.
3.
Riverwalk improvements. To be developed in 30-foot wide strip adjacent
to river in accordance with city design guidelines.
4.
Seawall improvements. To be developed in accordance with City design
guidelines.
5.
Streets/sidewalks/common spaces/fixtures and improvements. Need for
and locations to be determined and set forth in Development Agreement.
6.
Landscape Buffer/West Side of Mercury Marine Plant 24 Property~
7.
TIP administrative costs and expenses.
Schedule
1.
Phase I - Commencement - no later than September 20, 2006
a.
Completion - December 31, 2007.
2.
Phase II - Commencement - Spring, 2009 or before
a.
Completion - December 31, 2010.
3.
Phase III - Commencement - Spring, 2010 or before
a.
Completion - December 31, 2011.
Project completion shall be derIDed as the issuance of a.Certificate of
Occupancy for all elements and/or units ofthe projeët phase.
Adjustments to Schedule: Any adjustments to the schedule that would
provide for a later commencement or completion date would require
review and approval by the Redevelopment Authority Board and City
Council.
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II.
III.
City/RDA Undertakings Prior to Closing of Phase I
A.
Creation of TIP District and Project Plan on south side of Marian Road.
B.
Acquisition of Mercury Marine Plant 24 Property.
c.
Preparation of documents necessary for the construction of public improvements.
D.
Review and approve all private development plan, related zoning and approvals
necessary for the undertaking ofthe Development, including condominium plat.
E.
Arrange for City borrowing necessary to fund:
1.
Public improvements.
2.
Site acquisition.
3.
DAG as described in Section V below.
F.
Prepare or cause to be prepared all documents and conveyances necessary for
DAG
G.
Approve all documents of conveyance by deed or lease of Phase I Development
Site to Developer
Developer Undertalcings Prior to Closing Phase I
A.
B.
C.
D.
E.
F.
G.
H.
MADI_586911.2
Prepare Development Plan and submit for City review (and approval by no later
than January 10, 2006. Request for Conditional Use Permit/Development Plan
Review contingent on zoning District Change).
Prepare Development budget and schedule for construction for City approval.
Prepare plans and specifications for Phase I Development.
Prepare construction contract for Phase I Development
Secure construction and permanent financing and equity necessary to complete
Phase I. -
On or before May 31, 2006, present lender and equity commitments to CitylRDA
in form and substance satisfactory to CitylRDA. Developer shall demonstrate
satisfactorily to CitylRDA ability to satisfy all conditions of commitment on or
before closing.
If construction financing, Developer shall by May 31,.2006 provide evidence of
permanent financing to City/RDA's satisfaction.
Secure-all permits and approvals necessary for Phase I.
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IV.
B.
V.
DAG
A.
MADI_586911.2
1.
Commit to Phase I development costs of not less than $52,411,822.
J.
Prepare and submit condominium plat to City.
K.
Present to CitylRDA for approval all market studies, business plans, sales and
marketing plans.
L.
Submit to CitylRDA financial statements ofLLC members and economic
feasibility studies deemed necessary by the CitylRDA's Financial Advisor.
M.
Evidence of Management Agreements/Franchise Agreements for hotel, if
applicable.
N.
All of the above in form and substance satisfactory to City.
Closing Activities - Closing Date to be Set Forth in Development Agreement
A.
At Closing Developer will:
1.
Close Phase I financing and equity.
2.
Execute construction contract for Phase I Development.
3.
Deliver appropriate guarantees and security to CitylRDA.
4.
De.1iver appropriate representations and warranties.
At Closing CitylRDA will:
1.
Close on site acquisition.
2.
Convey by lease or deed the Phase I Development Site.
3.
Provide financing for public improvements - may be funded by RDA
Lease Revenue Bonds with lease of public improvements to City.
4.
Approve plans and specifications and contracts for public improvements.
5.
Deliver evidence ofDAG and all appropriate documents to Developer.
6.
Close on Lease Revenue Bonds for public improvements and DAG'if
applicable.
City and RDAshall provide a DAG necessary to assist the Development (DAG
may be phased to coincide with Development in Phases I and II). No DAG will
be provided for Phase III, which is situated in TIP District #13.
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MADL586911.2
c.
B.
Developer has identified potential need for $6.4 million DAG for the Phase I
project. Amount ofDAG to be determined by CitylRDA based on following the
factors:
1.
A projected value determination by CityIRDA of the Phase I development
and the anticipated tax increment generated"which will provide a basis for
calculating a potential borrowing capacity. Calculation ofthe anticipated
tax increment will take into consideration the base value applied to the
subject property, which base value has yet to be determined.
2.
The amount the City/RDA will need to bond for to cover costs ofland
acquisition and related expenses, for public improvements/activities and
expenses, capitalized interest, debt service reserve (if required), and cost
of issuance on the borrowing.
3.
The potential borrowing capacity that remains after the CitylRDA/s
bonding for Section V.R2. has been accounted for. The remaining
borrowing capacity would show a potential amoùnt the CitylRDA could
bond for to cover the costs of a Direct Pay DAG, including the cost of
capitalized interest, debt service reserve (if required), and cost of issuance
of borrowing, or the amount of the Pay-As-You-Go alternative.
4.
The combination and proportion of direct developer equity, financing, and
CitylRDA participation.
5.
An overall financial gap/feasibility analysis that shows and justifies the
need for the DAG.
6.
The payment method used, per Section V.C.
7.
The "Security/Guarantees" utilized, as set forth in Section VII.
Based on projections by the CityIRDA's financial consultant, the CitylRDAhas
identified the following two methods by which the DAG may be made to the
developer: direct payment from revenue bond proceeds, or pay-as-you-go bonds.
The DAG amounts are markedly different for each approach. The City has given
Five Rivers the option to choose either. When the selection is made, the amount
ofthe DAG identified for that option is to be used in calculating the sources of
funds available for project financing. The amount ofthe loan proceeds plus the
DAG (or in the case of pay-as-you-go, funds borrowed against the DAG), will be
compared to the aggregate cost of project completion. Any shortfall is to be made
up from Developer equity.
1.
Direct pay at closing
a.
Funded through RDA Lease Revenue Bonds (LRB's).
5
MADI_586911.2
2.
b.
Bond proceeds used to fund discrete portions ofproject, such as
land, parking, conference center and/or marina.
c.
Funded components to be owned by RDA.
d.
Leased to City (Security for bonds).
e.
Subleased to Developer.
f.
Quiet enjoyment leases (Mirror documents).
g.
h.
Lease payments equal to debt service on LRB's.
Developer to receive credit against lease payment in amount of tax
increment received by City from the Development and available
after payment of debt service on bonds issued to pay for public
improvements/activities, land acquisition and City costs and
expenses.
1.
RDA grants to Developer an option to purchase leased property
exercisable upon final maturity ofLRB's.
J.
Funds to be dispersed for derIDed costs in accordance with
disbursement agreement - funds to be used for last proj ect costs.
k.
Amount of borrowed capitalized interest depends upon schedule
for disbursement of funds.
1.
LRB's to fund a StabilizationlDebt Service Reserve Fund.
"Pay As You Go" Alternative
a.
City will issue its TIP Revenue Bond ("TIP Bond").
b.
TIP Bond delivered to Developer at closing.
c.
Annual payments to Developer as set forth in TIP Bond.
d.
Payments subject to:
(i)
(ii)
Receipt of tax increment from Development!
Annual appropriation by City Council.
(iii)
Subordination of payment to application of tax increment to
debt service on public improvements/activities, land
acquisition and City recovery of costs and expenses.
(iv)
Not in default under agreement.
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VI.
e.
TIF Bond will bear interest at a rate to be determined and set forth
in Development Agreement.
f.
Size of TIP Bond may reflect:
(i)
the time value of funds
(ii)
less risk to City
(iii)
no need for capitalized interest and debt service reserve.
g.
Title to Phase I land and Development conveyed to and held by
Developer.
Conditions to Close Phases II and III
A.
Developer preparation and City approval of all plans and specifications,
construction contract, financing and equity necessary to complete Phase II and/or
III.
B.
All permits and approvals.
c.
No default under Development Agreement.
D.
In accordance with phase schedule.
E.
Commit to Phase II/III Development cost.
F.
Public improvements.
Security/Guarantees - the specific form of guarantees will be negotiated in connection
with the Development Agreement. It is the intent of the City that the guarantees assure,
. completion of the project, a minimum valuation and adequate tax revenue stream and
other formes) of security to assure that City will recover all costs in connection with the
project. Among the form of guarantees to be considered are:
VII.
MADI_586911.2
A.
GuaranteeofDevelopment costs.
B.
Guarantee of assessed value.
c.
Guarantee of tax revenue stream.
D.
Value and tax adequate for City to recover costs of public
improvements/activities, land acquisition and costs and expenses.
E.
Special assessments in event of non-payment.
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VIII.
IX.
MADI_586911.2
D.
F.
H.
I.
J.
K.
L.
M.
N.
o.
F.
Letter of credit
1.
Performance on construction.
2.
Tax increment stream.
Limitation on Conveyance
A.
No tax exempt entities.
B.
Prior consent of City.
c.
Standards for conveyance of hotel operation.
D.
Except for individual residential condominium units.
E.
Restrictions on use of individual units to address hotel-motel room tax needs.
Miscellaneous Provisions
A.
Compliance with laws.
B.
Payment of all taxes and fees.
C.
Limitation on use.
Insurance.
E.
Indemnification.
Defaults.
G.
Remedies.
Force majeur.
Nondiscrimination.
No personal liability of City officials.
Right of inspection.
Representations and warranties.
Termination - survival of certain provisions.
Severability.
Additional miscellaneous provisions.
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