HomeMy WebLinkAbout32675 / 83-02December 8, 1983
(CARRIED
PURPOSE:
INITIATED BY
LOST
LAID OVER
#2
APPROVE AMENDMENTS TO OSHKOSH CENTRE
DEVELOPMENT AGREEMENT
CITY ADMINISTRATION
RESOLUTION
WITHDRAWN )
WHEREAS, the Common Council of the City of Oshkosh approved a Develop-
ment Agreement for the Downtown Centre Project on November 17, 1983, and
WHEREAS, in order to clarify and make more specific said agreement,
certain modifications and amendments to the agreement should be made,
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of
Oshkosh that the Development Agreement heretofore adopted is approved as
amended by the attachments to this resolution.
Amen�3ed December 8, 1983 as follows:
add to Sec. 3.01(g)(4) "which shall not exceed 1.7% of the total
revenu�."
SUBMITTED HY
APPROVED
�
. � RESOLUTION #2
ADD TO PARAGRAPH 2.04 OF DEVELOPMENT AGREEMENT
PVD shall design and construct the Hotel so as to provide the
foundation, structure and vertical transportation to accommodate
the vertiical expanse of the Hotel by two (2) ss' additional floors
capable of accommodating and containing fifty-six (56) rooms.
�
�
Oshkosh Radisson Hotel
Development Agreement
Redraft of Section 3.01(g).
(g) In addition to the above, PVD shall pay annually to City as
"contingent interest" fifteen percent (158) of the Net
Annual Cash Flow from operation of the Hotel as defined
below. "Net Annual Cash Flow" for any given calendar year
means Gross Operating Revenues for that year reduced by:
(1) Reasonable operating expenses deductible for federal
income tax purposes but not includir.g depreciaticn,
capital improvement uses or incentive asset manage-
ment fees from Gross Operating Revenues.
(2) Base management fee for Hotel Operator of four
percent (4�) of gross operating revenues.
(3) Real estate taxes and insurance.
(4) Furniture, fixtures and equipment reserve.
(5) Base asset management fee equal to $25,000 per
year.
(6) Debt service on first mortgage.
(7) Debt service on second mortgage.
(8) Incentive management fee equal to ten percent (lOB)
of adjusted operating profit as defined in the Hotel
Management Agreement.
(9) Debt service on outstanding balance of third mort-
gage based on eleven percent (11$) 'interest per
annum.
(10) Rent to City under Ground Lease.
(11) Incentive asset management fee to PVD equal to
one percent (18) of Gross Operating Revenues
less the $25,000 Base Asset Management Fee.
(12) $450,000 payment based on a calculation of
fifteen percent (15�) of $3 million of debt
equity reduced by all amounts previously paid
as interest on the third mortgage from proceeds
of Gross Operating Revenues and which accrual
balance cumulates and accrues interest at a rate
of fourteen percent (14�) per annum.
Hotel sha11 provide to City an annual certification of an
independent, certified public accountant of Gross
Operating Revenues and Net Annual Cash Flow and the amount
due City consistent with the terms of this Agreement and
the agreement between City and HUD, referred to hereinafter.
This statement shall be provided, together with the payment
of City's share of the Net Annual Cash Flow, within 120 days
of the close of each year during the term of the loan.
The parties agree that Exhibit D, referred to hereinabove,
will contain an illustration as to the process by which the
amount due the City pursuant to those provisions, is to be
calcLlated and paid using assumptions as to the various
revenue and expense items. Further, the parties agree that
City may at its own expense verify by reference to the
records of Radisson and PVD (PVD agrees to make this a part
of its contract with Radisson) the various revenue and
expense items affecting "Net Annual Cash Flow" and "contingent
interest". Said payments for contingent interest will
terminate upon payment in full of the Nine Hundred Thousand
Do11ar ($900,000) note and mortgage in favor of the City.
-2-
REDRI�F'P OF SECTION 3. Ol (h)
(h) Llpon any closing, sale, ref��a*Ming, £oxeclosure or other disposition of the
Hotel Proj�t or upon the liquidation, dissolutian, insolvency or bankivptcy
of PVD, any outstanding balance and accrued interest on the UDAG loan shall
iimediately becare due and payable to City. In additi.on, upon suc3i action,
the City shall rxeive 15� of any Excess Proceeds. "Exoess Proceeds" shall
npan the sale price o£ refinancing aimimt l�ss the cost of pmviding such
sale or refinancing azrl the outstanding balance on the first and second
mortgage 1oan, any other pennitted irortgage and accrued interest thereon,
and any deferred incentive asset manage�nt fee. Notwithstanding, the fore-
going, in respect of a refinancing, the UDAG second m�rtgage, may continue,
at the option of the City and PVD, if the annual debt service on the new
first irortgaqe is no greater than the annual debt service on the original
first mortgage.
0
3.05 INCENTIVE ASSET MANAGEMENT FEE DEFERRAL.
PVD agrees that the incentive asset management fee to be �
paid to it will be deferred and accrued under the following circum-
stances. In the event that actual reserve balances available to
the project during any given year falls below 75� of the reserve
balance as shown on the first line of Exhibit H attached hereto,
the incentive asset management fee for such year shall be deemed
earned but deferred and accrued until such time as the City re-
ceives the ground rent payment due in 1992. Thereafter, tlze
amounts accrued but unpaid shall be paid to PVD as cash is avail-
able from hotel operations or reserves in the order of priority set
forth in Section 3.01(g). For years prior to 1992 if the incentive
asset management fee is deferred for a particular year because the
reserve balance has dropped below 75� of that set forth on Exhibit
H for such year and the following year the reserve account is
greater than 75� of the figure shown on Exhibit H for such year,
the incentive asset management fee for such year need not be de-
ferred. For the year 1992 and every year thereafter the incentive
asset management fee may be paid and not deferred provided that
the ground rent due for that year has been paid. If the ground
rent has been paid £or any two consecutive years after 1991,
deferral of the incentive asset management fee shall no longer be
required.
EXHIBIT D
CALCULATION OF "CONTINGENT INTEREST" FOR ANY GIVEN YEAR
As Revised 12/7/83
SALES
Rooms
Food E Beverage
Food S Beverage Catering
Telephone
Other Income
Total Sales
DEPARTMENTAL EXPENSES
Rooms
Food E Beverage
Food & Beverage Catering
Telephone
Total Departmentai Expenses
$ 4, 918, 000
4, 381, 000
1,541,000
240,000
144,000
$ 1,017,000
3,272,000
1,186,000
254,000
$11,224,000
5,723,000
UNDISTR(BUTED OPERATING EXPENSE
Administrative 6 General $ 737, 000
Ivlarketing 403, 000
Property Maintenance E Energy 754,000
Totai Undistributed Operating Expense 1,894,000
BASIC MANAGEMENT FEE - 4$ of Sales
GROSS OPERATINC PROFIT
OTHER DEDUCTIONS
Real Estate Taxes
Insurance
F.F.Et. Reserve
Base Asset Management Fee
Total Other Deductions
AA7USTID OPERATING PROFIT
1.
2.
3.
4.
5.
6.
7.
Debt Service on $10 million
Industrial Revenue Bond
Interest Payment of $900,000
UDAG Mortgage to City
Management Incentive Fee*
(108 of $2,754,000)
11$ interest on 3rd Mortgage
Iand Lease Payment to City
The accnied interest payme�t on
the 3rd mortgage--difference
between 15� return on debt
equity and actual intesest paid
fran operations
Incentive Asset Mai�gement Fee
Total
CASH AVALTABLE FOR DISTRIBUPION
EXCESS (BASIS OE "C�ITINGIIVT INi'EREST")
$ 144,000
68,000
192,000
25,000
$ 1,175,000
"CCNTINGENT II�FPEREST" DUE &(X^7�ING TI-IE CITY OF
0.SI-IICOSH- $13,000 X 0.1�
135,000
275,000
330,000
520,000
195,000
86,000
449,000
429,000
$ 2,716,000
$ 3,158,000
S 2,729,000
$ 13,000
$ 13,000
1,950
*Managesnent Incentive Fee equals 10� of Gross Operating Profit less Real Estate
Ta�es, In�1ranpe, and F.F.&E. Reserve.
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