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Item 4CCITY OF SOUTHLAKE To: From: MEMORANDUM March 3, 2015 ITEM 4C Shana Yelverton, City Manager Shannon Hamons, Director of Economic Development & Tourism Subject: Item 4.C: Approve Resolution No. 15-016, a resolution of the City of Southlake, Texas, approving the terms and conditions of a program to promote economic development and stimulate business and commercial activity in the City; authorizing the Mayor to execute Amendment Two with Hines Southlake Land Limited Partnership, a Texas limited partnership, for such purposes; and providing an effective date. Action Requested: Approve Resolution 15-016 as noted above. Background Information: In October 2007, Hines Southlake Land Limited Partnership ("Hines") acquired approximately 285 acres along the north side of S.H. 114 between White Chapel and Carroll Avenue for the Carillon mixed -use development. They began their entitlement applications and processing in mid-2008 and received City Council approval in November 2008. On August 17, 2010, the City of Southlake entered into a Chapter 380 Incentive agreement ("Agreement") with Hines via adoption of Resolution 10-014. This Agreement outlined terms for performance -based incentives for the construction of area roadways and other amenities. These incentives included the use of General Fund revenues generated by the development from 50% of Ad Valorem taxes and Sales taxes from the 1 % that goes to General fund. All incentives are capped not to exceed 10 years. On May 6, 2014, The City approved Amendment One to the original 380 agreement to include adjust the language related to the construction of parking garages and extending the construction commencement date to June 30, 2016 and substantial completion date to June 30, 2018. Additionally, the original agreement tied reimbursement of Roadway Impact Fees to the substantial completion date and Amendment One altered that provision to provide for reimbursement of collected Roadway Impact Fees without the connection to the substantial completion date. This alteration was approved since Hines had completed the majority of Kirkwood Boulevard and the Roadway Impact Fees generated by the development were stipulated to be utilized as a grant towards a portion of their cost of the roadway's construction. Hines requested in January, 2014 reimbursement of Roadway Impact Fees for the Kirkwood Boulevard construction work. However, upon inspection of the roadway by Public Works, it was determined that approximately 620 feet of the southeast portion of the boulevard had not been completed to the lake area as required in the original 380 agreement. Furthermore, Public Works has indicated that this portion of the roadway is not needed at this time because it would remain unused until the City builds culverts at the lake and the remainder of Kirkwood Boulevard to the southeast of the lake. Because of this, Hines has proposed that they construct one of the culverts at the lake to facilitate a walking path around the water to be enjoyed by residents. In exchange for Hines building the culvert, the City would assume the construction of the remaining 620 feet of Kirkwood to the lake. This remaining portion of Kirkwood would be completed at a future date when the City deems it necessary to complete the boulevard further southeast of the lake area. Financial Considerations: The cost for Hines to complete one of the culverts at the lake to facilitate the walking path (also Hines responsibility) is estimated at $492,780. The estimated cost of completing the remaining leg of Kirkwood Boulevard to the lake is $483,514. By assuming responsibility for the roadway as opposed to the first culvert, the City would realize a savings of more than $9,000. Strategic Link: C2: Provide travel convenience with the City & Region C3: Provide attractive & unique spaces for enjoyment and personal interests 132: Collaborate with select partners to implement service solutions F2: Invest to provide & maintain high quality public assets CB01: Continue to implement Southlake 2030 Plan by focusing on short-term initiatives Carillon - 380 Agreement - Amendment Two - 2015-03-03 - Page 2 of 9 CBO5 : Optimize resources through collaboration and partnerships to reduce costs and add service value Citizen Input/ Board Review: Not applicable Legal Review: The City Attorney's office has been involved in the preparation of these documents. Alternatives: 1. Approve the Resolution as submitted 2. Approve the Resolution with amendments 3. Take no action on the Resolution. Supporting Documents: Resolution 15-016 with accompanying agreement Staff Recommendation: Approve Resolution 15-016 as submitted. Carillon - 380 Agreement - Amendment Two - 2015-03-03 - Page 3 of 9 RESOLUTION NO. 15-016 A RESOLUTION OF THE CITY OF SOUTHLAKE, TEXAS, APPROVING THE TERMS AND CONDITIONS OF A PROGRAM TO PROMOTE ECONOMIC DEVELOPMENT AND STIMULATE BUSINESS AND COMMERCIAL ACTIVITY IN THE CITY; AUTHORIZING THE MAYOR TO EXECUTE AMENDMENT TWO WITH HINES SOUTHLAKE LAND LIMITED PARTNERSHIP, A TEXAS LIMITED PARTNERSHIP, FOR SUCH PURPOSES; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, Chapter 380 of the Texas Local Government Code authorizes municipalities to establish and provide for the administration of programs that promote economic development and stimulate business and commercial activity in the City; and WHEREAS, On August 17, 2010 the City Council approved a Chapter 380 Agreement (the "Agreement") by and between the City of Southlake and Hines Southlake Land Limited Partnership, a Texas Limited Partnership ("Hines") to promote economic development and stimulate business and commercial activity in the City; and WHEREAS, On May 6, 2014 the City Council approved a Chapter 380 Agreement amendment (Amendment One) by and between the City of Southlake and Hines Southlake Land Limited Partnership, a Texas Limited Partnership ("Hines") to promote economic development and stimulate business and commercial activity in the City; and WHEREAS, the City Council has been presented with a proposed Agreement — Amendment Two by and between the City of Southlake and Hines, a copy of which is attached hereto as Exhibit "A" and incorporated herein by reference (hereinafter called "Amendment Two"); and WHEREAS, upon full review and consideration of Amendment Two and all matters attendant and related thereto, the City Council is of the opinion that Amendment Two will assist in implementing a program whereby economic development will be promoted and business and commercial activity will be stimulated in the City. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS, THAT: Carillon - 380 Agreement - Amendment Two - 2015-03-03 - Page 4 of 9 SECTION 1. The City Council finds that the terms of Amendment Two will promote economic development and stimulate business and commercial activity in the City and otherwise meet the criteria of Section 380.001 of the Texas Local Government Code. SECTION 2. The City Council hereby adopts amendments to the economic development program whereby the City of Southlake will make economic development program payments to Hines, and take other specified actions, in accordance with the terms outlined in the Agreement and Amendment Two. SECTION 3. The terms and conditions of Amendment Two, having been reviewed by the City Council of the City of Southlake and found to be acceptable and in the best interest of the City and its citizens, are hereby approved. SECTION 4. The Mayor is hereby authorized to execute Amendment Two and all other documents in connection therewith on behalf of the City substantially according to the terms and conditions set forth in Amendment One. SECTION 5. This Resolution shall become effective from and after its passage. PASSED AND APPROVED this the 3rd day of March, 2015 John Terrell, Mayor ATTEST: Lori Payne, TRMC City Secretary Carillon - 380 Agreement - Amendment Two - 2015-03-03 - Page 5 of 9 AMENDMENT TWO TO ECONOMIC DEVELOPMENT AGREEMENT CARILLON THIS AMENDMENT TWO TO ECONOMIC DEVELOPMENT AGREEMENT ("Amendment Two") is executed between the City of Southlake, Texas (the "City") and Hines Southlake Land Limited Partnership, a Texas limited partnership ("Hines'). City and Hines are sometimes hereinafter referred to collectively as the "parties" or individually as a "party". RECITALS WHEREAS, on August 17, 2010, the City adopted Resolution No. 10-014 (the "Resolution") establishing an Economic Development Program pursuant to Chapter 380 of the Texas Local Government Code ("Program") and authorizing the Economic Development Agreement between the parties (the "Agreement"); and WHEREAS, on May 6, 2014, the parties entered into an Amendment One which amended the Agreement and set forth additional obligations of the parties; and WHEREAS, under the terms of the Agreement, Hines is obligated to construct Kirkwood Blvd. from White Chapel Blvd. southeasterly to the north end of a bridge or multiple -culvert crossing ("Culvert") of Dove Creek at the southern end of the Property in accordance with the Phasing Plan submitted by Hines during the zoning approvals and as agreed to by the parties in Developer's Agreements; and WHEREAS, Hines has completed a majority of Kirkwood Blvd. to a point approximately 620 feet northwest of the Culvert; and WHEREAS, the parties wish to further amend the Agreement so that Hines is obligated to only construct a portion of the Culvert and to release Hines from its obligation to finish the extension of Kirkwood Blvd. to the north end of said Culvert; and WHEREAS, the City Council finds and determines that this Amendment Two will effectuate the purposes set forth in the Program and Hines' performance of its obligations in the Agreement. AGREEMENT NOW, THEREFORE, in consideration of the mutual benefits and premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: Carillon - 380 Agreement - Amendment Two - 2015-03-03 - Page 6 of 9 1. Unless otherwise defined herein, the terms used in this Amendment Two shall have the same meaning as given to such terms in the Agreement. 2. The Agreement is amended by adding an Exhibit D, which is attached to this Amendment Two. 3. Section 4.G of the Agreement is amended to read as follows: "G. Kirkwood Blvd.: Hines has constructed Kirkwood Blvd. as a full - width four -lane divided roadway from White Chapel Blvd. southeasterly to a point approximately 620 feet northwest of a bridge or multiple -culvert crossing ("Culvert") of Dove Creek at the southern end of the Property in accordance with the Phasing Plan submitted by Hines during the zoning approvals and as agreed by the parties in Developer's Agreements. No later than March 30, 2016, Hines agrees to construct a portion of the Culvert, the location of which is shown on the attached Exhibit D, so as to allow pedestrian access and connection of adjacent walking trails. The Culvert must be designed and constructed in compliance with all City regulations and to the satisfaction of the City's Department of Public Works. ROW Dedication: As a part of normal platting requirements, unless otherwise agreed to by both parties, Hines shall dedicate right-of-way to the City for adequate for full width lane construction, and any right-of-way required for turn lanes to serve the Property at no cost to the City. Hines will also dedicate property to the City for any area on which the Culvert is located. ii. Landscape Median Maintenance: Hines shall be responsible for the on -going maintenance of all medians in Kirkwood Blvd. to a standard acceptable to the City." 4. All other terms and conditions of the Agreement, with the exception of the terms modified by this Amendment Two, shall remain in full force and effect. IN WITNESS WHEREOF, the City and Hines have executed this Amendment Two as of the day of , 2015. CITY: Carillon - 380 Agreement - Amendment Two - 2015-03-03 - Page 7 of 9 ATTEST: Lori Payne, TRMC City Secretary THE CITY OF SOUTHLAKE, TEXAS John Terrell, Mayor HINES: HINES SOUTHLAKE LAND LIMITED PARTNERSHIP, a Texas limited partnership By: Hines Southlake Land GP LLC, a Delaware limited partnership, its General Partner By: Hines Interests Limited Partnership, a Delaware limited partnership, its sole Member By: Hines Holding, Inc., a Texas corporation, its General Partner By: Name: Mark Cover Title: Executive VP Carillon - 380 Agreement - Amendment Two - 2015-03-03 - Page 8 of 9 it Exhibit D --------------------� - PHASE IA I EE^MVIE H MN^7 � PHASE 4A a . OHM VIVO MOR _ Hines is now "sTTTTIITT:T. L., ` .� -' y4 responsible for LHines is no longer constructing one of responsible for completion two culvert of 620 remaining feet of :j -` components at lake to Kirkwood Boulevard. The -' �' design specifications City will complete at a future - approved and date accepted by Public t Works (PHASE SC —! LEMD .—d I - 0.emfl _ H_ - lHhee _ VIIIn A . •I In'i - Vlli.a B !SH'xl lfli - VH1.x i- !.»Itn n.I xiI IC 1 Carillon - 380 Agreement - Amendment Two - 2015-03-03 - Page 9 of 9 .C. I