The City and Museum Place Holdings, LLC (Developer) entered into an Economic Development Program Agreement (City Secretary Contract No. 36482, as previously amended) on January 14, 2008. Under the Agreement, in return for the Developer's commitment to construct a mixed-use development in the vicinity of the Cultural District, more commonly known as the Museum Place Development, the City agreed to pay the Developer certain economic development grants equal to 55 percent of the incremental value of the real, business personal property and sales taxes received from the development, as authorized by Chapter 380 of the Texas Local Government Code.
The Agreement called for the Developer to construct Museum Place in four phases, which would include commercial, retail, residential, parking and a hotel. The Agreement has been amended four times, each time to extend various completion deadlines associated with the project due to a substandard economic climate. The first amendment also revised the Minority/Women-Owned Business Enterprises commitment and allowed for collateral assignments of the Agreement to a lender.
The proposed amendment will remove Phases Nos. III and IV from the scope of the development project altogether, making Phases Nos. I and II the only phases incentivized under the Agreement. Accordingly, the overall Program Cap under the Agreement would be reduced from a maximum amount of $26,000,000.00 in aggregate incentive grants to a maximum amount of $10,000,000.00.
In addition, under the Agreement currently, the Developer is required to set aside 15 percent of all residential units comprising Phase II (which Staff has determined is equal to 33 apartments) as affordable housing units. Of these, four apartments must be set aside for lease exclusively to qualifying households whose adjusted incomes do not exceed HUD's 65 percent income levels for the Fort Worth-Arlington HUD Metro FMR Area, seven must be set aside for households earning no more than 60 percent income levels and the remainder of 22 must be set aside for households earning no more than 80 percent income levels. Under the amendment, all four of the units reserved for households earning no more than 65 percent income limits would be shifted and reserved exclusively for households earning no more than 60 percent income levels.
Phase I and Phase II of the Museum Place Development have been completed. However, documentation to the City's Economic Development of all reporting necessary to confirm completion of Phase II by its required completion deadline of December 31, 2013 was not received until October of 2015 due to a mailing error that was not the fault of Developer, which resulted in underpayment to the Developer of the full amount of all grants that would otherwise have been paid in 2014 and 2015. As a result, payments of $111,078.00 and $236,783.00 will be made in order for the City to be current in its obligations for economic development grant payments due to the Developer for the 2014 and 2015 program years (a total of $347,861.00). This payment will be made in addition to the grant due in 2016, which Staff has confirmed will be $368,292.00. Therefore, the total grant payments to be made this fiscal year will equal $716,153.00.
The Museum Place Project is located in COUNCIL DISTRICT 7. |
