HOA Hotels, LLC (Developer), with 38 years of hospitality experience in six states, is interested in constructing a twelve story, 200 room hotel at 3300 Camp Bowie Boulevard. Developer will invest at least $47,000,000.00 in total construction costs (exclusive of land acquisition costs) by August 31, 2019. Of that, a minimum of $36,500,000.00 shall be hard construction costs. The project consists of the following minimums:
• Minimum 200 hotel rooms;
• 9,000 square foot combined meeting space (which may include ballroom, conference room, or
boardroom space as well as rooftop banquet space);
• 2,500 square foot retail space within or connected to the hotel, with street frontage and direct
street access;
• Must operate and market itself at all times as a full service Forbes Travel Guide Four Star Hotel; and
• All portions of the project that are intended to be occupied, including the hotel and the ancillary retail
space, must have a temporary or final Certificate of Occupancy by August 31, 2019.
The Developer will cause to be expended a minimum 15 percent of hard construction costs with contractors that are Fort Worth contractors and a minimum 15 percent of hard construction costs with contractors that are certified Fort Worth Minority and Women Business Enterprise (M/WBE) contractors, with the understanding that expenditures with Fort Worth M/WBEs count toward the Fort Worth contractor minimum. The property will employ a minimum of 30 full-time equivalent jobs on the property by December 31, 2020, with 60 percent of those filled by Fort Worth residents, and 25 percent with Fort Worth Central City residents, with the understanding that Fort Worth Central City resident employment counts toward the Fort Worth resident requirement. Annually, the property will spend a minimum of 15 percent of annual discretionary service and supply expenditures with Fort Worth companies, and a minimum of 15 percent of annual discretionary service and supply expenditures certified Fort Worth M/WBE contractors, with the understanding that expenditures with Fort Worth M/WBEs count toward the Fort Worth minimum requirement.
Due to a financial gap in project feasibility, Staff recommends entering into an Economic Development Program Agreement with Developer for the project, as authorized by Chapter 380 of the Texas Local Government Code. The recommended Agreement provides for annual program grant payments equal to up to 100 percent of the City's 7 percent Hotel Occupancy Tax revenues for 16 years, capped at $7,200,000.00 net present value (at 6 percent) for the maximum total incentive amount. This Agreement is contingent on the State Comptroller's Office clearing this project for utilization of Hotel Occupancy Tax.
Except for cases of default, failure to meet a commitment will result in a reduction of the corresponding component of the grant for that year proportional to the amount by which the commitment was not met, or for the duration of the Agreement in the case of construction commitments, in accordance with the following chart:
Developer Commitment | Potential Grant | Total Construction Cost Investment of $47 million | 40 Percent | 15 Percent Construction Spending with FW Contractors | 7.5 Percent | 15 Percent Construction Spending with FW Certified M/WBE Contractors | 7.5 Percent | 60 Percent Full Time Equivalents are Fort Worth Residents | 15 Percent | 25 Percent Full Time Equivalents are Fort Worth Central City Residents | 15 Percent | 15 Percent Annual with FW Companies for Services and Supplies | 7.5 Percent | 15 Percent Annual with FW M/WBE Companies for Services and Supplies | 7.5 Percent | TOTAL | 100 Percent |
City Hotel Occupancy Tax paid for the incentive is capped at the lesser of 100 percent of the City's 7 percent hotel occupancy tax or the following annual amounts. Year | Annual Cap | Year | Annual Cap | Year 1 | $525,000.00 | Year 9 | $781,191.00 | Year 2 | $589,050.00 | Year 10 | $796,815.00 | Year 3 | $654,850.00 | Year 11 | $812,751.00 | Year 4 | $687,400.00 | Year 12 | $829,006.00 | Year 5 | $721,700.00 | Year 13 | $845,587.00 | Year 6 | $736,134.00 | Year 14 | $862,498.00 | Year 7 | $750,857.00 | Year 15 | $879,748.00 | Year 8 | $765,874.00 | Year 16 | $897,343.00 |
The Developer acknowledges that the convention facilities nearby will be a significant source of hotel business. Developer and City will enter into a Room Block Agreement on market rate terms for a 16-year term, in accordance with provisions to be agreed to by Developer and City as part of the definitive Agreement.
The Developer will deed land to the City, for City ownership, and City will ground-lease the land to Developer for a minimum term of 16 years at fair market value, corresponding to the years during which an incentive is paid using the City's hotel occupancy tax. During this 16 year period the City will provide an additional annual 380 grant based on the annual rent paid so that the annual net rent is $100.00. The Ground Lease will give Developer the option to purchase the land for then fair-market value of the land without consideration of the improvements on the land with the understanding that the City will pay Developer a final grant equal to the purchase price, less $10,000.00 if the option is exercised within 180 days of the final annual grant or sooner. The City will also have a "put" option to obligate Developer to purchase the land for the then fair-market value of the land within 180 days of the final annual grant payment without consideration of the improvements thereon, with the understanding that the City will pay Developer a final grant equal to the purchase price, less $10,000.00. If the Developer does not exercise the purchase option and the City does not exercise the put option as outlined above, then the annual rent will be adjusted to the then market rate for the remainder of the lease term.
This project is located in COUNCIL DISTRICT 7. |
