Transcript Proposed Hotel and Convention Center

Proposed Hotel and
Convention Center
City Council Meeting
December 10, 2013
Agenda
Purpose
Project Overview
Convention Center Financing
Convention Center Feasibility and Timeline
Development Agreements
Next Steps






2
Purpose of Convention Center

Encourage the convention and tourism industry, resulting
in positive economic impact to Denton retail, restaurant,
and hotel businesses

Expand the tax base through construction of new retail
and restaurants

Provide a facility in Denton to serve citizens, businesses,
educational institutions, and organizations
3
Project Overview

Collaboration Between:








City of Denton
O’Reilly Hospitality Management (OHM) (Developer & Operator)
O’Reilly Hotel Partners Denton (OHPD) (Financier)
University of North Texas (UNT)
Site - 13.5 Acres Located on UNT Property
Embassy Suites Hotel and Houlihan’s Restaurant (OHPD Funded)
Convention Center (City Funded)
Total Project Cost - $85 Million


4
Convention Center - $25 Million
Hotel & Restaurant - $60 Million
Project Overview – Hotel/Restaurant
OHPD to Lease Land from UNT
Funded and Owned by OHPD
OHM to Manage Construction and Operations
Embassy Suites with Latest Design Concepts
Planned 318 Suites
LEED Certified
Houlihan’s – 8,000 sq/ft with 290 Seats
Educational Opportunity Through the UNT School of
Hospitality








5
Project Overview – Convention Center
City to Lease Land from UNT
City to Fund and Own Convention Center
City is not Funding the Hotel
OHM to Serve as Architect and Construction Manager
Sub-Lease Convention Center to OHPD






Operated and Managed by OHM
Size is Currently Proposed at Approx. 100,000 sq. ft.
Grand Ballroom



6
Approximate 2,000 Person Capacity for Banquet Style Events
Project Overview- Site Plan
7
Convention Center Financing
Goal is to be Self Supporting
City to Sell Certificate of Obligations to Fund Conv.
Center



Debt Supported from Project Revenue Including OHM Rent
Creation of a Tax Increment Finance District (TIRZ).





8
Helps Ensure Project is Developed
Located on UNT Property that is Currently Tax Exempt
Leasehold Interest in Hotel will be Taxable
Opportunity for Participation by DISD and County
Convention Center Financing
Debt Service Funded by:


Hotel Occupancy Taxes (HOT) Related to the Development of
the Project




TIRZ Revenue (Ad Valorem Taxes from Increased Value)
City Sales Taxes – Derived from Project
OHPD Lease Payment to City


9
This Includes HOT Revenue from Convention Center Hotel and up
to $100K in Other HOT Revenue
Equal to the Net Balance of Total Project Revenue and the Amount
Needed to Satisfy the City’s Annual Debt Payment
Begins in Year Three of Operations
Convention Center Feasibility & Timeline
CONSTRUCTION
PHASE
DESIGN DEVELOPMENT PHASE
Approval of
Design Dev.
Drawings
Create Design
Development
Architectural
Drawings
Approval of all
Agreements
10
City Council
Initiates bond
Sale Process
and publishes
notice of
Intent
City Council
Approval of
GMP
Construction
Contract
Solicit GMP
Construction
Proposals &
Evaluate Price
Finalize Budget
& Receive
OHPD
Franchise and
Funding
Commitment
Initiate Creation
of the TIRZ, &
Final Evaluation
of the Overall
Project
Feasibility
OHPD Franchise
and Funding
Commitment
Required
City
Issues
Debt
Conclusion of
bond Notice
Period &
Evaluation of
Market
Conditions
Feasibility
Deadline
OHPD & City
Close on
Respective
Financing
Commitments
Financing
Viability
Deadline
Approval
of Final
Design
Funding
Available, Final
Design
Completed &
Finalize Creation
of TIRZ
Construction
Phase Begins
Development Agreements







11
Master Development Agreement
City-UNT Land Lease
City-OHPD Convention Center Sublease
UNT-OHPD Land Lease
Professional Service Agreement – Construction Management
Professional Service Agreement - Design
Non-Disturbance and Attornment Agreement
Next Steps



Approval of Development Agreements
Begin Initial Design
Initiate Creation of the TIRZ






Solicit Construction Proposals
Receive Franchise/Hotel Funding Commitment from OHPD
Finalize Project Budget
Confirm Feasibility
Close on Financing




Determine Level of Participation from Other Governmental Entities
OHPD Financing for Hotel
City to Issue Bonds
Finalize Design
Begin Construction
12