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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 06/19/2001 - ITEMS RELATING TO AMENDMENTS TO THE VARIOUS AGREEM I AGENDA ITEM SUMMARY ITEM NUMBER: 13 A-B DATE: June 19, 2001 FORT COLLINS CITY COUNCIL Alan Krcmarik/ FROM: Carrie Daggett SUBJECT: IX Items Relating to Amendments to the Various Agreements for the Civic Center Facilities. RECOMMENDATION: Staff recommends adoption of the Ordinances on Second Reading. EXECUTIVE SUMMARY: A. Second Reading of Ordinance No. 102, 2001, Approving Amendments to the Leasehold Deed of Trust, Site Agreement, Lease Agreement, and Parking Structure License Agreement for the 1998 Lease Certificates of Participation for the Civic Center Facilities Project. B. Second Reading of Ordinance No. 103, 2001, Authorizing the City Manager to, from Time to Time, Amend the Long-Term Lease of Real Property Adjacent to the Civic Center Parking Structure to Phelps Program Management, LLC, for the Development of Commercial Space and Related Easements. In 1998, Council approved Lease Certificates of Participation ("COPS") in the amount of $17,210,000 for the Civic Center Facilities Project. This Project includes the Civic Center Parking Structure and the new City Office Building at 215 North Mason Street. In coordination with the issuance of the COPS and the construction of the Parking Structure, the first level along the western side of the Parking Structure was leased to Phelps Program Management ("PPM"), an affiliate of Hensel Phelps, for private use as restaurant, retail and other related purposes to enhance the attractiveness of the downtown area. As a result of the completion of the planning and construction of the Project, staff has been better able to define and anticipate certain issues that are addressed in the various agreements. As a result, staff has prepared and worked with other involved parties to develop amendments to the several agreements that were part of the COPS arrangement and the commercial ground lease arrangement, in order to refine the terms of those agreements. The Bank of Cherry Creek, which is the trustee for the COPs financing, has already approved the proposed changes. Ordinance No. 102 and 103, 2001, were unanimously adopted on First Reading on June 5, 2001. AGENDA ITEM SUMMARY ITEM NUMBER: 15 A-B DATE: FORT COLLINS CITY COUNCIL June 5, 2001 STAFF: Alan Krcmarik/ Carrie Daggett SUBJECT: Items Relating to Amendments to the Various Agreements for the Civic Center Facilities. RECOMMENDATION: S�. Staff recommends adoption of the Ordinances on First Readin FINANCIAL IMPACT: There is no direct financial impact of the change egal descniytion, except that revisions to the legal descriptions will reduce the potential for disagreement in future..-Kevisions to the Parking Structure License Agreement with Latimer County will improve the functio the joint budgeting for shared operational expenses between the City and the Co larify the 's obligation to share in an equipment replacement and major maintenan arking e. The proposed Ordinance limits amendments to the Ground Lease r Commerci the Paz tcucture to those that do not increase private use of the Parking Stru or increase the r ancial ohgations under the Ground Lease. The payments to be received by the Gunder the Ground Le are outlined in the attached Outline of Commercial Lease,dated August 14, 1998 (Attachment 1). EXECUTIVE SUMM ' A. First Reading of Ordinance io, 102 2001, Approving Amendments to the Leasehold `Ywt Mi�ti` A Deed of Trust, Site Agre went, .Lease Agreement, and Parking Structure License Agreement for the 1998 Lease Certificates of Participation for the Civic Center Facilities Project. B. First Reading of Ordinance No. 103, 2001, Authorizing the City Manager to, from Time to Time, Amend the Long-Term Lease of Real Property Adjacent to the Civic Center Parking Structure to Phelps Program Management, LLC, for the Development of Commercial Space and Related Easements. In 1998, Council approved Lease Certificates of Participation ("COPS") in the amount of $17,210,000 for the Civic Center Facilities Project. This Project includes the Civic Center Parking Structure and the new City Office Building at 215 North Mason Street. In coordination with the issuance of the COPS and the construction of the Parking Structure, the first level along the western side of the Parking Structure was leased to Phelps Program Management ("PPM"), DATE: June 5,2001 2 ITEM NUMBER: 15 A-B an affiliate of Hensel Phelps, for private use as restaurant, retail and other related purposes to enhance the attractiveness of the downtown area. As a result of the completion of the planning and construction of the Project, staff has been better able to define and anticipate certain issues that are addressed in the various agreements. As a result, staff has prepared and worked with other involved parties to develop amendments to the several agreements that were part of the COPS arrangement and the commercial ground lease arrangement, in order to refine the terms of those agreements. The Bank of Cherry Creek, which is the trustee for the COPS �' financing, has already approved the proposed changes. BACKGROUND: Through the Civic Center Master Plan process, the City identified the need to construct several new facilities in the downtown area. Two of the facilities inc ` i`` City Offi Building and the Parking Structure. After substantial analysis and pre-co City decided to locate the new office building on Block 32 and to locate the Pazkm lock 21. The land area on both blocks had previously been divid to lots,which the City from individual owners. A portion of the area on which Structure would be as also identified as an appropriate location frcerci to enhance the appe and encourage activity in the downtown area. Amendments to the COPS Agreements Among the documents approved b ouncil when ; roved the COPS financing through Ordinance No. 128, 1998, we Site Agr t Lease Agreement, and License Agreement. These docume ; included leg ptions o on which the two buildings > to be constructed would birlocated, and, in soiue2_S, descnptrons_ of the improvements to be constructed. At that time, legal descriptions were„prepared based upon the anticipated final plans and construction oe buildings. Since that time, the actual construction of the Parking Structure and Office Bui ttg have resulted in modifications to the exact "as-built' of those two buildings from fhe ongina[ '' nption. In addition, in the course of tliiee planning process,it was determined that the property to be used for the Office Building would needI'_L replatted, and the replatting resulted in a modification of the lot description for the Office Building, adding 42 feet on the north end of the originally desfbed. and area. Because the;City consolidated several parcels when it took ownership of the properly, the development guidelines require that the property be replatted. In addition, based on original plans, the Office Building improvements were described as: "A 68,000-square-foot four- story office building and a 905-space parking structure." As a result of the final planning for the Office Building, the specific"improvements have been adjusted, and the description of the improvements in-the COPs agreements will be changed consistent with those adjustments, to: "A 71,515-square foot, three-story office building and a 909-space (895 automobile spaces and 14 motorcycle spaces) parking structure." On the site for the Parking Structure, some additional adjustments to the legal descriptions need to be made because of the commercial space that has been incorporated into the facility. Ordinance No. 102, 2001, makes the changes necessary to conform the legal descriptions to the projects as they have been constructed. The original and revised legal descriptions for the Parking Structure and Office Building are attached to this Agenda Item Summary (Attachments 2 and 3, respectfully). DATE: Jane 5, 2001 1 3 ITEM NUMBER: 15 A-B The Ordinance also authorizes changes to the Parking Structure License Agreement between the City and the County to recognize some changes to the budget for and leasing of parking spaces. These changes update the process originally described in this agreement with the County in order to allow for smoother and more efficient planning for cost-sharing and payment from the County for the operating costs of the Parking Structure, which are shared equally between the City and County. The changes to the License Agreement also clarify the County's obligation to share in an equipment replacement and major maintenance fund for the Parkin tructure. After Council has approved the changes to the legal descriptions, staff will have I affected parties execute the appropriate documents. S.. Amendments to Ground Lease and Reciprocal Easement Agreement K e S$ On September 1, 1998,the City Council adopted Ordinance N 98, whic ' uthorized the City Manager to execute an agreement to lease a portion o end of the first floor of the Parking Structure (the "Commercial Space") to Phe p ement, LLC ("PPM"), an affiliate of Hensel Phelps Constructi Company, the design- of the Parking Structure (under separate contract with th ing a grant of access ss easements reasonably required for the use of omme" ace. This lease ent provides for the development of private commercial space co ble with and incorporated into the design of the Parking Structure. The authorid Ground Lease agreement ("Ground Lease") and related Reciprocal Easement and Party WA ,Agreement ("REA") were executed in September 1998, and the Commercial Space has %- ;-.&veloped and partially subleased to private businesses by PPM, with onal subleases cuiWntly under negotiation. The initial term of the Ground Lease, inc(`r A_ - ar extensionsat PPM's sole option, will end in the year 2039, with a right of first option `�to PPM for an"additional subsequent term, if the Citychooses to continuf to lease out the Co a Xial Space a tat time. Section 2 of Ordinance No. 145, 1998, authorized the City Manager to incorporate into those documents such other lease and easement provisions`as the City Manager, in consultation with the City Attorney �deems� opriate to protect the driterests of the City, consistent with the N111,19,general lease terms. that putlined at the time of approval. Certain corrections and modifications to the Ground Lea�eand-REA have been made by the City Manager, pursuant to his authority under that Ordmance, .However, in order to allow the City Manager the administrative discretion to manage the Ground Lease and REA in view of the commercial uses for winch the Commercial Space is being used, and in order to allow the City Manager to c�dc respond t to requests of PPM in its management of the Commercial Space over time, the Ordinance authorizes the City Manager to amend the Ground Lease and REA to address or modify operational, maintenance or use requirements and restrictions for the use of the Commercial Space. An Outline of the Ground Lease and REA terms as originally approved in 1998 is attached for background regarding those documents (Attachment 1).