AgdaPkt 2002-02-25 - Laserfiche WebLink

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Background Max Keech, part owner of a site adjacent to the City's water tank "A" parcel which he is developing into a 95-room residential suites hotel, has agreed, pursuant to a lease arrangement with the City, to develop and own a 10,000 square foot childcare facility accommodating approximately 150 children on the City's water tank "A" parcel. The project will additionally include approximately 8,000 square feet of office space compatible with its location over the childcare facility. Shores Childcare, LLC is the partnership entity that will own the project. The City will own the land and lease it to Shores Childcare, LLC pursuant to a 50- year Ground Lease. Shores Childcare, LLC will pay for the construction of off-site utilities and egress to and from the site, as well as all environmental and geotechnical remediation on the site. These improvements, plus the land, will be the Leased Premises. Shores Childcare, LLC will be responsible for making and paying for all improvements to the Leased Premises. Shores Childcare, LLC will construct on the Leased Premises the childcare/office facility and all other improvements necessary therefore (the Leasehold Improvements). Shores Childcare, LLC or its assigns will own these Leasehold Improvements for the 50-year term of the lease, after which time ownership will revert to the City. The Leased Premises and the hotel will share maintenance costs in the proportion that the net rentable square feet (nrsf) of each project bears their aggregate nrsf. Mr. Keech's hotel development partners have granted him a permanent easement for utilities and access to the Leased Premises through the hotel site. As the managing partner of Shores Childcare, LLC, Mr. Keech will assign this easement to the City. For the duration of the lease, Shores Childcare, LLC (or its assigns) will pay for the Leased Premises' pro rata share of maintaining 1) a bridge connecting the hotel and Leased Premises to Twin Dolphin Drive and 2) utilities. The City will assume these pro rata maintenance costs after 50 years. The City has agreed to provide long-term financing for the childcare/office facility. To effect a transaction compatible with the City's municipal powers, upon completion of construction, Shores Childcare, LLC will sell a portion of the childcare/office facility to the City for an amount sufficient to pay off Shores Childcare, LLC's construction loan, but in no event for an amount greater than $3.2 million. The City will pay cash. The City will immediately sell the facility back to Shores Childcare, LLC, taking a Promissory Note from Shores Childcare, LLC for the purchase price. Shores Childcare, LLC will pay for this re-acquisition of the facility over a 20-year term. The Leasehold Improvements constructed by Shores Childcare, LLC will secure this note. Page 3 of 7