HomeMy WebLinkAboutSEPTEMBER 15, 1998 MINUTESMINUTES
VIRGINIA BEACH CITY COUNCIL
Virginia Beach, Virginia
September 15, 1998
Mayor Meyera E. Oberndorf called to order the VIRGINIA BEACH CITY COUNCIL'S SPECIAL
FORMAL SESSION re CONSIDERATION OF 3 P' STREET DEVELOPMENT, in the Council Chamber,
City Hall Building, on Tuesday, September 15, 1998, at 3:00 P.M..
Council Members Present:
Linwood O. Branch, III, William W. Harrison, Jr., Harold Heischober,
Barbara M. Henley, Louis R. Jones, Reba S. McClanan, Mayor Meyera E.
Oberndorf, Nancy K. Parker, Vice Mayor William D. Sessoms, Jr. and A.
M. "Don" Weeks
Council Members Absent:
Margaret L. Eure
IA TTENDING : TTD C/TR T
CONFERENCE ON LIGHT RAIL
- PORTLAND, OREGON]
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Item II. ITEM # 44068
The Mayor read the CALL TO SPECIAL FORMAL SESSION:
"HONORABLE MEMBERS OF CITY COUNCIL
In accordance with the City Charter, Section 3.06, the City Code,
Section 2-21, and by the authority vested in me as Mayor of the City, I
hereby call a SPECIAL SESSION of the VIRGINIA BEACH CITY
COUNCIL Tuesday, September 15, 1998, at 3:00 P.M. in the Council
Conference Room, City Hall Building, for the following purpose:
CONSIDERATION OF 31~ STREET DEVELOPMENT
Should it be necessary to recess into Executive Session, this will give
appropriate notice.
After adjournment, City Council will convene its regularly scheduled
Workshop at 4 PM
Sincerely,
Meyera E. Oberndorf"
September 15, 1998
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Rem III
ITEM # 44069
Mayor Oberndorf read into the record correspondence of September 11, 1998from Council Lady Margaret
L. Eure relative her absence:
September 11, 1998
"THE HONORABLE MA YOR
MEMBERS OF CITY COUNCIL
As you are aware l will be attending the Conference on Light Rail/TRT
on Tuesday, September 15, 1998, in Portland, Oregon; and, therefore
unable to attend the Special Session of City Council regarding the Thirty-
first Street Project.
I wish to go on record as being in full support of this project and
encourage the City Council to move forward. I sincerely regret not being
present.
Respectfully,
Margaret L. Eure
Council Lady - District 1 - Centerville"
September 15, 1998
hem IV
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ITEM # 440 70
Councilman Harrison advised, for approximately fourteen months, Councilman Jones and himself- City
Council Liaison 's, have been pursuing the City Council's direction to consummate a public/private
partnership with the developer of choice from a bidding process that took place last July for interest in the
31~ Street Property. The City has owned the property through its Development Authority for a number of
years. The Term Sheet achieves a number of points. City Council has indicated are its destination points
and goals. The plan presented today is a major step forward in continuing the revitalization of the
Oceanfront. This allows the City Council to achieve its collective vision for the Resort Area at a new higher
level of quality. The development plan provides an exceptional anchor for the Laskin Road/Corridor
Gateway which has received so much publicity recently and assists in facilitating the attraction ora worm
class year-round resort destination for Virginia Beach. This project also allows the City to achieve its vision
for a community park and amenities for its citizens. Councilman Harrison was proud of the teamwork of the
City Council, staff, the private sector and their professionals.
Councilman Jones expressed appreciation to Councilman Harrison. This will be very profitable both to the
public and private sector. The investment of the City will begin paying off immediately in the first year of
a 65-year lease and then pays off for the entire term of the contract. The net revenue will exceed $10-
MILLION over the first ten years of the lease. During the second decade of the lease, this net revenue will
add to the City 's budget approximately $18-MILLION to $20-MILLION. All of this net revenue will
obviously become very essential as the City searches for ways to fund growing needs in education, public
safety, transportation and numerous other challenges faced annually. Other key benefits include: retain
ownership of all land~expanded site and park. The Virginia Beach Development Authority land will be
returned to the tax rolls. The community park and public restrooms will be built and maintained at no cost
to the taxpayers.
Mayor Oberndorf extended appreciation to Council Members Harrison and Jones for the hundreds of hours,
which they personally devoted to these negotiations.
E. Dean Block, Director- Management Services, advised this project is another step in the fulfillment of City
Council's plan for improvement of the Resort Area. This project is being proposed to respond to City
Council's Comprehensive Plan and Destination Points:
Create a unified parking/traJfic system
Create a year-round destination
Create higher quality development
Revitalize, diversify and elevate physical resort amenities
Protect neighborhoods
HOW DOES THIS PROJECT ADVANCE AND FULFILL THE COUNCIL'S GOALS/VISION?
Provides a cornerstone for redevelopment of the 30th/31st Street Corridor
Stimulate higher-quality hotel development at the Oceanfront
Preserves and expands community open space and ocean vistas
Return VBDA land to the tax roils.
Generates net revenues to the City from the outset
Preserves public access to the ocean at 31s' Street
Addresses continuing demand for public parking in the Resort Area
Provides for private maintenance o fa public park and restrooms
PROJECT SCOPE
3.53 acres total land site at oceanfront
300-room, four-star-quality "name" hotel
14, 000 sq. fi. restaurant
14, 000 sq. fi. conference space
70, 000 sq. fi. community park
825-space public garage/walkway/streetscape
26, 000 sq. fi. retail shops
Free-standing Dairy Queen type restaurant and public restroorns
September 15, 1998
~em IV
ITEM # 44070 (Continued)
PRIVATE SECTOR PROVIDES
Capital investment of $30-MILLION (est.)
Lease oceanfront property for 65 years
SI-MILLION for community park improvements
Park construction:
Public participation in design
Mutually agreed plans
Design and build hotel
Construct Dairy Queen and restrooms
Maintain park and restrooms to standards
Obtain needed rezonings and permits
Sell Barracuda Bobs per agreement
Lease 380 spaces in parking deck for 65 years
Provide entertainment in park
PUBLIC SECTOR
Purchases Sandler property
Re-subdivides Oceanfront property
Acquires parking deck land by purchase or condemnation
Constructs 825-space parking garage, retail shell, streetscapes and
elevated walkway
Master leases high-quality retail shops via RFP (26, 000 sq. fi.)
Closes 30th and 31st Street stub streets
Coordinates with hurricane protection project
THE BENEFITS
Provide cash to City budget from year one
Net budget impact
Years 1 - 10: Over $10-MILLION*
Years 11-20: $18-MILLION-$20-MILLION
Retain ownership of all land/expanded site and park
Long-term lease benefits - income for 65 years - $46-MILLION
Largest park at Oceanfront - no cost to construct/maintain
Furthers parking, hotel quality, gateway goals
Achieves Council's Destination Points
Implements approved Comprehensive plan
Supports resort area Concept Plan
Redevelopment catalyst
Returns VBDA land to tax rolls
*These funds equate to those necessary to build an elementary school, build Holland Road to a four-lane
divided highway, and eliminate 'half of the total backlog of roadway maintenance in the City.
COSTS AND CONSIDERATIONS
Issuance of debt for Sandier Property and Parking Deck
Risk of greater-than-expected losses in garage
Success of hotel
May advance traffic management plans (CIP)
Benefits accrue over time
May involve discussions with private lender
Will require patience and diligence to see through to completion
September 15, 1998
~em IV
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ITEM # 44070 (Continued)
Mr. Block introduced E. Pope Bullock, Architect - Cooper Carry.
Mr. Bullock, with the utilization of slides, shared the concept and vision of a 300-room, four-star, fulloservice
hotel. Mr. Bullock advised Cooper Carry is an Atlanta based architectural firm. He is in charge of the
Hospitality Group and has spent approximately fifteen years designing and constructing hotels which
includes 15 Marriott 's. Cooper Carry has become a specialist in public/private ventures in the hospitality
industry. His firm works up and down the Eastern Seaboard and is experienced with all the national flags,
specializing in 4-star, 5-star luxury hotel properties. Cooper Carry was involved with the Norfolk Waterside
Marriott. This is a public-private venture. Mr. Bullock displayed a schematic drawing for a project for
downtown Portsmouth, Virginia, which is currently in working design and will be flagged as a Wyndam or
Renaissance Hotel. Mr. Bullock displayed examples of other resort hotels. All of the world class hotels have
some type of post card image, a distinctiveness in the architecture which says something about the people
who live there. The spaces around buildings are as important as the buildings themselves. The City has a
tremendous opportunity because of the park and the space along Atlantic Avenue between 30'h and 3 Pt Street
that can be captured and defined, not just as another thoroughfare along the Atlantic but to create a piazza,
a civic space. Mr. Bullock displayed the site with Laskin Road being the new "Gateway" to Virginia Beach,
on the north side. The south side of the site is surrounded by 30~, east by Atlantic and north by Pacific. The
hotel will be oriented towards the water. The public spaces, the conference spaces and the guest rooms are
all oriented toward the water. The sense of arrival is very important. There is no backside. This is a site with
a park on one side, a street on another and access ways on either side. The conceptional design of the
building has been organized with "active" edges. The space between the buildings becomes a civic space
as well as the park. The parking deck is to be viewed as a building. There has been a great deal of care in
the design to conceive a parking deck that does not say parking deck but becomes a responsible piece of
urban architecture and frames the other side of the civic space. The parking deck is surrounded by 26,000
square feet of retail. The deck has multiple points of access. The hotel, parking deck and the design of the
piazza become one space. Guest rooms are organized so everyone has a water view. The guest room tower
is 199' 6" tall, just below the 200-foot zoning litnitation.
Mr. Block cited the NEXT STEPS:
Approve Term Sheet
Public Hearing/Ordinances/
Property Acquisition
RFP for Retail Space Lease
Development Agreement
Developer Financing/Approvals
Land Use Approvals
Design Completion
Construction Start
Opening
Today
October
October
November
Jan/Feb 99
Jan/Feb 99
Spring 99
1999
2000
Attorney Thomas R. Frantz, Clark and Stant, expressed appreciation on behalf of Messrs Thompson and
Ruffin, Professional Hospitality Resources, the Thirty-First Street, L. C. and their senior staff, most of whom
are in attendance. They were grateful for the opportunity to work with Council Members Jones, Harrison,
City Manager James Spore, City Attorney Leslie Lilley, Assistant City Attorney Gary Fentress, E. D. Block
and C. Oral Lambert, as well as other city staff. This is a true public-private partnership that is embraced
by both sides. The Saturday after the Hurricane, Councilman Harrison came by Attorney Frantz's house,
which was withoutpower. They reviewed the Term Sheet, paragraph byparagraph. This is the level of effort
which has encompassed this project. Yesterday, Professional Hospitality Resources received a very
enthusiastic letter from Marriott, which is one of many franchises they will consider. Marriott International
is very excited about the possibility of this proposed new hotel and believes this would be a wonderful
compliment to their system.
The document requires that all components of the project be complimentary to a four-star national hotel.
The restaurants will be complimentary to the overall theme of the project.
September 15, 1998
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Item IV
ITEM Ib14070 (Continued)
Upon motion by Councilman Jones, seconded by Councilman Harrison, City Council ADOPTED:
Resolution to authorize the City Manager to execute a Development Term
Sheet between Thirty-first Street, L.C., The Virginia Beach Development
Authority and the City of Virginia Beach.
Voting: 9-1
Council Members Voting Aye:
Linwood O. Branch, III, William W. Harrison, Jr., Harold Heischober,
Barbara M. Henley, Louis R. Jones, Reba S. McClanan, Mayor Meyera
E. Oberndorf , Vice Mayor William D. Sessoms, Jr. and A. M. "Don"
Weeks
Council Members Voting Nay:
Nancy K. Parker
Council Members Absent:
Margaret L. Eure
September 15, 1998
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A RESOLUTION AUTHORIZING THE
CITY MANAGER TO EXECUTE A
DEVELOPMENT TERM SHEET
BETWEEN THIRTY-FIRST STREET,
L.C., THE VIRGINIA BEACH
DEVELOPMENT AUTHORITY AND
THE CITY OF VIRGINIA BEACH
WHEREAS, the Virginia Beach Development Authority ("Authority") is the owner
of a 1.03 acre parcel of land located on the oceanfront between 30th and 31st Streets in the City of
Virginia Beach;
WHEREAS, the Authority, following a competitive RFP process, has selected
Thirty-First Street, L.C. as its development partner to construct a four-star, full-service hotel and a
public park complex on the property;
WHEREAS, the Authority and Thirty-First Street, L.C. have prepared and presented
to the City Council a development proposal ("Term Sheet") which outlines the proposed
development and the responsibilies of the parties, including the City of Virginia Beach;
WHEREAS, the City Council finds that the proposed development will stimulate the
City's economy, increase public revenues, enhance public recreational amenities and further the
City's development objectives for the 30th and 31st Street corridors;
WHEREAS, the City Council desires the Authority and the City to pursue the
development project with Thirty-First Street, L.C. as described in the Term Sheet.
THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
VIRGINIA BEACH, VIRGINIA:
1. The City Manager is authorized to execute the Term Sheet in form and
substance substantially as attached hereto.
2. The City Manager and the City Attorney are directed to have prepared a
Development Agreement and related documents which are necessary to pursue the development
project identified in the Term Sheet.
3. The City Manager is directed to prepare and release an RFP for the lease of
the 26,000 square feet of retail space as described in the Term Sheet.
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4. The City Manager is directed to prepare and schedule for Council's action the
ordinances necessary to appropriate funds and to authorize the acquisition of property needed for the
project, and to schedule all necessary public hearings in connection therewith.
5. The Authority is requested to approve the project and to execute the Term
sheet.
September
Adopted by the Council of the City of Virginia Beach, Virginia, on the __
., 1998.
15 day of
CA-7145
Ordin/noncode/31 st.res
R-1
Prepared: 9/9/98
APPROVED AS TO CON.TENTS:
APPROVED AS TO
LEGAL SUFFICIENCY:
w Department
TERM SHEET-31sTSTREETDEVELOPMENT
Subject to the Agreement of the Parties
September l, 1998
I. THE OCEANFRONT LAND ACQUISITION
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City closes stub streets, 31~ Street and northern ½ of 30~ Street, and conveys to
VBDA.
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VBDA will acquire the SAS parcel via Developer's assignment of contract. No
commissions are due and none will be paid by City or VBDA.
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VBDA assembles the parcels (closed streets, SAS, and VBDA parcel) and leases
such parcels plus the parking spaces described in paragraph VI.B below to
Developer pursuant to a lease or leases ("Lease") for a term of 65 years, on the
following rent schedule, which shows the total rental for both the parcel described in
this paragraph C and the rent for the parking spaces described in paragraph VI.B:
Lease Years
1-3
Combined Rent Schedule for
Hotel and Parking Spaces
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Fixed Yearly Rent: $100,000
plus
Additional Rent equal to a yearly payment
of 2% of annual Rooms Revenue ("Rooms
Revenue") shall be the total gross revenue
received for rental of hotel rooms during the
12-month period beginning on the Rent
Commencement Date of the Lease and each
anniversary thereof) over $8,200,000, not to
exceed a total additional yearly rent of
$25,000 to continue through additional lease
4-6
7
8-10
11-20
21-65
years until the total of Additional Rent
reaches $125,000.
Fixed Yearly Rent: $400,000
Fixed Yearly Rent: $450,000
Fixed Yearly Rent: $550,000
Fixed Yearly Rent: $510,000
Fixed Yearly Rent: $510,000
plus
A yearly payment equal to 2% of the then
annual Rooms Revenue over the Rooms
Revenue for the 20th year of the Lease.
There will be no cap on this 2% amount.
"Rent Commencement Date" is the later of 1 ~ day of July following hotel opening
or the delivery to Developer of all parking spaces to be leased by Developer.
Developer pays all ad valorem taxes. At the end of 65 years, unless the Lease is
extended on terms mutually agreeable to the parties, the VBDA will purchase,
subject to appropriation, the unamortized interest in the hotel improvements based
on GAAP accounting. Provided that any capital improvements undertaken after
year 40 of the ground lease must be reasonably acceptable to and approved by the
VBDA.
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Developer, by appropriate legal means (e.g., sublease or easement) consistent with
the proposed development, conveys residual of the assembled parcel which lies
outside of the private use portion of the property, at no cost to City. This area when
combined with the existing public "green-belt" area will create an oceanfront park
which will preserve and enhance vistas along 31 ~ Street.
Developer donates $1 million to be placed in escrow at commencement of
construction of the project for the construction and landscaping of a park complex
and required open spaces on the assembled parcel. The park plans shall be a
mutually acceptable design. Interest accruing on funds will be utilized for enhanced
park development. Any residual mounts from the construction of the park and its
amenities will remain in escrow for expenditures for periodic capital-type
improvements or replacements.
II. THE OCEANFRONT DEVELOPMENT
Developer agrees to construct a four star, full service hotel, franchised with a major
national hotel franchise (such as Marriott, Wyndam, Inter-Continental, Hyatt,
Westin, etc.), including approximately 300 rooms (dependent upon density
permitted by zoning), approximately 14,000 sf of conference space, and restaurants
comparable with the quality of the hotel of approximately 14,000 sf.
Developer to construct a DQ type restaurant on a separately created site on the
assembled parcel, to include public restrooms under similar provisions for public
restrooms at the 17t~ Street park. The DQ to be aesthetically compatible with the
hotel. Subject to approval of the appropriate body and within an area to be defined,
parking in front of the DQ of at least 17 spaces, but not to extend into the closed 3 l~t
Street right-of-way, to be included.
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Developer agrees to construct the park complex according to a mutually agreed
master plan for the park improvements, which plan shall include the adjoining
public green-belt area, using the $1 million donated to the City for that purpose and
any interest earning on that sum.
There will be no construction management fee for development of the Park.
Direct out-of-pocket reimbursement for expenditures necessary to the
administration of the park construction contract and bookkeeping and
accounting will be paid from the escrowed funds.
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The Developer shall not be responsible for park-type improvements in the
green-belt area which may be a part of the Hurricane Protection Project
(HPP).
Developer will coordinate park improvements which are compatible with
the HPP, unless otherwise agreed between the parties.
City will use its best efforts to coordinate construction of the HPP consistent
with the Oceanfront Development and other existing boardwalk
improvements currently in place. However, inability of the City to cause
such coordination of the construction shall not diminish the obligations of
the Developer.
Developer further agrees to maintain the entire public park, including "green-belt"
areas, and restrooms in keeping with the provision of the RFP and in no event less
than the standards developed for the 17~ Street park, for so long as the hotel and/or
DQ style restaurant are permitted uses on the site.
Developer to have affirmative duty to provide and manage entertainment at the park
entertainment venues at no cost to the City for so long as the hotel is operating.
Entertainment shall be selected and scheduled at least 30 days prior to Memorial
Day each year and the City shall have prior approval of such schedules and artists
selected. Schedules shall be comparable to those approved by the City for other
oceanfront/boardwalk park venues.
Note: This provision may be changed should Developer desire a 5-year franchise or
to participate in a competitive process for a long-term franchise or should the parties
agree to locate the entertainment venues west of the green-belt area adjacent to the
boardwalk.
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VBDA to cause to be provided all public utilities at the border of the site.
Developer is responsible for all normal and customary fees including connection
fees; the only exception will be the public utilities for the park site and public
restrooms.
IlL THE OCEANFRONT LAND USE APPROVALS
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VBDA to prepare at its cost and seek preliminary approval of a resubdivision plat
for the resubdivision of the VBDA parcels, incorporating the SAS site, vacating
internal lot lines, and describing the restaurant parcel for the DQ type restaurant.
Developer at its cost to seek all necessary land use approvals including, but not
limited to, zoning, variance and site plan/building permit approvals.
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Proffers or other land use approvals or restrictions shall affirmatively require the
Developer to maintain the public park and restrooms as previously set forth.
IV. THE PARKING GARAGE SITE
City will acquire all property in the block on the west side of Atlantic Ave. bounded
on the north and south by 31~ and 30~h Streets and on the east and west by Atlantic
Ave. and Pacific Ave.
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Acquisition will be for the construction of a municipal parking facility and will be
by purchase or condemnation.
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The Barracuda Bob's site owned by some interests common to the Developer will
be acquired in the same manner of other properties. The Developer and City
agree that the City will enter into an agreement to purchase the Barracuda Bob's
site subject to usual terms and conditions and
entering into the ground leases described herein.
site will be established by the following method:
further subject to the Developer
The price of the Barracuda Bob's
1. The City will select an appraiser.
The Developer will have the reasonable right to approve the appraiser
selected.
3. The report of the appraiser will establish the price to be paid by the City.
To the extent that the appraised fmv price exceeds $1,500,000, the combined lease
payment shown in paragraph I.C will be increased during years 1-20 to allow City
to recover a pro-rated portion of such excess above $1,500,000 based on City's cost
of capital. ("Cost of capital" is defined as that percentage factor [constant] required
to pay both principal and interest over the 20-year life of the debt.) The prorated
portion will be paid only during years 1-20 of the lease and will be based on
380/800.
The City will move to gain right-of-entry onto the parcels comprising the garage site
as soon as possible and will be responsible for providing parking in accord with the
schedules to be agreed upon.
V. THE PARKING GARAGE DEVELOPMENT
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VBDA will cause to be designed and constructed on behalf of the City a municipal
parking facility of at least 800 spaces and a multi-modal transportation center,
including private valet and public trolley.
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Architectural design will be similar to and compatible with the Developer's hotel.
Developer will have the right to review and comment upon the parking garage
plans, which will include the plans for the retail space. VBDA will use best efforts
to incorporate Developer's comments.
Construction of the facility must be completed consistent with a schedule agreed
upon by the Developer and VBDA, but not later than the date of the opening of the
hotel·
Development will include designated parking spaces and lanes to be dedicated to
hotel, conference and themed restaurant development for ingress and egress.
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Development will include approximately 26,000 sf of shell space available for retail
development.
An overhead walkway connecting the garage and the park, beaches and providing
access to the hotel will be constructed by VBDA at its expense as a part of the
garage. Its design will be compatible and will complement the hotel and garage
design.
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City will provide streetscape improvements along 30~h and 31st Streets and along
Atlantic Ave. adjacent to the parking garage consistent with agreed upon plans and
overall "gateway" level improvements.
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VI. THE PARKING GARAGE OPERATION
VBDA will either manage and maintain the facility or employ services of a parking
facility management company. The parking facility will be operated in a manner
and on a schedule to complement a high-end mixed use development and to service
the private valet, public trolley and public self-parking requirements of the facility.
The parking facility will be open 24 hours a day to hotel guests and employees.
Developer will lease 380 spaces (or that number required by City ordinances to
satisfy development needs) of the facility for a sixty-five year period. The rent will
be as shown on the Combined Schedule for Hotel and Parking Spaces contained in
paragraph I.C. Rent commences upon the later of July 1 following the opening of
the hotel or the delivery to Developer of all parking spaces to be leased by
Developer. Developer pays any applicable City ad valorem taxes applicable to the
parking spaces leased by Developer.
The approximately 26,000 square feet of retail shell space to be constructed on the
parking facility parcels shall be leased following an RFP process by the VBDA or
the City, as described in paragraph VII.B below. The parties recognize the critical
importance of the high quality retail usage to the success of the project. In this
regard, the City will place reasonable restrictions on all shell space and conduct the
RFP process as to assure high quality retail usage compatible with and
complementary to, the construction and operation of the hotel, restaurants and the
park.
At such time as the parking facilities become insufficient to support the activities
which are a part of this development, defined as the parking facility being at 100%
occupancy for more than five (5) hours per day for 60 days in any 12-month period
of operation, the City will, subject to appropriation of sufficient funds for the
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purpose by the City Council, proceed with the addition of one floor (approximately
200 spaces) to the parking garage.
VII. THE GENERAL TERMS
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Developer will pay a deposit of $170,000 at execution of development agreement
("Development Agreement"), which stun together with interest accrued thereon
("Deposit"), upon performance and satisfaction of conditions to Closing, will be
applied to Developer's lease payments. The Developer will receive a refund of the
Deposit, if the Developer terminates the Development Agreement under paragraph
VII.B or VII.C.
Upon approval of this Term Sheet by the City and the VBDA, the VBDA and/or
City shall issue a request for proposal ("RFP") to lease approximately 26,000 sf of
retail space in the parking garage and will use best efforts to award a retail space
lease pursuant to the RFP by December 1, 1998. Further, upon approval of this
Term Sheet by the City and the VBDA, they shall engage Hunton & Williams to
prepare initial drafts of the Development Agreement, Lease and other definitive
agreements ("Transaction Documents") for submission to the Developer. The
parties shall work in good faith to finalize the Transaction Documents by November
1, 1998, and in all events by December 1, 1998. It is a condition of closing and
Developer's obligations hereunder that: (i) the high quality retail usage resulting
from the RFP award be compatible with the operation of a four star, full service
hotel and not impair Developer's investment requirements in its sole discretion, and
(ii) Developer obtain a commitment for a franchise for a four star, full service hotel
from a major national hotel franchise (such as Marriott, Wyndam, Intercontinental,
Hyatt, Weston, or the like) and financing for the hotel on terms and conditions
satisfactory to Developer within a reasonable period (not to exceed 120 days) after
the latter of the retail lease award or the execution of the Development Agreement
of the parties. The Developer will use its best efforts to satisfy this latter condition
as soon as reasonably possible.
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The land use approval schedules and construction time schedules, as they relate to
this agreement, will be developed mutually between the parties. To the extent
permitted by law they will be binding upon the parties. For purposes of this
agreement land use approvals shall include all actions/approvals which must be
granted by the City Council, BZA, or Planning Commission, but shall not include
site plan/building permit approval or any other action to be taken administratively.
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Failure of Developer to perform its obligations after all land use approvals are
received and all conditions to Closing are .met will result in forfeiture of the Deposit
and will entitle the City and VBDA to pursue any other appropriate claims for
damages. Failure of the City and VBDA to perform their obligations after all land
use approvals are received and all conditions to Closing are met will entitle
Developer to pursue any other appropriate claim for damages.
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Upon Developer's request, VBDA will participate with the Developer in discussions
with the prospective primary lender, and in good faith will negotiate, as appropriate,
the terms of the lease on the land as to such matters as default provisions, sale of the
improvements and other terms. In no event will VBDA's fee interest in the real
estate be subordinated to any lien securing a loan to the Developer.
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It is the intent of the City and VBDA not to incentivize to any greater degree the
construction of a new oceanfront 4-star full service hotel for a period of 5 years
from the date of the agreement. However, any development involving the City or
the VBDA which emerges from the planned RFI/RFP process for a conference
center shall not be subject to this provision. Additionally, the award of
encroachments, exchange of land, settlement of boundary disputes or conveyance of
excess property arising in connection with the City's Hurricane Protection Project
shall not be subject to this provision.
The lease and zoning proffers will prohibit ownership or use of any improvements
on the assembled parcels in any form of condominium, timeshare or similar
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ownership or use arrangement, without the express written consent of the Virginia
Beach City Council.
This Term Sheet sets forth the preliminary understandings of Thirty-First Street, L.C., Virginia
Beach Development Authority and the City of Virginia Beach concerning the 31~ Street
development. The parties will not be obligated to complete the transactions contemplated by this
Term Sheet unless the Development Agreement is executed and delivered by all parties and then
only in accordance with the terms of the Development Agreement, the Lease and other definitive
agreements.
Signed in Virginia Beach, Virginia as of the 1 ~ day of September, 1998.
THIRTY-FIRST STREET, L.C.,
a Virginia limited liability company
By
Professional Hospitality Resources, Inc.,
Man~mbe _~_
CITY OF VIRGINIA BEACH
DEVELOPMENT AUTHORITY
CITY OF VIRGINIA BEACH
90370002
term sheet9-14-98
By:
Title:
11
Item V.
-8-
ADJOURNMENT
ITEM # 440 71
Mayor Meyera E. Oberndorf DECLARED the City Council's PUBLIC HEARING ADJOURNED at 4:18
P.M.
Chief Deputy City Clerk
City Clerk
Meyera E. Oberndorf
Mayor
City of Virginia Beach
Virginia
AFTER ADJOURNMENT, THE CITY COUNCIL RECONVENED IN THE CITY COUNCIL CONFERENCE
ROOM FOR A WORKSHOP RE JLARC REPORT, POLICE PURSUIT POLICY, BOARDS AND
COMMISSIONS REVIEW POLICY AND AMPHITHEATER (NOISE ANALYSIS & NEIGHBORHOOD
SUR VEY RESUL TS).
September 15, 1998