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HomeMy WebLinkAbout2013-12-8108163872 ORDINANCE NO. 2013-12-8108 AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY, APPROVING HOTEL DEVELOPMENT AGREEMENT AMONG THE CITY OF PADUCAH, KENTUCKY, PADUCAH CONVENTION HOTEL, LLC, DAVID M. PUCKETT, TODD M. CLARK, JOHN M. CLARK, DAVID B. JONES, GLENN R. MALONE, EDDIE CORLEY, AND GARRETT FORBES MATHIEU, WITH RESPECT TO A PUBLIC PROJECT; AUTHORIZING THE EXECUTION OF THE HOTEL DEVELOPMENT AGREEMENT AND OTHER DOCUMENTS RELATED THERETO WHEREAS, the City of Paducah, Kentucky (the "City") is the owner of certain real property situated along and near North 4t' Street and Executive Boulevard in downtown Paducah adjacent to a publically owned convention center, generally known as the Julian Carroll and Paducah Expo Convention Center (the "Convention Center"); and WHEREAS, the Board of Commissioners of the City of Paducah, Kentucky, have determined that it is necessary, appropriate, and in the best interest of the City to have designed, developed, constructed, operated, and managed on the City owned real property an upscale hotel to serve the Convention Center as well as the downtown business and tourism markets (the "Project"); and WHEREAS, the Board of Commissioners of the City of Paducah, Kentucky, have reached an agreement with Paducah Convention Hotel, LLC, a Kentucky limited liability company, David M. Puckett, Todd M. Clark, John M. Clark, David B. Jones, Glenn R. Malone, Eddie Corley, and Garrett Forbes Mathieu (collectively, the "Developer") for the development and construction of an upscale hotel and related improvements, and now the City and the Developer desire enter into a binding, formal "Hotel Development Agreement" which would incorporate the final terms for the development and construction of the hotel and related improvements. NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF PADUCAH, KENTUCKY, AS FOLLOWS: Section 1. Recitals and Authorization. The City hereby approves the Hotel Development Agreement among City and the Developer (the "Agreement") in substantially the form attached hereto as Exhibit A and made part hereof. It is further determined that it is necessary and desirable and in the best interest of the City to enter into the Agreement for the purposes therein specified, and the execution and delivery of the Agreement is hereby authorized and approved. The Mayor of the City is hereby authorized to execute the Agreement, together with such other agreements, instruments or certifications which may be necessary to accomplish the transaction contemplated by the Agreement with such changes in the Agreement not inconsistent with this Ordinance and not substantially adverse to the City as may be approved by the official executing the same on behalf of the City. The approval of such changes by said official, and that such are not substantially adverse to the City, shall be conclusively evidenced by the execution of such Agreement by such official. Section 2. Severability. If any section, paragraph or provision of this Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Ordinance. Section 3. Compliance With Open Meetings_Laws. The City Commission hereby finds and determines that all formal actions relative to the adoption of this Ordinance were taken in an open meeting of this City Commission, and that all deliberations of this City Commission and of its committees, if any, which resulted in formal action, were in meetings open to the public, in full compliance with applicable legal requirements. Section 4. Conflicts. All ordinances, resolutions, orders or parts thereof in conflict with the provisions of this Ordinance are, to the extent of such conflict, hereby repealed and the provisions of this Ordinance shall prevail and be given effect. Section 5. Effective Date. This Ordinance shall be read on two separate days and will become effective upon summary publication pursuant to KRS Chapter 424. Y ATTEST: City Clerk Introduced by the Board of Commissioners, December 10, 2013 Adopted by the Board of Commissioners, December 17, 2013 Recorded by City Clerk, December 17, 2013 Published by The Paducah Sun, December 23, 2013 /ord/agree-hotel development EXHIBIT A THE DEVELOPMENT AGREEMENT See attachment. EXHIBIT A 167900clean 12-9-13 HOTEL DEVELOPMENT AGREEMENT THIS HOTEL DEVELOPMENT AGREEMENT (this "Development Agreement or this Agreement") is made and entered into as of the day of December, 2013, by and between PADUCAH CONVENTION HOTEL, LLC, a Kentucky limited liability company, DAVID M. PUCKETT, TODD M. CLARK, JOHN M. CLARK, having an address of 1115 South 4d` Street, Louisville, KY 40203; DAVID B. JONES, GLENN R. MALONE, having an address of c/o Senate Hospitality Group, LLC, 9005 Overlook Blvd., Suite 119, Brentwood, TN 37027; EDDIE CORLEY, having an address of 9005 Overlook Blvd., Suite 119, Brentwood, TN 37027; and GARRETT FORBES MATHIEU, having an address 9005 Overlook Blvd., Suite 119, Brentwood, TN 37027, (collectively, jointly and severally, the "Developer"); and CITY OF PADUCAH, a Kentucky second class city having an address of 300 South 5t' Street, PO Box 2267, Paducah, KY 42002-2267 (hereinafter referred to as the "City"). WHEREAS, the City is the owner of certain real property situated along and near North 4t` Street and Executive Boulevard in downtown Paducah adjacent to a publically owned convention center, generally known as the Julian Carroll and Paducah Expo Convention Center (the "Convention Center"); and WHEREAS, the City, having previously purchased and razed a dilapidated hotel which was at one time located thereon; and WHEREAS, the City, and its local government partners, namely the Paducah - McCracken County Convention Center (the "PMCCC") and the Paducah Riverfront Development Authority (the "PRDA") have determined, after conducting various planning studies, geotechnical studies, and market analyses that the presence of a new hotel adjacent to the Convention Center will stimulate business for the Convention Center as well as the downtown business and tourism markets; and WHEREAS, the City desires to have developed and constructed on this city owned real property an upscale hotel which will be located adjacent to the Convention Center; and WHEREAS, the Developer desires to develop, construct, operate and manage the hotel and the Convention Center; and WHEREAS, the parties hereto understand that the City's goal is the delivery of an exciting, vibrant, and professionally designed hotel that serves the Convention Center as well as the downtown business and tourism markets; and WHEREAS, the parties hereto acknowledge that a great deal of preliminary work has been completed, and the parties do now desire to enter into a legally binding development agreement to facilitate the process and to assure that the parties understand their respective roles in the development and financing of the development and construction of the hotel; and WHEREAS, the parties also desire to induce the City and the Developer to proceed to the next step of negotiating and executing definitive agreements with the City and PMCCC for the planning, construction, use, occupancy, operation, management of the hotel and related improvements and the Convention Center. NOW, THEREFORE, in consideration of the foregoing premises, and for other valuable consideration, the legal adequacy and sufficiency of which is hereby acknowledged by all parties hereto, the City and the Developer do hereby agree as follows: The City Manager has been directed and authorized by the Paducah City Commission to deliver this Development Agreement on behalf of the City as its offer to the Developer. If the Developer chooses to accept this offer it shall execute and deliver this Development Agreement to the City on or before December 20, 2013, and simultaneously thereto the Developer shall execute and deliver to Independence Bank (the "Bank") the Commitment Letter of the Bank dated November 27, 2013. By its signature on this Development Agreement, the Developer irrevocably accepts the terms of this Development Agreement and agrees to be bound by it. In the event, the Developer fails to timely accept this offer as required herein, this offer shall expire. This Development Agreement shall become effective upon its execution by all parties and shall expire on April 30, 2014 (the "Term") (unless the parties agree in writing to an extension of this date), unless the Conditions Subsequent set forth in Section 6 of this Development Agreement are satisfied, in which case this Development Agreement shall continue in force and effect for the same term as any definitive lease or other agreement for the use and occupancy of the hotel and the City's real property (as more particularly defined herein) entered into by and between the City and the Developer pursuant to this Development Agreement. 2. The City and the Developer acknowledge and agree that the Developer shall develop and construct an upscale brand hotel franchised by a major hotel chain with the specifications described in this Section 2 (the "Hotel"). The Hotel shall be not less than 120 hotel rooms for transient occupancy. The construction type shall be of a composite structural steel -concrete and have no fewer than six occupied stories. The Hotel will have amenities attractive to visitors including, at least, a 50 seat restaurant and full service bar. The restaurant will be open for breakfast, lunch, and dinner. It will also include a pool, fitness center, and business center and meeting spaces. The major thematic qualities of the hotel design must be approved by PRDA. 3. The City and the Developer acknowledge and agree that the Hotel shall be developed and constructed upon a certain tract of real property owned by the City located at 600 North 4th Street, Paducah, McCracken County, Kentucky, consisting of +/- 1.4 acres (the "Property") and is more particularly shown as Tract I on Exhibit A. Tract II as shown on Exhibit A is a portion of 1 Executive Boulevard and is +/- 1.0 acres and will be used for surface parking only in connection with the Hotel as described in Section 5 (c). The Developer may have a non-exclusive license to use areas immediately adjacent to the Property and Tract II, portions of which may be within the City's floodwall right-of-way, for purposes of surface sidewalks, parking, and circulation aisles. These areas may not be used for any permanent structure(s). 4. The parties acknowledge and agree that the following are the Developer's commitments for capital improvements and/or expenditures in connection with the development of the Hotel or for such other matters as set forth below (the "Investment Commitments"): a. To engage and hire on or before December 20, 2013, the services of architects, engineers, interior designers and other consults necessary to develop and deliver to the City a concept plan for the Hotel on the Property and the Non -Hotel Improvements (as defined in Section 5 (c)). This concept plan shall be provided to the City on or before January 24, 2014. b. To engage, hire, and obtain a fully executed written agreement with a contractor for the development and construction of the Hotel and the Non -Hotel Improvements on or before March 28, 2014. C. To fully satisfy the Investment Commitments by the Developer committing to expend under this Development Agreement and the definitive agreements contemplated herein a minimum of $17.5 million in the development, construction, and equipping of the Hotel on the Property and the Non -Hotel Improvements on Tract II. d. To have the Hotel fully operational and open for occupancy by no later than June 1, 2015. e. To execute and deliver to Independence Bank (the "Bank")simultaneously with this Development Agreement, the Commitment Letter of the Bank dated November 27, 2013, and to diligently complete and fully satisfy the conditions for construction/permanent financing with the Bank as set forth in the aforesaid commitment letter.. The aforesaid construction/permanent financing is necessary in order to fund the Investment Commitments. f. To diligently complete and submit its application to the Kentucky Tourism Development Commission for sales tax credits issued pursuant to the Kentucky Tourism Development Act on or before December 20, 2013, and receive written acknowledgement from the Kentucky Tourism Development Commission that the Developer has been awarded the aforesaid sales tax credits on or before April 15, 2014. Further, the Developer shall unconditionally assign the sales tax receipts to the City as security for lease payments to be made by the Developer for the improvements to be financed with the proceeds of the taxable general obligation bonds issued by the City under Section 5(e)(i) of this Agreement. The Developer agrees to promptly apply the sales tax credits as they are collected to the payment of the lease payments. g. To obtain and maintain all licensing, permitting and certification requirements for the lawful construction of the Hotel and the Non -Hotel Improvements and operation of the Hotel, including but not limited to, all City development and zoning ordinances and policies, Army Corps of Engineers permitting, and such other federal, state and local agency licensing, demolition, construction, permitting or certification requirements as are necessary for alcoholic beverage service, food service, construction, operation and maintenance and the overall public health (collectively, "Governmental Permits"). h. Develop, construct, and operate the Hotel on the Property in conformity with all applicable laws and regulations. i. Provide, at their expense, written reports reasonably satisfactory to the City of the Developer's progress in satisfying the Investment Commitments. Such reports shall be certified as accurate by the Developer. The City reserves the right to require any reasonable verification procedures or process. j. Provide, immediately upon execution of this Agreement, balance sheets and income statements for the past three (3) consecutive years, as well as the management -prepared financial statements for the past three (3) consecutive years (the "Financial Statements"), which will fairly represent the financial conditions of the Developer. The Financial Statements shall be considered confidential and shall not be disclosed to any third person or entity, unless required by law or order of a court of competent jurisdiction to disclose same. k. Negotiate and execute definitive management and/or operational agreements with PMCCC to operate the Convention Center on or before January 17, 2014. 1. To provide evidence to the City that the development and construction of the Hotel is secured by proper performance and payment bonds in an amount sufficient to ensure satisfactory completion of the Hotel and the Non -Hotel Improvements by Developer's contractor(s). in. To secure, at their sole cost and expense, comprehensive commercial general liability insurance covering the development and construction of the Hotel on the Property and the Non -Hotel Improvements on Tract II in an amount agreeable to the City Manager, or his designee. Insurance shall be with a reputable insurance company, which policy shall name the City of Paducah as an additional insured. The Developer shall obtain all workers' compensation insurance required by applicable statutes. The certificates of insurance shall be presented to the City upon taking possession of the premises. n. To relocate, at their sole cost and expense, all utility lines and facilities necessary for the development and construction of the Hotel and Non -Hotel Improvements. o. To promptly pay when due real property taxes, personal property taxes, and any and all other governmental levies, assessments or taxes of every kind and nature whatsoever, which are assessed, levied, imposed upon, or would become due and payable out of or with respect to the Property, the Hotel, or any personal property, equipment or other facility used in the operation of the Hotel; and any charges for utilities, communications and other services rendered or used in or about the Hotel, the Property, and the Non -Hotel Improvements. P. Negotiate and execute definitive agreements with the City as to the planning construction, use, and occupancy of the Property, Tract II, and the Hotel on or before March 14, t - 2014, including without limitation, the lease agreement by and between City and the Developer for the improvements to be financed with the proceeds of the taxable general obligation bonds issued by the City under Section 5(e)(i) of this Agreement. q. Negotiate and execute a repayment agreement with the City whereby the Developer promises and agrees to repay to the City $500,000.00 of the City's cash investment in the Hotel and Non -Hotel Improvements. The Developer agrees that the $500,000.00 repayment shall be paid unto the City in successive monthly installments over a period equal to the term of the Industrial Revenue Bonds as set forth in Section 5(e)(ii), with the first monthly installments to be made upon the issuance of the certificate of occupancy for the Hotel. In the event the Hotel is deemed exempt from ad valorem taxes, these repayments shall be made "in lieu of tax payments" pursuant to KRS Chapter 103. 5. The parties acknowledge and agree that the following are the City's commitments in connection with the development of the Hotel: a. Transfer long-term use and occupancy of the Property to the Developer by sale or lease for a nominal sum and upon such other terms as are mutually agreeable among the parties. This transfer is contingent upon the Developer satisfying the Investment Commitments and the Conditions Subsequent set forth in Section 6 of this Development Agreement. b. Lease unto the Developer Tract II, for a term concurrent with the term of the Lease specified in paragraph 5(a) above, for purposes of surface parking at a nominal annual cost and upon such other terms as are mutually agreeable among the parties. This lease is contingent upon the Developer satisfying the Investment Commitments and the Conditions Subsequent set forth in Section 6 of this Development Agreement. C. To reimburse the Developer for all reasonable and necessary expenses up to an amount not to exceed $900,000.00, in connection with the development and construction of (i) a +/-70 car surface parking lot on Tract II for the exclusive use by the Developer in connection with the operation with the Hotel (surface parking lot does not include landscaping, lighting or ornamental features), (ii) a pedestrian bridge with a staircase over the floodwall linking the Hotel to the Conventions Center and an elevator dedicated to serve the pedestrian bridge to and from the Hotel, and (iii) a rear entrance connecting the surface parking lot on Tract II through the flood wall to the Hotel; and, if any reimbursement is remaining after items (i) through (iii) aforesaid, then to (iv) kitchen improvements within the Convention Center as shown on Exhibit B. (These improvements shall be collectively referred to as the "Non -Hotel Improvements"). The City's commitment to reimburse the Developer as provided in this Section for these items of Non -Hotel Improvements shall be contingent upon the Developer satisfying the reporting and verification requirements set out in Sections 4 (i) and 0), the Conditions Subsequent set forth in Section 6 of this Development Agreement, and the Developer's negotiation and execution of a repayment agreement with the City in accordance with the terms set forth in Section 4(q) above. d. To the extent permitted under applicable law and without compromising public health, safety and welfare, take reasonable actions (subject to the City's rules and regulations and applicable law) to facilitate the construction of the Hotel. The City may also in its discretion grant waivers that are lawfully permitted to be granted, and may waive permit, inspection, and building inspector fees and zoning, and platting fees. e. To aid and/or participate in the financing necessary for the development and construction of the Hotel by the Developer as follows: (i) Issuance of taxable general obligation bonds to fund a portion of the costs of improvements related to the Hotel in a maximum principal amount equal to $4,000,000.00. Such amount, together with interest thereon (at the interest rate established for the bonds following advertised, competitive sale) to be retired from lease payments to be made by the Developer for the improvements financed with the general obligation bonds. The lease payments shall be payable by the Developer first from the sales tax credits awarded to the Developer under the Kentucky Tourism Development Act, and second from any other available funds of the Developer; provided, however, the issuance of general obligation bonds is expressly conditioned upon (1) the award of the tax credits and the Developer's unconditional assignment of the credited sales tax receipts to the City as security for lease payments to be made by the Developer for the improvements to be financed with the proceeds of the general obligation bonds and (2) the granting of a subordinated security interest in the Property, Hotel and Tract II in favor of the City pursuant to the terms of the lease agreement, subject only to any priority security interest therein granted to the Bank in connection with construction/permanent financing to be provided by the Bank. The Developer agrees to promptly apply the sales tax credits as they are collected, together with other available funds of the Developer, to the payment of the lease payments. (ii) Issuance of Industrial Revenue Bonds for a term up to twenty-five (25) years at the sole cost of the Developer in accordance with KRS Chapter 103. The bonds shall be limited and special revenue bonds of the City and neither the full faith or credit nor the taxing power of the City shall be pledged to the payment of such bonds. f. To establish and administer an account with the Bank to be utilized as a Hotel Occupancy Stabilization Fund to the Developer (the "Fund"). The City shall agree to deposit the Fund Contribution of City (as defined herein) into the Fund upon the issuance of the certificate of occupancy for the Hotel. The Developer shall agree to deposit the Fund Contribution of Developer (as defined herein) into the Fund upon the issuance of the certificate of occupancy for the Hotel. The Fund shall provide financial assistance to the Developer, if needed, in accordance with the following provisions: (i) Definitions. For purposes of calculating assistance provided through the Fund, capitalized terms not otherwise defined shall have the following meaning: "MonthlyRevPar" means the monthly revenue per available hotel room. The MonthlyRevPar is a performance metric in the hotel industry, which is calculated by multiplying the hotel's average daily room rate ("ADR") by its monthly occupancy rate ("OCC"). For example: $70.00 ADR x 70% OCC = $49.00 MonthlyRevPar. "ADR" means the Hotel's average daily room rate. ADR is determined in accordance with generally accepted accounting and business practices. "Fund Period" means the first sixty (60) months of the operation of the Hotel by the Developer, which shall commence upon the issuance of the certificate of occupancy for the Hotel. "Occupied" shall also include those rooms where a guest may have lodged on a "no charge," "comp," "exchange," "gratuity," or similar basis. "Monthly Assistance" means any payment made to the Developer from the Hotel Occupancy Stabilization Fund, as described herein. "Fund Contribution of City" means the $300,000.00 which the City agrees to deposit into the Fund account. "Fund Contribution of Developer" means the $200,000.00 which the1 Developer agrees to deposit into the Fund account. (ii) Purpose. To provide financial assistance, not to exceed $500,000.00 during the Fund Period, to the Developer in order for the Developer to meet certain debt obligations. (iii) Monthly Financial Assistance. If, in any calendar month during the Fund Period, the Developer's MonthlyRevPar falls below $74.00, the Developer, upon written request to the City, may seek financial assistance from the Fund to meet certain debt obligations. The debt obligations shall be acceptable to the City in its sole discretion and shall be directly related to the operation of the Hotel. The assistance shall be an amount to bring the Developer's MonthlyRevPar, in any given calendar month during the Fund Period, up to $74.00, which amount shall be calculated according to a mutually agreed upon formula to be more particularly described in the definitive agreements to be negotiated between the City and the Developer. However, the maximum aggregate amount of financial assistance which may be provided from the Fund to the Developer during the Fund Period shall not exceed $500,000.00. Further, Monthly Financial Assistance shall be first paid out of the Fund Contribution of Developer, and then from the Fund Contribution of City. (iv) Monthly Reporting/Payment. For each month during the Fund Period, the Developer shall provide the City a monthly report identifying: (i) the MonthlyRevPar; (ii) the ADR; and (iii) the Monthly Assistance Payments requested from the Fund. Each month's report shall be submitted to the City no later than the 20d, day of the following month. Monthly Assistance Payments due to the Developer shall be paid within 10 days of submission of the monthly report to the City. (v) Repayment of Monthly Assistance Payments. All Monthly Assistance Payments from the Fund Contribution of the City shall accrue interest, from the date paid by the City from the Fund until and including the date repaid at a rate of three percent (3%). All Monthly Assistance Payments together with interest shall be repaid by the Developer as follows: (a) During the Fund Period, payment shall be made to the City for deposit into the Fund, if, in any month during the Fund Period, the Developer's MonthlyRevPar exceeds $74.00. Developer shall pay to the City for deposit into the Fund the excess above the $74.00 MonthlyRevPar up to the cumulative amount of all Monthly Assistance Payments previously advanced to the Developer plus accrued interest. Repayment by the Developer shall be applied first to any accrued unpaid interest, then to the Fund Contribution of the City, and lastly to the Fund Contribution of Developer; and (b) Upon expiration of the Fund Period, all monies remaining in the Fund shall be disbursed to the City up to an amount equal to the Fund Contribution of City T-- - together with interest. In the event the remaining monies in the Fund are not sufficient to fully reimburse the City for the Fund Contribution of City together with interest, the Developer shall pay directly to the City the unpaid balance of the Fund Contribution of City together with interest in twelve (12) equal consecutive monthly installments beginning the month after the expiration of the Fund Period. In the event there are monies remaining in the Fund after the satisfaction in full of the Fund Contribution of City together with interest, these monies shall be paid to the Developer. In the event the Developer fails to pay and satisfy any monthly installment within thirty (30) days following the due date, such failure shall constitute an event of default, in which event, the holder thereof shall have the right to declare the entire unpaid Monthly Assistance Payments together with accrued interest and costs of collection, including attorney's fees, if any, to be immediately due and payable, and shall have the further right to make written demand upon the Developer for full payment of same. All Monthly Assistance Payments paid from the Fund shall be evidenced by commercially reasonable loan documents and shall be secured by a secured interest or lien in the Developer's interest in the Hotel and all fixtures, furnishings, equipment, and other personal property used by the Developer at the Hotel. Commercially reasonable loan documents may include without limitation, a promissory note, mortgage, leasehold mortgage, and UCC financing statements all of which shall be executed prior to the payment of the first Monthly Assistance Payment. g. City Covenant. As an incentive and an inducement to the Developer to develop, construct, operate and manage the Hotel and to aid in the Developer's financing of the Hotel, the City shall not offer Economic Incentives within the Downtown Market Area to any Hospitality Project for a period of two (2) years commencing with the execution of this Development Agreement; provided, however, the Developer is not in default of any obligation under this Agreement, any mortgage encumbering the Property and/or the Hotel, any obligation to any lender providing financing to the Hotel, and any obligation to PMCCC. For the purpose of this section only, the following definitions shall apply: L Hospitality Project — Shall mean any project, building or facility that is intended for the rent or occupancy of a suite, room, or rooms, charged by all persons, companies, corporations, or other like or similar persons, groups, or organizations doing business as motor courts, motels, hotels, inns, or like or similar accommodation businesses. This shall not apply to an owner occupied bed and breakfast business consisting of eight (8) or fewer guest rooms, or the rental or leasing of an apartment supplied by an individual or business that regularly holds itself out as exclusively providing apartments. Apartment means a room or set of rooms, in an apartment building, fitted especially with a kitchen and usually leased as a dwelling for a minimum period of thirty (30) days or more. ii. Downtown Market Area — Shall mean an area lying between HC Mathis Drive on the north; Broad Street on the south; 28th Street on the west and the Ohio River on the east; less and except the Irvin Cobb Hotel located at 600 Broadway, all as shown on Exhibit C. iii. Economic Incentive — Shall mean a grant, provision, or transfer from the City of Paducah, or other agency of the City designed to induce or spur economic development within the Downtown Market Area, that may consist of land transfers below fair market value, cash assistance, loans, grants, tax relief and other similar forms of financial assistance. 6. Conditions Subsequent. The obligations of the City as set forth in this Development Agreement are contingent upon the following (unless waived by the City): a. The City's ability to obtain financing for the construction of the Non -Hotel Improvements on terms reasonably acceptable to the City. b. The Developer's execution and delivery to Independence Bank (the "Bank") simultaneously with this Development Agreement, the Commitment Letter of the Bank dated November 27, 2013, and to diligently complete and fully satisfy the conditions for construction/permanent financing with the Bank as set forth in the aforesaid commitment letter. C. The Developer providing written assurances, to the sole satisfaction of the City, that the Developer has obtained all funding for the Investment Commitments as set forth in Section 4 herein; and that the Hotel will proceed and has the potential to generate the required new public revenue to finance the repayment of the Industrial Revenue Bonds and the tax credits granted by the Kentucky Tourism Development Act. d. The Developer's completion and submittal of its application to the Kentucky Tourism Development Commission for sales tax credits issued pursuant to the Kentucky Tourism Development Act on or before December 20, 2013. e. Receipt by the City on or before April 15, 2014 of written acknowledgement from the Kentucky Tourism Development Commission that the Developer has been awarded the sales tax credits issued pursuant to the Kentucky Tourism Development Act. f. The written engagement and hiring of the services of architects, engineers, interior designers, and other consults necessary for the design, development and planning of the Hotel and Non -Hotel Improvements on or before December 20, 2013. g. Receipt by the City of the, concept plan as set forth in Section 4(a) on or before January 24, 2014. h. The written engagement and hiring of the services of a contractor for the development and construction of the Hotel and Non -Hotel Improvements and delivery to the City of a fully executed written construction agreement on or before March 28, 2014. Definitive agreements are executed on or before March 14, 2014, by and between the Developer and the City as to the planning, construction, use, and occupancy of the Property, Tract II, and the Hotel. j. Definitive agreement is executed on or before January 17, 2014, by and between the Developer and the PMCCC as set forth in Section 4 (k). k. The Developer's continued ability to pay its debts when and as due, and avoid insolvency or any form of voluntary or involuntary bankruptcy. 7. Miscellaneous Provisions. The following miscellaneous provisions shall apply: a. Notices. All notices provided for herein will be in writing and addressed to the parties at the addresses as referenced above. b. Other Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available thereunder are in addition to and not a limitation of any duties, obligations, rights, and remedies, otherwise imposed or available by law.`, C. Assignment. The Developer shall not assign this Agreement without first obtaining the written consent of the City, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, the non-binding commitments provided in this Agreement shall be commitments upon the parties hereto, their heirs, successors, and assigns. d. Governing Law. This document shall, in all respects, be governed by the laws of the state of Kentucky. Venue shall be with the McCracken Circuit Court. e. Entire Agreement. This Agreement expresses the complete agreement of the parties and supersedes all prior written or oral agreements or understandings between the City and the Developer with regard to the matters addressed herein. The making, execution, and delivery of this Agreement by the parties hereto have not been induced by any representations, statements, warranties or agreements other than those expressly set forth herein. f. Amendments. This Agreement may not be modified or amended unless by writing signed by both parties hereto. g. Time. All times referred herein shall be strictly construed, as all of such times shall be deemed of the essence. Notwithstanding the foregoing, in the event of any reasonable delay or failure of the Developer to timely perform any of its obligations hereunder within the time period referred herein due to unforeseeable causes beyond its control and without its fault or negligence (force majeure), including, but not restricted to, acts of God, acts of a public enemy, unforeseen underground conditions, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, severe shortage of materials, unusually severe weather, acts of any governmental agency, or delays caused by the failure of contractors or subcontractors to perform, each such time period directly affected by the force majeure shall be extended for the period of the force majeure delay to a date mutually agreeable to the parties. h. Counterparts. This Agreement may be executed simultaneously or in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement. Binding Effect. Although the planning, construction, operation, management, use, and occupancy of the Property, the Tract Il, and the Hotel shall be subject to the terms of more definitive agreements, which will encompass issues not addressed in this Development Agreement, the parties agree that the terms of this Development Agreement will be incorporated into such other definitive agreements. The parties further acknowledge and agree that this Development Agreement reflects the basic business arrangement between the parties and is intended to be binding on the Developer, its successors and assigns, and conditionally binding on the City, its successors and assigns, provided the Conditions Subsequent are timely satisfied by the Developer. However, this Development Agreement shall be binding only as to the matters set forth in this Development Agreement, and shall not bind the parties regarding any other future matters not contained within this Development Agreement. [SIGNATURES CONTAINED ON FOLLOWING PAGES] IN WITNESS WHEREOF, the parties have executed this Hotel Development Agreement on the date first written above. DEVELOPER: PADUCAH CONVENTION HOTEL, LLC Title: DAVID M. PUCKETT JOHN M. CLARK GLENN R. MALONE GARRET FORBES MATHIEU TODD M. CLARK DAVID B. JONES EDDIE CORLEY IN WITNESS WHEREOF, the parties have executed this Hotel Development Agreement on the date first written above. CITY: CITY OF PADUCAH, KENTUCKY RIN Title: EXHIBIT B Kitchen Improvements To The Julian Carroll And Paducah Expo Convention Center See attachment. EXIiIBIT B Kitchen Improvements To The Julian Carroll And Paducah Expo Convention Center ID Qty Item I I Walk -In Freezer 2 1 Walk -In Cooler 3 1 Walk -In Freezer Refrigeration 4 1 Walk -In cooler Refrigeration. 5 lot Shelving Cooler/Freezer 6 lot Shelving Dry Storage 7 5 Can Rack 8 4 Carts 9 8 Bun Pan Rack 10 2 Hose Reels I I I Clean Dish Table 12 1 Booster Heater 13 1 Dish Machine 14 1 Pant Leg Duct 15 1 Soiled Dish table 15-A I Soak Sink 16 3 Wall shelves 17 3 Mobile Drying Racks 18 1 Disposer 19 1 Mixer (Floor Model) 20 2 Hand Sink, Paper Towel & Soap Dispenser 21 10 Storage Racks (Glass/China) 22 1 Roll -in Blast chiller 23 2 Roll -In Combi Ovens 24 2 Combi Oven (6 -Pan units stacked) 25 1 Kettle 60 gal. 26 1 Kettle 20 gal. 27 2 Floor Trough 28 1 Char Broiler With Stand 29 3 Fryer with Filtering Unit 30 1 Shortening Disposal Unit 31 12 Dunnage Rack 32 1 Two -Door Refrigerator -PT 33 3 Holding Cabinet -PT 34 2 Work table w/ Sink 35 1 Disposer 36 2 Stainless Steel Chase 37 2 Work Table 38 2 Work Table 39 1 Slicer with Stand 40 1 Two -Door Refrigerator 41 3 Plate Rack Carts 42 12 Banquet Cabinets 43 1 Reach -in Two -Door Refrigerator 44 1 Tray Make -Up Unit 45 2 Portable Bar 46 2 Draft Beer Cooler 47 1 Mop Sink 48 1 Utility Faucet 49 2 Mop/Broom Holders 50 1 Microwave 51 1 Food Processor 52 2 Can Opener 53 1 Ice Machine & bin 54 2 Ice Charts 55 2 Scale 56 2 Trash Cart 57 8 Trash cans 58 1 Exhaust Hood and Fans 59 1 Fire Control System 60 4 Security Beverage Storage Units 61 1 Hot Water Dispenser 62 1 Induction Range 63 2 Meat Carving Stations tt{{ pp ar \ 5 q SCJ' 1 ✓ rY i + .0 1 Si4 �5�'�' ` V� MY - on oil ry Pa 1 O! 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