Date: December 21, 2005
To: Ogden City Redevelopment Agency
Thru: John Patterson
From: Richard McConkie, CED Deputy Director
RE: Ratifications of Development and Lease Agreement with Boyer Ogden Mall L.C.
Staff Contact: Scott Brown, Business Development Manager
Requested Timeline: December 27, 2005
Recommendation: Approve the attached Development and Lease Agreement
Documents: Resolution; Ogden City Mall Development and Lease Agreement
Executive Summary: Ogden City Development Department has been in discussions with the Boyer Company regarding development of the mall site ever since Citiventure and Associates decided not to proceed with the final negotiations for the development. The Boyer Company was contacted based on it having received the second highest score in the original RFP for the development of the mall site. The Boyer Company has successfully negotiated with Larry Miller to develop an 11-screen cinema complex and Boyer is willing to enter into a 40-year development agreement with the Ogden City RDA.
Proposal: The proposal is broken down into two parts. The first part of the proposal deals with the Development Agreement and the second part of the proposal defines the terms and conditions of an extended land lease. Both the Development Agreement and the land lease are closely modeled after the BDO agreement.
The significant points of the Development Agreement are as follows:
1. The RDA agrees to lease to Boyer a portion of the overall project as defined as Phase I and agrees to lease additional future phases of the project.
2. The RDA agrees to develop certain improvements, which consist of the existing work that has been done on the streets and infrastructure, including improvements on the existing parking structure and improvements scheduled to be completed on the parking structure during 2006.
3. A site plan must be submitted to the RDA for approval which clearly defines the Phase I improvements prior to commencement of the Phase I development.
4. A site plan must be submitted to the RDA for approval for all future phases of the project prior to future phase developments.
5. The RDA must approve any and all modifications to any of the proposed development plans prior to commencement of the proposed development.
6. A final conception plan must then be submitted to the RDA for final approval prior to the commencement of the phase developments.
7. The RDA is to split the maintenance cost of all tracts that are developed in Phase I with Boyer on a 50/50 basis.
8. If the RDA requires additional landscaping beyond the existing development guidelines, the RDA will be required to pay for all maintenance cost for this portion of the landscaping until future phases come on line.
9. The Developer is required to deliver a final lease with Larry Miller for an eleven-screen cinema complex within 120 days of the completion of the infrastructure, which is now complete.
10. The Developer is to manage the existing parking structures.
11. The RDA is to show evidence that the second phase of the parking improvements will be completed by 2006 year end.
12. The RDA is required to show proof that the recreation center has been financed.
13. The RDA is required to certify that the children's museum will be completed simultaneously with the Phase I development.
14. The RDA and Developer will enter into Reciprocal Covenants, Conditions and Easements after 60 days from the execution of the Development agreement.
15. The Developer must comply with the existing Mall Development Design Guidelines adopted by the RDA and Ogden City Planning Commission.
16. The RDA may be required to sell certain portion of the property in order to obtain financing under certain conditions:
- Terms and conditions of the sale must be arms length
- Must be subject to RDA approval
- Net sale proceeds must be distributed to the RDA as defined in Phase I Ground Lease where as the property sales price will go to the RDA
The significant points of the Lease Agreement are as follows:
1. Performance clause states that a minimum of 1000,000 square feet of mixed-use development must be completed by the year 2009 and an additional 135,000 square feet must be developed by year 2009.
2. Initial lease term is to be forty (40) years with three (3) five (5) year extensions.
3. Use of lease premises are to be for any allowed uses per CBD zoning requirements.
4. The rent the RDA will receive from the Boyer Company is equal to 50% of the Net Operating Revenue on a quarterly basis.
5. The RDA must approve a submitted business plan, which covers such items as operations, leasing, maintenance, repairs and upgrades.
6. The RDA must approve all subsequent budgets and business plans.
7. The maintenance on undeveloped future tracts will be shared between the RDA and Boyer on a 50/5- basis unless the RDA requires additional landscaping.
8. The RDA will warrant all preexisting environmental conditions.
9. The leased Premises will be required to pay all privilege taxes per Utah Code section 59-4-101.
10. The Tenant will comply with all designs guidelines and zoning requirements.
11. Tenants will maintain all property and liability insurances required by the RDA.
12. Tenants will be able to sublease.
13. Tenants will be able to sell portions of the property upon RDA approval, if required for financing.
During a work session held on December 20, 2005 the Agency Board discussed the appropriate level of its involvement in matters respecting notification to and approved by the Agency Board pertaining to the development and lease agreements. The proposed level of involvement has been memorialized as exhibit C of the attached resolution.
Fiscal Impact: The RDA will be looking for future income from future retail and commercial leases as well as income from future property sales.
RDA Board Approval, Review and Notification Summary
Boyer Development Agreement and Lease for the Mall Site
Development Agreement -- Board Approval
1. Final conceptual plans. The Planning Commission will review the final conceptual plans, including the master development site plan map, and provide a recommendation to the board. Material amendments, after initial approval, will be reviewed by the Planning Commission and approved by the Board.
2. Parking garage improvements. Per previous direction given by the Board, the parking garage improvements are to be reviewed by the Planning Commission and approved by the Board.
3. Remaining property - future development tract ground lease when there is a tenant.
4. Sale out of parcels. Out parcels are those parcels with no tenant and the land is being proposed to be sold in Phase I.
Development Agreement -- Board Notification
6. Declaration of reciprocal conditions and easements
7. Costs and expenses for maintenance of future development tract. This information is to be added to the existing Mall Budget report as appropriate - provided monthly.
Lease -- Board Approval
8. Transfer of landlord's interest to a third party
Lease -- Board Review (the board reviews the Administration's decision in a work session but does not formally make a decision.
9. Tenant Budget and business plan - including annual revisions
10. Tenant or landlord default
11. Noncompliance with the period of force majeure - recovery timeframes from acts of God.
12. Separate lease for each tract in future development land
Lease - Board Notification
13. Major decisions -- dispute resolution
14. Improvements not contemplated by the budget
15. Subordination or pledge of fee title to leased premises
16. Subleases that fail to meet the subleasing criteria or a major sublease. Notification to the Board is to be provided after each sublease is signed and prior to any public disclosure. For subleases of 25,000 sf and larger, an executive summary is to be provided - including the Larry Miller Theaters."
