REPORT TO THE CITY COUNCIL
FROM: GEORGEANNE A. WHITE, City Manager
Office of the Mayor & City Manager
THROUGH: JENNIFER K. CLARK, Director
Planning and Development Department
BY: LUPE PEREZ, Project Liaison, Downtown
Planning and Development
SUBJECT
..Title
Approve a Second Amendment to the Disposition and Development Agreement between Metro Hospitality Services, Inc., and City of Fresno to extend the construction schedule for the Courtyard by Marriott Hotel in Downtown Fresno located at the northeast corner of Inyo and M Street (District 3) ..Body
RECOMMENDATION
Staff recommends Council consider approval of a Second Amendment to the Disposition and Development Agreement (DDA) between Metro Hospitality Services, Inc. (Developer) and City of Fresno (City) to extend certain performance deadlines. The newly proposed Completion of Construction deadline is September 30, 2025, and the Certificate of Completion deadline is December 31, 2025. Staff recommends authorizing the City Manager to administratively extend the performance deadlines, upon a determination of good cause, for up to 180 days without further Council approval.
EXECUTIVE SUMMARY
The City owned a parcel of land at the north east corner of Inyo and M Streets in downtown Fresno abutting the Convention Center. In 2017, the Developer submitted a Letter of Interest (LOI) to develop a hotel on the site. Subsequently, the Developer and the City agreed to a DDA on December 18, 2017, to develop a 200-room hotel branded as either a Hilton or Marriott.
On March 14, 2022, a First Amendment to the DDA extended certain deadline s in the performance schedule and reduced the 200 -room hotel to reflect a 144 -room hotel , branded as a Courtyard by Marriott. This extension was granted due to residual supply chain disruptions stemming from the pandemic. The First Amendment extended Completion of Construction to December 31, 2024 , and Certificate of Completion to March 31, 2025. Generally, the project includes the construction of a 144- room hotel with guest rooms on the 2 nd to 5th floors and construction of a swimming pool, fitness center, meeting rooms, lounge, bar/bistro, and back of house on the 1st floor.
On January 10, 2025, the Developer submitted a request for a one-year extension of the DDA due to significant construction delays due to unforeseen weather conditions as described in their request (attached). The Second Amendment proposes extending the deadline for Completion of Construction to September 30, 2025, the Certificate of Completion to December 31, 2025 , and authorizes the City Manager to administratively extend the performance deadlines, upon determination of good cause, for up to 180 days without further Council approval.
BACKGROUND
For more than 2 5 years, the idea of a new hotel has been considered to meet the need for accommodations for conventions, events, and visitors to the city and downtown area. Th e planned hotel will be located on land owned by the City that abuts the Convention Center and is across from the Fresno Sports and Entertainment facilities, which include the Saroyan Theater, Valdez Hall, and Selland Arena.
The City and Developer signed a DDA on December 18, 2017, to build a downtown hotel branded as either Hilton or Marriott on this site. The First Amendment extended the Developer's performance schedule and reduced the number of rooms from 200 to 144.
The Developer has requested an extension of the performance schedule due to construction schedule delays resulting from unforeseen and severe wet weather conditions during 2022 and 2023, and supply chain disruptions. The City of Fresno experienced record-breaking rainfall from late 2022 through early 2023, leading to widespread flooding and significant disruptions at the construction site. This continuous wet weather made it difficult to perform essential tasks like ex cavation, foundation work, and pouring concrete. In December 2023, another period of substantial rainfall further delayed construction activities, affecting site access, supply chain materials and equipment deliveries.
Construction of the hotel is making steady progress. The building's exterior is now ready for lath and plaster, the switchgear and transformer were installed, and the project is scheduled with PG&E to energize the building, enabl ing interior work to begin. The approval of this extension will allow the Developer to manage the weather -related construction delays and uphold construction quality and safety standards to successfully complete the hotel project.
ENVIRONMENTAL FINDINGS
This amendment is not a project subject to CEQA.
LOCAL PREFERENCE
Local preference is not applicable.
FISCAL IMPACT
There is no fiscal impact.
Attachments:
2nd Amendment to the Disposition and Development Agreement with Metro Hospitality
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RECORDING REQUESTED BY:
City of Fresno
No Fee-Gov’t. Code Sections
6103 and 27383
WHEN RECORDED, MAIL TO:
City of Fresno
2600 Fresno Street
Fresno, CA 93721
Attention: City Manager
______
________________________________________________________________ (SPACE ABOVE THIS LINE FOR RECORDER'S USE)
SECOND AMENDMENT
TO DISPOSITION AND DEVELOPMENT AGREEMENT
by and between
CITY OF FRESNO,
a municipal corporation
and
METRO HOSPITALITY SERVICES, INC.
M and Inyo Streets
Courtyard By Marriot Downtown Fresno
Fresno, California 93721
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S
ECOND AMENDMENT TO
DISPOSITION AND DEVELOPMENT AGREEMENT
THIS SECOND AMENDMENT TO DISPOSITION AND DEVELOPMENT
AGREEMENT (Second Amendment) is entered as of ____________, 2025 (Effective Date), between the CITY OF FRESNO, a municipal corporation, (City) and METRO HOSPITALITY SERVICES, INC. (Developer).
RECITALS
A. WHEREAS, the parties entered into a Disposition and Development Agreement (the Agreement) effective December 18, 2017, and recorded on December 21, 2017, as Document Number 2017-0164954 in the Office of the Fresno County Recorder; and
B. WHEREAS, the Agreement set forth terms and conditions for Developer to purchase the Property from the City and develop it privately as a Hilton or Marriott multi- story hotel with 200 rooms; and
C. WHEREAS, the parties entered into a First Amendment to the Agreement (First Amendment) to extend certain deadlines in the performance schedule and reduce the 200-room hotel to reflect a 144-room hotel on March 14, 2022, and recorded on June 3, 2022, as Document Number 2022-0074161 in the Office of the Fresno County Recorder; and
D. WHEREAS, the parties wish to amend the terms of the Agreement to further extend deadlines in the performance schedule due to significant construction delays due to unforeseen weather conditions, and supply chain delivery disruption.
NOW, THEREFORE, BE IT RESOLVED, that the parties hereby amend the terms of the Agreement as follows:
1. The Performance Schedule (Revised Exhibit “C” attached to the First Amendment) is hereby deleted in its entirety and replaced with the “Revised Exhibit “C” – Second Amendment” attached hereto.
2. The City Manager is authorized to administratively extend the deadlines contained in the Performance Schedule for up to 180 days upon a determination of good cause.
3. Capitalized terms used herein and not otherwise defined shall have the meaning given to such terms in the Agreement.
4. Except as expressly set forth herein, the terms and conditions of the Agreement shall remain in full force and effect.
5. In the event of a conflict between this Second Amendment and the Agreement, the terms of this Second Amendment shall control. [SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, City and Developer have signed this Ame ndment effective as of the date first above written.
CITY OF FRESNO,
a municipal corporation
By:
Georgeanne A. White,
City Manager
(Attach notary certificate of acknowledgment)
APPROVED AS TO FORM :
ANDREW JANZ
City Attorney
By:
Date Tracy N. Parvanian
Assistant City Attorney
ATTEST:
TODD S
TERMER, CMC
City Clerk
By:
Deputy
METRO HOSPITALITY SERVICES, INC.
By:
Tehal Thandi,
President and Secretary
(Attach notary certificate of acknowledgment)
Attachment:
Revised Exhibit “C” – Second Amendment – Performance Schedule
Page
4 of 4
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REVISED EXHIBIT “C” – SECOND AMENDMENT
Performance Schedule effective January 30, 2025
Items Completed Time for Performance Completion Date
City of Fresno City Council consideration
of Disposition and Development
Agreement (DDA)
Com pleted
Execution of DDA Within fifteen days after
approval of DDA by City
Council and receipt and
approval of insurance
certificates and receipt of
executed documents from
Developer.
Completed
Escrow Opens Within three days following the
effective date of the DDA
Submission of Building Plans for
Planning and Building Review
Com pleted
Escrow Closes Within thirty days of approval of
all land use and other
entitlements, permits, and
approvals that City or any other
governmental agency with
jurisdiction over the Project
requires for construction of the
Project.
Completed
Commencement of Construction of
Developer’s Improvements. Within thirty
days after receipt of building permits by
the Developer, construction shall
commence on the improvements to be
constructed on the Project Site.
Com pleted
Substantial Completion of Construction
of Developer’s Improvements. The
Developer shall substantially complete
construction of the improvements to be
constructed on the Project Site.
Sept ember 30,
2025
Issuance – Certificate of Completion.
City shall furnish the Developer with a
Certificate of Completion on the Project.
Promptly after completion of all
construction and upon written
request thereof by the
Developer.
December 31,
2025