Exhibit
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Exhibit J
TERM SHEET FOR AGREEMENT TO SHARE
TRANSIENT OCCUPANCY TAX REVENUE
Parties
:
Coombs Street LLC (“
Developer
”) and the
City of Napa, a
California charter city (“
City
”)
.
Intent:
Developer has proposed a mixed
-
use project consisting of up to 78
market rate branded residential multi
-
family housing units and a six
story upper upscale hotel with a maximum of 161 hotel rooms and subsequent retail uses.
The Project includes community public benefits as described in the Agreement, including the development of a new public plaza to
facilitate the revitalization of downtown Napa by restoring the historical grid and creating visual connections for pedestrians from Coombs Street to the 9/11 Memorial Garden and the Opera House .
The New Plaza component of the Project Public Improvements will be designed to match the quality and aesthetic of an upper upscale hotel outdoor/grounds experience and provide for seaml
ess
pedestrian and improved visitor and community experience with the goal of making the downtown Napa area more attractive to community members, consumers, and visitors.
The public benefits provided under the Agreement are expected to significantly contribute to the maintenance, growth, and expansion of the economic base of the City, including increased transient occupancy tax revenue for the City for the lifetime of the P roject.
This
Term Sheet
sets forth the manner in which
the City will provide
funding to Developer in an amount equal to a percentage of revenue received by the City from transient
occupancy tax generated by the
Project (“
Project
TOT
”) as a contribution to the cost of the
Reimbursable Project Public Improvements. The Parties agree to the general terms and conditions set forth in this Term Sheet which will be incorporated into a “
TOT Agreement
” in accordance with
Section 6.2 of the Agreement.
Public Benefits:
The
Project
includes the Project Public Improvements
which will
provide the City, its citizens and the surrounding region with significant
quantitative and qualitative p
ublic
b
enefits
, and
prospective future benefits
set forth in
Article 6
of the Agreement.
As set forth in the Agreement, the Project Public Improvements eligible for reimbursement include only the “
Reimbursable Project
Public Improvements
” which are as defined those Project Public
Improvements listed in Section 6.1.1 of the Agreement.
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Revenue Sharing
Structure:
Commencing
120 days
following
the date of the remittance of the
first Project TOT payment by the Developer to the City and quarterly thereafter,
and continuing for 10 years
from the date of
the first payment
, the
City
shall
reimburse the Developer for costs
of the Reimbursable Project Public Improvements based on the
following percentages of
Project
TOT revenue
provided, however,
that in no event shall the City’s obligation to provide such reimbursement exceed the lesser of the Reimbursement Cap ($33,000,000) or the actual
cost of the Reimbursable Project Public
Improvements dependent on the approach to cost utilized as set forth in the section below entitled “
Costs Eligible for Reimbursement”
:
Years 1
-
4 :
90%
of Project TOT
Years 5
-
8 -
70% of Project TOT
Years 9
-
10 -
50%
of Project TOT
Years 11 and thereafter: 0%
of Project TOT
The City’s obligation to reimburse Developer shall terminate at the end of the 10
th
year, whether or not the Developer has been fully
reimbursed for the cost of the Reimbursable Project Public Improvements.
Costs Eligible for
Reimbursement:
The cost of the Reimbursable Project Public Improvements shall be determined as follows:
1. The cost of the Reimbursable Project Public Improvements will be determined by the City Manager based upon the plans for such improvements approved through Design Review and an engineer’s or other qualified
estimate of such costs provided by the Developer
,
acceptable to the City Manager, and such other information reasonably requested by the City Manager
.
The City may hire an
independent third party to estimate the cost of the Reimbursable Project Public Improvements the cost of which will be paid by City.
The approved plans will become an exhibit to the TOT Agreement and will include the specific materials that will be used during construction of the Reimbursable Project Public Improvements .
The City Manager shall have final authority to approve the detailed Reimbursable Project Public Improvement plans and verify that the proposed improvements are consistent with the Agreement, Design Guidelines, the aesthetic of an upper upscale hotel use, a nd that the
value of the Reimbursable Project Public Improvements meets or exceeds the Reimbursement Cap. When assessing the value of the Reimbursable Project Public Improvements, the City Manager may ATTACHMENT 16
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factor Developer’s carrying costs over a 10 year period provided that the Developer provides information satisfactory to the City Manager that justifies this expense
; or
2. In the event that the City Manager determines that the value of the Reimbursable Project Public Improvements does not meet or exceed the Reimbursement Cap, the City’s obligation to reimburse the Developer under the TOT Agreement shall be based upon the
actual cost of the Reimbursable Project Public Improvements and will be limited to the lesser of: (i) the actual cost of the Reimbursable Project Public Improvements; or (ii) the Reimbursement Cap.
T
he costs associated with
the Reimbursable
Project Public
Improvements subject to Reimbursement Payments
in this case
shall
be determined from actual hard and soft costs for permitting, construction, construction management and related costs of the Reimbursable
Project Public Improvements
. Such costs
shall
include, without limitation: (i) PG&E and other utility or Agency Fees permitting fees; (ii) any Performance and Payment bonds; (iii) City required legal documentation fees; (iv) Engineering and Desig
n costs, construction surveying, material testing, permitting, and inspection
;
(v) construction management overhead in the
amount of 10% of the
Reimbursable
Project Public Improvement
construction costs incurred from
commencement of construction
to
final inspection (for items (i) through (v))
;
and (vi) Developer’s
financing costs associated with
the Reimbursable
Project Public
Improvements
during the 10
-
year payback period
(“
Reimbursable
Public Improvement Final Costs
”). All
Reimbursable
Public
Improvement
Final Costs shall be subject to Developer providing
documentation to the satisfaction of the City Manager which shall include without limitation, a copy of the agreements with design professionals, construction contracts, and proof of payment.
The
City shall retain audit rights.
Developer
Responsibility:
Developer shall be solely responsible to pay the full cost of constructing the
Project
Public Improvements but shall be entitled
to
the R
eimbursement
Payments
from the City
for the costs
identified herein
.
Source of Funds:
City ma
y, but is not required to
use any source of funds it deems
appropriate to make the reimbursement payment
up to the
Reimbursement Cap in order to expedite completing payments. .
City’s obligation to reimburse Developer shall survive the expiration of the
Development Agreement
Term and any Extended
Term.
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