ITEM TITLE:
Contingent upon a companion budget amendment being approved, consider approving the First Amendment to Redevelopment Agreement by and among the City of Lawton, a municipal corporation (“City”), the Lawton Economic Development Authority (“LEDA”), a public trust having its beneficiary the City of Lawton, the Lawton-Fort Sill Economic Development Corporation (“LEDC”), an Oklahoma 501(c)(6) not-for-profit corporation, and Fisher59 Properties, L.L.C., a Texas limited liability company, duly authorized to conduct business in the State of Oklahoma.
INITIATOR: John Andrew, City Attorney
STAFF INFORMATION SOURCE: John Andrew, City Attorney; Rebecca Johnson, Finance Director
BACKGROUND: The City, LEDA, LEDC, and Fisher59 Properties, L.L.C., a Texas limited liability company (“Fisher59” or “Redeveloper’) previously entered into a Redevelopment Agreement dated April 23, 2024 (“Agreement”), pursuant to which the Fisher59 agreed to: (a) develop approximately 15.71 acres of real property located in the Airport Industrial Park by making a minimum capital investment of $16 million for the construction an approximately 100,000 square foot warehouse and distribution center and related parking and site improvements (collectively, the ”Distribution Center”); and (b) provide the design and cause the construction of the offsite public sewer, water, roadway, and drainage improvements required to serve the Distribution Center (“Public Improvements”). Under Section 1.2 of the Agreement, the City agreed to provide assistance in development financing to Fisher59 by reimbursing the actual out-of-pocket costs and expenses associated with the design and construction of the Public Improvements, with an Initial Cap of $1.6 million. Thereafter, at the request of Fisher59, on June 25, 2024, the City Council approved Resolution No. 24-142, increasing the Initial Cap to $2.9 million (now the Adjusted Cap). The Redevelopment Agreement specified that Fisher59 would be reimbursed the actual out-of-pocket costs and expenses associated with the design and construction of the Public Improvements following construction, City inspection, and acceptance of the improvements by the City Council.
With the approval of the First Amendment, the parties agree that Fisher59 will be reimbursed for actual out-of-pocket costs and expenses associated with the design and construction of the Public Improvements, up to the Adjusted Cap of $2.9 million, in monthly/regular installments, based on the percentage of completion of the City inspected work. This is subject to the terms and conditions of this First Amendment, to include the dedication of all required easements, provision of the required insurance and performance and maintenance bonds, and submittal of a Request for Reimbursement specifying the amount of the reimbursement requested, together with: (i) a completed and fully itemized Application for Payment in the form AIA Document G702 and G703 reflecting the total amount requested for payment by the General Contractor for the period immediately preceding the requested payment, after the withholding of Retainage, executed by the General Contractor and verified by the Redeveloper's architect or engineer of record; (ii) invoices from contractors and suppliers for the work completed; (iii) lien waivers from all contractors, subcontractors, and suppliers for all work done or materials furnished through and including that which was paid for the period the immediately preceding the requested payment; (iv) a detailed schedule of values showing the percentage of completion of each component of the Public Improvements; and (v) evidence of Redeveloper’s payment to the General Contractor in the amount reflected in the Application for Payment. The City’s inspector will review the Request for Reimbursement and issue a report either recommending payment or providing reasons for any required adjustment.
Another important part of this amendment is that Fisher59 will provide a Certification of Costs, including those costs reflected in the Construction Contract; engineering and design costs; project management costs; and other costs eligible for reimbursement as Assistance in Development Financing, up to the Adjusted Cap. The City will provide LEDA with funds up to that amount, and LEDA will make the periodic reimbursements to Fisher59. The Redeveloper Certification may be supplemented periodically during construction to reflect cost increases incurred or other adjustments to the Public Improvements, provided such supplemental amounts remain under the Adjusted Cap. Upon approval of the Redeveloper Certification, LEDA will deliver it to the City requesting disbursement of the funds.
Also a companion item is being presented to approve a budget amendment to fund a portion of the $2.9 million from the general fund. Approval of this item will need to be contingent upon approval of the companion item.
Richard Rogalski from LEDA is expected to be present at the city council meeting to discuss the proposed amendment and answer questions from council.
EXHIBIT: First Amendment to the Redevelopment Agreement
KEY ISSUES: N/A
FUNDING SOURCE: Up to $1.3 million from 2019 CIP Redevelopment Fund 4400000-54150; and up to $1.6 million from general fund.
STAFF RECOMMENDED COUNCIL ACTION: Contingent upon a companion budget amendment being approved, approve the First Amendment to the Redevelopment Agreement by and among the City of Lawton, a municipal corporation, the Lawton Economic Development Authority, a public trust having its beneficiary the City of Lawton, the Lawton-Fort Sill Economic Development Corporation, an Oklahoma 501(c)(6) not-for-profit corporation, and Fisher 59 Properties, L.L.C., a Texas limited liability company, duly authorized to conduct business in the State of Oklahoma.