From
Bob O’Neal, Economic Development Director
Title
Resolution authorizing an Economic Development Agreement and Five-Year Tenant Lease with Three 2 One, LP for the Construction and Operation of a Restaurant
Presenter
Bob O’Neal, Economic Development Director
Recommended Action
Approve
Analysis
The City has made significant investments to revitalize our downtown area in the past few years with the restoration of the Uptown Theater, adding a new Market Square, adding parking, working with building owners to create new facades, rebuilding sidewalks, and improving drainage. Adding to this focus on the downtown area, the City constructed a new Fire Station on the north side of Main Street to provide a modern facility that would serve the fire and EMS needs of the area. The new Fire Station was occupied in the Fall of 2014 and the previously occupied 1950’s era Fire Station has remained vacant.
To continue revitalization efforts in our downtown, the City desires to repurpose the old Fire Station as a restaurant to bring more people into the area. A Request for Qualifications (RFQ) was developed to promote the viability of the downtown area as a destination and to investigate the potential restaurant owner/operators who would be interested in partnering with the City. The RFQ was issued in March 2015 and we received four formal proposals and all four were selected for further investigation, negotiation, and interviews. Based on this process, Three 2 One, LP was selected as the tenant/operator by the Council as the restaurant operator who best fit the City’s requirements.
The Three 2 One, LP principals are experienced restaurateurs currently operating an American style, full service operation in Keller under the name FnG Eats. Three 2 One, LP principals are Executive Chef/Proprietor Bob Stephenson, Chef/Proprietor Carlos Arevalo, and Controller/Partner Julie Stephenson. Together, the three principals have a combined 85 years of broad experience in the restaurant industry.
The City negotiated an Economic Development Agreement with Three 2 One, LP to renovate the old Fire Station as a restaurant and to outline the process that the building may be purchased from the City. Under the Agreement, the City would hire a general contractor and invest up to $2,000,000 for renovation and remodel of the old Fire Station, purchase furniture, fixtures, and equipment, and add parking in order to repurpose the site as a restaurant. Three 2 One, LP would provide an additional $200,000 toward the project upon execution of the Agreement. The $200,000 is non-refundable. After a minimum of three years of successful operation with a minimum annual average of $1,200,000 in sales, Three 2 One, LP would have the right to purchase the building and associated property for the amount of funding the City invested in renovation and remodel of the property. A Three 2 One, LP principal would be required to directly oversee the management of the restaurant operation for the duration of the lease period.
Contemporaneously, a separate five-year Lease Agreement (Lease) would be executed with Three 2 One, LP as the tenant. The Lease would require Three 2 One, LP to operate an American style restaurant with bar service open for lunch and dinner, seven days a week. Rent would be calculated at 6% of food, mixed beverage, and catering sales net state and local taxes. The City would give the tenant a 180-day grace period after the Certificate of Occupancy (CO) is issued before rent would commence in order to firmly establish the restaurant. The tenant would pay all costs for building and equipment maintenance, insurance, and utilities from the date of final CO. The tenant may not sublet the space and has no right to assign the lease without City approval. The Lease would expire upon purchase of the building by the tenant or could be renewed for two additional five-year terms based on performance.
Financial Consideration
Funding for the City's participation in the amount of $2,000,000 is available in the FY 2015/2016 Capital and Lending Reserve Fund (402690).
Body
A RESOLUTION OF THE CITY OF GRAND PRAIRIE, TEXAS, TO ENTER INTO A CHAPTER 380 ECONOMIC DEVELOPMENT AGREEMENT FOR THE REMODEL OF A CITY OWNED FIRE STATION
Whereas, The City of Grand Prairie wishes to enter into this agreement to repurpose a vacant city-owned Main Street Fire Station as a restaurant and it is in the public interest to do so; and
Whereas, Three 2 One, LP was selected after a competitive selection process to partner with the City and operate the restaurant under a lease; and
Whereas, Three 2 One, LP has the option of purchasing the fire station if it meets certain requirements, and
NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of GRAND PRAIRIE, Texas that:
Section 1. The granting of this Chapter 380 Economic Development Agreement and Lease Agreement is approved and the City Manager is hereby authorized to execute contracts to effectuate this approval.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS, ON THIS THE 2ND DAY OF FEBRUARY, 2016.