Ordinance No. 10,885ORDPN.ANCENO. 1(08i
AN ORIANANU OU 1 HE� (1TY ('01-7NCIL (A` THE CH Y OF BAY FO"V`N,
TEXAS. AUTFR)RIZING AN FXCIIjSFVF NF(UrtA I 1NG AGREFA41_'N'F
NVURI NARVOWFATA PiXTEL. CHIKYFU PATFJ...,, Kl,,,N i,xri-!L AND
SHASHIKANT AVICACRISAW.W. !V /A PAIT'J. 1NVI,,,,")`TCvtEN1' G'ROUP
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Seclion 1: 'rhm the Oly Council ofthe City (W"Baytoxmi, Vexas, herQhy amhorizes
the (_ 1ty Manager to execuu; and the C]erk h) auest to an Exclusk,e Negotiating Agreement
Wh Narendm Paid, HIM Patel. Un 11.itel and Shashikant Nlorriswalla, d/b/a Pate[
Invesunent Gnnqi Or the devc1opmeni MId CwJXT,-t6()11 OCa hotel/ct,-,mit'eremce facihty at Hay land
L,Aancl. A copy. of Wd agmemem A amutted hereto. marked Exh1h "AY and nmde to pan hemof
Nr A Vems and puMoscs,.
Section 2: 'Ilk m1nmwe shall ml,x cCfcci iminedialely ban and afta W Immige by
the City (_.,ouncfl of the City„ ot'Ba�r 110\'rllr
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(my or Baytown this the 8'�'da� of'vlay. 2008.
APPROVI"D AS TO FORNt
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EXCLUSIVE NEGOTIATING AGREEMENT
STATE OF TEXAS
COUNTY OF HARRIS
THIS EXCLUSIVE NEGOTIATING AGREEMENT (the "Negotiating Agreement ") is
entered into this day of May. 2008 ("Effective Date ") between the CITY OF BAYTOWN, a
municipal corporation located in Harris and Chambers Counties. Texas (the "City"), and NARENDRA
PATEL, CHHOTU PATEL, KEN PATEL AND SHASHTKANT MORRISWALLA, d /b /a Patel
Investment Group (the 'Developer") (the Developer and the City are collectively referred to herein as
the "Parties "). on the terms and provisions set forth below.
RECITALS
The following recitals are a substantive part of this Negotiating Agreement.
WHEREAS. the Parties agree and acknowledge that the purpose of this Negotiating Agreement is
to establish a period during which the Developer shall have the exclusive right to negotiate with the City
the terms of a Ground Lease and Development Agreement or other agreement (the "GLDA ") for the
development and operation of a full - service hotel (the "Proposed Development ") located on a portion of
city -owned property known as Bayland Island located at Highway 146 and Goose Creek Stream adjacent
to the Houston Ship Channel (the "Site''); and
WHEREAS, the Proposed Development shall meet the following minimum development
standards:
1. Full- service hotel of at least 120 guest rooms:
2. Meeting/fimction facilities capable of seating at least 500 for dinner and divisible into smaller
event spaces,
3. Full- service catering/meal facilities with at least one full- service restaurant on -site; and
4. "Three- diamond" or higher rated facility by AAA; and
WHEREAS, the City is interested in reviewing the Proposed Development's feasibility, and, if
mutually agreed.. to facilitate and implement the Proposed Development; and
WHEREAS. the Parties intend that during and for the period of negotiations set forth herein (the
"Negotiating Period ") each will perform certain actions and fulfill certain obligations and responsibilities
under this Negotiating Agreement;
NOW THEREFORE, the City and the Developer hereby agree as follows:
I.
Agreement to Negotiate
A. Agreement to Engage in Good Faith Negotiations
The City, by and through its staff: and the Developer, acknowledging that time is of the essence.
agree for the Negotiation Period set forth below to negotiate diligently and in good faith to prepare a
GLDA to be considered for execution between the City and the Developer, in the manner set forth herein.
with respect to the Proposed Development of the Site. The City agrees. for the period set forth in Section
Exclusive Negotiating Agreement, Page l
LB below, not to negotiate with any other person or entity regarding development of the Site or any
portion thereof for a hotel facility.
B. Duration of this Negotiating Agreement
The duration of this Negotiating Agreement (the "Negotiation Period ") shall be ninety (90) clays
from the Effective Date. If upon expiration of the Negotiation Period, the Developer has not signed and
submitted a GLDA, with terms acceptable to the City Manager, to the City. then this Negotiating
Agreement shall automatically terminate unless this Negotiating Agreement has been mutually extended
by the City and the Developer for an additional period of time not exceeding ninety (90) days upon terms
satisfactory to the Parties. Such extension must be requested in writing by the Developer and approved in
writing by the City Manager or his designee prior to the expiration of the initial Negotiation Period.
If a GLDA containing terms acceptable to the City Manager is so signed and submitted by the
Developer to the City Manager on or before expiration of the Negotiation Period or any extension thereof:
then this Negotiating Agreement and the Negotiation Period or any extension thereof shall be extended
without further action by the City for an additional thirty (30) days from the date of such submittal during
which time the City shall take all steps legally necessary to (1) consider further the terms and conditions
of the proposed GLDA. (2) if appropriate, take the actions necessary to authorize the City to enter into the
GLDA, and (3) if approved by the City. execute the GLDA. It is expressly understood and agreed by the
Parties that by this Negotiating Agreement. the City undertakes no commitment or obligation to
Developer to execute any proposed GLDA.
C. Termination
In the event the Developer does not timely perform its obligations under this Negotiating
Agreement, the City shall give written notice thereof to the Developer who shall then have ten (10) clays
to cure any default specified in the notice. If the Developer does not timely cure such default within ten
(10) days, this Negotiating Agreement may be terminated by the City. In the event of such termination by
the City, neither party shall have any further rights against or liability to the other under this Negotiating
Agreement.
In the event the City not timely perform its obligations under this Negotiating Agreement, the
Developer shall give written notice thereof to the City who shall then have ten (10) days to cure any
default specified in the notice. If the City does not timely cure such default within ten (10) days, this
Negotiating Agreement may be terminated by the Developer. In the event of such termination by the
Developer, neither party shall have any further rights against or liability to the other under this
Negotiating Agreement.
II. Development Concept
A. Scope of Development
The negotiation hereunder shall be based on a development concept, which shall include the
development on the Site or it portion thereof, of a hotel/conference center project and other related uses as
approved by the City to be included in the GLDA. Design and architecture will continue to be developed
by the Parties during the negotiation of the GLDA, and as approved by the City Council.
Exclusive Negotiating Agreement, Page 2
13. Developer Submissions
Within the first forty -five (45) days of the commencement of the Negotiating Period, the
Developer shall submit to the City concept drawings and an economic analysis of Developer's Proposed
Development. The Developer's submission shall at a minimum include: (i) a preliminary or concept
development proposal and site plan, including, but not limited to, elevations. square footage, and
landscape areas for the Proposed Development: (ii) a statement of qualifications as a developer and
operator of a hotel/conference center project. particularly those of a scale comparable to that proposed
herein, (iii) detailed biographical and background information of the Developer; (iv) a list of financial
references; and (v) other information as may be reasonably requested by the City Manager. It is
understood that City may take appropriate steps necessary to verify information in such submissions, or
waive the Developer's obligation to provide any item(s) required pursuant to this Section. Developer
agrees to cooperate in furnishing the information to the City.
C. Developer's Findings, Determinations, Studies and Reports
Upon reasonable notice of no more than ten (10) days, as from time to time requested by the City.
the Developer agrees to make oral and written progress reports advising the City on all non - confidential
or non- proprietary matters and all studies being made by the Developer.
M.
Lease of the Site and Costs of Appraisals and Related Consulting Work
The lease price and/or other consideration to be paid by the Developer for the Site under the
GLDA will be established by the City and the Developer. Such lease price and /or other consideration will
be based upon such factors as market conditions, density of development, costs of development, risks of
the City, risks of the Developer, estimated or actual Developer profit. public purpose and/or reuse value
for the uses permitted to be developed and financial requirements of the City, and will be subject to
approval by the City Council. Any costs. fees and charges associated with the appraisals for the value of
the land and /or costs associated for retaining and utilizing consultants necessary to evaluate the feasibility
of the proposed projects or work related thereto shall be paid solely by the Developer. The selection of
the appraiser(s) and other consultant(s) and type of appraisal report(s) or other consultant report(s)
necessary for the project is at the sole discretion of the City Manager. who shall reasonably consider
Developer's input as to such selection.
1V.
The Developer's Full Disclosure
The Developer will make full disclosure to the City of its principals. officers, major stockholders,
major partners, joint venturers and key managerial employees. Any significant change in the principals,
associates, partners, joint venturers. negotiators, development manager, consultants, professional and
directly - involved managerial employees of the Developer is subject to the reasonable approval of the
City. At no time shall the Developer's interest be less than fifty one percent (51 %). Notwithstanding the
foregoing, the Developer reserves the right at its discretion to join and associate with other entities in joint
ventures, partnerships or otherwise for the purpose of developing the Site, provided that the Developer
retains responsibility for day -to -day management and control of such entities and remains fully
responsible to the City hereunder.
Exclusive Negotiating Agreement, Page 3
V.
City's Responsibilities
A. City Assistance and Cooperation
The City shall cooperate in providing the Developer with not only appropriate existing
documentation and information concerning the Site but also assistance for development of the Site, which
may include assisting in coordinating with other governmental agencies as necessary and upon request.
B. City Council
A GLDA resulting from the negotiations hereunder shall become effective only after and if the
GLDA has been considered and approved by the City Council.
VI.
Confidentiality
To the extent permitted by law. the Parties shall not disclose any information, marked as
confidential to a third party without the other Party's prior written consent. If the City receives a public
information request for information marked as confidential by the Developer, the City shall submit the
requested documents to the Texas Attorney General. It will be the responsibility of the Developer to
submit arguments to the Texas Attorney General as to why the requested information should not be
released. Should the Developer fail to make timely arguments to the Texas Attorney General, the
information requested will be deemed to be public and shall be disclosed by the City. Should the
Developer make timely arguments to the Texas Attorney General, the City and the Developer shall
be bound by the resulting opinion unless the opinion is timely appealed.
VII.
Hazardous Materials Assessment
The City will provide the Developer information which it has regarding the location and analytics
of the dredge spoils at Bayland Island. However. the Developer at its sole cost and expense shall conduct
or cause to be conducted environmental assessments, audits and /or testing of the Site. If the Developer is
not reasonably satisfied with the findings and the recommendations made in any environmental
assessment. audit and /or testing conducted by or for the Developer and the City decides not remediate the
condition to which the Developer reasonably objects, the Developer shall have the right:
to terminate this Negotiating Agreement and
2. to seek reimbursement from the City for the environmental assessment, audit and /or
testing conducted by the District up to a maximum amount of FIFTEEN THOUSAND
AND NO/100 DOLLARS ($15.000.00). unless a different amount is approved in writing
by the City prior to the commencement of the assessment, audit and /or testing.
In order to obtain the reimbursement for expenses associated with the environmental assessment, audit
and /or testing, the Developer must submit within thirty (30) days of termination of this Agreement the full
report concerning the environmental assessment, audit and/or testing together with an invoice and receipt
showing what services were performed and evidencing payment therefor. The City shall pay the
Exclusive Negotiating Agreement. Page 4
reimbursement costs up to the maximum specified hereinabove within thirty (30) days after receipt of the
requisite information from the Developer. Both Parties acknowledge and agree that the City will provide
no specific representations or warranties in the GLDA pertaining to the condition of the Site.
VIII.
Costs and Expenses
Except as provided herein, each party shall be responsible for its own costs and expenses in
connection with any activities and negotiations undertaken in connection with the performance of its
obligations under this Negotiating Agreement.
IX.
Non - Discrimination
Developer shall not discriminate against nor segregate any person, or group of persons on account
of sex. race, color. marital status. religion. creed, national origin or ancestry in the lease, sublease, use,
occupancy, tenure. development or enjoyment of the Site.
X.
Real Estate Commission
Each party represents that it has not engaged any broker, agent or tinder in connection with this
transaction and each party agrees to hold the other party harmless from any claim by any broker. agent or
finder retained by or claimed through such party.
XI.
Limitations of this Negotiating Agreement
By its execution of this Negotiating Agreement. the City is not committing itself to or agreeing to
undertake: (1) lease of land to the Developer: or (2) any other acts or activities not referenced
hereinabove.
This Negotiating Agreement does not constitute a disposition or transfer of property or the release
of any exercise of control over property by the City. Execution of this Negotiating Agreement by the City
is merely an agreement to enter into a period of exclusive negotiations according to the terms hereof
reserving final discretion and approval by the City Council as to any Ground Lease and Development
Agreement and all proceedings and decisions in connections therewith.
XII.
Independent Contractor.
The Developer shall operate as an independent contractor as to all services to be performed under
this Negotiating Agreement and not as an officer, agent. servant, or employee of the City. The Developer
shall have exclusive control of its operations and performance of services hereunder, and such persons,
entities, or organizations perfor►ning the same and the Developer shall be solely responsible for the acts and
omissions of its directors. officers, employees. agents. and subcontractors. The Developer shall not be
Exclusive Negotiating Agreement. Page 5
considered a partner or joint venturer with the City, nor shall the Developer be considered nor in any manner
hold itself out as an agent or official representative of the City.
XIII.
Insurance
At all times, when the Developer and/or its agents are performing work at the Site. the Developer
and/or such agent performing such work shall, at a mutimum, maintain insurance as follows:
1. Commercial General Liability
• General Aggregate: $1,000.000
■ Per Occurrence: $500,000
• Coverage shall be at least as broad as ISO CG 00 01 10 93
• No coverage shall be deleted from standard policy without notification of
individual exclusions being attached for review and acceptance.
2. Business Automobile Policy
• Combined Single Limits: $500.000
• Coverage for "Any Auto"
3. Workers' Compensation
• Statutory Limits
• Employer's Liability: $500.000
• Waiver of Subrogation required.
The following are general requirements applicable to all policies:
AM Best Rating of B +; VII or better for all liability policies.
r Insurance carriers licensed and admitted to do business in the State of Texas will be accepted.
➢ Upon request of and without cost to City of Baytown, certified copies of all insurance
policies and /or certificates of insurance shall be furnished to City of Baytown's
representative.
Certificates of insurance showing evidence of insurance coverage shall be provided to City of
Baytown's representative prior to any work being performed at the Site.
Liability policies must be on occurrence form.
' o Each insurance policy shall be endorsed to state that coverage shall not be suspended, voided,
canceled or reduced in coverage or in limits except after thirty (30) days' prior written notice
by certified mail, return receipt requested, has been given to the City.
➢ The City of Baytown, its officers, agents and employees are to be added as Additional
Insureds to all liability policies.
XIV.
Release
By this Negotiating Agreement, the City does not consent to litigation or suit, and the City hereby
expressly revokes any consent to litigation that it may have granted by the terms of this Negotiating
Agreement or any other contract or Negotiating Agreement, any charter, or applicable state law. Nothing
contained herein shall be construed in any way so as to waive in whole or part the City's sovereign
immunity. The Developer assumes full responsibility for its work performed hereunder and hereby
Exclusive Negotiating Agreement, Page 6
releases, relinquishes. discharges, and holds harmless the City, its officers, agents. and employees from all
claims, demands, and causes of action of every kind and character, including the cost of defense thereof,
for any injury to or death of any person (whether they be either of the parties hereto, their employees, or
other third parties) and any loss of or damage to property (whether the property be that of either of the
parties hereto, their employees, or other third parties) that is caused by or alleged to be caused by, arising
out o£ or in connection with the Developer's work to be performed hereunder. This release shall survive
expiration or termination of this Negotiating Agreement and shall apply with respect to the Developer's
work regardless of whether said claims. demands, and causes of action are covered in whole or in part by
insurance.
XV.
No Arbitration.
Notwithstanding anything to the contrary contained in this Negotiating Agreement. the City and
the Developer hereby agree that no claim or dispute between the City and the Developer arising out of or
relating to this Negotiating Agreement shall be decided by any arbitration proceeding including, without
limitation, any proceeding under the Federal Arbitration Act (9 U.S.C. Sections 1 -14), or any applicable
State arbitration statute. including.. but not limited to. the Texas General Arbitration Act, provided that in
the event that the City is subjected to an arbitration proceeding notwithstanding this provision, the
Developer consents to be joined in the arbitration proceeding if the Developer's presence is required or
requested by the City of complete relief to be recorded in the arbitration proceeding.
XI NIL
Assignment.
The Developer shall not assign this Negotiating Agreement without first obtaining the written
consent of the City.
XVH.
Notice
Any notice required to be given under this Negotiating Agreement or any statute, ordinance, or
regulation, shall be effective when given in writing and deposited in the United States mail. certified mail.
return receipt requested, or by hand- delivery, addressed to the respective parties as follows:
CITY
City of Baytown
Attn: City Manager
P.O. Box 424
Baytown, TX 77522
DEVELOPER
Narendra Patel
Chhotu Patel
Ken Patel
Shashikant Morriswalla
d/b /a Patel Investment Group
1422 North Parkridge Road
Wichita, Kansas 67212
XVM.
Ambiguities
In the event of any ambiguity in any of the terms of this Negotiating Agreement, it shall not be
construed for or against any party hereto on the basis that such party did or did not author the same.
Exclusive Negotiating Apreenient, Page 7
XIX.
Governing Law and Venue
This Negotiating Agreement shall be constructed in accordance with the laws of the State of
Texas. The place of making and the place of performance for all purposes shall be Baytown, Harris County,
Texas.
XX.
Time of Essence
Time is of the essence of every portion of this Negotiating Agreement in which time is a material
part. During the Negotiating Period the time periods set forth in this Negotiating Agreement for the
performance of obligations hereunder shall apply and commence upon a complete submittal of the
applicable information or occurrence of an applicable event. In no event shall an incomplete submittal by
the Developer trigger any of the City's obligations hereunder, provided, however, that the City shall
notify the Developer of an incomplete submittal as soon as is practicable and in no event later than the
applicable time set forth for the City's action on the particular item in question.
XXI.
Entire Agreement
This Negotiating Agreement contains the entire understanding and agreement of the Parties,
integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all
negotiations or previous agreements between the Parties or their predecessors in interest with respect to
all or any part of the subject matter hereof.
XXH.
Duplicate Originals
This Agreement is executed in duplicate originals.
XXI M.
Headings
The headings and subheadings of the various sections and paragraphs of this Negotiating Agreement
are inserted merely for the purpose of convenience and do not express or imply any limitation, definition, or
extension of the specific terms of the section and paragraph so designated.
X1X1V.
Severability
If any section. subsection, paragraph. sentence, clause, phrase or word in this Negotiating
Agreement, or application thereof to any person or circumstance is held invalid by any court of competent
jurisdiction, such holding shall not affect the validity of the remaining portions of this Negotiating
Agreement, and the parties hereby declare they would have enacted such remaining portions despite any such
invalidity.
Exclusive Negotiating Agreement Page 8
XXV.
Authority
The officers executing this Negotiating Agreement on behalf of each party hereby confirm that
such officers have full authority to execute this Negotiating Agreement and to bind the party he /she
represents.
IN WITNESS WHEREOF. the parties hereto have executed this Negotiating Agreement as of
the date set opposite their signatures. The effective date of this Negotiating Agreement is May __, 2008.
CITY OF BAYTOWN
ATTEST:
KAYTHIE DARNELL. City Clerk
APPROVED AS TO FORM:
IGNACIO RAMIREZ. SR., City Attorney
GARRISON C. BRUMBACK (Date)
City Manager
DEVELOPER: Patel Investment Group
NARENDRA PATEL (Date)
CHHOTU PATEL (Date)
KEN PATEL
(Date)
SHASHIKANT MORRISWALA (Date)
Exclusive Negotiating Agreement. Page 9
STATE OF §
COUNTY OF §
Before me on this day personally appeared NARENDRA PATEI.
known to me:
proved to me on the oath of : or
proved to me through his /her current
(description of identification card or other document issued by the federal
government or any state government that contains the photograph and signature of the
acknowledging person)
(check one)
to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that
he /she executed the same for the purposes and consideration therein expressed.
SUBSCRIBED AND SWORN before me this clay of
STATE OF §
COUNTY OF
2008.
Notary Public in and for the State of Texas
Before me on this day personally appeared CHHOTU PATEI.
(check one)
known to me;
proved to me on the oath of
proved to me through his/her current
(description of identification card
or
or other document issued by the federal
government or any state government that contains the photograph and signature of the
acknowledging person)
to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that
he /she executed the same for the purposes and consideration therein expressed.
SUBSCRIBED AND SWORN before me this day of
Exclusive Negotiating Agreement, Page 10
2008.
Notary Public in and for the State of Texas
STATE OF
COUNTY OF
Before me on this day personally appeared KEN PATEL
known to me;
proved to me on the oath of ; or
proved to me through his /her current
(description of identification card or other document issued by the federal
government or any state government that contains the photograph and signature of the
acknowledging person)
(check one)
to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that
he /she executed the same for the purposes and consideration therein expressed.
SUBSCRIBED AND SWORN before me this day of 2008.
Notary Public in and for the State of Texas
STATE OF §
COUNTY OF §
Before me on this day personally appeared SHASHIKANT MORRISWALA
known to me;
proved to me on the oath of : or
proved to me through his/her current
(description of identification card or other document issued by the federal
government or any state government that contains the photograph and signature of the
acknowledging person)
(check one)
to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that
he /she executed the same for the purposes and consideration therein expressed.
SUBSCRIBED AND SWORN before me this day of 2008.
Notary Public in and for the State of Texas
R:1Karcn\Files\ContractsiBayland Island Development Agreement\ Baytown- DBAPatel ExclusiveNegotiatingAgicententNoDepositCleanRevised .doc
Exclusive Negotiating Agreement, Page I I