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Res 129-2017 9/19/2017Resolution No. 129-2017 Resolution approving the programs and expenditures of the Wichita Falls 4B Sales Tax Corporation Board of Directors and amending the budget to include funding up to $90,000 in additional funding for Ganache Custom Cakery LLC to historically preserve and renovate the buildings at 800-806 Ohio Street WHEREAS, Texas Local Gov't. Code § 501.073(a) provides "The corporation's authorizing unit will approve all programs and expenditures of a corporation and annually review any financial statements of the corporation;" and, WHEREAS, on September 7, 2017, the Wichita Falls 4B Sales Tax Corporation (4BSTC) approved the project listed below and as stated in its agenda. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, THAT: 1. The Wichita Falls 413 Sales Tax Corporation's approval and funding of the following programs and expenditures, in a total amount not to exceed $195,000 as described below and in said corporation's agenda, is approved: To Ganache Custom Cakery LLC to historically preserve and renovate the buildings at 800-806 Ohio Street to be phased as follows: ($105,000 for the Karat Bar and Bistro, $45,000 for the Supper Club, and $45,000 for the Upstairs Patio Bar). 2. The current fiscal year budget of the 4B Sales Tax Corporation is amended to provide for the aforementioned expenditures and changes thereto. PASSED AND APPROVED this the 19t" day of September, 2017. 1 5 . MAYOR ATTEST: City Cle I c a Jul` ri c rl o I COMMERCIAL RESIDENTIAL - REMODEIL August1, 2017 Ganache Custom Cakery, LLC Attn: Mrs. Amber Schacter— Mr. Andy Lee 2412 Jack Street Wichita Falls, TX 76308 RE`. Proposal for the Karat Downtown Renovation Project (Zales Building) Including Fire Suppression System Complete, Plumbing Infrastructure and Electrical Infrastructure` To whom it may concern: We propose to provide labor, equipment and materials as required forthe above referenced project in accordance with the plans and specifications and local buildingand life safety codesfor the Sum of: Two hundred eighty-three thousand, eight hundred ninety-one and `No/100`Dollars ($283,891.00) SCOPE OF WORK & GENERAL INCLUSIONS: 1.: The following Scope of Work is included in this proposal: • Fire Suppression System Complete —SNB Mechanical Subcontract $96,976.00 • Plumbing Infrastructure Complete—Brian's Plumbing Subcontract $94,903.00 • Electrical Infrastructure Complete Oechsner Electric Subcontract $92,012.00 • TOTAL $283 891.00 Please be advised'of the toIlow ing:< 1.. We include supervision, fuel, tools, cleanup, permitting and coordination for all of the above proposed items in accordance with the plans and specifications. 2. General liability insurance ($1M/$2M aggregate) and workers' compensation certificateswill be provided at the start of construction. 3, Unforeseen site conditions will be considered a change in'scope and may result in additional charges. Upon discovery, Owner will be immediately notified of these changes and associated costs. 4. Performance and Payment Bond are specifically; excluded unless requested and paid for by the Owner. 5. One Year Warranty on Materials and Workmanship from Date of Substantial Completion., 6. Anywork not specifically included in this proposal or the contract documents is excluded'fromthis proposal' Thankyou for this opportunity., Sincerely, Axis Construction Jeremy'Steinruck, VP 940.923.4999 axisissegmail.com P.O. BOX 40875 2610 GRANT WICHITA FALLS, TEXAS 76308-0087 940-264=2947/940-923-4999 (866) 910-2956 FAX Gr:i7athe C'zistons ('cak rev l,L(. 2412 Jack Ste. B. parker Square SO Wichita Falls, TX, 76308 Anther Schacter, President 940-280-1989 Jim Crockery Assistant City Manager Community Development Director City of Wichita Falls Municipal Building 1301 Seventh Street Wichita falls, Texas 76305 APPLICATION FOR 4B SALES TAX FUNDS —48 SALES TAX BOARD Dear Jim: Amber Scfaacter, president of Ganache Custom Cakery, LLC and husband Dr. Joshua 5chacter are purchasing the Zale s Building 800-802-806 Ohio from ILWFD Zale's Building Vision LLC: Andy Lee is representing the new ownership for the 413 application. Request, for Development Assistance from 413 Board to lnstaaricany preserve anU rcrbrrvaie LIVU building, as a restaurant mixed -use occurpancy: Location: alle's Building — Texas Bistorical Commission Marker (tale's Legacy Depot Square Historic District, National Register as a contributing building to the District. TIF 4 4 District, Legal: East 80' of Lot 1, Narth'tz of East 80' of Lot 2 and the South: V of the fast 80' of Lot 2, Block 176, Original Townsite to the city Of Wichita Falls,; Wichita county Texas. Zoning: CBD Previous Occupancy: Pavan/Gun Shop (LDefoors)„ classified as retail use Occupancy: Future Restaurant(s) Retail Mixed Use. 2015 Building Code: Transition - change of occupancy= Asseanbly. Property Tax Value: $25,061.00 (WCAD — 2016). Qualified Expcnses;5111 117; (tales, L LCI IDWF D, inc.) $486,537.22 (Texas Historical Commission) IDW FID, Inc./tales LLC Grants: Priddy Foundation $80,000 Rehabilitation Approvals: Landmark Commission (resign Review); Texas Historical Corazmission (Parts A,B,C)9 City of Wichita Falls Building Inspection. Building Sq. Footage: 12,000 SF consisting of 8,000 SF ground floor and 2,000 SF second floor located above Suite A (corner). wcHs Commercial Phoenix Award (May, 2017) Texas State Tax Credits — Certification DWFD Zales Building LLC (non-profit organization)— May, 2017 provides approvals to sell State Tax Credits to'a Third Party. - $121, 656,00. TDW Liles Cost: $486,537,22 with incentive recapture of $201,656,00. incentives were required as 41.31% (grant, tax credit sale) to achieve ID dF'iD goals. I 7L'dl e rlW Id]ONOD N01330 ON 02fl, {1 i _ ( fj r 1 u y { tYS v ' if d � o a o> i, ce i 2412 JackSte, D, Parker Square SC Wichita Falls, TX, 76308 Amber 5chacter, President 940-280-3989 1) impact-- 30 new employees. Historic Renovation: 20 jobs. 4,) Heritage Tourism Impact : Direct Spending $6,591(10.5 % of 500iV M persons spent can Texas Travel. Food Beverage per day trip average is $4931. 5.) Provides a restaurant experience near the Downtown Entertainment District for the new Gateway/Double Tree Convention Hotel, 6.) The Carat Bar/Restaurant imports Mine from St. Jo —Blue Ostrich, Arche,;contracts with Farmer's Market leaders — Morath's, Youngs, exclusively uses odd Duck Coffee which underlines the true definition of economic development. 7.) The Ganache Group took over operations of "The Yard" —food truck park which operates Thursday —Saturday. complimenting theFarmersMarket, Farmers Market income has increased 165% over past five years with Special Events and Occasions are over 50% of the increase, The Carat and development of the Zales Building will only compliment the growth for the Depot Square District: Existing conditions at the Zeiss Building require assistance for the Economic Gap of $241,965,00. 1 have included' examples from San Angelo Downtown Association of three restaurant developments as DWFD took a field trip hosted by SADD in February. The Incentive gap is the same as the Carats renovation of Zales. Also the Catalyst is mentioned in the Vision20/20 plan as attached. L)- Removal of asbestos — 2nd floor —over Suite A. 2,) Architect/MEP plans: WF has design engineers associated waith-HVAC, Plumbing and electrical companies, MEP cost is sometimes an overload, Historic Preservations requires plan documentation for Texas Historical commission and National Parks (National Register buildings and Districts. 3,) Utilities: site plans enclosed as sanitary suer, electric, and plumbing have to brought to the building. We have a 3.7" alley between Casa lvlanana and Zales Building We also have an alley easement area which reduces working area for utility installation. See picture below. Sewer line, grease traps concrete. Note: Utility lines and Oncor upgrade required, 4 Gow<.aelie ( kko r; f ttsloric "s i .i c bhi ?3„ so 2412 Jack Ste, B, Parker Square SC Wichita Falls, TX 76308 :ember Schaefer, President 940 2&tl 3959 k � k� Ps t k�ikkrk< � 11 � try xt r Back of Suite D —electric drop from alley transformer. Carat liar & Bistro is historic preservation development by a new owner occupied restaurant at the tales Building within Depot Square Historic District which provides the Largest' opportunity for tax base growth as it combines new preservation construction with operational gains. It also triggers the highest cost and need for economic gap financing in this case. A high- level of the economic gap is depicted below. post Model - Program: 10,000 SF Acquisition Cost: $ 260,000 Shell Development Cost(New construction) ($169.40/SF) $1,694,00 Tenant Improvement Allowance ($92.95/SF) $ 929,500 Current Lease Rates: $12.00/SF Operating Cost (soon reimbursable CAM) $1.25/SF Return on Cash Threshold 5.5% Federal State Tax Credits (year 1) ($ 762,300) Economic Gap requiring Incentive $ 325,150 Requested 4S Grant $ 241,965 5 c f � r. s r� o; 2412 Jack Ste. B Parker Square SC Wiebita Falls, TX 76308 Amber S940-280 3999 f t p r Ohio Si: A-13 C-ff atio- New Orleans 5 ^�\� �`��� ^ .\� < . �« : <�<•. : 2� \ ��� � ^�� © © . � < � \ 7} :� �/ «� ..� 2� � \. \: \v,» �> \ � �< .`\ : � � � °�� ±\.� %� � � / °� � \«�<; � � � \z ��\/����\\^ \£<w«f�yyz: ° .«� /Z ^ \ .§}���:��<>\ _�»�. «� /� � ; \/�\ƒ« `� ����/ �� 5\.� �»Q��!) � y 2412 Jack Ste,13„ Parker Square SC Wichita Falls, TX. 76308 Arnber Schacter, President 940-280-3989 That's when she was approached by developer Andy Lee, of Andy Lee Co. she said she looked at the Zoles Building and fell in love with the rich history. major work to the building — including its beautiful art nouveau facade, tin ceiling tiles and prison cut gloss window — having been completed was definitely attractive to her. She said she crunched some numbers to make sure the idea made financial Sense, took the weekend to think it over, and decided this was the time and place tofulfill her dream. ber5chocter, new owner of the Zaies Building in downtown Wichita Falls, looks to carry on the Zrates Legacy at the corner of Eight and Ohio while continuing on her own path. Three restaurants will occupy portions of two units of the four -section complex and she hopes to lease the remaining two.. (Photo: John InglelTirnes Record News) "I realized that all of the shell was done; that a Pot of the obstacles the (Downtown Wichita Falls Development) board had already remedied to make it a much more doable project fear a business person coming downtown,"she said. "... The inside shell is what's going to need all the work but thefact that the outside is so beautiful -- they've dealt with the code when it comes to (American Disabilities Act), the sidewalks and the doors and replacing the windows — giving me a finished exterior makes it financially feasible to finish up the interior and st ove forward. The Carat Bar and Bistro will occupy the space directly an the corner of Eighth and Ohio. schoctersaid she has plans to seat about 60 patrons in that area at tables and the bar: A portion of the mezzanine will be extended and enclosed to serve as storage space and heating and air conditioning equipment, The extension will go over the bar and serve as a sort of sound buffer. Behind The Carat Bar and Bistro bar will be Gontache To Go that will offer the some savory pleasures of Ganache Cupcake Lounge. it's also a place where people can pop in to pick up a to -go order, and Schuster said they are also working on a room service menu with items that can be order byTalks downtown and delivered to there. Next to The Carat Bar and Bistro will be The Morris Supper Club. Schacter said the downtown area doesn't have an upscale, fine -dining restaurant; which is what this addition will do. Named In honor of Morris Zoles, the supper club entrance will be through The Carat Bar and Bistro, where the hostess will escort the guests to the restaurant where white table cloths, exquisite cuisine, fine wine and whisky will await patrons. Schactersaid they will use the vault that has been in the,facilityfor decades as a wine and whisky vault, with Packers in which patrons can store their libations: All three eateries will be supported by a state-of-the-art kitchen that will be located in Gonache To Go. The remaining two units of the four unit complex will be leased out for other retail businesses. Schacter said if that paeans to competing restaurant wants to move into one of the locations, so be it; "®The more the merrier, "she said, Cynthia Caney, executive director of Downtown Wichita Fails Development; said Tuesday — the day it became official that Schacter was purchasing the Zales Building — was bittersweet for the organization. She said the DWFD board purchased the structure in September 2013 with the goal of preserving it and keeping it from falling into disrepair. But as the group continued to research the facility, they discovered that it was the very first Zales jewelry store in the business's chain, which began in the early 1900s. That's when the board's vision of the building changed from preservation to a full -on restoration project. She said the project was a labor of loveand became the symbol of downtown revitalization efforts. Laney said she couldn't think of anyone better suited to fit the vision of the DWFD thanSchacter. "i couldn't be more pleased because she has such a good business head on her shoulders and a strong following, she said. "She knows what she's doing and l think she will take it and absolutely make it the cornerstone and a destination notonly for our local people, but also people from out of town, She is absolutely amazing. ,,She has a vision that goes along with our vision efdowntown for it to be that destinratian, for it to be that heart of our city; " 8 Club -Suite 6 r concept— Underr Bath the 10 ✓`,ales tfislt d✓.t t'Zg tltac .. f.t}i' - `role! Ohio 2412 Jack Ste. B, parker Square SC Wichita Falls , TX. 76308 Amber Schacter, President 940-280-3999 In conclusion, WE appreciate the 4b Board's review of the application and would appreciate consideration as the REQUEST is mach less than the model economic gap presented. also it is based upon the development approvals for tax credits by National Parks and Texas Historical Commission. Development time frame will be in phases with opening of the Carat Oar & Bistro in September, 2017; The Morris Supper Club in late November, 2017. Retail/Restaurant spaces are expected by Fail, 2018 and the Second floor Rooftop event special occasion would be anticipated to open September, 2019. Thank you for the time, Sincerely Yours; OAmbb�erSi,hac�terPres�ide,t alt3 Cindy tee, Consultant . Define current Market Cease Rates for Similar Class Improved Assets: Through a thorough review of the immediate market it was determined that rental rates are in the $15 psf range 3. Establish an Operating Budget to Operate the Asset as Stabilized: An operating budget of $1.25 lost has been established to operate a building of this quality. . Calculate the Net Operating Income: Net Operating Income is revenues (Market Cease Rates) less Operating Expenses: This was calculated as $t 3.75 psf. 5. Define Returns on Costs Threshold - The Return on Costs is the unlevered rate of return required for the risk profile of the investment. This was determined to be 8.5%. 6e Calculate the Supportable Cast: This is the Net Operating. Income divided by the Return on Costs Threshold. This was calculated as approximately $808,000 7. Determine the Financial Gap: This calculation is the Total Development Costs (step 1 ) less Total Supportable Costs (step 6). This derived a gap of approximately $740,00 t Note_ There are a ranee of tools that may be utilized to close the gap described above and should be tailored to the specific' project and developer sponsor: The full collection of gap financing mechanisms is presented in the Development incentives section of this document, the scenario; described above is for illustration purposes. pF SA City°s Role As previously discussed, the ity's role is simply to communicrate this opportunity to an existing property owner or prospective building tenant. As part of this dialogue, the City would communicate the available incentive program and related qualifying factors. The City's role should not be to act as a redevelopment principal that actively purchases buildings or properties for the purpose of redevelopment unless such activities are the result of careful strategy and consideration as these efforts can tend to upset the local investment market due to the unknowns created by such public action,, Analysis Behind Cost Model y, Identify Cost to improve the Asset to Achieve Market Level Rent For purposes of this analysis, the building shelf and common areas were assumed to be improved with a cost of $45per net rentable square foot and the cost for the Tenant Finishes Improvements were quantified at $75 per net rentable square foot. \ 2. Define Current Market base Rates for Similar Mass improved .Assets: Through a thorough review of the immediate market it was determined that rental rates are in the $l 6.50 psf range with the blended of uses. 3. Establish are operating Budget to Operate the Asset as Stabilized; An operating budget of $4.65 psf has been established to operate a building of this quality and blending of uses. 4. Calculate the Net Additional Operating Income: Net Additional Operating Income is Additional Revenues less Operating Expenses, This was calculated as $1 135 psf. S. Define Retum on Costs Threshold: The Return on Costs is the unlevered rate of return required for the risk profile of the investment. This was determined to be 9. o. , Calculate the Supportable Building Acquisition Cost: This is the Additional Net Operating income divided by the Return on Costs Threshold. This was calculated as approximately $140,000 7. Determine the Financial Gap: This calculation will be determined by the Total Sales Price less the Supportable Building Acquisition cost, as well as other unforeseen costs such as primary infrastructure upgrades, etc- 3.4 Public/Private Partnership - These investment scenarios would culminate in 0 public/private partnership and development agreement that defines the gap g concepts necessary to implement the development, and define the timefromes for implementation and related rates of the City, land owner, and developer/tenant. 04 ay r r, r r 28 a r cYer IDeW,",'O,Umen y":UP ... FIRST AMENDMENT TO REAL ESTATE SALES CCSI�i [ � This First Amendment to ileac Estate Sates Contract ("First endrnent") is by and between DWFD Zales Bldg. Vision, LLC ("Seller") and OPG Ganache Custom Caalsery, , LLC ("Initial Buyer"). Recitt�ds; WHEREAS, Seller and initial Buyer entered into that certain beat Estate Sales Contract on or about April 14, 2017 for the sale and purchase a commercial building with an address of 800-802-806 Ohio legally described as East 8W of loot 1, North 'I2 of East SCI's of Lot 2, and the South''/ of the East 80' of Lot 2 Block 176, Original Townsite to the City Wichita Falls, TIC, in rise County of Wichita, State of Texas ("Original Contract"), said land being commonly known as 800 Ohio, Wichita Falls, Texas, shown and depicted on Exhibits "N' of the Original Contract; and WHEREAS, Seller and Buyer entered into that certain Contract with Earnest Morley and Defaults, Paragraph 4. (Pgs.1 and 2) dated on or about April 14, 2017. All objections and Inspection Requirements on Exb. C are hereby waived and Earnest Money; ($10,000.00) is now Non -Refundable and shall be applied to the Purchas Price at closing; NOW, THEREFOfor and in consideration of the: undertakings and agreements contained in the First Amendment, and for other good and valuable consideration, the parties hereto agree as follows. 1. 'the foregoing recitals are incorporated herein and made as substantive part hereof, a. Paragraph 12. (page 5) in the Original Contract hereby amended in its entirety as follows,.Closin - Subject to the terms and conditions of this Contract (inlay 15, 2017), the closing of this transaction (the "Closing„) shall occur by June 1, 2017 or such earlier date as is mutually acceptable to Buyer and Seller: If it is deemed necessary, are extension to this Contract that is mutually agreeable to both Buyer and Seller can be applied. Seller shall deliver possession of the Property to Buyer at Closing: 2. This First Amendment is effective immediately upon the last of the dated signatures below. The First Amendment may be executed in one or more counterparts and signatures will be deemed valid whether received as are original, by facsimile, by pdf, by telegram, by teley,., by telecopy or any other form of electronic signature, each of which shall for all purposes be deemed to be an original, but all of which together shall constitute but one and the same Agreement. Only one such counterpart need be produced to evidence the existence of this Agreement, 3 e 'the persons executing this First Amendment on behalf of the respective entity or individual involved, whichever the case may be, hereby warrant on behalf of said entity and themselves that they have the express authority of said party enter into this Agreement and to 4845-0797-8282 ut[Si naiaares appear can following page} bind said entity or individual hereto, and recognize that the other Parties are relying on this representation. All other t s and conditions to remain the same, IED on this the 15`°' day of May, 2017. SELL;FR.D Zales Bffldg�. Vision , LILAC By; Syd Litteken, President DVVM Inc. y: Dusty Potter, President EXECUTED € n this the I5 clay art"May, 2017m Buyer: GanacheCustom Cakery1LL Amber Schacter, President