To: Mayor and City Council
From: Aaron Rector, City Manager
Subject:
Title
Consider a resolution approving Amendment No. 3 of the Ground Lease Agreement with ME Development, approved by Resolution No. 4716, dated October 17, 2023, through a Chapter 380 Economic Development Program Agreement, pursuant to Chapter 380 of the Texas Local Government Code, and further authorizes the City Manager to execute said documents on behalf of the City of Keller, Texas.
Action Requested:
Consider a resolution amending the date the applicant is required to obtain a building permit in the Ground Lease Agreement with ME Development, LLC (tenant). The current agreement requires the tenant to obtain a building permit within 18 months of the effective date of the lease agreement, making the deadline April 18, 2025. ME Development is requesting to extend the deadline to July 1, 2025.
Background:
ME Development LLC., is proposing to build an approximately 84,000 square-foot indoor sports facility for basketball, volleyball, cheer and futsal on undeveloped land at the Keller Sports Park.
This ground lease is summarized as follows:
- Lease of the 7.813 acres, more or less;
- Provides a lease term of 50 years;
- Rent payment of $15,000 per year;
- Establishes an escalating rent payment in 10-year increments;
- Controls use of facilities as recreational or approved by City.
Previous lease approval timeline:
- October 17, 2023: Council approved the Ground Lease 380 Agreement which included a due diligence period of six (6) months, with rent commencing on April 1, 2024.
- March 19, 2024: Council approved an extension to the due diligence period to June 17, 2024.
- May 7, 2024: Council approved Amendment No. 2 to the Ground Lease Agreement to extend the rent commencement date to July 1, 2024, to align with the new Due Diligence Period.
Alternatives:
City Council has the following alternatives:
- Approve as submitted
- Approve with changes
- Denial