01-09-12 Council Agenda & Packet

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the Building Improvements, as such improvements will provide for additional economic development of the downtown area of the City, including increasing the assessed value of the Chase Tower yielding additional annual property taxes and retaining and creating jobs within Downtown South Bend; and WHEREAS, in order to induce Care Hotels to undertake the Building Improvements, establish a reputable hotel presence in the Chase Tower and rehabilitate the Chase Tower, the Commission desires to purchase a 99 year leasehold interest in the parking garage portion of the Chase Tower (the "Garage Interest"), and the City and the Commission desire to provide certain additional incentives and undertakings to Care Hotels, as more particularly described herein; and WHEREAS, the Parties recognize that (i) the City and the Commission must take additional actions in order to implement certain of the incentives and undertakings set forth herein including, in some instances, completion of required statutory and regulatory proceedings, and that the City's and the Commission's obligations hereunder shall be subject to completing such additional actions, (ii) the obligations of the City and the Commission hereunder are subject to Care Hotels fulfilling its obligations hereunder, and (iii) the obligations of Care Hotels hereunder are subject to the City and the Commission fulfilling their respective obligations hereunder. NOW, THEREFORE,the Parties hereby agree that the foregoing recitals are accurate and incorporated into this Agreement for all purposes, and further agree as follows: SECTION I. City Agreements. The City and the Commission agree with Care Hotels as follows: (a) The Commission shall, subject to further proceedings required by law, purchase the Garage Interest from Care Hotels for a total purchase price of Five Million Seven Hundred Thousand Dollars ($5,700,000). The Parties agree to enter into a Garage Purchase and Master Lease Agreement, Garage Lease and Operating Agreement, Financing Agreement, Escrow Agreement, and such other Agreements necessary to carry out the intent of this Agreement (collectively "Closing Agreements") setting forth the obligations of the Commission and Care Hotels in connection with the transfer of the Garage Interest to the Commission. (b) In connection with the Garage Purchase and Master Lease Agreement, the Parties will also enter into an Escrow Agreement. The proceeds from the sale of the Garage Interest shall be deposited in an escrow account at Meridian Title Corporation. The Escrow Agreement will provide a procedure for draws against the escrowed funds for expenses incurred by Care Hotels in making the types of improvements set forth herein. The escrowed funds will not be available to Care Hotels until Care Hotels has invested a minimum of Five Million Seven Hundred Thousand Dollars ($5,700,000) of its own funds in the Building Improvements. A maximum of One Million Five Hundred Thousand Dollars ($1,500,000) shall be available from the escrowed funds until Care Hotels has rebranded the hotel as required by Section 2(d). Once the hotel meets the Qualified Hotel Brands requirement under the Section 2(d), all of the escrowed funds shall be available to Care Hotels pursuant to the Escrow Agreement. -2 - BDDBOI 90052150