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Home My WebLink AboutContract 1567-3 - t 3- -3 THIRD AMENDMENT TO TRANSIENT OCCUPANCY TAX SHARING AGREEMENT This Third Amendment to Transient Occupancy Tax Sharing Agreement ("Third Amendment") is hereby entered into on this36 1 day of June, 2016 by and between the CITY OF CATHEDRAL CITY, a California general law city ("City"), and T Alliance One Palm Springs, LLC, a California limited liability company("Owner"), as follows: RECITALS A. City and Owner entered in a Transient Occupancy Tax Sharing Agreement on April 10, 2013 ("Agreement"). The Agreement provides that the City will share with Owner a portion of the transient occupancy taxes received by the City from the Owner's operation of the Doubletree by Hilton Hotel provided that certain conditions are satisfied. B. A First Amendment and a Second Amendment to the Agreement have been executed by the City and Owner that extended the deadline for the opening of the Hotel. As amended, the Hotel was required to open by no later than April 1, 2016 in order to be eligible for transient occupancy tax sharing. The Hotel opened on January 1, 2016. C. Section 4 of the Agreement provides that transient occupancy tax sharing payments will be made by the City to the Owner annually in accordance with the calendar year (e.g. payment will be made within 30 days of City's receipt of Owner's transient occupancy tax report and remittance for December of each year). D. This Third Amendment amends Section 4 to change the timing of the transient occupancy tax sharing payments to align with the fiscal year ending June 30 ("Fiscal Year") rather than the calendar year. OPERATIVE PROVISIONS NOW, THEREFORE, in consideration of the promises made and recited herein,the parties do hereby enter into this Third Amendment which modifies and amends the Agreement as follows: 1. AMENDMENT. Section 4 (Terms Related to Calculation of Tax Sharing) of the Agreement is hereby amended to read as follows: Section 4. Terms Related to Calculation of Tax Sharing. a. The term of the Transient Occupancy Tax Sharing period shall be for a period of 17 years and shall commence on the later to occur of(such commencement date, the "TOT Sharing Commencement Date"): (i) January 1, 2016, or (ii) the date on which the Hotel Opening occurs provided that, if the Hotel Opening occurs later than October 1, 2016, the City has granted an extension to Owner with respect to the time frame for completion of the Hotel Improvements in accordance with and to the extent required under the terms of this Agreement. Payments from the Transient Occupancy Tax Increment shall be made by the City to the Owner on an annual (Fiscal Year) basis, with each such payment being required to be made on or before the date that is thirty (30) days from the date on which the City's -1- ORIGINAL Finance Department receives the monthly TOT report and remittance from the Owner for June of the subject year. Notwithstanding any language in this Agreement to the contrary, the Owner shall faithfully file monthly reports, together with their accompanying remittances, as required by the City's current procedures, or otherwise obey said procedures as they may change from time to time. By way of example only: if the City receives the June report and remittance from the Owner on July 31 of the Fiscal Year following the subject Fiscal Year, the payment of the Transient Occupancy Tax Increment for the subject Fiscal Year shall be made by the City to the Owner on or before August 31 of the same fiscal year. If the TOT Sharing Commencement Date begins on a date other than July 1 (start of the fiscal year), the first annual payment of Transient Occupancy Tax Sharing shall be for the number of months, commencing on the first day of the month following the TOT Sharing Commencement Date, remaining in the fiscal year during which the TOT Sharing Commencement Date falls. b. The Parties agree that "Transient Occupancy Tax Increment," as used in this Agreement, shall mean, for any given fiscal year, the amount by which the TOT receipts, as determined from the City's records, for the Hotel for said fiscal year exceed the Base Amount. As used herein, the "Base Amount" shall be an amount equal to the amount set forth in Exhibit "B" hereto, subject to the terms expressed in said exhibit, which amount equals the average annual amount of the TOT receipts received by the City, as determined from the City's records, from the Hotel during the three (3) full years prior to the date of Owner's acquisition of the Hotel, which the Parties expect to occur in 2013. Therefore, the calculation in Exhibit "B" uses calendar years 2010, 2011 and 2012. During the term of the Transient Occupancy Tax Sharing period, the Base Amount shall not change from the amount set forth above, unless the acquisition of the Hotel by the Owner occurs after December 31, 2013, in which case the three (3) years used as a basis for calculating the Base Amount will change. The calculation of the Base Amount is set forth on Exhibit "B" attached hereto and incorporated herein by reference, which assumes acquisition of the Hotel during calendar year 2013. As noted, this Base Amount may change if acquisition of the Hotel occurs after December 31, 2013. The Parties agree that the "Transient Occupancy Tax Sharing" amount shall mean an amount equal to fifty percent (50%) of the Transient Occupancy Tax Increment for any given fiscal year, which Transient Occupancy Tax Sharing amount shall be payable for a period of seventeen (17) years, subject to the provisions of this Agreement. By way of example only, if: (i) the TOT receipts from the Hotel for fiscal year 2015-16 is $100,000, and (ii) the Base Amount is $60,000, then the Transient Occupancy Tax Increment for fiscal year 2015-16 would be $40,000 and the Transient Occupancy Tax Sharing amount for fiscal year 2015-16 would be $20,000 (50%of$40,000). c. The 'yearly' period for measurement of Transient Occupancy Tax Increment shall be each Fiscal Year. If necessary to reach the full seventeen (17) year term of the Transient Occupancy Tax Sharing period,the final month or months shall be prorated. d. The Parties acknowledge that the information from which the City's Finance Department calculates the Transient Occupancy Tax Increment is based upon reports filed by the Owner or Owner's designated operator of the Hotel. Accordingly, the Owner agrees to provide the City's Finance Department with accurate occupancy reports, at such frequency as the City's procedures may from time to time require of the Hotel. The City's Finance Department may adopt such procedures, audits or required reports as are reasonable or -2- ORIGINAL necessary to enable the Finance Department to accurately calculate the Transient Occupancy Tax Increment. The annual payment of the Transient Occupancy Tax Sharing amount shall be based on information which is as accurate as can be reasonably obtained by the Parties. The Parties agree that past payments of the Transient Occupancy Tax Sharing amount are subject to adjustment if further information indicates that any payment was inaccurate. 2. GENERAL PROVISIONS. 2.1 Remainder Unchanged. Except as specifically modified and amended in this Third Amendment, the Agreement remains in full force and effect and binding upon the parties. 2.2 Integration. This Third Amendment consists of pages 1 through 4 inclusive, which constitute the entire understanding and agreement of the parties and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the transaction discussed in this Third Amendment. 2.3 Effective Date. This Third Amendment shall not become effective until the date it has been executed by the appropriate authorities of the City and Owner. 2.4 Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Third Amendment. 2.5 References. All references to the Agreement include all their respective terms and provisions. All defined terms utilized in this Third Amendment have the same meaning as provided in the Agreement, unless expressly stated to the contrary in this Third Amendment. [THIS SECTION LEFT INTENTIONALLY BLANK] -3- 3REGI JAL IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment to the Agreement on the date and year written above. CITY: THE CITY OF CATHEDRAL CITY • By: 'arles '. McClendon, City r anager OWNER: T ALLIANCE ONE PALM SPRINGS, LLC By: Name: /LC'`-`f'-1", Po—Pcri Title: '4-C`""''14/ By: Name: Title: NOTE: OWNER'S SIGNATURES SHALL BE DULY NOTARIZED, AND APPROPRIATE ATTESTATIONS SHALL BE INCLUDED AS MAY BE REQUIRED BY THE BYLAWS, ARTICLES OF INCORPORATION, OR OTHER RULES OR REGULATIONS APPLICABLE TO OWNER'S BUSINESS ENTITY. -4- li ORIGINAL � Q / • California All-Purpose Certificate of Acknowledgment A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California 7. �Mt s.s. County of � v� , On OL V C oe31, /01(o before me, (Ti I n i e HOW ail . J Pki i C , personally appeared I v A u r ra lc(y 1 T g who proved to me on the basis of satisfactory evidence to be the person(s5whose name. _ is/afesubscribed to the within instrument and acknowledged to me that he/s+&eIthey executed the same in hisLbeiLtheir authorized capacity44es), and that by his/her ttFreir'signature5 on the instrument the personfs1, or the entity upon behalf of which the persons) acted, executed the • instrument. - certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is JENNIFER 110wARD true and correct. t ' OMM. *2142222 = r WITNESS my hand and official seal. A i..,/ Comm. Cou Y g 2020 - - ,(6(.57,ea.4 60 _,, ,Nofarr - OPTIONAL INFORMATION 1 E. t!7Lal.l`, .�..,PC ) o-.r ? 31!�71?,1 1'ii IZ ".:r' r�, it ri+� w'. �, or rrvr• + :, ,.f"_' 1;,::?�. '"7r-,,,. Description of Attached Document Additional Information . The preceding Certificate of Acknowledgment is attached to a Method of Signer Identification z document titled/for the purpose of Proved to me on the basis of satisfactory evidence: : ❑form(s)of identification ❑credible witness(es) • containing pages, and dated . Notarial event is detailed in notary journal on: ' Page# Entry# The signer(s)capacity or authority is/are as: ❑ Individual(s) Notary contact: _ ❑ Attorney-in-fact ❑ Corporate Officer(s) other Additional Signer❑ g ❑ Signer(s)Thumbprints(s) 7 ❑ Guardian/Conservator - ❑ Partner-Limited/General ❑ Trustee(s) f.• ❑ Other: j • representing: 7. ♦l .l<-S.trrt\(.1.1 rr.[I rt'1'.♦t h\rr\t l,i.ol.\It. ORII'G'IN' AL