Two agreements related to the Bayland Island hotel/convention center project were approved at the first-ever Baytown Hospitality Public Facilities Corporation meeting.
The PFC members, whose members are practically identical to the Municipal Development District, authorized a pre-construction agreement with DPR Construction to build the hotel/convention center.
Ron Bottoms, former deputy city manager, talked about the agreement.
“This is an agreement with DPR Construction to finish the process in order to get the initial guaranteed maximum price,” Bottoms said.
City Manager Rick Davis said the IMGP is the builder’s best price for what the buildings will cost. This is expected from the builders during the first week of December.
“It is also to finish the design work while we are re-doing the design/build agreement with the (Public Facilities Corporation),” Bottoms said. “We changed everything to the PFC, and this cleaned all of that up.”
Bottoms added the cost is in line with the budget Garfield Public/Private presented in October, which was $63.6 million, $5.2 million more than initial estimates.
PFC Vice President Chris Presley asked about when would members approve the actual construction agreement.
“That is the new design/build agreement, and that’s is being worked on as we speak,” Bottoms said. “This is a stopgap measure.”
PFC member Bob Hoskins asked who was the actual owner of the hotel and convention center. Bottoms said the way the structure is set up, the city will own the convention center. Through ownership, the city will receive $9 million over the next 10 years thanks to House Bill 4347 legislation authored by Rep. Rafael Anchia. It makes the city eligible for money in hotel occupation taxes and sales taxes that are shared with the state.
“This was not the way we worked it before. The MDD was going to own the whole thing,” Bottoms said. “The PFC will now own the hotel, and the city will own the convention center. Then, we’ll build an operator’s agreement between the MDD and the PFC for the MDD to operate the project. That is the structure we have put together to make this thing work.”
David Himsel, also a PFC member, asked about the timeframe of the construction of a hotel mockup. This is a replica of what a hotel room will look like to give agents a glimpse before they agree to book multiple guests at the hotel. It is to be constructed on Goose Creek CISD property at 601 Lee Drive.
“That is the model room and over by Lee College,” Bottoms said. “Nothing has changed except now they are now doing two rooms. I think they started on it to a certain extent, but they stopped when we moved from one brand to the other. I would think they need to (construct it) pretty quickly because that is what they have to get all of the approvals from the brand as they go along. They want to see what the room will look like.”
The PFC also approved a development services agreement with Garfield Public/Private for the hotel/convention center.
“This combines the hotel development that we approved a year-and-a-half ago and the master development agreement and rolls it into one,” Bottoms said. “You are the folks executing this document. The terms are the same.”
A third item approved by the PFC was a resolution authorizing a municipal advisory agreement with Hilltop Securities.
City attorney Ignacio Ramirez explained why the corporation was approving this item.
“This is the agreement to engage Hilltop to run the numbers for you, to give financial advice on the issuance of bonds for the projects,” Ramirez said. “We’ve used them before.”
The compensation for services associated with the issuance of municipal services is $19,500 plus $1.75 per thousand over $5,000,000. In addition, other post-sale services will be based upon an hourly rate.