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Home My WebLink AboutResolution - 2005-R0170 - Escrow Agreement - American State Bank - Milwaukee Project - 04/25/2005xesolution No. 2005-RO170 April 25, 2005 Item No. 3' RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock, an Escrow Agreement between the City of Lubbock and American State Bank, as escrow agent, and the developers of the Milwaukee Project from 34 h Street to 92nd Street, being (i) Bacon Crest, LTD; (ii) Betenbough Capital, Inc.; (iii) Rick Betenbough; (iv) Ron Betenbough; (v) Day Estates, LTD; (vi) Hubwest Development, L.L.C.; (vii) Canyon Hub Holdings, L.P.; (viii) Milwaukee, LTD; (ix) S & S Commercial Properties, LTD; and (x) Sonny Arnold Trust. Said Escrow Agreement is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the Council. Passed by the City Council this 25th da ATTEST: Reb cca Garza, City Secretary I,I.y aig FafinelfJ Director of Pinning and,Transportation AW Lee Ann Dumbauld, Chief Financial Officer 95. APPROVED AS TO FORM: Richard K. Casner First Assistant City Attorney ml/ccdocs/Milwaukee Paving.Escrow Agreement.res April 22, 2005 CONTRACT NO. ESCROW AGREEMENT 00006049 THIS Escrow Agreement, dated as of the 25th day of April, 2005 ("Agreement"), entered into by and between the City of Lubbock, Texas, a Texas home rule municipal corporation (the "City"), and Bacon Crest, LTD, a Texas limited partnership; Betenbough Capital, Inc., a Texas corporation; Rick Betenbough and Ron Betenbough, individuals; Day Estates, LTD, a Texas limited partnership; Hubwest Development, L.L.C., a Texas limited liability company; Canyon Hub Holdings, L.P., a Texas limited partnership; Milwaukee, LTD, a Texas limited partnership; S & S Commercial Properties, LTD, a Texas limited partnership, successor by conversion to S & S Commercial Properties, LLC, a Texas limited liability company; and the Sonny Arnold Trust (collectively, the "Developer"), and American State Bank, a state banking association authorized to do business in the State of Texas, (herein together within any successor in such capacity, called the "Escrow Agent"). WITNESSETH: WHEREAS, on or about September 16, 2004 (as amended by Resolution dated September 28, 2004) and October 11, 2004, the City and Developer entered into those certain Development Agreements for Design and Construction of Milwaukee Avenue (collectively, the "Development Agreement"), wherein Developer obligated himself/itself to pay for certain costs and expenses regarding paving and other construction activities on Milwaukee Avenue, within the City of Lubbock; WHEREAS, the Development Agreement provides that the Developer is committed to pay to Escrow Agent the Actual Bid Cost, as defined in the Development Agreement, for the costs and expenses related to paving and construction activities on Milwaukee Avenue, said Actual Bid Cost to be limited to the amount of the Estimated Amount, as defined in the Development Agreement, plus an additional five percent (5%) of the Estimated Amount, unless a greater amount is agreed to otherwise between City and Developer; WHEREAS, the City and Developer now desire to enter into this Agreement according to the terms and provisions hereof; WHEREAS, the Escrow Agent is a party to this Agreement and hereby acknowledges its acceptance of the terms and provisions hereof; NOW, THEREFORE, in consideration of the mutual understandings, undertakings, promises and agreements herein contained, the sufficiency of which are hereby acknowledged, the City, Developer and Escrow Agent mutually undertake, promise and agree for themselves and their respective representatives and successors, as follows: Article I ESCROW DEPOSIT 1.01. Initial Deposit. No later than three (3) days after receipt of the Notice of Intended Award, as defined in the Development Agreement, or ten (10) days prior to the meeting of the City Council wherein the award of the bid for the Milwaukee Project, as defined in the Development Agreement, is to be considered, whichever is the later to occur, each Developer shall deposit, or cause to be deposited, with the Escrow Agent the Actual Bid Cost, as defined in the applicable Development Agreement, unless a greater amount has been agreed to Escrow Agreement Page 2 of 17 by the City and the Developer. The City shall notify the Escrow Agent, with a copy to the Developer, at least one (1) day prior to the time the deposit is required of Developer of the amount of funds to be deposited to the credit of the Escrow Fund, as defined below, by each Developer pursuant to the terms of the Development Agreement. The Escrow Agent shall, upon the receipt of the funds, acknowledge such receipt to the City and Developer in writing. 1.02. Subsequent Deposit. In the event the Developer is required to deposit additional funds to the Escrow Agent due to the award of a bid of a larger amount than that set forth in the Notice of Intended Award, as defined in and provided by the Development Agreement, each Developer shall deposit said funds on or before three (3) days after the meeting of the City Council wherein the bid is awarded. The City shall notify the Escrow Agent, with a copy to the Developer, of the amount of additional funds to be deposited to the Escrow Fund, as defined below, pursuant to the terms of the Development Agreement. The Escrow Agent shall, upon the receipt of the additional funds, acknowledge such receipt to the City and Developer in writing. Article II CREATION AND OPERATION OF ESCROW FUND 2.01. Escrow Fund. The Escrow Agent hereby creates on its books an escrow fund comprised of the funds, described in Article I, above, for the purpose of paying the Developer's obligations under the Development Agreement (the "Escrow Fund"). The Escrow Agent hereby agrees that upon receipt thereof it will deposit to the credit of the Escrow Fund such funds. Such deposit or deposits, all Escrow Agreement Page 3 of 17 proceeds therefrom, and all cash balances from time to time on deposit therein (a) shall be the property of the Escrow Fund; and (b) shall be applied only in strict conformity with the terms and conditions of this Agreement. 2.02. Payment of Principal and Interest. The Escrow Agent is hereby instructed to transfer to the City from the Escrow Fund such amounts requested by the City to fund the Developer's obligations under the Development Agreement, as communicated by City in writing to Escrow Agent. The City may request up to one (1) transfer from the Escrow Fund per month during the term of this Agreement. No consents, documentation, representations or any other matter, other than the written request of City, by and through its City Manager or his/her delegee, as per written delegation, shall be required for disbursement of the requested funds by Escrow Agent. Escrow Agent may rely on the written request of City herein in disbursing such funds and shall not be required to make inquiries, of any kind or nature, regarding such request. Developer shall indemnify and hold harmless Escrow Agent for and from any loss, liability or damage arising from Escrow Agent's transfer of funds to the City in conformance with the terms hereof. 2.03. Escrow Fund. The Escrow Agent (i) shall hold at all times the Escrow Fund in an interest bearing capacity entirely segregated from all other funds and securities on deposit with the Escrow Agent; (ii) shall never allow the assets of the Escrow Fund to be commingled with any other funds of the Escrow Agent; and (iii) shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The amounts received by the Escrow Agent under this Agreement, and the interest earned thereon, shall not be considered as a banking deposit. The Escrow Agent Escrow Agreement Page 4 of 17 shall have no right or title with respect thereto except as Escrow Agent under the terms of this Agreement. Article III DUTIES AND REPRESENTATIONS OF ESCROW AGENT 3.01. Records. The Escrow Agent will keep books of record and account in which complete and correct entry shall be made of all transactions relating to receipts, disbursements, allocations and applications of the funds deposited to the Escrow Fund and all proceeds thereof and such books shall be available for inspection by the Developer and City at reasonable hours and under reasonable conditions. 3.02 Representations. The Escrow Agent hereby represents that it has all necessary power and authority to enter into this Agreement and to undertake all of the obligations and responsibilities imposed upon it herein, and that it shall carry out all of its obligations hereunder. 3.03 Limitations on Duties. The Escrow Agent makes no representation as to the value, condition or sufficiency of the Escrow Fund. The Escrow Agent has no duty to determine or inquire into the happening or occurrence of any event or contingency, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund and to dispose of and deliver the Escrow Fund in accordance with the terms of this Agreement. Article IV COMPENSATION OF ESCROW AGENT 4.01 Compensation. Concurrently with the delivery of the funds set forth in Article I, above, Developer shall pay or cause to be paid to Escrow Agent the collective Escrow Agreement Page 5of17 sum of One Thousand Five Hundred Dollars ($1,500.00), each Developer shall contribute the amount of the fee in the proportion which each Developer's allocation of the Escrow Fund bears to the entire Escrow Fund, said Percentage Allocation (herein so called) being set forth in Exhibit "A", attached hereto, the sufficiency of which is hereby acknowledged by the Escrow Agent to pay its fee for performing the services of Escrow Agent hereunder and for any expenses incurred or to be incurred by it as Escrow Agent in the administration of this Agreement. In the event the Escrow Agent is requested to perform any extraordinary services hereunder, the Developer hereby agrees to pay, on the Percent Allocation basis, reasonable fees to the Escrow Agent for such extraordinary services and to reimburse the Escrow Agent for all expenses incurred by the Escrow Agent in performing such extraordinary services. The Escrow Agent hereby agrees and stipulates to look only to the Developer for the payment of such fees and reimbursement of such expenses. The Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien against the Escrow Fund for any fees for its services, whether regular or extraordinary, as Escrow Agent, or any other capacity, or for reimbursement for any of its expenses. 4.02. Successor Escrow Agents. (a) If at any time the Escrow Agent or its legal successor or successors should become unable, through operation of law or otherwise, to act as Escrow Agent hereunder, or its property and affairs shall be taken under the control of any state or federal court or administrative body because of insolvency or bankruptcy or for any other reason, a vacancy shall exist Escrow Agreement Page 6of17 in the office of Escrow Agent hereunder. In such event the City shall appoint an Escrow Agent to fill such vacancy. (b) Subject to the terms hereof, the Escrow Agent may at any time resign and be discharged of its obligations hereunder by giving not less that one hundred and twenty (120) days written notice to the City and Developer; provided, that no such resignation shall take affect unless: (i) a successor Escrow Agent shall have been appointed by the City; (ii) such successor Escrow Agent shall have accepted such appointment under the terms of this Agreement; (iii) the successor Escrow Agent shall have agreed to accept the fees currently in affect for the Escrow Fund; and (iv) the Escrow Agent shall have paid over to the successor Escrow Agent a proportional part of the Escrow Agent's fee hereunder. Such resignation shall take affect immediately upon compliance with the foregoing requirements. (c) Any successor Escrow Agent shall be: (i) a'corporation organized and doing business under the laws of the United States or the State of Texas; (ii) authorized under such laws to exercise corporate trust powers; (iii) have its principle office and place of business in the State of Texas; (iv) have a combined capital and surplus of at least five million dollars ($5,000,000); and (v) be subject to the supervision or examination by federal or state authority. (d) Any successor Escrow Agent shall execute, acknowledge and deliver to the City, Developer and the Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall execute and deliver an instrument transferring to such successor Escrow Agent, subject to the terms of this Escrow Agreement Page 7of17 Agreement, all the rights, powers and trusts of the Escrow Agent hereunder. The Escrow Agent shall pay over to the successor Escrow Agent a proportional part of the Escrow Agent's fee under this Agreement. Article V EVENTS OF DEFAULT/ REMEDIES 5.01 (a) Events of Default/ Remedies. In the event any party hereto shall default in the performance of any term or provision of this Agreement, if said default shall be continuing after five (5) days notice of such default delivered to the defaulting party, any non -defaulting party may exercise any right or remedy available to it by law, contract, equity or otherwise, including with limitation, specific performance of the terms of this Agreement. (b) Cross Default. It is expressly stipulated that any uncured event of default by a Developer under the applicable Development Agreement shall constitute, for all purposes, a default hereunder. Further, any uncured event of default by a Developer under this Agreement shall constitute, for all purposes, a default under the applicable Development Agreement. Article VI MISCELLANEOUS 6.01 Notice. Any notice, request, authorization or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given (i) if personally delivered or by telephonic facsimile, on the day provided; and (ii) Escrow Agreement Page 8 of 11 if by mail, three (3) days after mailed by registered or certified mail, postage pre- paid, addressed as follows: For City: Lee Ann Dumbauld, CFO City of Lubbock P.O. Box 2000 Lubbock, Texas 79457 Facsimile: 806-775-2051 and: Larry Hertel, City Engineer City of Lubbock P.O. Box 2000 Lubbock, Texas 79457 Facsimile: 806-775-3074 For Developer: Bacon Crest, LTD Attn: George McMahan 7209 76"' Street Lubbock, Texas 79424 Facsimile: 806-794-2768 Betenbough Capital, Inc. Attn: Rick Betenbough, President and Ron Betenbough, Vice President 6305 82nd Street Lubbock, Texas 79424 Facsimile: 806-797-4413 Rick Betenbough 6305 82"d Street Lubbock, Texas 79424 Facsimile: 806-797-4413 Ron Betenbough 6305 82nd Street Lubbock, Texas 79424 Facsimile: 806-797-4413 Escrow Agreement Page 9of17 Day Estates, LTD Attn: Dan A. Day P.O. Box 93823 Lubbock, Texas 79493 Facsimile: 806-783-0300 Hubwest Development, L.L.C. Canyon Hub Holdings, L.P. Attn: Charles Hodges 13642 Omega Dallas, Texas 75244-4514 Facsimile: 972-960-1129 Milwaukee, LTD Attn: George McMahan 7209 76th Street Lubbock, Texas 79424 Facsimile: 806-794-2768 S & S Commercial Properties, LTD Attn: Marc Shipton, President P.O. Box 64189 Lubbock, Texas 79464 Facsimile: 806-794-1559 Sonny Arnold Trust Attn: Kyle Fulton, Senior Vice President 5010 University Avenue Lubbock, Texas 79413 Facsimile: 806-791-7379 With copy to: Ken Flagg Ken Flagg Realtors 3403 73ra Street, Suite 4 Lubbock, Texas 79423 Facsimile: 806-785-3173 Escrow Agent: American State Bank Attn: Steve Exter 1401 Avenue Q Lubbock, Texas 79401 Facsimile: 806-767-7228 Escrow Agreement Page 1.0 of 17 The United States Post Office registered or certified mail receipts and telephonic facsimile reports showing delivery of the notice shall be conclusive evidence of the date and fact of delivery. Either party hereto may change the address to which notices are to be delivered by giving to the other party not less than ten (10) days prior notice, as described herein, thereof. 6.02. Termination of Responsibilities. Upon completion of all actions described herein by the Escrow Agent, including without limitation, the withdrawal of the Escrow Funds by the City, as contemplated herein, the Escrow Agent, except as provided herein, shall have no further obligation or responsibility hereunder to the City, the Developer or to any other person or persons in connection with this Agreement. Escrow Agent shall, upon the termination of all actions described herein, distribute the interest earned on the Escrow Fund, less any expenses or fees due Escrow Agent hereunder, pro rata to each Developer on the Percentage Allocation basis described in Section 4.01, above. Upon completion of all required actions herein of Escrow Agent in conformance with the terms of this Agreement, Developer and City release Escrow Agent from all obligations and liabilities under this Agreement. 6.03. Binding Agreement. This Agreement shall be binding upon, and inure solely to the benefit of, the City, the Developer and the Escrow Agent, and their respective successors and legal representatives. 6.04. Severability. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any Escrow Agreement Page 11 of 17 other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. 6.05. Texas Law and Venue. THIS AGREEMENT SHALL BE GOVERNED EXCLUSIVELY BY THE PROVISIONS HEREOF AND BY THE APPLICABLE LAWS OF THE STATE OF TEXAS. THE VENUE FOR ANY ACTION ARISING HEREUNDER SHALL SOLELY LIE IN THE COURTS OF LUBBOCK COUNTY, TEXAS. 6.06. Modification of Agreement. No alteration, amendment or modification of any provision of this Agreement shall be effective unless such alteration, amendment or modification is in writing and signed by all parties hereto. 6.07. City, Developer, and Escrow Agent each bind themselves and their successors and assigns to the other parties to this Agreement. Each Developer represents and warrants to City and Escrow Agent that it (i) possesses the requisite power and authority to execute, deliver and perform this Agreement; (ii) has taken all actions and formalities necessary to authorize Developer to execute, deliver and perform this Agreement; and (iii) the party executing for and on behalf of each Developer has been duly authorized to act in such behalf for Developer. Developer may assign its obligations under this Agreement, provided however, that Developer shall not be released from liability for performance of any obligation to City or Escrow Agent contained in this Agreement and will be held as a surety for the performance of this Agreement by any subsequent assignee. 6.08 This Escrow Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement, and any of the Escrow Agreement Page 12 of 17 parties hereto may execute this Escrow Agreement by signing any such counterpart. IN WITNESS WHEREOF, this Escrow Agreement has been executed as of the date and year appearing on the first page of this Agreement. ATTEST: Re ecca Garza, City Secretary APPROVED AS TO CONTENT: r el CITY OF LUBBOCK, TEXAS Craig Farrher,'Managing Director of Planning and Transportation AHerteVCity Engineer GX&44"�.— Ann Dumbauld, Chief Financial Officer APPROVED AS TO FORM: Richard K. Casner First Assistant City Attorney Escrow Agreement Page 13 of 17 ATTEST: By: _ Title: ATTEST: By: Title: DEVELOPERS: BACON CREST..LTD By: Zq � �., ►� George McMahan, Managing Partner of George McMahan, LLC, Managing Partner of Bacon Crest, LTD, a Texas limited partnership BETENBOUGH CAPITAL, INC. By: Ron Betenbough Vice President RICK BETENBOUGH RON BETENBOUGH DAY ESTATES, LTD By: Dan A. Day, President of Dan A. Day, Inc. General Partner of Day Estates, LTD, a Texas limited partnership Escrow Agreement Page 14 of 17 ATTEST: By: _ Title: HUBWEST DEVELOPMENT, L.L.C. BY: Name: Charles Hodges Title: Manager BY: Name: Artemio de la Vega Title: Manager CANYON HUB HOLDINGS, L.P. By: Name: Artemio de la Vega Title: Manager of General Partner NULWAUKEE, LT By: George McMahan, Managing Partner of George McMahan, LLC, Managing General Partner of Milwaukee, LTD, a Texas limited Partnership S & S COMMERCIAL PROPERTIES, LLC By: Marc Shipton, President Escrow Agreement Page 15 of 17 ATTEST: By: Title: vicc ATTEST: By: _ Title: DEVELOPERS: BACON CREST, LTD By: George McMahan, Managing Partner of George McMahan, LLC, Managing Partner of Bacon Crest, LTD, a Texas limited partnership BETEN UGH C PITAL, INC. By: — Ron Betenbough Vice President ;RIFC:NBETENBOUGH RON BETENBOUGH 1 DAY ESTATES, LTD By: Dan A. Day, President of Dan A. Day, Inc. General Partner of Day Estates, LTD, a Texas limited partnership Escrow Agreement Page 14 of 17 ATTEST: By: _ Title: DEVELOPERS: BACON CREST, LTD By: George McMahan, Managing Partner of George McMahan, LLC, Managing Partner of Bacon Crest, LTD, a Texas limited partnership BETENBOUGH CAPITAL, INC. By: Ron Betenbough Vice President RICK BETENBOUGH RON BETENBOUGH DAY ESTATES, LTD By: �&LA&.ti- Dan A. Day, PresijYent of Dan A. Day, Inc. General Partner of Day Estates, LTD, a Texas limited partnership Escrow Agreement Page 14 of 17 ATTEST: By: _ Title: Ha:arles D VELOPMEN L.C. B N Hodges Title: Manager 10 Title: Manager of General MILWAUKEE, LTD. By: George McMahan, Managing Partner of George McMahan, LLC, Managing General Partner of Milwaukee, LTD, a Texas limited Partnership S & S COMMERCIAL PROPERTIES, LTD, a Texas limited partnership, successor by conversion to S &,S Commercial Properties, LLC, a Texas limited liability company By: Marc Shipton, Sr., Sole Member of S & S Commercial Properties GP, L.L.C., General Partner Escrow Agreement Page 15 of 17 HUBWEST DEVELOPMENT, L.L.C. By: Name: Charles Hodges Title: Manager CANYON HUB HOLDINGS, L.P. By: Name: Charles Hodges Title: Manager of General Partner MILWAUKEE, LTD. By: George McMahan, Managing Partner of George McMahan, LLC, Managing General Partner. of Milwaukee, LTD, a Texas limited Partnership S & S COMMERCIAL PROPERTIES, LTD, a Texas limited partnership, successor by conversion to S & S Commercial Properties, LLC, a Texas limited liab' ' company By.`i Marc Shipton, S ., Sole Member of S & S Commercial Properties GP, L.L.C., General Partner Escrow Agreement Page 15 of 17 SONNY ARNOLDIFTRUST By:.11 KylWapital tive Vice President of Plailth Management Company, Trustee of the Sonny Arnold Trust ESCROW AGENT: AMERICAN STATE BANK, a state banking association Name: Title: ml/CityaPAUchard/EscrowAgreement. MilwaukeeProject.final April 19, 2005 Escrow Agreement Page 16 of 17 SONNY ARNOLD TRUST By: Kyle Fulton, Executive Vice President of Plains Capital Wealth Management Company, Trustee of the Sonny Arnold Trust ATTEST: By: _ Title: ESCROW AGENT: AMERICAN STATE BANK, a state banking association By: Name: S.T—R.,E EXTER,j.D., GTFA Executive Vice President Title: mUCityat RichardlEscrowAgreement.NlwaukeeProject.final April 19, 2005 Escrow Agreement Page 16 of 17 Exhibit "A" Developer Estimated Based on Actual Bid: Percentage Contribution of Contribution of Allocation Individual Individual Developer (D/T) Developer (D) Bacon Crest, LTD $666,743 $700,080 16.77% Betenbough Capital, Inc. $326,923 $3431269 8.22% Rick and Ron Betenbough $303,498 $318,673 7.63% Day Estates, LTD $5,918 $6,214 0.15% Hubwest Development L.L.C. and Canyon Hub Holdings, L.P. $394,053 $413,756 9.91 % (North) Hubwest Development L.L.C. and Canyon Hub Holdings, L.P. $701,040 $736,092 17.63% (South) Milwaukee, LTD $655,051 $687,804 16.48% S & S Commercial Properties, LTD $491,835 $516,427 12.37% (CMS Properties) S & S Commercial Properties, LTD $303,720 $318,906 7.64% (Milwaukee Land & Trust) Sonny Arnold Trust $24,485 $25,709 0.62% Hubwest Development Traffic $107,570* $107,570* 2.58% Signal Total Developer Contribution $3,980,836 $4,174,500 100.00% * Per First Amendment to Hubwest Development Agreement