Plan for project moving forward

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After several months of public silence on a proposed hotel and convention center, a development agreement for the project could soon be finalized, the developer says.

According to developer Tim O’Reilly, there’s no timeline to finalize the development agreement, but his group — O’Reilly Hospitality Management of Springfield, Mo. — is working toward that goal in the next 30 days. That agreement, he said, is part of the overall structure in moving toward construction starting on the project.

“We’re extremely excited to get the project started,” said O’Reilly, the developer’s managing member and chief executive officer.

O’Reilly Hospitality Management LLC has proposed a public-private partnership with the city of Denton to build the project on land owned by the University of North Texas.

The Denton City Council is scheduled to hear an update on the convention center proposal in a work session on March 19.

But the last public meeting on the proposed project took place in December before the Denton school board, which had not been part of the discussion and planning since the city, university and developer began working on it in 2009.

The discussion stalled and early last year was revived.

School board members say the discussion was a way to stay transparent with constituents and have more visibility with those who attend school board meetings.

Though the school board holds joint meetings with the Denton City Council generally once a quarter, there’s only a limited amount of time for discussion, some board members say. Holding such discussions during school board meetings allow for more in-depth conversations about projects with a potential impact on the district.

At the Dec. 11 meeting, representatives from the city of Denton and O’Reilly Hospitality Management shared with the school board their plans for the proposed hotel and convention center on UNT property.

According to a preliminary agreement, UNT would lease the land to the developer and the city. The city will build and own the convention center and lease the convention center to the developer for management and operation, and the developer will build the hotel and restaurant.

The Dec. 11 presentation revealed that a development agreement between the city and UNT was slated for January, with construction slated to begin the first quarter of this year and be completed by summer 2014.

Although Assistant City Manager Jon Fortune told the school board in December that the City Council was expected to consider a developer’s agreement in January, that schedule appears to have changed.

In January, Fortune said the city was still waiting for additional information from the developer.

“We don’t have a developer’s agreement that we’ve all agreed to,” Fortune said. “The ball’s in their court.”

During the Denton City Council’s planning retreat last month, Assistant City Manager Bryan Langley told the council the city may be issuing certificates of obligation to help pay for the conference center in the near future. However, the city does not yet know the exact amount and timing of the bond package, which would be supported by revenue from the conference center.

The council, during a February meeting, also discussed the project in executive session.

Andrew Harris, UNT’s vice president of finance and administration, said there hasn’t been a change.

All three parties have been interested in the project for a long time, he said.

The UNT Board of Regents hasn’t formally discussed the project for more than a year. In February 2012, regents met in executive discussion to discuss “matters related to the purchase, exchange, lease or value of real property” for the proposed hotel and convention center, according to the agenda for that meeting.

Currently, the conversations are mainly between the city and the developer.

Once they get their parts worked out and the project moves forward, UNT will bring it before the Board of Regents for approval to lease the land to the city and the developer to build the convention center and hotel, Harris said, adding that UNT’s intent hasn’t changed.

“We are waiting for the right alignment,” he said.

Harris also said that details regarding the leasing of the land have not been set because no agreement has been reached.

He said it’s in the “stage of feasibility.”

“We’re encouraged; we’re hopeful,” he said, adding that it will be good for the city and the university.

“We think this will be a great project, and we hope we can bring this to fruition,” Harris said.

Area hoteliers have been concerned about the project for some time because of low occupancy ratings in the city.

Despite concerns, supporters for the hotel and conference center project say the hotel offers a different option and the convention center will bring additional business to existing hotels.

Mia Price, president of the Denton school board, said the board is waiting to learn more details of the project, hopefully within the next few months.

Superintendent Jamie Wilson said the district has not seen a complete business plan from the developer but that it’s in regular contact with the city because this project could have an impact on its tax rolls.

School board members say they, too, are interested in the impact such a project could have on the district’s tax revenue base.

School officials say because the land is currently owned by UNT, a Texas public university, it currently generates no tax revenue. If the land were to be leased, that has taxable value, school board member Charles Stafford said.

“It creates a revenue source out of a property that would have otherwise never paid taxes,” he said.  “An unknown percentage of something is better than 100 percent of nothing.”

At this point, the potential tax revenue that could be generated from the project for the school district is unknown, according to district officials.

School board member Glenna Harris said the project impacts the district from the standpoint of its bottom line and could bring more revenue onto the tax rolls.

Jim Alexander, also a board member, said that while the district has made no commitments regarding the project in any way, he said trustees are interested in looking at options and ways the school district might be able to improve prospects.

Some effort is being made to put together proposals for the district, Alexander said, but he’s unsure of what they could entail. Alexander added that he suspected it could probably involve the school district helping with “encouragement” for O’Reilly to put together and bring the project to Denton, but nothing has been revealed. He said the district likely could hear more about potential proposals throughout the spring.

O’Reilly said ways the school district and other entities could partner in the project are still being discussed, but at this point there’s been no conclusion.

Stafford said that in 2001, legislators forbade school districts from offering tax abatements.

Board members say they’re also intrigued by the economic growth the project could bring to the city.

Kim Phillips, vice president of the Denton Convention and Visitors Bureau, told the board in December that more than 1,000 associations with hundreds of members annually move their conferences from city to city around the state. They could potentially come to Denton if meeting space was available.

Trustees said such a project could generate new jobs in the city, impact growth and the housing market, attract other businesses to the city and generate more revenue through organizations conducting their conferences in Denton.

“I think there’s a potential payoff for all involved,” school board member Rudy Rodriguez said.

 

Staff writers Peggy Heinkel-Wolfe and Rachel Mehlhaff contributed to this report.

BRITNEY TABOR can be reached at 940-566-6876. Her e-mail address is btabor@

dentonrc.com.


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