The Denton City Council unanimously approved a master agreement with a Missouri development group that is expected to bring the city a convention center and full-service hotel as soon as 2015.
The vote came Tuesday in a special session that followed a council work session that went over much of the same ground visited over the past year as details of the public-private partnership were hammered out.
The deal provides for a $25 million, 100,000-square-foot convention center to be built and owned by the city, but managed by O’Reilly Hospitality Management. O’Reilly and its investment partners will build and manage a $60 million, 300-room full-service hotel and restaurant adjacent to the convention center.
Both projects will be built on about 13.5 acres of land owned by the University of North Texas close to Apogee Stadium.
The master agreement includes a half-dozen related agreements, including leases and professional service agreements that begin a “feasibility period” for the city and the developer. Both still have an opportunity to halt the deal before construction begins sometime next year.
The council’s approval means a project architect may begin a partial design of the convention center sufficient for the city to seek and secure construction bids for a guaranteed maximum price. If the bids are too high, the city could halt the deal.
Soon after, the city would begin putting the financing together, which includes the issue of $25 million in certificates of obligation.
Once the city closes on the sale of those certificates, its decision to build the convention center is final, Assistant City Manager Jon Fortune told the council.
The financing also includes steps the city must take to set up a special taxing district, known as a tax-increment reinvestment zone. The city has approached the Denton County Commissioners Court and the Denton school district about contributing some of the new property tax revenue they would receive from the hotel to help the city repay the convention center bonds.
The special taxing district was at the request of the developer, who is being asked to guarantee the city’s bond payments, which are expected to cost more than $2 million per year.
Neither the county nor the school district has committed to the tax abatements.
Should the project proceed as planned, the hotel and convention center would open either in late 2015 or early 2016, Fortune said.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881 and via Twitter at @phwolfeDRC.