ITEM PH2

OFFICE OF THE CITY MANAGER

(910) 341-7810
FAX(910)341-5839
TDD (910)341-7873

11/19/2013

City Council
City Hall
Wilmington, North Carolina 28401

Dear Mayor and Councilmembers:

Attached for your consideration is an ordinance authorizing an amendment to the Development Agreement
by and between the City of Wilmington, North Carolina and Riverfront Holdings II, LLC, a North Carolina
Limited Liability Company. The initial agreement was executed in January of 2009. The City staff and the
developer have been working on changes to the agreement that will accommodate mutual needs and desires.

In summary, the developer wishes to move the location of a portion of the Riverwalk from along a newly
constructed bulkhead at the base of the extension of Harnett Street to an area that would go behind (landward
of) restaurants that have been proposed for that same general area. In exchange for the movement of the
Riverwalk, the developer agrees to relieve the City of its previous obligation to purchase, from the developer,
a half-acre public park site at the base of Harnett Street (07PK60). In addition, the developer agrees to
construct public bathrooms in the vicinity of the base of the extension of Harnett Street and deed them to the
City following completion of construction.

The amendments outlined in this proposal renew the Citys interest in completing stormwater improvements
at the base of extended Harnett Street. An allocation had previously been made into the Northern Riverfront
Development Project for these improvements, but City staff later determined that the stormwater
improvements were not, at that time, necessary as there was no public benefit to the installation of the
improvements. There is now the potential for public investment to take place at the base of Harnett Street
that would benefit from the construction of the previously designed stormwater improvements. The
amendment would allow the City to participate with the developer, in equal amounts up to a maximum of
$325,000 investment on the part of the City, in stormwater improvements at the base of Harnett Street,
extended (06ST20).

We would ask that you note that the proposed amendment is contingent upon the City and Riverfront
Holdings II reaching an agreement on the provisions of the sale to the City of approximately seven acres of
property along the northern riverfront(14ED10). This property would be proposed for use as a passive
public park. Should the City Council choose not to act favorably on a proposed resolution authorizing the
City Manager to sign an Offer to Purchase agreement for the seven or so acres, or should the developer refuse
to sell the approximately seven acres under the terms agreed to by the City, then approval of the amendment
to the development agreement would not be valid.
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A public hearing is required in conjunction with the consideration of this amendment. The public hearing
has been properly advertised. This item will be ripe for consideration at the November 19, 2013 meeting.

Passage of this resolution is consistent with the Council Focus Areas of: Diverse and Thriving Economy;
Welcoming Neighborhoods and Open Spaces; Civic Partnerships; and, Sustainability and Adaptability.
Failure to pass this resolution would result in the existing agreement remaining in place. Passage would
allow the developer to proceed with two restaurants and public facilities, movement of the Riverwalk, and the
construction of public bathrooms.

Passage of the attached Ordinance is recommended.

Respectfully submitted,

Sterling B. Cheatham,
City Manager

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 City Council
Ordinance City of Wilmington
North Carolina

Introduced By: Sterling B. Cheatham, City Manager Date: 11/19/2013

Ordinance Approving Amendment No. 1 to the Development Agreement by and between

the City of Wilmington, North Carolina and Riverfront Holdings II, LLC, a North
Carolina Limited Liability Company, et. al. (14ED10, 07PK60, 06ST20)
LEGISLATIVE INTENT/PURPOSE:

The City of Wilmington, as reflected in its Vision 2020 Downtown Plan, desires to encourage
the development of a mixed-use commercial area in the northern downtown riverfront area with
a public riverwalk, park areas and improved public infrastructure.

Riverfront Holdings II, LLC, a North Carolina limited liability company, City Marina
Wilmington, LLC, a North Carolina limited liability company, Zephyr Land Holdings, LLC, a
North Carolina limited liability company, and Riverfront Holdings, LLC, a North Carolina
limited liability company, their respective successors and assigns (collectively the "Developer"),
own various parcels of property within the northern downtown riverfront area exceeding 25
acres of developable property and desire to cooperate with the City to implement the Vision
2020 Plan in the area.

Part 3D of Article 19 of Chapter 160A of the General Statutes of the State of North Carolina (the
Act) provides authorization for municipalities to enter into development agreements.

The Act recognizes that large-scale development projects often occur in multiple phases
extending over a period of years, requiring a long-term commitment of both public and private
resources, and careful integration between public capital facilities planning, financing, and
construction schedules and the phasing of the private development.

The Act further recognizes that such large-scale developments often create community impacts
and opportunities that are difficult or impossible to accommodate within established zoning and
development processes.

Developer intends to redevelop its property to provide a full service marina as well as a mix of
residential, commercial, hotel, civic, and retail uses that will enhance the marketability and
attractiveness of the Citys northern downtown riverfront area.

Redevelopment of the property will occur in multiple phases extending over a period of years
and will require a commitment of significant resources from the Developer.

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Under the terms of the Act, the City and the Developer have previously negotiated a
development agreement in the form attached hereto as Exhibit "A" and incorporated herein by
reference (the "Agreement") for the purpose of providing assurances to the Developer that it
may proceed with the development of its property without encountering future changes of law
by the City that would adversely affect its ability to develop the property or the costs associated
with said development.

The Agreement is to remain in effect for a period of twenty (20) years.

The City is authorized by Section 13.7 of the Wilmington City Charter to enter into contracts
with developers of property to construct utilities, drainage facilities, parks, streets and related
public facilities funded with public funds as part of the development of the property based upon
provisions sufficient to assure that the public facilities meet the needs of the City and are
constructed at a reasonable price.

On March 4, 2008, the City Council authorized agreements with Riverfront Holdings, LLC and
Riverfront Holdings II, LLC for the joint development of certain Riverwalk Improvements in the
area between Harnett Street and the Isabelle Holmes Bridge ("Riverwalk Improvement
Agreements"), and the Development Agreement provides for the extension of the riverwalk
from the City's Convention Center property to the Holmes Bridge.

Under the terms of the Act, the City and the Developer have previously negotiated an
amendment to the development agreement in the form attached hereto as Exhibit "B" and
incorporated herein by reference (the "Amendment") for the purpose of providing assurances to
the Developer that it may proceed with the development of its property in accord with the
revised terms of the Agreement without encountering future changes of law by the City that
would adversely affect its ability to develop the property or the costs associated with said
development

As provided by N.C.G.S. Section 160A-400.24, the Wilmington City Council conducted a

public hearing on November 19, 2013 to consider the approval and execution of the Amendment
in accordance with the procedures set forth in N.C.G.S. Section 160A-364; the notice of public
hearing, among other things, specified the location of the parcels of land subject to this
Amendment, the development uses proposed on the parcels of land and a place where a copy of
the Amendment could be obtained.

The City Council has determined that it is in the public interest to enter into the Amendment
with the Developer.

THEREFORE, BE IT ORDAINED:

THAT, the City is hereby authorized to enter into the Development Agreement Amendment
with the Developer relating to the Northern Downtown Riverfront Area.

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That, the City Council approves entering into the Development Agreement Amendment so long
as the City and the Developer execute a mutually agreeable Offer to Purchase and Contract for
seven acres of Developers property for the purpose of developing a public park prior to the
execution of the Amendment.

As provided by G.S. 160A-400.30, the Developer shall record the Development Agreement
Amendment in the New Hanover County Registry within fourteen (14) days after the City's
execution of the Amendment.

Adopted at a ________________ meeting

on ____________________ 2013
Bill Saffo, Mayor

ATTEST: APPROVED AS TO FORM:

Penelope Spicer-Sidbury, City Clerk City Attorney

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STATE OF NORTH CAROLINA

COUNTY OF NEW HANOVER

AMENDMENT NO. 1
CITY OF WILMINGTON, NORTH CAROLINA

AMENDMENT TO CONTRACT

THIS AMENDMENT TO CONTRACT (hereinafter the AMENDMENT), is made and

entered into this the ____ day of ________________, 2013, by and between/among the CITY
OF WILMINGTON, NORTH CAROLINA, a North Carolina municipal corporation (hereinafter
called CITY); and RIVERFRONT HOLDINGS II, LLC a North Carolina Limited Liability
Company, CITY MARINA WILMINGTON, LLC a North Carolina Limited Liability Company,
ZEPHYR LAND HOLDINGS, LLC a North Carolina Limited Liability Company, and
RIVERFRONT HOLDINGS, LLC a North Carolina Limited Liability Company, their respective
successors and assigns (hereinafter collectively referred to as the DEVELOPER).

WITNESSETH:

WHEREAS, Part 3D of Article 19 of Chapter 160A of the General Statutes of the State
of North Carolina (the Act) provides authorization for municipalities to enter into development
agreements; and

WHEREAS, The City is authorized by Section 13.7 of the Wilmington City Charter to
enter into contracts with developers of property to construct utilities, drainage facilities, parks,
streets and related public facilities funded with public funds as part of the development of the
property based upon provisions sufficient to assure that the public facilities meet the needs of the
City and are constructed at a reasonable price; and

WHEREAS, the CITY and DEVELOPER (hereinafter collectively referred to as the

PARTIES) entered into that certain known DEVELOPMENT AGREEMENT on or about the
16th day of January, 2009 (hereinafter the DEVELOPMENT AGREEMENT); and

WHEREAS, pursuant to Section 10.2 of the DEVELOPMENT AGREEMENT, the

DEVELOPMENT AGREEMENT may not be amended except by written agreement duly
executed by the PARTIES; and

WHEREAS, the PARTIES hereto desire to amend the DEVELOPMENT AGREEMENT

to include certain revised terms regarding the respective rights and obligations of the CITY and
DEVELOPER; and

WHEREAS, as provided by N.C.G.S. Section 160A-400.24, the Wilmington City

Council conducted a public hearing on November 19th, 2013 to consider the approval and

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execution of this AMENDMENT in accordance with the procedures set forth in N.C.G.S.
Section 160A-364; and

WHEREAS, pursuant to N.C.G.S. Sections 160A-400.24 and 160A-364, a notice of

public hearing was made, specifying the location of the property subject to the development
agreement and this AMENDMENT, the development uses proposed on the property, a place
where a copy of the proposed development agreement and AMENDMENT can be obtained; and

WHEREAS, the Wilmington City Council has approved this AMENDMENT along with
the Citys execution of the same.

NOW, THEREFORE, in consideration of the mutual covenants and conditions herein

contained, and for other good and valuable consideration the sufficiency and receipt of which is
hereby acknowledged, the PARTIES hereto agree as follows:

1. Development Agreement Amendment. The DEVELOPMENT AGREEMENT is

hereby amended pursuant to its Paragraph 10.2 as follows:

Amendment I

Article 7.1 of the DEVELOPMENT AGREEMENT shall be revised to

read, in its entirety, as follows:

7.1. Acquisition of Public Park. The City may purchase the Public
Park Property from the Developer. Transfer shall be free and clear of all liens and
encumbrances but subject to the terms and conditions of the BFA. The specific
parcel, purchase price, and method of payment shall be as the parties hereto shall
mutually agree.

Amendment II

Article 1.2 of the DEVELOPMENT AGREEMENT shall be revised to

redefine the following terms:

Public Park shall mean the parcel that will be conveyed to the City in
accordance with this Agreement and thereafter developed, utilized and maintained
by the City as a public park.

Riverwalk Improvement Agreements shall mean (1) the Agreement for

Joint Development of Riverwalk Improvements dated January 16, 2009 between
the City and City Marina, LLC and Riverfront Holdings II, LLC as amended, and
the accompanying Deed of Easement recorded in Book 5364 at Page 914 of the
New Hanover County Registry, and (2) the Agreement for Joint Development of
Riverwalk Improvements dated December 11, 2008 between the City and

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Riverfront Holdings, LLC and the accompanying Deed of Easement recorded in
Book 5364 at Page 898 of the New Hanover County Registry.

Amendment III

Article 8.1 (B)(iv) of the DEVELOPMENT AGREEMENT shall be

eliminated in its entirety.

Amendment IV

Article 6.1(A) of the DEVELOPMENT AGREEMENT shall be changed

to add the words as amended to the end of Riverwalk Improvements
Agreements.

Additionally, Article 6.1 of the DEVELOPMENT AGREEMENT shall be

increased to add a subparagraph D which shall read in its entirety as follows:

D. Reimbursement for Certain Utility Improvements. CITY agrees to

reimburse DEVELOPER in the amount of fifty percent (50%) of the actual costs
incurred by DEVELOPER for certain mutually agreed upon stormwater Utility
Improvements. This shall include and be specifically limited to those stormwater
Utility Improvements in the area of Harnett Street and shall not extend beyond the
area as set forth in Exhibit B (as amended) on page entitled Riverfront Food &
Beverage Complex. Notwithstanding the above, CITYs obligation for
reimbursement pursuant to this subparagraph 6.1 D shall be limited to a maximum
amount of three hundred twenty five thousand dollars ($325,000).

Amendment V

Exhibit B to the DEVELOPMENT AGREEMENT entitled Master

Redevelopment Plan shall be augmented to include Attachment 1 hereto
entitled Riverfront Food & Beverage Complex and dated July 23, 2013 which
shall be incorporated herein by this reference. Attachment 1 shall be added as an
additional page to Exhibit B and to the extent that the specific provisions of
Attachment 1 conflict with the general guidance of Exhibit B, the provisions of
Attachment 1 shall control. It is specifically intended by the PARTIES that the
location of a portion of the Riverwalk Improvements shall be changed to the
extent practicable to conform to the location as set forth in Attachment 1 hereto.

In addition to the above, it is specifically intended by the PARTIES that

DEVELOPERs obligation to construct Roadway Improvements which include
an extension of Water Street (formerly Nutt Street) pursuant to the Master
Redevelopment Plan (hereinafter the NUTT ST. EXTENSION) be changed to
eliminate DEVELOPERs obligation to construct the NUTT ST. EXTENSION in
the area North of Harnett Street. DEVELOPERS obligation to construct the
NUTT ST. EXTENSION South of Harnett Street shall remain.

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 Amendment VI

Article 8.2 of the DEVELOPMENT AGREEMENT shall be increased to

add a subparagraph D which shall read in its entirety as follows:

D. In addition to the above, Developer shall, at its own expense and

not subject to any reimbursement therefore, construct public restroom facilities
(hereinafter the Public Restrooms) to include no less than three toilet facilities
in each of the mens and womens sides. The location of the Public Restrooms
shall, to the extent possible, be as set forth in Exhibit B (as amended) on page
entitled Riverfront Food & Beverage Complex and identified as PROP.
PUBLIC RESTROOM BUILDING consisting of an area approximately 24 feet
by 28.6 feet.

The parties hereto acknowledge that all other provisions of the DEVELOPMENT
AGREEMENT shall remain in full force and effect.

2. Incorporation of Development Agreement. The DEVELOPMENT

AGREEMENT is incorporated by reference as if fully set forth herein, however this
AMENDMENT shall control in the event of any inconsistency between this AMENDMENT and
the DEVELOPMENT AGREEMENT.

3. Binding Effect. Subject to the specific provisions of this AMENDMENT, this

AMENDMENT shall be binding upon and inure to the benefit of and be enforceable by the
parties and their respective successors and assigns.

4. Effect as to Land. The provisions of this AMENDMENT shall run with the lands
referenced herein, and shall run with the lands upon which any improvements contemplated by
this AMENDMENT are constructed.

5. Entire Agreement, Amendments. This AMENDMENT, including the

DEVELOPMENT AGREEMENT as incorporated herein, constitutes the entire agreement
between the parties and no warranties, inducements, considerations, promises or other inferences
shall be implied or impressed upon this AMENDMENT that are not set forth herein. This
AMENDMENT shall not be altered, amended modified or rescinded in any way except by
written instrument duly executed by all PARTIES.

6. Counterparts. This AMENDMENT may be executed in several counterparts,

including separate counterparts. Each shall be an original, but all of them together constitute the
same instrument.

7. Severability. If any section, subsection, paragraph, sentence, clause, phrase or

portion of this AMENDMENT is for any reason held invalid, unlawful, or unconstitutional by

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any court of competent jurisdiction, such portion shall be deemed severable and such holding
shall not affect the validity of the remaining portions hereof.

8. Construction of Amendment. This AMENDMENT shall be deemed to have been

made in and shall be construed in accordance with and subject to the laws of the State of North
Carolina. The captions and headings are inserted for convenience of reference and do not define,
describe, extend or limit the scope or intent of this AMENDMENT. In the event of a conflict
between the various terms and conditions contained herein or between these terms and other
applicable provisions, then the more particular shall prevail over the general and the more
stringent or higher standard shall prevail over the less stringent or lower standard.

9. No Presumption. None of the Parties shall be considered the drafter of this

AMENDMENT or any provision hereof for the purpose of any statute, case law, or rule of
interpretation or construction that would or might cause any provision to be construed against the
drafter hereof. This AMENDMENT was drafted with substantial input by all Parties and their
counsel, and no reliance was placed on any representations other than those contained herein.

10. Best Efforts. The PARTIES shall, for no further consideration, use their best
efforts to perform all other actions and execute, acknowledge and deliver and cause to be
executed, acknowledged and delivered such other documents as may be reasonably required to
effectuate the intent of the PARTIES as reflected herein.

11. Authority. The undersigned represent and warrant that they have full authority
and capacity to bind themselves and/or the party on whose behalf they are signing to fully
undertake any and all releases, covenants, warranties, representations and promises set forth
herein and that no other person or entity need execute this AMENDMENT in order to make the
same effective and binding on the PARTIES.

12. Representation by Counsel. The PARTIES acknowledge that they have had the
opportunity to have this AMENDMENT reviewed by counsel of their choosing, and have
executed this AMENDMENT only after fully reviewing the same and giving due consideration
to the provisions set forth herein and the consequences of performance or non-performance. The
PARTIES have relied exclusively on their own judgment and advice of their respective counsel
in executing this AMENDMENT.

13. Other Laws and Regulations. The PARTIES shall comply with all federal, state
and local laws, regulations and ordinances in the performance of their respective obligations as
set forth herein. DEVELOPER specifically acknowledges and agrees that it has complied with
and shall continue to comply with the provisions of the federal E-Verify program in compliance
with N.C. Gen. Stat. 64-25 et seq. Any Subcontractors employed by DEVELOPER shall also be
in compliance with the federal E-Verify program in accordance with N.C. Gen. Stat. 64.25 et.
seq.

14. Immunity Not Waived. This AMENDMENT is governmental in nature, for the
benefit of the public, and is not intended to be for private profit or gain. No Party intends to
waive its sovereign immunity by reason of this AMENDMENT.

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 15. Conflict of Interest. No paid employee of the CITY shall have a personal or
financial interest, direct or indirect, as a contracting party or otherwise, in the performance of this
AMENDMENT.

16. Non-Waiver of Rights. It is agreed that either partys failure to insist upon the
strict performance of any provision of this AMENDMENT, or to exercise any right based upon a
breach thereof, or the acceptance of any performance during such breach, shall not constitute a
waiver of any rights under this AMENDMENT.

IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 the day and
year first above mentioned.

DEVELOPER:

RIVERFRONT HOLDINGS II, LLC, a North

Carolina Limited Liability Company

By: ___________________________________
Charles J. Schoninger, Manager

CITY MARINA WILMINGTON, LLC, a North

Carolina Limited Liability Company

By: ___________________________________
Charles J. Schoninger, Manager

ZEPHYR LAND HOLDINGS, LLC, a North

Carolina Limited Liability Company

By: ___________________________________
Charles J. Schoninger, Manager

RIVERFRONT HOLDINGS, LLC, a North

Carolina Limited Liability Company

By: ___________________________________
____________________, Manager

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 CITY:

CITY OF WILMINGTON, NORTH CAROLINA

By:

___________________________________
Bill Saffo, Mayor

ATTEST:

________________________________
Penelope Spicer-Sidbury, City Clerk

APPROVED AS TO FORM:

William E. Wolak, City Attorney

FINANCE OFFICERS CERTIFICATION STATEMENT

This instrument has been pre-audited in the manner required by the Local Government
Budget and Fiscal Control Act.

____________________________________ Date:
Debra H. Mack, CLGFO
Finance Director

Project Code Account # Amount Description

07PK60 033-0000-520-5641 ($436,000) PO094104 Amend I Sec 7.1 As
Amended Park Land Purchase Developer

06ST20 031-0000-520-5631 $325,000 Amend IV Section 6.1 (D)

Stormwater Improv Harnett St Developer

Requisition/PO Number__________________

Federal ID Number: 56-6000239

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STATE OF NORTH CAROLINA

COUNTY OF NEW HANOVER

I, ______________________________, a Notary Public, for said County and State do

hereby certify that Charles J. Schoninger, personally came before me this day and
acknowledged that he is the Manager of RIVERFRONT HOLDINGS II, LLC, a North Carolina
Limited Liability Company and that by authority duly given and as the act of the Company,
executed the foregoing instrument.

Witness my hand and official seal, this the ____ day of ________________, 2013.

_____________________________
Notary Public
My Commission Expires:

_____________________

STATE OF NORTH CAROLINA

COUNTY OF NEW HANOVER

I, ______________________________, a Notary Public, for said County and State do

hereby certify that Charles J. Schoninger, personally came before me this day and
acknowledged that he is the Manager of CITY MARINA WILMINGTON, LLC, a North
Carolina Limited Liability Company and that by authority duly given and as the act of the
Company, executed the foregoing instrument.

Witness my hand and official seal, this the ____ day of ________________, 2013.

_____________________________
Notary Public
My Commission Expires:

_____________________

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STATE OF NORTH CAROLINA

COUNTY OF NEW HANOVER

I, ______________________________, a Notary Public, for said County and State do

hereby certify that Charles J. Schoninger, personally came before me this day and
acknowledged that he is the Manager of ZEPHYR LAND HOLDINGS, LLC, a North Carolina
Limited Liability Company and that by authority duly given and as the act of the Company,
executed the foregoing instrument.

Witness my hand and official seal, this the ____ day of ________________, 2013.

_____________________________
Notary Public
My Commission Expires:

_____________________

STATE OF NORTH CAROLINA

COUNTY OF NEW HANOVER

I, ______________________________, a Notary Public, for said County and State do

hereby certify that_____________________, personally came before me this day and
acknowledged that he is the Manager of RIVERFRONT HOLDINGS, LLC, a North Carolina
Limited Liability Company and that by authority duly given and as the act of the Company,
executed the foregoing instrument.

Witness my hand and official seal, this the ____ day of ________________, 2013.

_____________________________
Notary Public
My Commission Expires:

_____________________

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STATE OF NORTH CAROLINA

COUNTY OF NEW HANOVER

I, ______________________________, a Notary Public, for said County and State do

hereby certify that Penelope Spicer-Sidbury personally came before me this day and
acknowledged that she is the City Clerk of the City of Wilmington, a North Carolina municipal
corporation, and that by authority duly given and as the act of the City, the foregoing instrument
was signed in its name by its Mayor, sealed with its corporate seal and attested by herself as its
Clerk.

Witness my hand and official seal, this the ____ day of ________________, 2013.

_____________________________
Notary Public
My Commission Expires:

_____________________

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