DATE: November 7, 2023
TO: Mayor and City Council
FROM: Director of Public Works
SUBJECT
Title
Adopt a Resolution Authorizing the City Manager to Negotiate and Execute a Third Amendment to the Existing Ground Lease with Mahabal Hospitality, LLC
End
RECOMMENDATION
Recommendation
That the Council adopts a resolution (Attachment II) authorizing the City Manager to negotiate and execute a Third Amendment to the Ground Lease with Mahabal Hospitality, LLC.
End
SUMMARY
In November 2017, the City entered into lease agreements with Mahabal Hospitality, LLC and Ramesta Hospitality, LLC to build two new hotels on vacant airport parcels. Construction of the Home2Suites hotel (developed by Ramesta Hospitality) was completed in early 2022 and the hotel opened for business in March of that year. Plans and specifications for the Hyatt Place hotel property (developed by Mahabal Hospitality) were approved and construction will commence by the end of 2023.
Prior to construction of the first hotel, the Federal Aviation Administration (FAA) requested additional information regarding siting and penetrations of protected airspace. A seven-month period was required for approval of the revised Airport Layout Plan (ALP) and property release documents by the FAA, causing construction of the Hyatt Place development to be pushed back to November 2020, which is outside the lease-mandated two-year construction timeline of no later than November 2019. Accordingly, an amendment for this extension was approved by Council on October 1, 2019 that allowed for a three-year construction window from November 2020 to November 2023. However, soon after the amendment was executed, the COVID19 pandemic impacted development of the Hyatt hotel, including the construction schedule and revenue projections. As a result, the project incurred further, significant delays. As the business environment has returned to pre-COVID19 levels, this third amendment is ...
Click here for full text