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RESOLUTION NO. 2007- 183 R A RESOLUTION OF THE' CITY COUNCIL OF THE CITY OF SAN MARCOS, TEXAS` APPROVING A FOURTH AMENDMENT TO THE CHAPTER 380 ECONOMIC DEVELOPMENT GRANT AND LOAN AGREEMENT; APPROVING A MODIFICATION AGREEMENT BETWEEN THE CITY AND JQH -SAN MARCOS DEVELOPMENT, LLC REGARDING THE HOTEL AND CONFERENCE CENTER PROJECT; RATIFYING THE FOURTH AMENDMENT TO THE MASTER DEVELOPMENT AGREEMENT; AND DECLARING AN EFFECTIVE DATE. RECITALS: 1. The City Council adopted a Resolution dated July 14, 2005, approving a Chapter 380 Economic Development Grant and Loan Agreement (the "380 Agreement") between the City and John Q. Hammons, as Trustee of the Revocable Trust of John Q. Hammons dated December 28, 1989, as amended and restated ("JQH"). 2. The 380 Agreement relates to a joint project (the "Project") whereby (a) JQH would construct and operate a full service upscale hotel (the "Hotel"), and (b) the City would construct, and lease to JQH, a first class conference center facility and related improvements (the "Conference Center") adjacent to the Hotel. 3. Under the 380 Agreement, JQH and the City (collectively the "Parties") acquired adjacent tracts of land located in San Marcos, Hays County, Texas to serve as the site for the Project. 4. During the negotiations that preceded the initiation of construction, the 380 Agreement was amended three times. In January 2007, in order to bring the project within the opt out cost limits delineated in the Master Development Agreement ("MDA"), JQH requested that the City forgive the loan portion of the 380 Agreement. The City Council instructed staff to complete negotiations. 5. The attached amendment to the 380 Agreement includes a number of milestones that must be attained before the loan is converted into a grant. The attached modification agreement makes certain language changes to the 380 Agreement so that it is in conformance with a number of other documents and reflects the actions previously taken by the Parties. 6. The Fourth Amendment to the Master Development Agreement incorporates an amended lease agreement wherein the City agrees to grant a renewal option at the conclusion of the original term of the lease. The terms of the renewal option include a rental escalation clause based on the increase in the consumer price index over the term of the lease. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SAN MARCOS, TEXAS: