MARBLE FALLS — Developers of a hotel conference center project have agreed in a contract to create several dozen jobs and pay a portion of profits to the city on land adjacent to Lake Marble Falls, officials say.
Novak Cobalt Partners inked the deal during the regular meeting of the Marble Falls Economic Development Corp. on Sept. 7.
The $26 million-$28 million project is proposed to be primarily funded through private investors; however, the EDC has pledged about $6.5 million subject to approval by the Marble Falls City Council.
Developers plan to build on property owned by the EDC, which approved a 90-year lease on the property with a base rent of $200,000 per year.
“We have a system in there for the draw schedule. We don’t give the $6.5 million up front. It has to be tied to the project,” EDC Executive Director Christian Fletcher said. “It’s about a two-year period. Because it’s a construction project, it has to be a little bit flexible.”
Contract details include a goal of 35 “job equivalents,” where two part-time jobs would equal one job equivalent while a full-time job is counted as one.
“If the number ever drops below 35, there are penalties involved, so we wanted to be as conservative as we could so we don’t have to rewrite or amend the document,” Fletcher said. “We know the number will be higher than that. Contractors or those involved in the building process will be over and above that.”
In addition to “base rent,” a so-called “performance rent” stipend would involve the private partner paying 25 percent of any room revenue over $2 million annually.
“That’s a very typical retail contract arrangement,” Fletcher said.
Officials estimate the partner would contribute about $180,000 per year to the Tax Investment Recovery Zone (TIRZ). The figure represents 75 percent of the tax to be dedicated to downtown revitalization.
Approximately $45,000 per year would go into the city’s general fund, Fletcher said..
“At every step in that draw schedule, we’re inspecting from the city side to make sure those goals are being met,” he said.
A joint meeting between the EDC and the council is scheduled for Oct. 18 to authorize the proposed issuance of the $6.5 million in bonds to support the project.