Fededer is a German speaker and being a tournament that is closer to home, he entered Halle before he even thought about entering Queens. Then he gained success at the tournament and has obviously built up a relationship with the tournament organisers and fans. Hence the lifetime contract.
It's a slight shame in my opinion that he won't be playing at Queens, but the decision is totally understandable.
As well as his love of playing in Germany (his record in tournaments there is outstanding), I imagine he must like the relaxing and almost village-like atmosphere at Halle (the tournament site is pretty secluded and isolated isn't it), as opposed to the hustle and bustle of London.
Halle has a roof so no interruption when it rains, the courts are more similar to Wimbledon than that of Queen's and it allows him to have one more week before dealing with the crazy British media getting geared up for their two weeks of tennis coverage a year.