HomeMy WebLinkAbout025298 RES - 05/13/2003RESOLUTION
APPROVING THE CITY OF CORPUS CHRISTI, TEXAS, BUSINESS
AND JOB DEVELOPMENT CORPORATION'S GUIDELINES &
CRITERIA FOR GRANTING BUSINESS INCENTIVES
WHEREAS, the Board of Directors of the City of Corpus Christi, Texas Business and
Job Development Corporation on Monday, May 5th, adopted the Corporation's
Guidelines & Criteria for Granting Business Incentives.
WHEREAS, Section 21 of the Texas Development Corporation Act of 1979, Art. 5190.6,
Vernon's Texas Revised Civil Statutes, requires the City Council to approve all
programs and expenditures of the corporation and annually review any financial
statements of the corporation.
WHEREAS, the members of the City Council and the City staff have reviewed the
guidelines and criteria and believe the Guidelines & Criteria for Granting Business
Incentives will help carry-out one of the identified uses for the City's 1/8 cent economic
development sales tax, e.g., the promotion and development of new and expanded
business enterprises in the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CORPUS CHRISTI, TEXAS:
SECTION 1. The City Council approves of and endorses the Guidelines & Criteria for
Granting Business Incentives adopted by the Board of Directors of the City of Corpus
Christi, Texas Business and Job Development Corporation on Monday, May 6, 2003.
The copy of the Guidelines & Criteria for Granting Business Incentives are attached to
this resolution as Attachment A.
ATTEST:
Arm'ando Chapa
City Secretary
Mayor
APPROVED: 9th day of May, 2003·
AR~t~nag~/cR ~ttgo r ney/
R32106A1.doc
Corpus Christi, Texas
~,~"bay of ~'~~ ,20~
The above resolution was passed by the following vote:
Samuel L. Neal, Jr.
Brent Chesney
Javier D. Colmenero
Melody Cooper
Henry Garrett
Bill Kelly
Rex A. Kinnison
Jesse Noyola
Mark Scott
CITY OF CORPUS CHRISTI, TEXAS
BUSINESS & JOB DEVELOPMENT CORPORATION ATTACHMENT A
GUIDELINES & CRITERIA
FOR GRANTING BUSINESS INCENTIVES
WHEREAS, the attraction of long-term investment and the establishment of new jobs in
Corpus Christi would enhance the City's economic base; and,
WHEREAS, Corpus Christi must compete with other communities across the nation
currently offering a variety of business incentives to attract new jobs and business; and,
WHEREAS, the Texas Legislature in Section 4A of Article 5190.6, Vernon's Texas Revised
Civil Statutes (Development Corporation Act of 1979) has empowered local communities with the
ability to adopt an optional local sales and use tax as a means of improving the economic health
and prosperity of their citizens; and,
WHEREAS, on November 5, 2002, residents of the City of Corpus Christi overwhelmingly
passed Proposition 2: NEW AND EXPANDED BUSINESS ENTERPRISES which authorized the
adoption of a sales and use tax for the promotion and development of new and expanded
business enterprises at the rate of one-eighth of one percent (1/8~ cent) to the imposed for 15
years; and,
WHEREAS, under Proposition 2 and as required by Ordinance 024952, funds approved for
the promotion and development of new and expanded business enterprises can only be used for
the following Projects and no others:
a) Education/Skills Development. These funds will be used to make grants to
companies and organizations to provide training, retraining and education to insure the
knowledge and skills required for the jobs of the future are in place.
b) Business Development/Incubation. These funds will be used to develop programs
and facilities that assist small and start-up companies that have the ability to produce
jobs for the future.
c) Jobs. These funds will be used to assist companies in the creation of meaningful,
wealth producing jobs (jobs that bring in dollars from outside of the community) in
Corpus Christi. Funds would be available to both existing and new companies.
WHEREAS, the 1/8th cent sales tax authorized by passage of Proposition 2 was
subsequently enacted by the City Council and filed with the State Comptroller of Texas, effective
April 1, 2003, to be administered by the City's Section 4A board of directors (Corpus Christi
Business and Job Development Corporation Board); and,
WHEREAS, to assure a common, coordinated effort to promote economic development,
these Guidelines and Criteria have been circulated among the City of Corpus Christi, other
governmental entities, the Corpus Christi Regional Economic Development Corporation, area
chambers of commerce and the Corpus Christi community in general for consideration;
NOW, THEREFORE, BE IT RESOLVED by the Corpus Christi Business and Job
Development Corporation that these Guidelines and Criteria for Granting Business Incentives be
adopted:
C:\Documents and Settings\User\My Documents~Special Projects\4AEcoDevoPolic~FinaI.DOC ]
Section 1. Definitions.
(a) "Ac.~t" means Section 4A of Article 5190.6, Vernon's Texas Revised Civil Statutes
(Development Corporation Act of 1979)
(b)
"AFireement" means a contractual agreement between a property owner and/or lessee within
the City of Corpus Christi City Limits and the "Corporation" for the purposes of granting
business incentives.
(c)
"Basic Manufacturinq or Service Facility" means buildings and structures, including fixed
machinery and equipment not elsewhere described, used or to be used for the production of
products or services.
(d) "Board" means the Corpus Christi Business and Jobs Development Corporation Board
(Section 4A Board) as established by "City" Resolution 024233 and pursuant to the "Act".
(e)
"Business Incubator" means a program established with the primary objective of improving
the potential success of emerging small businesses, preferably through the transfer or
application of technology, and in doing so, creates jobs, ensures self sufficiency and
invigorates the local economy. T hreugh such programs, s mall b usiness owners typically
have access to assistance which might include items such as rental space, administrative
support services, on-site business consulting, workshops, and business management
seminars.
(f)
"Capital Investment" means the increase in the assessed value of an eligible property as a
result of "expansion" or "modernization" of an "existing facility" o r construction of a "new
facility." It does not mean or include "deferred maintenance".
(g) "City" means the City of Corpus Christi, Texas.
(h) "Corporation" means the City of Corpus Christi Business and Job Development Corporation
established by "City" Resolution 024233.
(i) "Deferred Maintenance" means improvements necessary for continued operations which do
not improve productivity or are performed to meet regulatory obligations.
(j) "Economic Life" means the number of years a property improvement is expected to be in
service in a "facility".
(k) "Executive Director'' means the chief executive officer for the "Corporation," or his/her
designated representative.
"Expansion" means the addition of buildings, structures, fixed machinery or equipment for
the purposes of increasing capacity.
(m) "Facility" means property improvements completed or in the process of construction which
together compromise an integral whole, as well as new fixed machinery or equipment.
(n)
"Modernization" means the replacement and upgrading of existing "facilities" which increase
the productive input or output, updates the technology or substantially lowers the unit cost of
the operation, and extends the economic life of the "facilities". Modernization may result
from the construction, alteration or installation of buildings, structures, fixed machinery or
equipment. It shall not be for the purpose of reconditioning, refurbishing, repairing or
completion of "deferred maintenance".
CSDocuments and Scttings\UserXMy Documcnts\SpeciaI Projects\4AEcoDevoPolicy_FinaI.DOC 2
(o)
(q)
(r)
(s)
(t)
(u)
(v)
(w)
"New Facility" means a property previously undeveloped which is placed into service by
means other than or in conjunction with an "expansion" or "modernization".
"Owner" means the owner of a "facility" or "program" subject to business incentives. If the
"facility" is constructed on a leased property, the owner shall be the party which owns the
property subject t o t he business incentive. T he other p arty to the lease shall join in the
execution of the "agreement" but shall not be obligated to assure performance of the party
receiving business incentive.
"Petrochemical Facility" means buildings and structures, including fixed machinery and
equipment, the primary purpose of which is or will be the manufacture or processing of
petrochemicals or fuels by physical or chemical change.
"Primary Employer" means a business which produces goods a nd services to customers
that are located predominantly outside of the local area, thus generating rather than
redistributing wealth in the community. Primary employers generate new wealth through
wages p aid f or jobs created, a s w ell a s through new demand f or materials a nd services
bought from local suppliers. A primary employer is further defined as a business that owns
or operates a "basic manufacturing or service facility," "petrochemical facility," "regional
distribution center facility," "regional telecommunications/data processing center facility," or
"research and development facility".
"Proiect Aqreement" means the agreement made by and between the "City" and the
"Corporation" which assigns responsibilities for jointly carrying out each "agreement" to
assure that funds are used for authorized purposes. City execution of the Project
Agreement shall be in the form of an adopted Resolution by the City Council of the City.
"Reqional Distribution Center Facility" means buildings and structures, including fixed
machinery and equipment, used or to be used primarily to receive, store, service or distribute
goods or materials owned by the Facility operator where a majority of the goods or services
are distributed to points beyond a 50-mile radius of Nueces County.
"Reqional Telecommunications/Data Processinq Center Facility" means buildings and
structures used or to be used primarily for the provision of telecommunication or data
processing services by the Facility operator where a majority of the services are provided to
points beyond a 50~mile radius of Nueces County.
"Research and Development Facility" means buildings and structures used or to be used
primarily for the purpose of product developmental engineering, testing and evaluation.
"Small Business" means a "primary employer" that employs 20 or less full time (2,080
hours/year) permanent employees at the time of application.
(a)
Section 2. Mission & Goals
It shall be the mission of the Board i n a dministration o f these Guidelines a nd Cdteria t o
promote, encourage and enhance the creation of jobs which expand the City tax base and
economy through granting business incentives which assist in the retention, expansion and
recruitment of Primary Employers.
C:\Documents and Settings\User\My Documents~Special Projects~4AEcoDevoPolic~Final. DOC 3
(b) The goals of the Board in administration of these Guidelines and Criteria are to:
(c)
· Create jobs;
· Expand the City tax base and economy;
· Strengthen and diversify Primary Employers within the local economy.
The role of the Corporation in carrying out this mission and goals is to review and approve
applications for business incentives, recognizing that the Corpus Christi Regional Economic
Development Corporation exists for the purpose of organizing, coordinating and leading the
City's economic development efforts.
(a)
(b)
Section 3. Business Incentives Authorized.
Capital Investment/Facility Business Incentives Authorized. Incentives granted by
Agreement for Capital Investment or Facilities under these guidelines pursuant to Section 4
below may include, but are not limited to:
· land, facilities, equipment & infrastructure grants;
· loan participation/guarantees;
· direct Iow interest loans;
· rent subsidies;
· relocation and moving expense grants; and,
· job training grants/loans.
Small Business Incentives Authorized. Incentives granted by Agreement for Small Business
under these guidelines pursuant to Section 5 below may include, but are not limited to:
· Small Business start up grants/loans; and,
· Business Incubation grants/loans.
(a)
(b)
Section 4. Capital InvestmentJFacility Business Incentives.
Authorized Facilities. A Capital Investment for a Facility may be eligible for incentives by
Agreement if it creates jobs for a Primary Employer. Incentives may be granted for land or
Capital Investment related to either New Facilities or improvements to existing Facilities for
the purpose of Modernization or Expansion. The following types of property shall be
ineligible for business incentives: inventories; supplies; tools; furnishings and other forms of
movable personal property; vehicles; vessels; aircraft; deferred maintenance investments;
improvements to real property which have an economic life of less than 15 years; with the
exception of the City of Corpus Christi, property owned or used by the State of Texas or its
political subdivisions or by any organization owned, operated or directed by a political
subdivision of the State of Texas.
Completion of Facility Construction. The completion of Facility construction or installation of
Capital Investment shall be deemed to occur upon the earliest of the following events (as
determined by the Board):
· when a certificate of occupancy is issued for the project;
· when commercial production of a product or provision of a service is achieved at the
Facility;
· when the architect or engineer supervising construction issues a certificate of substantial
completion, or some similar instrument; or,
· two (2) years after the date of the Agreement.
C:\Documents and Settings\User~vly Documents\Special Projects\4AEcoDevoPolicy_Final DOC 4
. (c)
Location or Residency Requirement. Facilities or land may be eligible for business
incentives only in the event that any associated Capital Investment is located within the City.
Property which is covered by an executed industrial district agreement shall be considered
to be within the City for purposes of determining if a project meets location requirements.
With regard to job training incentives, these may be eligible outside of the City only in the
event that at least 51% of the jobs created during the term of the Agreement are held by
residents of the City.
(d)
WaRe Requirement. In order to count as a job under an Agreement, the job shall pay at
least a "living wage". For purposes of this provision, living wage shall mean that annual
amount determined by the U.S. Department of Health and Human Services for the Corpus
Christi area as being at the poverty level for a family of three, divided by 2,080 hours per
year. In determining if this requirement is met, the Board may also consider other
compensation factors or employee benefits that enhance the employee's compensation
package as a whole. Accordingly, the Corporation, through its Project Agreement with the
City, may adjust the living wage target under these Guidelines and Criteria and insert a
specific target in each Agreement to govern the incentive offered. With regard to job
training, a job shall pay at least an amount as determined by the Act in order to count as a
job under an Agreement.
(e)
Job Creation Qualification. In order to be eligible for business incentives, the planned
Capital Investment must create a nd maintain t he minimum n umber o f 50 full-time (2,080
hours/year) permanent jobs within three (3) years of an effective date as set out in the
Agreement. With regard to job training, an exception to this requirement may be granted by
the Board on a case by case basis.
(f)
"Buy Local" Provision. Each recipient of business incentives under this Section shall
additionally agree to use best efforts to give preference and priority to local manufacturers,
suppliers, contractors and labor, except where not reasonably possible to do so without
added expense, substantial inconvenience, or sacrifice in operating efficiency. For the
purposes of this provision, the term "local" as used to describe manufacturers, suppliers,
contractors and labor shall include firms, businesses, and persons who reside in or maintain
an office within a 50-mile radius of Nueces County.
(g)
Maximum Value of Incentive for Capital Investment/Facilities. The maximum value of
incentive granted by Agreement under this Section shall be $5,000 for every job created.
With regard to job training, the business incentive may not fund more than an amount
allowable by the Act.
Section 5. Small Business Incentives.
(a)
Authorized Projects/Dedicated Allocation. For projects which may not meet the
requirements of Section 4 above, business incentives may also be granted to Small
Business to create jobs for Primary Employers through Small Business start up and/or
Business Incubation. On an annual basis, the Board shall budget a separate allocation for
funding all small business start up and/or business incubation incentives.
(b)
Project Implementation. An authorized Small Business project funded by a business
incentive under this Section must be implemented within two (2) years from the date of the
Agreement.
C:\Documents and Settings\User~vly Documents\Special ProjectsX4AEcoDevoPolic~FinaI,DOC 5
(c)
(d)
Location or Residency Requirement. Small Business start up and/or Business Incubation
projects m ay b e eligible f or business incentives only i n t he e vent t hat associated Capital
Investment or services are located/provided within the City. Additionally, programs should
be directed at creating jobs for City residents.
Waqe and Job Creation Requirements. Wage and job creation requirements for Small
Business start up and Business Incubation shall be evaluated and determined by the Board
on a case by case basis.
(a)
(b)
(c)
(d)
Section 6. Application.
Written Application. Any present or potential Owner or sponsor may request business
incentives by filing a written application with the Executive Director, or his designated
representative.
Contents of Application. The application shall consist of a completed application form
accompanied (when applicable) by: a general description of proposed Capital Investments to
the Facility; a descriptive list of the improvements or program for which business incentives
are requested; a list of the kind, number and location of all proposed improvements of the
properly; a map and property description; and, a time schedule for undertaking and
completing the proposed improvements or programs. In the case of a Modernization or
Expansion project, a statement of the assessed value of the Facility, separately stated for
real and personal property, shall be given for the tax year immediately preceding the
application. The application form may require such financial and other information as the
Corporation or City deems appropriate for evaluating the financial capacity and other
relevant factors of the applicant.
Feasibility/Economic Impact Study. After receipt of a completed application, and at the cost
of the applicant, the Executive Director shall cause to be performed a study of feasibility and
economic impact using an independent consultant selected by or agreed to by the Board.
This study shall include, but not be limited to, an estimate of the economic effect of
incentives, including job creation, employment enhancement and capital investment. Once
completed, the study and the application will be forwarded to the Board for review and
discussion before consideration of any Agreement.
No Business Incentives if Construction or Proqram has Commenced. No business incentive
Agreement shall be approved if the application was filed after the commencement of any
construction, alteration or installation of improvements related to the proposed Facility
Modernization, Expansion or New Facility. Similarly, no business incentive Agreement shall
be approved for any program if the application was filed after the program has been
establishment or program activity has commenced.
Section 7. Approval.
(a)
Reservation of Riqhts. The Board reserves the right to determine the eligibility of a project
and the terms and conditions of any loan, grant or guarantees based on the mission, goals
and objectives in Section 2 above. Nothing herein shall be construed to limit the authority of
the Board to examine each application for business incentives before it on a case-by-case
basis and determine in its sole and absolute discretion whether or not the proposed project
should be granted any business incentive and whether or not it complies with these
Guidelines and Criteria, is feasible, and whether or not the proposed business incentives will
be to the long-term benefit of the City.
C:\Documcnts and Settings\UserhMy Documents\Special P]ojects~4AEcoDcvoPolic~F/naI.DOC 6
(b) Proiect Aqreement Required. Each Agreement shall also include and be accompanied by a
separate Project Agreement executed between the Corporation and the City.
(a)
(b)
Section 8. Agreement.
Contents of Business Incentive Aqreement. The Agreement shall include (when applicable):
· the estimated value of Capital Investment;
· the commencement date and termination date of the business incentive;
· the proposed use of the Facility, nature of construction, time schedule, map, property
description and improvements list as provided in the application as required;
· in the case of l~programs, the proposed l~program description, targeted employment
market, nature and schedule of activities, facilities and equipment used to carry out
activities, and complete Pprogram budget listing all sources of funding a nd projected
expenditures;
· the contractual obligations in the event of default, delinquent taxes, recapture,
administration and assignment as provided in these Guidelines or other provisions that
may be required for uniformity or by state law; and,
· the number of permanent jobs, and wage/salary minimums for jobs created.
Time of Execution. The business incentive Agreement shall normally be considered by the
Board within 60 days after the applicant has provided all necessary information and
documentation.
(a)
(b)
(c)
(d)
Section 9. Recapture.
Failure to Timely Comply and Continue Operations In the event that the Owner of a Facility
or program fails to timely, fully and completely comply with any one or more of the
Agreement r equirements, obligations, duties, terms, conditions o r warranties, such failure
shall be an act of default and, if not fully and completely cured and corrected, Corporation
and/or City may terminate the Agreement and pursue all legal remedies as provided by law.
Delinquent Taxes. In the event that the Owner allows its ad valorem taxes to become
delinquent and fails to timely and properly follow the legal procedures for their protest and/or
contest, the Agreement shall terminate and so shall the business incentives.
Notice of Default. Should the Corporation and/or City determine that the Owner be in default
according to the terms and conditions of its Agreement, it shall notify the Owner in writing at
the address stated in the Agreement that if such is not cured within 60 days from the date of
such notice (the "Cure Period"), then the Agreement may be terminated. In the event the
Owner fails to cure said default during the Cure Period, the Agreement may be terminated.
Potential Liability. After exhausting good faith attempts to address any perceived default
during the Cure Period, and taking into account any extenuating circumstances that might
have occurred through no fault of the Owner as determined by the Board, potential liability
under an Agreement may include the immediate return of all money grants and
consideration previously paid, the maximum lawful rate of interest on all money paid until
fully repaid, reasonable attorney fees and costs of court to collect such money, and the
termination of all further obligations made under Agreement. In addition, City and/or
Corporation shall not be liable for any alleged consequential damages.
C:\Documcnts and Settings\UserhMy Documents\Special Projects\4AEcoDcvoPolicy_FinaI.DOC 7
(a)
(b)
(c)
Section 10. Administration.
Access to Facility. The Agreement shall stipulate that employees and/or designated
representatives of the City will have access to the Facility or program during the term of the
Agreement for inspection to d etermine i f t he terms a nd c onditions o f t he Agreement a re
being met. All inspections will be made only after giving 24 hours prior notice and will only
be conducted in such manner as to not unreasonably interfere with the construction and/or
operation of the Facility or program. Inspections will be made with one or more
representatives of the Owner and in accordance with its safety standards.
Annual Evaluation. The City, acting on behalf of the Corporation, shall annually evaluate
compliance with the Agreement and report possible violations of the Agreement. As part of
this evaluation, the Owner shall provide information sufficient to ensure compliance.
Right to Modify or Cancel. Notwithstanding anything herein or in any agreement to the
contrary, the Board may cancel or modify the Agreement if the Owner fails to comply with
the Agreement.
Adopted by the Board
May 5,2003
C:\Documents and Settings\User2vly Documents\Special Projects\4AEcoDevoPolic~FinaLDOC 8