HomeMy WebLinkAbout026354 RES - 07/19/2005
RESOLUTION
APPROVING CONTRACT BETWEEN CORPUS CHRISTI BUSINESS
AND JOB DEVELOPMENT CORPORATION AND MCTURBINE, INC.
FOR $500,000 OF ECONOMIC DEVELOPMENT SALES TAX MONIES
FOR REIMBURSEMENT OF CONSTRUCTION COSTS FOR NEW
40,000 SQUARE FOOT HELICOPTER MAINTENANCE FACILITY FOR
CREATION AND EMPLOYMENT OF 100 NEW FULL-TIME POSITIONS
WHEREAS, the Texas Legislature in Section 4A of Article 5190.6, Vernon's
Texas Revised Civil Statutes ("Development Corporation Act of 1979")
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;
WHEREAS, on November 5, 2002, residents of the City of Corpus Christi 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 to be
Imposed for 15 years;
WHEREAS, the 1/8 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 Corporation's Board of
Directors ("Board");
WHEREAS, Section 21 of the Development Corporation Act of 1979 requires the
City Council to approve all programs and expenditures of the Corporation;
WHEREAS, the Board of Directors of the Corporation ("Board"), on May 5, 2003,
adopted the Corporation's Guidelines and Criteria for Granting Business Incentives;
WHEREAS, the City Council approved the Corporation's Guidelines and Criteria for
Granting Business Incentives on May 13, 2003;
WHEREAS, McTurbine, Inc. has submitted a proposal to the Corporation to request
business incentives of approximately $500,000 to be used to assist McTurbine, Inc. in
Its construction of new 40,000 square ft. or larger facility and engine facility, to be built
on property owned by McTurbine, Inc. at 401 Junior Beck Drive in Corpus Christi,
Nueces County, Texas, ("Facility"), for total McTurbine, Inc. capital investment of Three
million one hundred dollars $3,100,000) to allow McTurbine, Inc. to create and employ
additional 1 00 new full-time employment positions at Facility;
WHEREAS, the Board determined that it is in the best interests of the citizens of Corpus
Christi, Texas that contract be developed to provide business development funds to
McTurbine, Inc. to reimburse up to $500,000 of its construction costs for new 40,000
square foot helicopter maintenance facility which will result in creation of 100 new full-
time permanent jobs in the city of Corpus Christi;
I) :.: td 5 4
Page 2 of 2
WHEREAS, the City Council has determined that it is in the best interests of the
Corporation and the citizens of Corpus Christi, Texas that the proposed McTurbine, Inc.
project and its associated expenditure be approved;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CORPUS CHRISTI, TEXAS, THAT:
SECTION 1. The City Council approves contract between the Corpus Christi Business
and Job Development Corporation and McTurbine, Inc. to reimburse McTurbine, Inc. for
up to $500,000 of its costs to construct 40,000 square foot new helicopter maintenance
facility to create and employ 100 new jobs. A copy of the agreement is attached as
Exhibit A.
ATTEST
CITY OF CORPUS CHRISTI
!~~
A~,"do Chapa
City Secretary
1.k.1+~
Mayor I
Approved: July 14, 2005
j:. A Y' Az 1.N-w....,
Lisa Aguilar)
Assistant City Attorney
for City Attorney
HILEG-DIR\Llsa\Res 2005\McTurbine Inc. 4A Board Agmt.doc
AGREEMENT TO GRANT BUSINESS INCENTIVES TO
MCTURBINE, INC.
FOR THE CREATION OF JOBS
This Agreement to Grant Business Incentives for the Creation of Jobs ("Agreement") is
entered into by and between the Corpus Christi Business and Job Development Corporation
("Corporation"), a Texas nonprofit corporation organized underVAC.S. Art. 5190.6, Sec. 4A,
with mailing address of 1201 Leopard, Corpus Christi, Texas, 78401, and McTurbine, Inc., a
Texas corporation, with principal place of business currently at 1902 Holly Road, Corpus
Christl. Texas 78417-2915
I. BACKGROUND
1.1 Project. McTurbine, Inc. shall construct a new 40,000 square ft or larger facility and
engine test facility, to be built on property owned by McTurbine, Inc. at 401 Junior Beck Drive
In Corpus Christi, Nueces County, Texas, 78405, ("Facility"), for total McTurbine, Inc. capital
Investment of Three million one hundred dollars ($3,100,000). McTurbine desires the
assistance of the Corporation. The Facility shall be utilized by McTurbine, Inc. for its
distribution, maintenance, repair, and fabrication of helicopter engines and components.
1~' Purpose of Agreement. Corporation and McTurbine, Inc. wish to enter into an
agreement whereby the Corporation will provide financial assistance for the following:
reimbursement of McTurbine Inc. actual architectural, engineering, and construction costs for
completion of construction of Facility, up to a maximum of five hundred thousand dollars
($500,000). In consideration of Corporation's financial assistance, McTurbine shall create
and continuously employ minimum of additional one hundred (100) full time employment
positions at its Facility within three years from effective date of this Agreement.
II. BUSINESS INCENTIVES
2.1 McTurbine, Inc. shall submit monthly requests to Corporation to be reimbursed for
McTurbine Inc. actual and verified construction costs incurred during the billing month, up to
total of $500,000 in requested reimbursements.
2.2 McTurbine, Inc. specifically acknowledges that Corporation shall only pay the
reimbursement amounts solely out of its economic development sales tax revenue collected
during the term of this Agreement. Should the actual sales tax revenue collected for anyone
year be less than the total amount of grants to be paid to all parties contracting with the
Corporation for that year, then, all contracting parties shall receive only their pro rata share of
the available sales tax revenue for that year and Corporation shall not be liable to McTurbine,
Inc for any shortage.
2.3 McTurbine, Inc. shall allow Corporation reasonable access to McTurbine's
construction site to allow Corporation to verify construction progress.
2.4 McTurbine, Inc. shall allow Corporation reasonable access to records of McTurbine to
allow Corporation to verify requests for construction reimbursement payments.
2.5 All Corporation payments are subject to the McTurbine's successful completion of all
of performance requirements outlined in this Agreement
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Page 1 of 10
III. CONSTRUCTION REQUIREMENTS
3 1 McTurbine, Inc. agrees to construct new 40,000 square ft. or larger production facility
and engine test facility, ("Facility"), to be located on property owned by McTurbine, Inc. at 401
Junior Beck Drive in Corpus Christi, Nueces County, Texas, 78405, more fully described in
Exhibit A.
32 McTurbine, Inc. agrees that its Facility shall be utilized throughout the term of this
Agreement for its distribution, maintenance, repair, and fabrication of helicopter engineers
and components.
32 McTurbine, Inc. agrees that construction of Facility shall be completed within 12
months of the execution of this agreement.
33 McTurbine Inc. shall begin full operation at Facility within two months from completion
of construction. Completion of construction occurs with the issuance of Certificate of
Occupancy by the City of Corpus Christi.
3.4 McTurbine, Inc. agrees that its capital investment for this project is at least Three
million one hundred thousand dollars ($3,100,000).
35 McTurbine, Inc. shall maintain insurance on the Facility, at McTurbine's expense,
during the term of this Agreement, insurance of the type and with the amount of coverage
shown on the Attachment, which is incorporated in this Agreement by reference. McTurbine,
Inc. shall use an insurance company or companies acceptable to the Risk Manager. Failure
to maintain the insurance during the term of this Agreement, at the limits and requirements
shown on Attachment constitutes grounds for termination of this Agreement. The Certificate
of Insurance must be sent to the Risk Manager prior to occupancy of and operations at the
Facility. The Certificate of Insurance must provide that the City will have thirty (30) days
advance written notice of cancellation, intent to not renew, material change, or termination of
any coverage required in this Agreement. McTurbine, Inc. shall provide, during the term of
this Lease, copies of all insurance policies to the Risk Manager upon written request by the
City Manager. The Risk Manager shall retain the right to annually review the amount and
types of insurance maintained by McTurbine, Inc. to require increased coverage limits, if
necessary in the interest of public health, safety, or welfare, and to decrease coverage, if so
warranted. In the event of any necessary increase, McTurbine, Inc. shall receive thirty (30)
days written notice prior to the effective date of the requirement to obtain increased coverage.
McTurbine, Inc. shall, prior to any addition or alteration to, in, on, or about the Premises,
obtain prior clearance, in writing, from the Risk Manager that the proposed addition or
alteration will not necessitate a change or modification in the existing insurance coverage
maintained by Lessee.
IV. EMPLOYMENT REQUIREMENTS
4.1 McTurbine, Inc. agrees to create and maintain at least one hundred (100) new full-time
Jobs, permanent jobs at its Facility within three years from April 27, 2005, the date McTurbine,
Inc. submitted its application for business incentives to Corporation. A full-time permanent
Job is one that provides at least 2,080 hours annually.
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4.2 The jobs shall be primarily engaged in serving a customer base outside a 50-mile
radius of the city of Corpus Christi.
4.3 In order to count as a job under this Agreement, the job must pay wages as required in
Section 38 (b) of the Development Corporation Act of 1979~
4.4 McTurbine, Inc. agrees to maintain the new full-time permanent jobs created under
this Agreement throughout the remainder of the term of this Agreement.
4.5 By January 15 of each year of this Agreement, McTurbine, Inc. agrees to provide
Corporation with a sworn certificate by its corporate officer in charge of personnel records
certifying the following:
(i) the number of full-time permanent employees at its Facilities as of December
31 of the previous calendar year; and
(ii) the number of full-time permanent jobs which were created during the
previous calendar year, with hourly wage.
4.6 McTurbine, Inc. shall allow Corporation reasonable access to McTurbine's personnel
records to verify the job creation qualification
V. COVENANTS AND WARRANTIES
51 McTurbine, Inc. warrants and represents to Corporation the following:
5.1.1. McTurbine, Inc. is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Texas, has all corporate power and authority to
carry on its business as presently conducted in Corpus Christi, Texas.
51.2 McTurbine, Inc. has the authority to enter into and perform, and will perform, the
terms of this Agreement.
5.1.3 McTurbine, Inc. has timely filed and will timely file all local, State, and Federal
tax reports and returns required by laws to be filed and all taxes, assessments, fees,
and other governmental charges, including applicable ad valorem and employment
taxes, have been timely paid, and will be timely paid, during the term of this
Agreement.
5.1.4 No litigation or governmental proceeding is pending or, to the knowledge of
McTurbine, Inc. or McTurbine Inc. officers, threatened against or affecting McTurbine,
Inc. that may result in any material adverse change in McTurbine's business,
properties, or operations.
5.1.5 No statement or information provided by McTurbine, Inc. to Corporation or the
City of Corpus Christi contains any untrue statements or fails to state any facts
necessary to keep the statements contained therein from being misleading.
51.6 To the best of its knowledge, McTurbine, Inc. has acquired and maintained all
necessary rights, licenses, permits, and authority to carry on its business operations in
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Corpus Christi, Texas, and will continue to use its best efforts to maintain all necessary
rights, licenses, permits and authority.
5.1.7 The funds herein granted shall be utilized solely for the purpose of offsetting the
cost of Facility construction
5.1.8 McTurbine, Inc. shall continue its full-time business activities on its property in
Corpus Christi, Texas, including maintaining its employment and investment
requirements at all times throughout the term of this agreement.
5.1.9 McTurbine, Inc. shall complete the project required by this Agreement and shall
provide and staff the required employment positions described in this Agreement.
51.10 McTurbine, Inc. shall timely and fully comply with all of the terms and
conditions of this Agreement.
51.11 McTurbine, Inc. may not sell stock, assets, or any ownership interest in
McTurbine, Inc. that would be more than twenty (20) percent of McTurbine Inc.' s total
authorized and issued stock, assets or ownership interest, without prior written notice
to the Corporation and City of Corpus Christi.
51.12 McTurbine, Inc. shall notify Corporation in writing of substantial changes in
management within seven (7) days. Substantial changes mean changes in Chairman
of the Board, President, CEO. or area management.
51.8 McTurbine, Inc. has received a copy of the Texas Development Corporation Act
of 1979, Art. 5190.6, Vernon's Texas Revised Civil Statutes, and acknowledges that
the funds granted in this Agreement must be utilized solely for purposes authorized
under State law and by the terms of this Agreement.
5.1.9 In the event it is determined by Corporation or City of Corpus Christi that funds
provided under this Agreement were not used in accordance with State law, then
McTurbine, Inc. agrees to repay such funds to the Corporation within 30 days of
written notice requesting reimbursement.
51.10 If an audit determines that the funds were not used for authorized purposes,
McTurbine, Inc. agrees to reimburse Corporation for the sums of money spent for
purposes not authorized by law within 30 days written notice requesting
reimbursement.
5.1.11 There are no bankruptcy proceedings currently pending concerning McTurbine,
Inc., nor are any such proceedings contemplated by McTurbine, Inc., as of the date of
execution of this Agreement by McTurbine, Inc.
51.12 The parties executing this Agreement on behalf of McTurbine, Inc. are duly
authorized by its Board of Directors to execute this Agreement on behalf of McTurbine,
Inc.
5.1.13 McTurbine, Inc. will not discriminate nor permit discrimination against any
person or group of persons, with regard to employment and the provision of services
McTurbine,lnc.lldoc.doc
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at, on, or in the Facility, on the grounds of race, religion, national origin, marital status,
sex, age, disability, or in any manner prohibited by the laws of the United States or the
State of Texas.
51.14 McTurbine, Inc. agrees to provide information, reports, or statements
respecting its business operations and financial condition as Corporation may
reasonably request from time to time.
51.15 McTurbine, Inc. shall provide Corporation with evidence of its ownership of real
property located at 401 Junior Beck Drive, Corpus Christi, Nueces County, Texas,
78405 upon which Facility shall be constructed.
5.2 All representations, warranties, covenants and agreements of the parties, as well as any
rights and benefits of the parties pertaining the transaction contemplated hereby, shall
survive the original execution date of this agreement.
VI. DEFAULT
6.1 Events of Default. The following events constitute a default of this Agreement:
6.1.1 Failure of McTurbine, Inc. to timely, fully, and completely comply with anyone or
more of the requirements, obligations, duties, terms, conditions, or warranties of this
Agreement;
6.1.2 The Corporation or City determines that any representation or warranty on
behalf of McTurbine, Inc. contained in this Agreement or in any financial statement,
certificate, report, or opinion submitted to the Corporation in connection with this
Agreement was incorrect or misleading in any material respect when made;
6.1.3 Any judgment is assessed against McTurbine, Inc. or any attachment or other
levy against the property of McTurbine, Inc with respect to a claim remains unpaid,
undischarged, or not dismissed for a period of 30 days.
6.1.4. McTurbine, Inc. files a petition in bankruptcy, or is adjudicated insolvent or
bankrupt.
6.1.5 If taxes on the Facility become delinquent, and McTurbine, Inc. fails to timely
and properly follow the legal procedures for protest or contest.
6.1.6 McTurbine, Inc. changes the general character of business as conducted of the
date this Agreement is approved by the Corporation.
6.1.7 Foreclosure or sale of the Facility.
6.2 Notice of Default. Should the Corporation or City determine that McTurbine, Inc. is in
default according to the terms of this Agreement, the Corporation or City shall notify
McTurbine, Inc. in writing of the event of default and provide thirty (30) days from the date of
the notice ("Cure Period") for McTurbine, Inc. to cure the event of default.
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6.:! Results of Uncured Default. After exhausting good faith attempts to address any default
during the Cure Period, and taking into account any extenuating circumstances that might
have occurred through no fault of McTurbine, Inc., as determined by the Board of Directors of
the Corporation, the following actions must be taken for any default that remains uncured
after the Cure Period:
6.3.1 McTurbine, Inc. shall immediately repay all amounts of reimbursements paid by
Corporation under this Agreement, with interest at the interest rate paid by the City on
its most recently issued general obligation bonds from date of expiration of Cure
Period until fully paid.
6.3.2 McTurbine, Inc. shall pay Corporation reasonable attorney fees and costs of
court to collect amounts due to Corporation.
6.3.3 The Corporation shall have no further obligations to McTurbine, Inc. under this
Agreement.
6.3.4. Neither the City nor the Corporation may be held liable for any consequential
damages.
6.3.5. The Corporation may pursue all remedies available under law.
6.4 In the event of unforeseeable third party delays in the construction of the
Improvements or force majeure and upon a reasonable showing by McTurbine, Inc. that it
has immediately and in good faith commenced and is diligently and continuously pursuing the
correction, removal or abatement of such delays by using its best efforts, Corporation may
consent to and excuse such delays, which consent and excuse shall not be unreasonably
withheld. Failure by McTurbine, Inc. to use its best efforts as required in this paragraph shall
be an act of default. Force majeure means severe weather such as tornadoes or flooding,
wars, riots, and the unavailability of necessary and essential equipment and supplies from all
sources.
6.5 Any delay for any amount of time by Corporation in providing notice of default to
McTurbine, Inc. shall in no event be deemed or constitute a waiver of such default by
Corporation of its rights and remedies available under this agreement, or in law or equity.
6.6. No waiver of any covenant or condition, or the breach of any covenant or condition of
this Agreement, constitutes a waiver of any subsequent breach of the covenant or condition
of the Agreement.
6 7 No waiver of any covenant or condition, or the breach of any covenant or condition of this
Agreement, justifies or authorizes the nonobservance on any other occasion of the covenant
or condition or any other covenant or condition of this Agreement.
6.8 Any waiver or indulgence of McTurbine, Inc.'s default may not be considered an estoppel
against the Corporation.
VII. GENERAL TERMS
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7' Effective Date. The effective date of this Agreement ("Effective Date") is the latest date
that either party executes this Agreement.
7',
"
Term. The term of this Agreement is five years from the Effective Date.
7.:1 Termination. This Agreement may be terminated by mutual agreement of the parties
or by either party, upon the failure of the other party to fulfill an obligation as set forth herein.
The termination of this agreement shall extinguish all rights, duties, obligations, and liabilities
of the parties under this Agreement, except all rights, duties, liabilities, and obligations
accrued prior to such termination shall survive termination.
74 Compliance with Laws. McTurbine, Inc. shall observe and obey all applicable laws,
ordinances, regulations, and rules of the Federal, State, County and City governments, as
may be amended or enacted.
75 Assignment. McTurbine, Inc. may not assign all or any part of its rights, privileges, or
duties under this Agreement without the prior written approval of the Corporation and City.
Any attempted assignment without approval is void, and constitutes a breach of this
Agreement.
7.6 Indemnity. McTurbine, Inc. covenants to fully indemnify, save, and hold
harmless the Corporation, the City, their respective officers, employees, and agents
("lndemnitees'7 against all liability, damage, loss, claims, demands, and actions of any
kind on account of personal injuries (including, without limiting the foregoing,
workers' compensation and death claims), or property loss or damage of any kind,
which arise out of or are in any manner connected with, or are claimed to arise out of
or be in any manner connected with Mc Turbine, Inc. activities conducted under or
incidental to this Agreement, including any injury, loss or damage caused by the sole
or contributory negligence of any or all of the Indemnitees. McTurbine, Inc. must, at its
own expense, investigate all those claims and demands, attend to their settlement or
other disposition, defend all actions based on those claims and demands with counsel
satisfactory to Indemnitees, and pay all charges of attorneys and all other cost and
expenses of any kind arising from the liability, damage, loss, claims, demands, or
actions.
7 7 Buy Local Provision. McTurbine, Inc. agrees to use its 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 section, the term "local" as used to describe
manufacturers, suppliers, contractors, and labor includes firms, businesses, and persons who
reside in or maintain an office within a 50-mile radius of Nueces County.
7.8 Notices.
a. Any required written notices shall be sent mailed, certified mail, postage prepaid,
addressed as follows:
Me! urbine, Inc.lldoc.doc
Page 7 of 10
McTurbine, Inc.:
McTurbine, Inc.
clo Ken Essary
Vice President and General Manager
1902 Holly Road
Corpus Christi, Texas 78417-2915
Corporation:
City of Corpus Christi
Business and Job Development Corporation
Attn: Executive Director
1201 Leopard Street
Corpus Christi, Texas 78401
b. A copy of all notices and correspondence must be sent the City at the following
address:
City of Corpus Christi
Attn.: City Manager
P.O. Box 9277
Corpus Christi, Texas 78469-9277
c. Notice is effective upon deposit in the United States mail in the manner provided
above.
7.9 Incorporation of other documents.
a. The Corpus Christi Business & Job Development Corporation Guidelines & Criteria
for Granting Business Incentives ("Corporation Guidelines"), adopted May 5, 2003, are
incorporated into this Agreement.
b McTurbine, Inc. application submitted to the Corporation for business incentives
("Application") is incorporated into this Agreement.
c. If there is any conflict in the terms of these documents, the following order controls:
(i) This Agreement, (ii) Corporation Guidelines, (iii) Application.
7.10 Amendments or Modifications. No amendments or modifications to this Agreement
may be made, nor any provision waived, unless in writing signed by a person duly authorized
to sign agreements on behalf of each party.
7.11 Relationship of Parties. In performing this Agreement, both the Corporation and
McTurbine, Inc. will act in an individual capacity, and not as agents, representatives,
employees, employers, partners, joint-venturers, or associates of one another. The
employees or agents of either party may not be, nor be construed to be, the employees or
agents of the other party for any purpose.
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7 12 Captions. The captions in this Agreement are for convenience only and are not a part
of this Agreement. The captions do not in any way limit or amplify the terms and provisions
of this Agreement.
7.13 Severability.
7.13.1 If for any reason, any section, paragraph, subdivision, clause, provision,
phrase or word of this Agreement or the application of this Agreement to any person or
circumstance is, to any extent, held illegal, invalid, or unenforceable under present or
future law or by a final judgment of a court of competent jurisdiction, then the
remainder of this Agreement, or the application of the term or provision to persons or
circumstances other than those as to which it is held illegal, invalid, or unenforceable,
will not be affected by the law or judgment, for it is the definite intent of the parties to
this Agreement that every section, paragraph, subdivision, clause, provision, phrase,
or word of this Agreement be given full force and effect for its purpose.
7.13.2 To the extent that any clause or provision is held illegal, invalid, or
unenforceable under present or future law effective during the term of this Agreement,
then the remainder of this Agreement is not affected by the law, and in lieu of any
Illegal, invalid, or unenforceable clause or provision, a clause or provision, as similar in
terms to the illegal, invalid, or unenforceable clause or provision as may be possible
and be legal, valid, and enforceable, will be added to this Agreement automatically.
7.14 Venue. Venue for any legal action related to this Agreement is in Nueces County,
Texas
7.15 Sole Agreement. This Agreement constitutes the sole agreement between the
Corporation and McTurbine, Inc.. Any prior agreements, promises, negotiations, or
representations, verbal or otherwise, not expressly stated in this Agreement, are of no force
and effect.
Corpus Christi Business & Job Development Corporation
By:
Name:
Title:
Date:
McTurbine, Inc.
By:
Name:
Title:
Date:
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1'Jt d.i ~1';">"'t.- ;,;; r'~)f'''',,L,/J r. .... ,,,) J
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Federal Tax ID No.:
Corporate Seal:
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Page 9 of 10
The State of Texass
County of Nuecess
Before me, (Notary's name), on this day
personally appeared Ken Essary, Vice President and General Manager of McTurbine, Inc.
Inc., known to me to be the person whose name is subscribed to the foregoing instrument
and acknowledged to me that he executed the same in the capacity stated as the act of
McTurbine, Inc., Inc., a Texas corporation, for the purposes and consideration expressed in
the Instrument.
Given under my hand and seal of office this the _ day of
,2005.
Notary Public in and for the State of Texas
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Corpus Christi, Texas \'\
Iq~ Day of \\~ , 2005
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The above resolution wWpassed by the following vote:
Henry Garrett (~
Brent Chesney ~
Melody Cooper
Jerry Garcia fut-
Bill Kelly ~
Rex Kinnison (hi
John E. Marez 0fJ-
Jesse Noyola (J))/l-
Mark Scott %/
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