HomeMy WebLinkAbout030615 RES - 09/15/2015 RESOLUTION ADOPTING AMENDED CORPUS CHRISTI BUSINESS AND JOB
DEVELOPMENT CORPORATION GUIDELINES AND CRITERIA FOR GRANTING
BUSINESS INCENTIVES
WHEREAS, in 2003, the City Council approved the original Guidelines and Criteria for
Granting Business Incentives for the Corpus Christi Business and Job Development Corporation,
a Type A Corporation ("the Corporation") for the expenditure of sales tax money approved in
2002 by the voters of the City of Corpus Christi for jobs,job training, and business development;
WHEREAS, in 2010 the City Council last amended these Guidelines, and the
Corporation has forwarded its recommendation that they be amended again to address concerns
that came up in a joint workshop on April 7, 2015, where the board of the Corpus Christi
Regional Economic Development Corporation ("CCREDC") also attended and directed their
staff to draft these amended guidelines, in consultation with City staff;
WHEREAS, these concerns include defining the role of CCREDC and its board in the
application process, defining"economic driver jobs", allocating funding for projects,job training
and small business assistance, laying out the requirements for economic impact reports by
project type, adding additional reporting requirements on small business and job training
projects, and providing a process if a project has no action by the City Council;
THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CORPUS CHRISTI THAT:
SECTION 1. The City Council of the City of Corpus Christi finds that it is advisable for
the reasons stated above for the Corporation to adopt the Amended Guidelines and Criteria for
Granting Business Incentives for the Corpus Christi Business and Job Development Corporation,
attached to this Resolution and incorporated herein for all purposes;
SECTION 2. The City Council approves the form and the substance of Guidelines and
Criteria for Granting Business Incentives for the Corpus Christi Business and Job Development
Corporation.
Date: September 15, 2015
Attest:
Rebecca Huerta, City Secretary NELDA EZ, MAYOR
CITY OF CORPUS CHRISTI
.► 30615
INDEXED
Corpus Christi, Texas
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The above resolution was passed by the following vote:
Nelda Martinez I A 1 Brian Rosas /A ,!
Rudy Garza Ed! Lucy Rubio A I /
(tiChad Ma illA./ Mark Scott I!
g I IColleen McIntyre / J / Carolyn Vaughn L.Ad
Lillian Riojas Si
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03Q-615
CORPUS CHRISTI
BUSINESS & JOB DEVELOPMENT CORPORATION GUIDELINES & CRITERIA
FOR GRANTING BUSINESS INCENTIVES
WHEREAS, the attraction of long-term investment and the establishment of new primary jobs in
Corpus Christi would enhance the City's economic base bringing new revenues into the
economy; 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), now codified as Subtitle Cl, Title 12, Texas
Local Government Code, ("the Act"), 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 ("City") 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, 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 ensure 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 Type A 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;
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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:
Section 1. Definitions.
(a) "Agreement" 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.
(b) "Basic Manufacturing 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.
(c) "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".
(d) "Business Incubator" means a program established with the primary objective of improving
the potential success of emerging primary employers, preferably through the transfer or
application of technology, and in doing so, creates jobs, ensures self-sufficiency and invigorates
the local economy. Through such programs, small business owners typically have access to
assistance which might include items such as rental space, administrative support services, on-
site business consulting, workshops, enterprise facilitation, and business management
seminars.
(e) "Capital Investment" means the increase in the assessed value of an eligible property as a
result of"expansion" or "modernization" of an "existing facility" or construction of a "new facility."
It does not mean or include "deferred maintenance".
(f) "City" means the City of Corpus Christi, Texas.
(g) "CCREDC "means the Corpus Christi Regional Economic Development Corporation which
serves as a professional economic development advisor to the City, the Corporation, and the
Board:
(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 Driver" means a project that will add at least 50 full time employees and at least
50% of their sales and revenue come from outside a 50 mile radius from the intersection of
Staples Street and Leopard Street. These revenues will increase the wealth of the area.
(k) "Economic Life" means the number of years a property improvement is expected to be in
service in a "facility".
(I) "Executive Director" means the chief executive officer for the "Corporation," or his/her
designated representative.
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(m) "Expansion" means the addition of buildings, structures, fixed machinery or equipment for
the purposes of increasing capacity.
(n) "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.
(o) "Jobs" means employment of a full time employee, contractor, consultant, or leased
employee who has a home address in the Corpus Christi MSA.
(p) "Living wage" means the 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.
(q) "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".
(r) "New Facility" means a property previously undeveloped which is placed into service by
means other than or in conjunction with an "expansion" or"modernization".
(s) "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 to the business incentive. The other party 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.
(t) "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.
(u) "Primary Employer" means a business in which at least 50% of its goods and/or services are
sold to customers that are located more than 50 miles from the intersection of Staples Street
and Leopard Street and (1)whose goods and/or services are in one of the following two-digit
NAICS codes 31-33 Manufacturing; 42 Wholesale Trade; 48-49 Transportation and
Warehousing; 52 Finance and Insurance; 54 Professional and Technical; or 55 Management of
Companies; or(2)which is a supplier of who supplies at least 50% of its non-retail goods and/or
services to local primary employer(s)that are located within a 50 mile radius away.
Professional services companies qualifying for incentives must have more than 50% of their
contract work(i.e. the location where the physical work/construction/manufacturing, etc.
resulting from the professional services is done) located outside of a 50 mile radius of the
region. The inability of a company to satisfactorily document the "primary" nature of the jobs
shall be deemed ineligible for this incentive agreement payments.
(v) "Project Agreement" 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.
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(w) "Regional 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 from the intersection of Staples Street and Leopard
Street.
(x) "Regional Telecommunications/Data Processing 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 from the intersection of Staples Street and Leopard Street.
(y) "Research and Development Facility" means buildings and structures used or to be used
primarily for the purpose of product developmental engineering, testing and evaluation.
(z) "Retention" means to retain existing primary employers so that they continue their business
operation within the Corpus Christi city limits and its extraterritorial jurisdiction (ETJ).
(aa) "Small Business" means an employer that employs 49 or less full time (2,080 hours/year)
permanent jobs at the time of application.
(ab) "Small Business Primary Employer" means a primary employer that employs 49 or less full
time permanent jobs at the time of application and complies with the requirement(s) set forth
under"Definitions" letter (u).
Section 2. Mission & Goals
(a) It shall be the mission of the Board in administration of these Guidelines and Criteria to
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.
(b) The goals of the Board in administration of these Guidelines and Criteria are to:
• Create and retain jobs;
• Expand the City tax base and economy;
• Strengthen and diversify Primary Employers within the local economy.
(c)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. CCREDC shall be responsible for accepting and
processing all Type A incentive applications and forwarding to the Board and Corporation with
recommendations for action. All completed applications filed with CCREDC that meets the
qualifying standards of the Type A Program, and provided funds allocated and budgeted are
available, will be forwarded to the Type A Board along with a recommendation on course of
action. CCREDC will provide a monthly report to the Board of any application that was deemed
ineligible and the reason.
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(d) In order to achieve a balance of the types of uses of Type A funds the following allocation
shall be allotted: 50% of total for Business Incentives; 15% for Small Business Assistance
programs and 35% of total for Education/Skills Development. As a best practice the Board may
choose to stay within these percentages to ensure balance in the fund projects.
Section 3. Business Incentives Authorized.
(a) Primary Employer and Small Business Primary Employer Business Incentives Authorized.
Incentives granted by Agreement under these guidelines pursuant to
Section 4 below may include, but are not limited to the following:
• land, facilities, equipment & infrastructure grants;
• loan participation/guarantees;
• direct low interest loans;
• rent subsidies;
• relocation and moving expense grants;
• job training grants/loans;
• business incubation activities; and
• Projects located in a tax increment reinvestment zone will be given preference.
(b) 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 the following:
• Small Business start-up grants/loans;
• Business Incubation grants/loans; and
• Business Incubator development.
(c) Education Skills Development(defined below)
Section 4. Primary Employer Business Incentives.
(a)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, Expansion, or for Capital Investment necessary for the retention of
an existing primary employer. The following types of property shall be ineligible for business
incentives: inventories; supplies; tools; furnishings and other forms of movable personal
property (not including capital production equipment); vehicles; vessels; aircraft; deferred
maintenance investments; improvements to real property which have an economic life of less
than 15 years; and, 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.
(b)Annual Certification. The Business Incentive Agreement shall require annual certification of
capital investment as required by the Agreement.
(c) 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):
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• 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.
(d)Average Wage Requirement. In determining an incentive based on net new jobs, the
following matrix shall be considered as a guiding principal for incentive reviews.
New Gross Payroll Incentive per New Job for employees, leased employees, contractors, and
consultants. Benefits shall not be included in the gross payroll calculations.
<$30,000 per new job A maximum of$750 per net new job*
$30,000 to $40,000 per new job $751 to $5,000 per new job*
$40,001 to $50,000 per new job $5,001 to $10,000 per new job*
>$50,000 per new job $10,001+ per new job*
*up to, or not-to-exceed amounts, based on projected economic impact report and CCREDC
staff recommendations.
(e) For each project an economic impact report using accepted industry standards will be
completed. For purposes of calculating the impact, only direct and indirect(not induced)
revenue impacts shall be considered. As a guiding principle, no company creating fewer than
50 net new jobs (FTEs) should receive more than 50% of the positive economic impact value
calculated and paid over a five year period.
Companies creating over 50 net new jobs may be eligible to receive greater than 50% of the net
positive economic impact. As a guiding principle, major employment projects (over 50 net new
jobs)will have a significant city-wide economic impact and may be generally considering
multiple cities or metro areas and shall be designated as Economic Driver projects. When there
is clear and direct evidence that the City is in direct competition with another region for such a
major project(over 50 net new jobs) the guiding principle may require the Board and City to
extend incentives offers beyond 50% of the direct and indirect economic impact of the project.
The CCREDC staff will present to the Board a recommendation including the summary
economic impact report, based on careful analysis and negotiations with the applicant company
along with a clear acknowledgement when a project may require (or has requested) incentives
in excess of the 50% direct and indirect positive benefits for the project. As a further guiding
principle, incentives should not exceed 100% of the direct and indirect project benefits unless
clear evidence exists that the project will bring further investments or is a "game changer" deal
that will significantly and positively impact the wider Corpus Christi economy.
(f) Job Creation Qualification. In order to be eligible for business incentives, the planned Capital
Investment must create and maintain the minimum number of 50 full-time (2,080 hours/year)
permanent jobs within the agreed time of an effective date as set out in the Agreement. Annual
validation of wage rates shall be provided as set forth in Section 12 (b) herein. With regard to
job training, an exception to this requirement may be granted by the Board on a case by case
basis.
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(g) Health Insurance. To qualify for incentives, a primary employer shall certify that it has offered
a health insurance program that meets federal and/or state standards for its employees during
the term of the Agreement.
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
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)Wage 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.
(c) Each Small Business incentive application shall be accompanied by an economic impact
report prepared by CCREDC and each company shall adequately report job and payroll
numbers to CCREDC for reporting and compliance. The CCREDC staff shall prepare a
recommendation to the Board on an appropriate course of action on levels of incentives to be
offered.
Section 6. Small Business Primary Employer Incentives.
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 Primary
Employers to create jobs through Small Business start-up and/or Business Incubation. On an
annual basis, the Board may budget a separate allocation for funding all small business start-
up, expansion, retention, and/or business incubation incentives.
Section 7. Small Business Support
(a) Small business support programs are programs designed to help small businesses grow in
the community to create jobs. These programs may include technical assistance, business
assistance, loan programs, and internships.
(b) Internships will be funded at a maximum of 50% of the wage plus FICA.
(c)The programs must report at a minimum; the number of interns, the companies using
interns, intern duties, whether the intern received a job at that company, and whether the intern
received a job in the area. Companies cannot use this as a supplement to their workforce.
Interns must be used in their academic major field. Internship programs shall not be used as a
substitute for permanent job or position creation. Companies cannot use interns more than two
years without creating a job. If they do not create a job in that time they will be removed from
the list for one year. No company shall receive an intern if another company, who has never
had an intern, is requesting one.
(d) Small business support program grants will not automatically be renewed; organizations
must reapply annually.
Section 8. Education/Skills Development.
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(a) Requests for education/skills development grants must be made through the application
process adopted for all other business applicants.
(b) Education/Skills Development projects must target job skills that are currently needed or will
become needed within the next three years as identified by WorkForce Solutions, Inc.
(c)The Education/Skills Development grant must be matched by the applicant by at least 50%
of the cash contributed. In-kind donations/contributions will not count toward this minimum.
(d) The programs must report the number of students, the number of graduates, and their
location and average salary when they are ultimately hired. Failure to do so may jeopardize
future applications.
(e) Economic Impact, given the unique nature of these projects, may include direct, indirect and
even induced economic impact, but awarded incentive grants should be matched with the
educational institution's actual cash (not in-kind) participation, nor exceed 50% of the value of
the economic impact.
(f)The grant shall be used for capital expenditures and not for operations.
(g) Economic impact report should be completed by an independent third party deemed
acceptable by CCREDC, on behalf of the Board.
Section 9. Universal Requirements.
(a) Project Implementation. An authorized project funded by a business incentive under this
Section must be implemented within two (2)years from the date of the Agreement.
(b) 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.
(c) Living Wage Requirement. In order to count as a permanent full-time job under this
incentive program, the job should provide a "living wage" for the employee. The target living
wage under this abatement program is that annual amount equal or greater than poverty level
for a family of three, established by the U.S. Department of Health and Human Services
Poverty Guidelines, divided by 2,080 hours per year for that year. The City has the right to
adjust the living wage target under these Guidelines and insert a specific target in each property
Agreement to govern the abatement offered under that Agreement.
(d) Health Insurance. To qualify for this incentive, an employer shall certify that it has offered a
health insurance program for its employees during the term of the Agreement and in compliance
with state and federal standards for healthcare coverage.
(e) Utilization of Local Contractors and Suppliers. Developer agrees to exercise reasonable
efforts in utilizing local contractors and suppliers in the construction of the Project, except where
not reasonably possible to do so without added expense, substantial inconvenience, or sacrifice
in operating efficiency in the normal course of business, with a goal of 50% of the total dollar
amount of all construction contracts and supply agreements for elements that are not owner-
provided or owner affiliate-provided being paid to local contractors and suppliers within the 50
mile radius of Leopard Street and Staples Street intersection. For the purposes of this section,
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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 the 50 mile radius of
Leopard Street and Staples Street intersection. The Developer agrees, during the construction
of the Project and for four years after Completion, to maintain written records documenting the
efforts of the Developer to comply with the Local Requirement.
(f) Utilization of Disadvantaged Business Enterprises. Developer agrees to exercise reasonable
efforts in utilizing contractors and suppliers that are determined to be disadvantaged business
enterprises, including minority business enterprises women-owned business enterprises and
historically-underutilized business enterprises, in the construction of elements of the Project that
are not owner-provided or owner affiliate-provided. In order to qualify as a business enterprise
under this provision, the firm must be certified by the City, the Regional Transportation Authority
or another governmental entity in the jurisdiction of the home office of the business as
complying with state or federal standards for qualification as such an enterprise. The Developer
agrees to a goal of 30% of the total dollar amount of all construction contracts and supply
agreements, for elements of the Project that are not owner-provided or owner affiliate-provided,
being paid to disadvantaged business enterprises, with a priority made for disadvantaged
business enterprises which are local. The Developer agrees, during the construction of the
Project and for four years after Completion, to maintain written records documenting the efforts
of the Developer to comply with the DBE Requirement. For the purposes of this section, the
term "local" as used to describe contractors and suppliers that are determined to be
disadvantaged business enterprises, including minority business enterprises women-owned
business enterprises and historically-underutilized business enterprises includes firms,
businesses, and persons who reside in or maintain an office within a 50 mile radius from the
intersection of Staples Street and Leopard Street.
(g) Insurance Requirements. Each recipient of business incentives shall carry worker's
compensation insurance and other appropriate insurance coverage as the Board may determine
is appropriate and required in the Business Incentive Agreement.
Section 10. Application.
(a)Written Application. Any present or potential Owner or sponsor may request business
incentives by filing an authorized and signed application with the President of the CCREDC.
(b) Contents of Application. The application shall consist of a completed application form
accompanied (when applicable) by the following:
• 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 property;
• a map and property description; and,
• a time schedule for undertaking and completing the proposed improvements or
programs.
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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.
(c) Feasibility/Economic Impact Study. After receipt of a completed application, the President of
the CCREDC shall cause to be performed an economic impact report. This report may be
completed by CCREDC (or its consultant) using established accepted economic impact models
such as IMPLAN, RIMS II, EMS', or similar model. 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. The
costs and expenses of the feasibility/economic impact study shall be borne by the Economic
Development Corporation. The economic impact report should clearly identify the direct and
indirect economic impact of each project.
(d) No Business Incentives if Construction or Program 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.
(e) Financial Information. The applicant shall provide to the Corporation, or the Corporation's
appointed agent, the last three years financial statements-company and/or personal financial
statements (may include audited financial statements)for review and evaluation to assess the
financial strength of the applicant. After receipt of the financial statements, the President of the
CCREDC may cause a financial review to be performed . Upon completion, any negative
findings from the financial review will be forwarded to the Board for review and discussion
before consideration of an Agreement. The applicant will be allowed to address, and explain in
writing, any negative findings before the Corporation takes action on an Agreement.
Section 11. Approval.
(a) Reservation of Rights. 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.
(b) Project Agreement Required. Each Agreement shall also include and be accompanied by a
separate Project Agreement executed between the Corporation and the City.
(c) Non action by the City Council is deemed as denial of the application within six months of
Corporation approval and return to the Board for further action.
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(c) Denial or non-action by the City Council. If the City Council fails to act on an application for
a period of 6 months following approval by the Board, then the application is deemed to be
denied, and any funds for said application shall be thus deemed to be unencumbered. In a case
of denial or Non-action (deemed denial after 6 months), an applicant would be required to begin
the application process from the start.
Section 12. Agreement.
(a) Contents of Business Incentive Agreement. 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 programs, the proposed program description, targeted employment
market, nature and schedule of activities, facilities and equipment used to carry out
activities, and complete program budget listing all sources of funding and 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.
• Commencement must occur within the time frame specified and agreed to in the
agreement.
(b) 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.
(c) Deadline for Execution. If the incentive proposal is approved by the Corporation
Board of Directors, then the Owner will have ninety (90) days from the date the final
Business Incentive Agreement is received by the Owner to execute the Agreement.
Failure to execute the Business Incentive Agreement within ninety (90) days from date of receipt
will result in the Agreement being null and void and of no effect.
Section 13. Recapture.
(a) 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
requirements, obligations, duties, terms, conditions or 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. If the Owner is not
in compliance during any compliance reviews, then the Corporation, in its sole discretion, shall
determine the incentives that the Owner shall be required to refund. As a best practice,
incentive agreements should include an appropriate graded scale of penalties negotiated on a
case-by-case basis to ensure applicants adhere to performance goals and to ensure any
penalties are reflective of the level of non-performance.
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(b) Employment Verification. Owner shall annually provide documentation, in the form of
quarterly Texas Workforce Commission payroll reports or other mutually acceptable
employment and payroll report, to verify compliance with new job and payroll commitments. The
four quarterly reports, required to be filed with the Texas Workforce Commission, shall be due
not later than the fifteenth day after the deadline for filing the fourth quarter report with the
Texas Workforce Commission, each year. Corporation may request Owner to provide such
documentation at any time.
(c) 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 its protest and/or
contest, the Agreement shall terminate and so shall the business incentives.
(d) Utility Payments. In the event that the Owner allows its utility billing payments to become
delinquent, the Agreement shall terminate and so shall the business incentives.
(e) 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. If default on new
construction occurs at the fault of the Owner, then the Owner must provide a written explanation
of the reason for the default to the Corporation. This written explanation, and any legitimate
reasons for delay, will be taken into consideration as a possible remedy for the default. The
Owner shall also notify the Corporation, in writing, explaining any delays in completing any
required Agreement milestones as soon as the delays are realized. These Agreement
milestones would include deadlines for completion of new construction, hiring new employees,
or any other required Agreement milestones.
(f) 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.
Section 14. Administration.
(a)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 determine if the terms and conditions of the Agreement are 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.
(b)Annual Reviews. Business Incentive Agreement reviews will be conducted annually to
ensure that the Owner is in compliance with the provisions of the Agreement. If the Owner is not
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in compliance or is in default, then the appropriate provision of the Agreement, as outlined in
Section 9 herein and the Agreement, will be enforced to recover incentives paid to Owner,
unless the Owner remedies the default on or before the conclusion of any Cure Period.
(c)Annual Evaluation. The City, or designee, 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.
(d) 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.
Section 15. Waivers/Variances
The Corporation shall have discretion to vary, alter, and/or waive any guideline or criteria set
forth herein when such variance, alteration, and/or waiver shall be in the public interest and in
furtherance of the purposes and goals of the Corporation as set forth in its Articles of
Incorporation, By-laws, Ordinance 024952, and the Act.
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