HomeMy WebLinkAboutC2005-341 - 7/19/2005 - ApprovedAGREEMENT TO GRANT BUSINF_8~ INCEH/NE8 TO
MCTIJRBINE, INC.
FOR THE CREATION OF JOB8
This Agreement to Grant BuNness Irx:e~ives for the Creation of Jobs ('Ag,~..,~d') b
entered into by and be(ween the Corpus Christi Business and Job Develofxn~t ~
("Corporation"), a Texas nonprofit corpo~ organized under V.A.C.S. Art. 5190.6, Sec. ~
with mailing addrees of 1201 I_eo~rd, Corpus ChriS, Texaa, 78401, and McTurblne, Inc.,
Texas corporation, with principal piece of bu~ness c~rre,,U? at 1902 Holly Road, C, orrx~
Christi. Texas 78417-2915.
I. BACKGROUND
1.1 Project. McTurblne, Inc. N~all conatruct a n~w 40,000 ~u~m ff or larger f~=allty ~1
engine test facility, to be built on property ovmed by McTurblne, Inc. at 401 Junior Beck Drive
in Corpus Chrb'd, Nuecea County, Texas, 78405, ('Facility'), for to(al McTurblne, Inc. capital
invesl~nent of Three million one hundred clol[am ($3,100,000). McTurbine deein~ the
assistance of the Corporation. 'The Facility ~ be utilized by McTurblne, Inc. for ~
distflbutlon, rnaJ.k~nance, repair, and fabrication of helicop{er enginee and comlxmenta.
1.2 Purpose of Agreement. Corpora'don and McTurblne, Inc. wish to ~ Into an
agreement whereby the Corpo,u;.ion will provide financial aaai~tance for the follo~ng:
reimburaement of McTurblne Inc. actual architectural, engineering, and construction coets for
completion of construction of Facility, up to a maximum of five hundred lhousand
($500,000). In COl't~derat~n of Corporation's financial a~tance, McTurblne shall crea~
and c~ntlnuouNy employ minimum of additional one hundred (100) full time employment
posi'dons at its Facility within three yearn from effectNe date of l~b Agreement.
II. BUSINEU INCENTNE$
2.1 McTurbine, Inc. N'mll ~ubrnit monl~ly requests to Corporation to be mlmbumed for
McTurb~e Inc. actual and verified construction coats incurr~l dudng ltm billing month, up to
total of $500,000 In requested relmbursermm~.
2.2 McTurbine, Inc. specifically act~owfedgee that Corporatlm~ ehal only pay the
relmburaement emount~ aolety out of its economic devek3pment aalea tax revenue collected
dudng the term of ~la Agreement. Should the actual aalea tax revenue ~ for any one
year be leas lhan the to(al amount of grants to be paid to all parUes conb,~ng ~ the
CorporalJon for lhat year, then, all contracting parlJes ~hall receive 0nly their pro rata sham of
the available sales tax revenue for that year and Corporation N~all not be liable to McTurblne,
Inc for any shortage.
2.3 McTurbine, Inc.,. shall allow Corpo~=~o~ reasonable access to McTurblne'e
construction si(e to allow Corpo~u~on to verify construction progress.
2.4 McTurbine, Inc. shaft allow Corpo..~on reasonable ecceaa to records of McTurbh'~ ~o
allow Corporation to verify request~ for con~truction reimbum~rrm~t payments.
2.5
AJI Coqx~-Uon payments am subject to the McTurbine'e ~K~ea~ful compleUon of al
Z005-341 )utlined in thb Agreement
07119/05
#~)~63.~l Page 1 of 10
McTurbine
IlL CONSTRUCTION REQUIREMENT8
3.1 McTurbine, Inc. agree~ to construct new 40,000 m:lUme lt. or larger productkm factllty
and engine teat facility, ('Facility'), to be located on property owned by McTurblrm, Inc. at 401
Junior Bec~ Drive in Corpus Christi, Ntmces County, Tmca~, 78405, mom ruby described in
Exhibit A.
3.2 McTurbine, Inc. agreee tflat its Facility s~all be utilized throughout tim tram of this
Agreeme~ for Its distribution, maln'mnance, repair, and fabrication of helicoptm engineers
and components.
3.2 McTurblne, Inc. agrees that cormtruction of Facility shall be completed within 12
months of the executlo~ of this agreement.
3.3 McTurblne Inc. mhall begin full operatfon at Facility within two months from completion
of cofmtnJcbon. Completion of construction occum ~ tt~ is~Janoe of ~ of
Occupancy by the City of Corpus ChriS.
3.4 McTurbine, Inc. agrees ~at Its capital Investment for thb project Is at least Three
million o~e hundred ~ousand dollars ($3,100,000).
3.5 McTurblne, Inc. shall maintain insurance on the Facility, at McTurblne's
dunng the term of t~is Agreement, Insurance of the type and wtflh Itm amount of coverage
shown oe tt~e Attachment, which ia incorporated in thi~ Agreement by reference. McTurbine,
to maintain the Irmumnce during the term of t~ls Agreement, at ttm llm~ and requirements
shown o~ Attachment cono[;~te~ gmund~ for ten~lnation
at Insurance must be oent to the ~ Manager prior to occupancy at' and agenfdon~ at the
Facility The CmlJfk:ate of Insurance must provide ~at the City will have thirty (30) days
advance w~mn notice of cancellation, ir,~nt to not renew, ~1 change, or ten'nbmtlon of
any coverage required in t~ia Agreement. McTurblne, Inc. shall provide, dudng rite term
this Lea~e, copie~ of all insurance policies to the Risk Manager upon w,r'u~n requeet by the
City Manager. 'The Risk Manager ~hall reLain tim right to annually review tim amount and
types of Irmumnce mai~Lained by McTurbJrm, Inc. to require Incr~ coverage I[nfi'm, If
necessary in the i~b~eet of public health, su;~L]f, or welfare, and to decmmm coverage, if
warranted. In the event of any necessary increase, McTurbtne, Inc. shall receive thirty (30)
days w,1~u~n notice prior to the effective date of the requirement to ol~aln Incrmmed coverage.
McTurbine, Inc. shall, prior to any addition or arm,,,~n to, in, on, or about the Pmmlae~,
obtain prior clearance, in writing, from the Risk Manager fi'tat l)he pR)posed addition or
alteraflc~ will not neceesltate ia change or modification In t~e existing Insurance coverage
maintained by Leeaee.
IV. EMPLOYMENT REQUIRBIIEN'r8
4 1 McTurblne, Inc. agree~ to create and maintain at lea~t one hundred (100) new full-time
jobs. permanent jobs at its Facility wtthin flhree years from Apdl 27, 2005, lhe date McTurblne,
Inc. submitted its application for business IncentJve~ to Corporation. A full-time permane~
job is one that provides at least 2,080 hours annually.
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4.2 The job~ ahall be pdrnadly engaged In aarvlng a cush3mer base out,de ,a 50-mile
radiu~ of the city of Corpu~ Chdefi.
4.3 in order to count aa a job under this Agreement, ~ job must pay wages aa required In
Sectio~ 38 Cb) of the Development Corporation Act of 1979,
4.4 McTurbine, Inc. agrees to maintain the new full-time permanent Jobe created under
this Agreement throughout ~ remainder of the term of this Agreement.
4.5 By January 15 of each year ofthis Agreemm% McTurbJ~, Inc. agreaa to provide
(l) the number of full-time permanent employees at Its Facilities aa of ~
31 of ~ previous calenda~ year, and
(il) the number of full-time permanent jobs which were created during the
previous calendar year, ~ hourly wage.
4.6 McTurb~ne, Inc. ahall allow Corporation masonal3ie accaaa to McTurblne'a pemonnel
V. COVENANTS AND WARRANTIF.8
5.1 McTurblne, Inc. wnrm,,t~ end repro to ~ the following:
5.1.1. McTurbine, Inc. is n corporat~:m duly organized, validly existing, and In good
standing under the laws of the S',-k~ of Texaa, has all coq3omte power and authority to
carry o~ M bu~ineaa as praaent~y conducla<l in Corpus Christi, Tm.
5.1.2 McTurbine, Inc. haa the authority to enter Into and perform, and v~ perform, the
tams o~ this Agmermmt.
5.1.3 McTurblne, Inc. haa timely filed and will timely file all local, State, and Federal
tax reporm and re~ume required by ~ to be filed and all tmma, ~, feaa,
and offer govemmental charges, including applicable ad valorem and ernl31oymeat
taxes, have been timely paid, and will be timely paid, dudng Ihe term of this
5.1.4 No litigation or governme.~,l proceeding is pending or, to the I<]~wtedge of
McTurbine, Inc. or McTurblne Inc. officem, threatened against or affecting McTurb~ne,
Inc. that may result in any rnat~dal adveme change in McTurbine's bualneas,
propefdaa, or o~eratJons.
5.1.5 No statement or Information provided by McTurbine, Inc. to Coqx)ra'don orthe
City of Corpus Christi contains any untrue atatements or fails ~ state any fac~
5.1.8 To the baat of i'm knowledge, McTurblne, Inc. haa acquired and melntained all
necemry rights, licenses, permits, and authority to carry on its business c~n in
McTu~, Inc. ........
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Corpus Christi, Texas, and will contdnu~ to u~ ~ ~ a~o~ to maintain ali ~ry
right~, license, permits and authority.
5.1.7 The funds herein granted shall be utilized m31ety for Itm purpose of offsetting the
cost of Facirdy corinth, ration.
5.1.8 McTurbine, Inc. stroll continue Uts full-trine buslneas aclNitlas on I!~ propert7 In
Corpus Christi, Texas, including maintaining Uts employment and Investment
requirements at all firnee thro~h~ the tram of this ~reement.
5.1.9 McTurbine, Inc. shall complete the project required by this Agreement ,,nd ~hall
provide and staff the required employment poaitiorm dsea'Emd In this Agreement.
5.1.10 McTurbina, Inc. shall timely and fully comply with all of the terrrm and
cortcli'doas of this Agreement.
5.1.11 McTurblne, Inc. may not sell ~:~ck, saints, or any owrmmbip In'rarest In
McTurbine, Inc. that would be more than twenty (20) perce~ of McTurblne Inc.'
authortzed and issued ~3ck, assets or ownership Interest, wffi'tout prior wrlff~n notice
to the Corrmm'don and City of Corpus Christi.
5.1.12 McTurbirm, Inc. shall notify Coqxxaflo~ In writing of m.~ba~antlal cJumge~ I~
management wflhln seven (7) day~. Substantial changes mean changas In Chairman
ofthe Board, President, C.E.O. or area management.
5.1.8 McTurbine, Inc. has received a copy of the Texas Devek3prne~t ~ Act
of 1079, Art. 5190.8, Vemon's Texas Revised CMl S;-[utas, and aclm~ Ihat
the funds granted in this Agreement mu~t be utilized m31ely for purpoeas authortred
under State law and by the terms of this Agreement.
5.1.9 In the event it is determirmd by Corporation or City of C<xpua Christi that funds
provided under this Agreement vmm not used in accordance with State law, then
McTurbine, Inc. agrees to repay such funds to Itm Corpom'do~ within 30 day~ of
en~"uun notJce requesting reimbursement.
5.1.10 If an audit determines that the funds were not used for authorized purpueee,
McTurbk'm, Inc. agree~ to retmbume Corporation for the surrm o~ money spe~t for
purposes not aufl'mrized by law within 30 days w,~'u~n no'dca requesting
reimbursement.
5.1.11 Them am no bankruptcy I~'Oceedinga curm,,Uy pending concerning McTurbine,
Inc., nor are any such proceedings con'mmfllated by McTurbino, Inc., as of the date of
ex~cuti~ of this Agrment by McTurbine, Inc.
5.1.12 The parties e~mctYdng this Agreement c~ behaJf of McTurbine, Inc. am duly
authorized by Uts Board of Directom to execute this Agreement o~ behaff of McTurbine,
Inc.
5.1.13 McTurbine, Inc. will not discriminate nor pen'nit diacrtmk~tlon agalrmt any
pemon or group of pemorm, wtth regard to employment and Ihs prov~on ofm
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aL o~, or in the Facility, o~ the gmunde of race, religion, national origin, marllal .:-[da,
sex, age, disability, or In any manner prohibited by the iawa of ~ United S~e. or the
S'.=A~ of Texaa.
5.1.14 McTurbine, Inc. agrees to provide infc,,~on, repot'm, or ~
reepec~ng i'm buainea, oparationa and financial condition as Corporation may
5.1.15 McTurblne, Inc. shall provide Corporation with evidence ofll~ ovmer~flp of mai
property located at 401 Junior Beck Drive, Corpus Chrlati, Nueces County, Texas,
78405 upon which Facility shall be conatn. K~ed.
5.2 NI ref3~e~ffatfons, warranties, covenan'm and agreeme.~ of lfte partlee, as well aa any
right and benefl'm of the parties pertaining the tmnaaction contemplated hereby, ,hall
survive the original execution date of this agreement.
~. ~F~LT
6.1 Event~ofDef'ault. Thefollowingeverffs~ad~'aultofthisAgmement:
6.1.1 Failure of McTurbina, Inc. to timely, fully, and complat~ly comply ~ any one or
6.1.2 The Corporation or City de~ermlnas that any reprea~'~tatlon or warranty un
behalf of McTurbine, Inc. contained In this Agreement or In any financial
cerltf-~ate, report, or opinio~ submit'md to the Corpo, u~ort In connection with this
Agreement was Incorrect or misleading i~ any material respect whea made;
6.1.3 Any judgment ia assasasd against McTurbine, Inc. or any attachment or other
kwy against the property of McTurbina, Inc. wflfl respect to a ctak~ mmalrm unpaid,
undischarged, or not dismisasd for a period of 30 days.
6.1.4 McTurbine, Inc. files a petition in bankruptcy, or is edjudical~d Irm431went or
bankrupt.
6.1.5 If taxes un the Facility become delinquent, and McTurbine, Inc. falis to t3Tmely
and properly follow the legal procedume for prol~st or contest.
6.1.6 McTurbine, Inc. changes the general character of buairmea as conduced of the
6.1.7 Foreclosure or sale ofthe Facility.
6.2 Notice of Default. Should the Corpora'don or City determine that McTurbirm, Inc. ia in
clefuult acco~:llng to ttm terms of this Agreement, the Corpc.,.Uofl or City shall no~y
McTurbine, Inc. in writing of the event of default and provide thirty (30) days from the cla~ of
the notice ("Cum Period') for McTurbine, Inc. to cum the event of default.
McTurl~ne I~_.J',C.~c doc
Page 5 of 10
6.3 Reau~ ct= Uncured Default. After exhausting good fa~ attampt~ to addreas any default
dunng the Cure Period, and taldng Into account any extenuating clrcurr~fancas that might
have occurred through no fault of McTurbine, Inc., as determined by the Board of ~ of
the Corpora'don, the following actions must be taken for any default fl~t remains uncured
after the Cur~
6.3.1 McTurbine, Inc. shall immediately repay all amoun'~ of relmburaermnt= paid by
Corporation under thia Agreement, with interest at the Intemat ,,.~, paid by the City orr
rts most recently Maued general obligaflo~ bonds from da~ of expiration of Cum
Period until fully paid.
6.3.2 McTurbine, Inc. shall pay Corpo~,,0on rea~mab~ a"uurney fees and coat~ of
court to collect amount~ due to Corpom'do~.
6.3.3 The Corporation shall have no further obligatlon~ to McTu~ino, Inc. under this
Agreement.
6.3.4 Neither the City nor the Corpomfi(m may be held liable for any com~quential
damages.
6.3.5 The Corporati(m may pursue all remedlas available under law.
6.4 In the event of unforeseeable third party delays in the construction of the
Improveme~ or force majeure and upon a reasonable Nx3wlng by McTurbine, Inc. that it
haB immediately and In good faith commenced and is diligently and contlnuouNy pumulng the
correction, removal or abatement of such deta~ by ualng it= be~t eabrt~, Corpomtm may
consent to and excuse such delays, which con~ent and excuse ~hall not be unraaaonably
withheld. Failure by McTurbl~e, Inc. to uae its best effor~ as mcluln~d In thla paragraph emil
be an act o~ d~;'~ult. Force majeure means severe weather each as tomadoee or flooding,
wars. nots, and the unavallebility of necea~ry and eaeential equipment and supplies from all
6.5 Any de~/for any amount of time by Corporation in providing noBce of default to
McTurbine, Inc. ~hall In no event be deemed or con~tituta a waiver of such de~ult by
Corporation of ~ righta and remedie~ ava#able under thl~ agreement, or In law or equity.
6.6. No waiver of any cover~nt or condition, or the bm of any covenant or condition of
this Agreement, constitutes a waiver of any subeequent breech of the covenant or condition
6.7 No waiver of any covenant or condition, o¢ the breach of any coveaant or condll~on of this
Agreement, juatlfl~ or authorlz~ the nonobaervance 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 acTurbine, Inc.'s default may not be considered an a~opp~
against the Corporation.
VII. GENERAL TEI~I$
McTurb~e
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7.2 Term The terrn oi~ 1~il Agreetflffi ill five yelira from the EJTeclJve Date,
7 3 Terming'don. This Agreement may be ~errninalsd by mutual agreement of the parlJee
m by eflher party, upon the failure of the other party to fulfill an obiigatloe as ae~ forth herein.
of U~e parUas under this Agreement, except all rlgh'm, dutke~, Ilabflltlee, and obllgaUone
accrued prior to ~uch terrninaldon ahall survive termination.
7.4 Compliance with Laws. McTurbine, Inc.ahall m and obey all apl:dlcable laws,
ordinances, regul(dona, and rules of the Federal, Slate, County and City govemrneete, as
may be amended or e~ac~sd.
7 5. Aaelgnment. McTurbirm, Inc. may not asaign all or any part of Iai rlghta, prlvtlegas, or
dudes um:l~ this Agmmeflt without the prior W¥~u~n appmv. I of the C, orporaUo~ and City.
Any atl~mpled assignment w~thout approval la void, and cormtihJl~m ia breech of
7.7 Buy Local Provision. McTurblne, Inc. agree~ to uas its be~ efforta to give profemrme
and priority to local manufacturem, auppliem, conltactm, and labor, except where not
reasonably mia to do aa wifl'm~ m:lded experme, substantial Incoflvealence, or aacriflce
in operaflf~ efficiency. For the purposes of this section, the term "local" as used to dascri~
manufacturers, suppliers, co,,ba,~ure, and labor Includes firms, buslne~Ms, and m who
reside in or maintain an office w~thln a 50-mile radius of Nueces County.
a Any required written nolJcee al'mil be sent rolled, cer'dfled mall, poetage prepaid,
addmsaed as follows:
McTm ~
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McTurbine, Inc.:
McTurbine, Inc.
c/o Ken E~aary
Vice Pmaident and General Manager
1902 Holly Road
Corpus Christi, Texaa 78417-2915
City of ~ Christi
Buaineaa and Job Development Corpora'don
Attn: Executive Director
1201 Leopard Stmet
Corpus Chr~fi, Texas 78401
b. A cot:~y of all notlce~ and con'~nce muat be aant the City at the following
City of Corpus Christi
Attn.: City Manager
P.O. Box 9277
Corpus Christi, Texas 78489-9277
c. Notice ia effective ulx)n depoeit In Ihe United States mall in the manner
above.
7.9 Incorporation of other documente.
a. The Corpus Chri~d Business & Job Development Corporation Guldeilnaa & Crll~'ia
for Gmflting Buaineaa Incentives ("Corpo~..IJon Guidellnee'), adopted May 5, 2003, are
b. McTurbine, Inc. aPl~ica'don aubmltted to the ~ for bualneea Incentives
('Application") ia incoq:mmted into thl~ Agreement.
c. If them ia any conflict in tile terms of lheae documents, ff~e following order conlmb:
h) This Agreement, (il) Corporation Guidelines, (iiO Application.
7.10 Amendme,[a or Modifications. No amendrnents or modifications to t~b Agreeme~t
may be made, nor any ~ waived, unlea~ in wilting signed by a person duly authorized
to sign agreements on behalf of each party.
7.11 Relatlon~ip of Parties. In performing ff~is Agreement, bo~ ff~e Corporalion and
McTurbine, Inc. will act in an Individual capacity, and not aa agent~, repraae,3taflvee,
employees, employers, partrmm, joint-venturers, or aaaociab~ of one another. The
agents of the other party for any purpose.
McT,.rt:~,e
Page 8 of 10
7.12 Caption~. Tbe captJona in this Agreement am for convenienc~ only aad are not a part
of this Agreement. The captions do not In any way limit or mr~pllfy the I~wm and ~
7.13 Severabllity.
clrcurn~tance Is, to any extent, held Illegal, invalid, or unenfomeable under pm~aat or
futura law o~ by a final j~lgme~t of a court of competamt juri~llctlon, then the
circumatmmea ull,er than thoae a~ to whic~ it Is held Illegal, invalid, or unenforceable,
7.13.2 To the extent that any daLme or prov~alon is held Illegal, invalid, or
une~omaable under pre~ent or future law afl. clive during the ~errn of thl, Agreement,
then the ren~inder of this Agreement is not affect~ by the law, and in ,au of any
~legal, immlld, or une~forc~able datme or provision, a clauae or provi~on, a~ aJnllar in
terrain to the illegal, invalid, or unenforceable clause or provia~m a~ may be poaable
and be legal, valid, and enforceable, will be added to this Agreement au'mmatJcally.
7.14 Venue Venue for any legal ac~)n rela'md to this Agreement la in Nuecea County,
Texas.
7.15 SoleAgf~m~% ThiaAgmementconotituteatheao~eagreemeat be(vmenthe
Corporation and McTurbi~e, Inc.. Any prior agreernenta, promisea, negotiations, or
re~re~m'mtiona, verbal or otf~rwi~, not expma~y am'md In this Agreement, are of no forc~
and effect.
Corpu~ Chrletl Bu~ln~ · Job E'svalOl~e;~. CorlX~ratlon
McTurbtne. Inc.
Federal Tax ID No.: '7YTM -~' ,: 7~,~ Coq3om~ &iii:
Page 9 of 10
The State of T~
County of Nuece~
personally appeared Ken Ea~ary, Vice Prealdent and Geaeml Manager of McTurblne, Inc.
Inc.. Imow~ to me to be the person who~ name i~ subacri~ed to the foregoing ~atrurnent
McTurbine, Inc., Inc., a Texas coq3omtion, for the purpoaee and consideration expressed ~
the inabument.
Given unde[ my hand and ~ee, of office till, the _~__~ of (~u {),~ , 2005.
IklcTu r'ome ~..l~loc. de~
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