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HomeMy WebLinkAboutC2006-342 - 8/22/2006 - Approved AGREEMENT BETWEEN THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION AND ACCION TEXAS, INC. This Agreement ("'Agreement") IS entered into between the Corpus Christi Business and Job Development Corporation ("Corporation') and ACCION Texas, Inc., a Texas nonprofit corporation "ACCION Texas"). WHEREAS, the Texas Legislature III Section 4A of Article 5190.6, Vernon's Texas Revised Civil Statutes (Development Corporation Act of 1 Cl79) 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 promotinn 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 1/8tl1 cent sales tax authorized by passage of Proposition 2 was subsequently enacted by the City Council and tiled with the State Comptroller of Texas, effective April 1, 2003, to be administered by the Corpus Christi Business and Job Development Corporation Board; WHEREAS, the Corpus Christi Business and Job Development Corporation exists for the purposes of encouraging and assisting entities in the creation of jobs for the citizens of Corpus Christi, r exas; WHEREAS, the Board l)fDirectors of the Corporation ("Board"), on May 5, 2003, adopted the Corporation's Guidelines and Criteria f()r Granting Business Incentives; WHEREAS. Section 21 of the Texas Development Corporation Act of 1979, Art. 5190,6, V emon' s Texas Re\ISed C' vi] Statutes. requires the City Council to approve all programs and expenditures of the \~orporation: WHEREAS. the City Council approved the Corporation's Guidelines and Criteria for Granting Business Incentives on Ma\ 13. 2003: WHEREAS, ACCION Texas is a Texas nonprofit corporation whose principal mission is to provide loans to small business owners lacking access to commercial credit and ACCION Texas has provided $39 mdlion in 6.700 lnans 10 over 4, i 00 clients in Texas from 1994 to 2005; WHEREAS. ACTION re>-as, through its contract with the Corporation has provided $150,000 m interest buy down loans to 23 small business owners, providing 30 new and 68 retained jobs in Corpus Christi since July. :~004 2006-342 08/22/06 mp\Al(]O]\' fEXAS Agreement 060810clean.doc Res026915 (,CB.Hle ~M_ WHEREAS, ACCION fexas anticIpates disbursing, over the next twelve months, approximately 20 loans with a totai value)f $25,000 to jow and moderate income micro and small business owners In Corpus Christi to generate 20 new permanent full-time jobs; WHEREAS, the Board has determined that it is in the best interests of the citizens of Corpus Christi, Texas that business development funds be provided to ACCION Texas, through the one- year extension of the contract with ACCION Texas, to be used by Acci6n Texas for small business loan assIstance pr,)grams which will result in creation of new full-time permanent jobs m the City of Corpu-; Chris! L In consideration of the cOVenants, promises, and conditions stated in this Agreement, Corporation and ACCION Texas agree as follows 1, Effective Date. The etfective date of this Agreement ("Effective Date") is the latest date that either party executes this Agreement 2. Term. The term of this Agreement IS for one year from August 1,2006, through July 31, 2007 3, Loan Loss Reserve Program. a. Pursuant to the Agreement between the Parties dated July 8, 2004, and amended April 19,2005. in consideration for creation and maintenance of new jobs as provided in this Agreement the Corporation paid $50,000 and the Corporation agrees to pay $25,000 within 30 days of Cllrporation 's execution of this AgreementJor the Loan Loss Reserve Program. b. The Loan Loss Reserve Program funds will be used to allow ACCION Texas to leverage additi< lllal capital for small business loans, c "Small husines-;" is defined in the Corpus Christi Business & Job Development Corporation Guidelines & Criteria for Granting Business Incentives ("Corporation Guidelines), adopted on Ma) 5. 2003. and amended on July 24,2004, and April 25, 2006. d. ACCIO\.J T cxa-; antIcipates that it will have one million dollars available on an annual basis to be lent t,) qualifying small businesses in Corpus Christi. e, For every $::iO,UOO in loans that ACCION Texas provides to a small business in Corpus Chnsti, ACCION Texas shall ensure that the loan will result in the creation of one ne\\ full-time permanent lob in the city of Corpus Christi. f. Businesses aSSIsted must be located in or locating within the city limits of Corpus Christi. Texas. C:\DOClTME-l Veannie\LOCA.LS 1\Temp\AC CION TEXAS Agreement 06081 Oclean.doc Page 2 of 10 ---- g. Busmesses assisted must be unable to obtain a loan form traditional lending institutions h. Loan amounts shall be within the range of $+ 2,000 to $50,000. 1. ACCION Texas shall provide the Corporation with quarterly reports to identify the loans made, name and address of business receiving loan, jobs created, and other reports as requested by the C\)rporation. J. ACCION Texas shall provide the corporation with quarterly reports of capital aVaIlable for la<ms to qualified Corpus Christi small businesses or qualified small husmesses locating to Corpus Christi. k. ACCION Texas will provide funds for operations and loan capital to implement and sustain the program L At the termination of thIS agreement and after repayment or other conclusion of all loans assisted by Interest Buy Down Program, ACCION Texas will return to the Corporation anv unexpended funds remaining from this Loan Loss Reserve Program. 4. Interest Buy Down Pmgram. a. In consideration for creation and maintenance of new jobs as provided in this Agreement, the Corporation agrees to pay ACCION Texas up to $150,000 for the Interest Buy Down Program as follows: l. ACTION 1 exas must first receive a request for a loan from a small business located m (orpus Christi, or a business locating in Corpus Christi ("Business"). n. ACTION 1 exas shall review the request for a loan from the Business. Ill. Upon ACTION Texas approval of a loan and prior to the closing of the loan, AC< ION 'I exas shall suhmit Attachment "A" to the Corporation requesting funds to buy dOVvt1 the interest rate from the interest rate allowable per the underwriting critena to 5 5% The Corporation authorizes an interest buy-down up to 7% of the mteres1 rate to finance the loan Payment by Corporation shall not exceed $ 7 :'00 pc:' loan and shall be calculated using the following formula: (Loan amount x interest rate to buy down 105.5%) 12 = N N 'i. numbe:' of payments=interest huy dO\vn reimbursement to Acci6n for busmess loan. (The number of monthly payments shall not exceed sixty (60).) Example: ,$10,000 x 70'0) 12 = 55 33 5 ~ :: ' x 36 .C: $2, I O(i = amount to be reimbursed to ACCION for business loan. IV The ('orporation shall provide a response to approve or deny the reimbursement fpr lhe Interest Buy Down Program funds to ACCl()N Texas within 2 business days of receipt of Attachment "A." The Corporation shall reimburse funds within 30 days after evidence of closing the loan is submitted. \'. The total funds avaIlable on an annual basis under the Interest Buy Down Program under this agreement is $150,000. C:'{)OCUME..l\Jeanme LOCAL"--l\Iemp\j\CCfON rEXAS Agreement 06081Oclean.doc Page 3 of ] 0 ~......,,- b. The loans assisted with the program shall be within the range of$5,000 to $50,000. c This program shall result in the creation of one permanent full-time job per every $50,000 in loans assisted with the Interest Buy Down Program within two years of the loan~. ACC ION Texas shall ensure that the loan will result in the creation of one new full-time permanent job in the cit) of Corpus Christi. d. Busines~.es assisted through this program must be: 1 Unable to obtain a loan from a traditional financial institution or unable to qualify for the total needed for a business loan through a bank or credit union, in which case ACCION Texas can loan the remaining amount with the buy-down interest rate program in conjunction with the bank\credit union. 11. Located in or locating in Corpus Christi city limits. Ill. New or expanding business or home-based businesses located in the Corpus Christi city limits. IV. Current on payment of all sales taxes. \ Current on payment of all ad valorem taxes in the City of Corpus Christi. e. The following projects are lOeligible for this program: I. Refinancing of existing loans or debt 11. Businesses located outside the Corpus Christi city limits Ill. Home-based businesses located outside the Corpus Christi city limits lV. Loans to eXisting businesses which are not planning on expanding v Business retention. f ACCION Texas shall provide the Corporation with quarterly reports as provided in Attachment "B" to identify the loans made, name and address of the business receiving the loan, jobs created under the Interest Buy Down Program, and other reports as requested by the Corporation. g. ACTION Texas shall pnlvlde funds for operations and loan capital to implement and sustain the program h. ACC10N Texas shall develop loan underwriting criteria and payment terms and conditions for i IS loan program and provide to the Corporation. 5. Job Creation Qualification. a. In order to count as a created Job under this Agreement the job must pay wages as required by Section 38(b) ufthe Development Corporation Act of 1979, as amended, whlch i~ the median wage of the occupation in the Corpus Christi MSA as determined by Texas Workforce CommiSSiOn's Texas Industry Profiles report. b. A full-time permanent job IS one that provides at least 2,080 hours annually. C:\DOCUME'I\Jeanme\i.OCAL~ '. I\Temp\AC CION TEXAS Agreement 0608 1 Oclean.doc Page 4 of 10 ..........-.."""" c ACTION Texas agrees to confirm and document to the Corporation that each job created as a result of funding provided by this Agreement is maintained throughout the term \)ftheoan to the Business. d ACCION Texas agrees to provide Corporation with a sworn certificate by authorized representative ()f each shall business assisted under this Agreement certifying the number of full-rime permanent employees employed by the small business. e ACCION Texas shall ensure that the Corporation is allowed reasonable access to personnel records of the small businesses assisted under this Agreement. 6. Buy Local Provision. a. ACCION Texas 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 efficienn b. F or 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 Local Offices Two staff persons of ACCION Texas offices shall be located in Corporation designated offices ur a mutually agreeable location. Representation on Acci6n Texas governing board. ACCION Texas agrees 10 appomt a person designated by the Corporation as a member of Acci6n r exas governing board. 8. Warranties. ACCION Texas \>,.:arra11ts and represents to Corporation the following: a. /\.CCIO\ Texas a corporation duly organized. validly existing, and in good standing under the laws ,)f the State of Texas. has all corporate power and authority to carryon Its business as oresentl) conducted in ('orpus Christi, Texas. b A.CCl()\ Texas has the authority to enter into and perform, and will perform, the terms of this A>?,reement c, L\.CCI()\ Texas has timely filed and will timely file all local, State, and Federal tax reports and returns required by laws tCl be filed and all Texas, assessments, fees, and other gn ernmental charges, including applicable ad valorem taxes, have been timely paid, and will be timely paid. during the term of this Agreement. d, ACC!()]\, Texas has received a copy of the Texas Development Corporation Act of 1979. Art. 5190.6. Verno11's Texas Revised Civil Statutes, and acknowledges that the C:\DOClJME~ l\Jeanme' LUCAL:-- .1\ [emp'j\( 'CIO'\ IEXAS Agreement 060810clean.doc Page 5 of 10 - funds granted in this Agreement must be utilized solely for purposes authorized under State law and bv the tenns of this Agreement e. If an audit determines that the funds were not used for authorized purposes, Acci6n Texas agrees to reimburse Corporation for the sums of money spent for purposes not authorized by law within 30 days written notice requesting reimbursement. f The partIes executing this Agreement on behalf of ACCION Texas are duly authorized to execute this Agreement on behalf of ACCION Texas. 10. Compliance with Laws. ACCION Texas shall observe and obey all applicable laws, ordinances. regulatiom. and rules of the Federal. State, County and City governments. 11. Non-Discrimination. ACTION Texas covenants and agrees that ACCION Texas will not discriminate nor permit discrimination against any person or group of persons, with regard to employment and the provision of services 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 llnited States or the State of Texas. 12. Force Majeure, If the Corporation or ACCI()N Texas are prevented, wholly or in part, from fulfilling its oblIgations under this Agreement by reason of any act of God, unavoidable accident, acts of enemIes, tires. floods, governmental restraint or regulation, other causes of force majeure. (lr by reason of circumstances beyond its control, then the obligations of the Corporation or Acci6n Texas are temporarily suspended during continuation of the force majeure. If either partv's obligation is affected by any of the causes of force majeure, the party affected shall pwmptly notify the other party in writing, giving full particulars of the force majeure as SOt)JliS possible after the occurrence of the cause or causes relied upon. 13. Assignment. A( 'CIC)N Texas may not assign all or any part of its rights, privileges, or duties under this Agrel'ment without the prior written approval of the Corporation and City. An; attempted ,lssignment without approval is \oid. and constitutes a breach of this Agreemen t 14. Indemnit)\(CION fexas c<.)Venants to fully mdemnify, save, and hold harmless the Corporation, the City. cheir respective officers. employees, and agents ("Indemnitees") against allliabiilty. 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 c)[ damage of any kind. which arise out of or are in any manne~ connee1 ed with, or are,,: I ai med to aris\.' out of or be in any manner connected with AC('ION Texas activities conducted under or II1cidental to this Agreement, including any llljury, loss or damage caused by the sole or c1mtributory negligence of any or all of the lndemnitees. ACCrON Texas 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 '^ ith counsel satisfactory to Indemnitees, and pay all charges of attorneys and al] other cost and expenses of any kind arising from the liability, damage, loss, claims. demands. or a( tions C:\DOCl i ME-I \Jeannie\ I' )C\LS I \lemp\A (CION TEXAS Aflreement 06081 Oclean.doc Page 6 of 10 15. Events of Default. The followmg events constitute a default of this Agreement: a. Failure of ACC [ON T'exas to timely, fully, and completely comply with anyone or more of the requirements, obligations, duties, terms, conditions, or warranties of this /\greement b The Corporation or City determines that any representation or warranty on behalf of ACCION Texas contained m this Agreement or in any financial statement, certificate, report. or opininn submitted to the Corporation in connection with this Agreement was inwrrect or misleading in any material respect when made; c. Any judgment IS assessed agamst ACTION Texas or any attachment or other levy against the property of ACCION Texas with respect to a claim remains unpaid, undischarged, Pf not dismissed for a period of 30 days. d. ACCION Texas makes an assignment for the benefit of creditors. e. ACCION Texas files a petition in bankruptcy, or is adjudicated insolvent or bankrupt. f If taxes owed bv ACCION Texas become delinquent, and ACCION Texas fails to timely and properly follow the legal procedures for protest or contest. g. ACCION Texas changes the general character of business as conducted of the date this Agreement is approved by the Corporation 16. Notice of Default. Should the Corporation or City determine that Accion Texas is in default according to the terms of this Agreement, the Corporation or City shall notify ACCION Texas m writing of the event of default and provide 60 days from the date of the notice ("Cure Period" for AJ 'Cl()N Texas to cure the event of default. 17. Results of Uncured Default. \ftcr exhausting good faith attempts to address any default during the cure PerIod. and takmg into account any extenuating circumstances that might have occurred through no fault of ACCrON Texas, 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. a, ACCIO\, Texas shall immediately pay $200,000 to Corporation, with interest at the mterest rate paJd by the City on its most recently issued general obligation bonds from date of expiration of Cure Period until fully paid. b. ACCIO\, Texas shall pay Corporation reasonable attorney fees and costs of court to collect amounts due to Corporation. c. The Corporation shall have no further obligations to ACCION Texas under this Agreement. C:\DOCUME-l\Jeannie\i OCAL:-' j\l'emp\ACCI01\ TEXAS Agreement 060810cleanJoc Page 7 of 10 -'~ '.. d, Nelther ~he Cit, nor the Corporation may be held liable for any consequential damage~ e, The Corporation may pursue all remedies available under law. ] 8. No Waiver a. 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. b. 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. c, Any waiver or mdulgence of ACCION Texas' default may not be considered an estoppel againsT the Corporation, d, It is expressly understood that ifat any time ACCION Texas is in default in any of its conditions or covenants ofthls Agreement, the failure on the part of the Corporation to promptly avail itself of the rights and remedies that the Corporation may have, will not be considered a waiver em the part i)f the Corporation. but Corporation may at any time avail itself of the rights Gr remedies or elect to terminate this Agreement on account ,)1' the (jefault, ] 9. Notices. a. An} required \\ritten notices shall be sent mailed. certified mail, postage prepaid, addressed as fo! lows -\CCION Texas \( '( H)N Ti~xas "\ttn J anit' Barrera 2014 Hackbern San .\ntoni( Texas 78211) ('orporation City of COf]lUS Christl Business and Job Development Corporation Attn.. Executive Directol i 201 Leopard Street Corpus Chri sti. Texas 78401 C:\OOCUME-l\Jeannie\LOCALS. l\Temp~(CION TEXAS Agreement 060810clean.doc PaSt 8 of 10 -.-. b, A copy of all notices and correspondence must be sent the City at the following address CIty of C'orpus Christi Attn. ('it) 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 20. Incorporation of other documents The Corpus Christi Business and Job Development Corporation GUidelines and Criteria for Granting Business Incentives ("Corporation Guidelines"), as amended. are incorporated into this Agreement. 21. 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. 22. Relationship of Parties. In performing this Agreement, both the Corporation and ACCION Texas will act in an individual capacity, and not as agents, representatives, employees, employers. partners. jomt-venturers. or associates of one another. The employees or agents of either party may not be. nor he construed to he. the employees or agents of the other party for any purpose 23. Captions. The captions in this Agreement are for convenience only and are not a part of this Agreement The captirllls do n0t in any way limit or amplifY the terms and provisions of this Agreement 24. Severability. a. If for an.' reason, an) 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 lavv or by a final judgment of a court of competent jurisdiction, then the remainder of thl s 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 he affected hy the Imv or judgment for it is the definite intent of the parties to this Agreement that ever; sectIOn, paragraph, subdivision, clause, provision, phrase, or 'Nord t)fthis \greement [Je given full force and effect for its purpose. b. 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 th1 S Agreement 1 s not affected by the law, and in lieu of any illegal, invalid. or unen!orceable clause or pro\ision, a clause or provision, as similar in C:\DOCUME I \Jeanni~\L: >CAIS I \TempA( ( ION I FXAS Agrc~ement 06081 Oclean.doc Page 9 of 10 _..~ terms to the illegal, invalid, or unenforceable clause or provision as may be possible and be legal, valid, and enforceable, w1l1 be added to this Agreement automatically. 25. Venue Venue tin an) legal action related to this Agreement is in Nueces County, Texas. 26. Sole Agreement Thi~ Agreement constitutes the sole agreement between Corporation and ACCION Texa:-. Any prior agreements, promises, negotiations, or representations, verbal or otherwise, not expressl v stated 1I1 this Agreement, are of no force and effect. 27. Survival of terms of agreement and obligations of parties. The terms of this agreement and the obligation of the parties relating to the Loan Loss Reserve Program and the Interest Buy Down Program shall survi ve the terminatlOn of this agreement. Corpus Christi Business & Job Development Corporation By: L_. (M~.~ Gail, fman \~-=-~ ~lrpe on \. Date: --:__ui3Jt\.\-G4 Attest: By: ~.~ AU ,"\JI<'.' " 01 LZ/ O~ " rAIlU..Cll.....__.1..L!-- r ._.....~ SEctnARV LtL- ACCION Texas. Inc. By: ~:dffJXf:'~"~ dl=~t Janie Barlera President and ChIef ExeCUTive Officer Date:'!.~ , ~.tobm: '/-/.). -C)t.~ i- ~1a'~4OrnttL \.:Ja W. ,\s8iltant CIty Attorney =')f City Attorney THE S1 ATE OF TEXAS COUNTY OF Nt "FeES --t Ihls instrument wa'i acknowledged before me on ~fJi1'fl/~...; J I , 2006, by Janie Barrera, President and ChiefExeculive Officer for Acci6n Texas, Inc., a Texas non-profit corporation, on behalf of ACCION Texas. Inc. '~:~'" ANGIE SANCHEZ . ,.: ~ COMMISSION EXPIRES .~.' 0d0bIr12,3lO8 C:\DOCUME I\Jeannie\10eALS I\Temp\Al 'CION TEXAS Agreement 0608lOcleandoc Page 10 of ] 0 '-. .-"