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HomeMy WebLinkAboutC2011-233 - 7/26/2011 - ApprovedBUSINESS INCENTIVE AGREEMENT BETWEEN THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION AND COMMERCIAL METALS COMPANY FOR CREATION OF JOBS This Business Incentive Agreement for ( "Agreement ") is entered into between the Corpus Christi Business and Job Development Corporation ( "Corporation ") and Commercial Metals Company ( "CMC "), a Delaware corporation. 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 C1, Title 12, Texas Local Government Code, 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, the 118th 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 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, Texas; WHEREAS, the Board of Directors of the Corporation ( "Board "), on September 10, 2007, amended the Corporation's Guidelines and Criteria for Granting Business Incentives, which the City Council incorporated into the City of Corpus Christi Economic Development Incentive Policies 2009 -2011 on November 17, 2009; WHEREAS, the City Council approved the Corporation's amended Guidelines and Criteria for Granting Business Incentives on November 9, 2010; WHEREAS, CMC buys secondary metals, sorts by type and grade, processes the metals and sells them to manufacturers in Texas and around the world; WHEREAS, CMC proposes to invest approximately $20 million over a 5 year period at a new location on Bronco Road; 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 CMC, through this Agreement with CMC, to be used by CMC to open another location in Corpus Christi, and which will result in creation of up to 12 new full -time permanent jobs and will retain 39 existing jobs at either its new Bronco Road location, existing Agnes Street 2011 -233 Res. 029164 Page 1 of 9 07/26/11 EEMENT Final (2 ).docx . Commercial Metals Co. INMXED location, or at a combination of both locations in the City of Corpus Christi, with an estimated annual average salary of $35,000. In consideration of the covenants, promises, and conditions stated in this Agreement, Corporation and CIVIC agree as follows: 1. Effective Date. The effective 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 5 years beginning on the Effective Date. 3. Performance Requirements and Grants. The Performance Requirements and Grants are listed in Exhibit A, which is attached to and incorporated into this Agreement. 4. Job Creation Qualification. a. In order to count as a created job under this Agreement, the job must pay wages as required by Section 501.162, Texas local Government Code, formerly Section 38(b) of the Development Corporation Act of 1979, as amended, which is 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. CIVIC agrees to confirm and document to the Corporation that the minimum number of jobs created as a result of funding provided by this Agreement is maintained throughout the term by CIVIC. d. CIVIC agrees to provide Corporation with a sworn certificate by authorized representative of each business assisted under this Agreement certifying the number of full -time permanent employees employed by the business. e. CIVIC shall ensure that the Corporation is allowed reasonable access to personnel records of the businesses assisted under this Agreement. 5. Buy Local Provision. a. CIVIC 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. b. 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. Page 2 of 9 CMC BUSINESS INCENTIVE AGREEMENT Final (2).docx 6. Warranties. CIVIC warrants and represents to Corporation the following: a. CIVIC is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, has all corporate power and authority to carry on its business as presently conducted in Corpus Christi, Texas. b. CIVIC has the authority to enter into and perform, and will perform, the terms of this Agreement to the best of its ability. c. CIVIC has timely filed and will timely file all local, State, and Federal tax reports and returns required by laws to be filed and all applicable taxes, assessments, fees, and other governmental charges, including applicable ad valorem taxes, have been timely paid, and will be timely paid , during the term of this Agreement. d. CIVIC has received a copy of the Texas Development Corporation Act, Subtitle C1, Title 12, Texas Local Government Code, 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. e. The parties executing this Agreement on behalf of CIVIC are duly authorized to execute this Agreement on behalf of CIVIC. 7. Compliance with Laws. CIVIC shall observe and obey all applicable laws, ordinances, regulations, and rules of the Federal, State, county, and city governments. 8. Non - Discrimination. CIVIC covenants and agrees that CIVIC will not discriminate nor knowingly 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 United States or the State of Texas. 9. Force Majeure. If the Corporation or CIVIC 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, fires, floods, governmental restraint or regulation, other causes of force majeure, or by reason of circumstances beyond its control, then the obligations of the Corporation or CIVIC are temporarily suspended during continuation of the force majeure. If either party's obligation is affected by any of the causes of force majeure, the party affected shall promptly notify the other party in writing, giving full particulars of the force majeure as soon as possible after the occurrence of the cause or causes relied upon. 10. Assignment. CIVIC 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, which shall not be unreasonably withheld. Any attempted assignment without approval is void, and constitutes a breach of this Agreement. Page 3 of 9 CMC BUSINESS INCENTIVE AGREEMENT Final (2).docx 99. Indemnity. CMC covenants to fully indemnify, save, and hold harmless the Corporation, the City, their respective officers, employees, and agents ( "Indemnitees ") 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 CMC 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. CMC 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 arising under this Agreement. 12. Events of Default. The following events constitute a default of this Agreement: a. Failure of CMC to timely, fully, and completely comply with any one or more of the requirements, obligations, duties, terms, conditions, or warranties of this Agreement, other than the requirement to create a minimum number of new jobs or maintain a minimum number of jobs in any specific year. However, the minimum number of new jobs must be created and maintained by the end of the contract term. b. The Corporation or City determines that any representation or warranty on behalf of CMC 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; c. Any judgment is assessed against CMC or any attachment or other levy against the property of CMC with respect to a claim remains unpaid, undischarged, or not dismissed for a period of 120 days. d. CMC makes an assignment for the benefit of creditors. e. CMC files a petition in bankruptcy, or is adjudicated insolvent or bankrupt. f. If taxes owed by CIVIC become delinquent, and CMC fails to timely and properly follow the legal procedures for protest or contest. g. CMC changes the general character of business as conducted as of the date this Agreement is approved by the Corporation. Page 4. of 9 CMC BUSINESS INCENTIVE AGREEMENT Final (2).docx 13. Notice of Default. Should the Corporation or City determine that CIVIC is in default according to the terms of this Agreement, the Corporation or City shall notify CIVIC in writing of the event of default and provide 60 days from the date of the notice ( "Cure Period ") for CIVIC to cure the event of default. 14. 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 CIVIC, 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. CIVIC shall immediately repay all funds paid by Corporation under this Agreement. b. CIVIC 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 CIVIC under this Agreement. d. Neither the City nor the Corporation may be held liable for any consequential damages. e. The Corporation may pursue all remedies available under law. 15. 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 indulgence of CMC's default may not be considered an estoppel against the Corporation. d. It is expressly understood that if at any time CIVIC is in default in any of its conditions or covenants of this 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 on the part of the Corporation, but Corporation may at any time avail itself of the rights or remedies or elect to terminate this Agreement on account of the default. 16. CIVIC specifically agrees that Corporation shall only be liable to CIVIC for the actual amount of the money grants to be conveyed to CIVIC, and shall not be liable to CIVIC for Page 5of9 CMG BUS[NESS INCENTIVE AGREEMENT Final (2).docx any actual or consequential damages, direct or indirect, interest, attorney fees, or cost of court for any act of default by Corporation under the terms of this Agreement. Payment by Corporation is strictly limited to those funds so allocated, budgeted, and collected solely during the grant term of this Agreement. Corporation shall use its best efforts to anticipate economic conditions and to budget accordingly. However, it is further understood and agreed that, should the actual total sales tax revenue collected for any one year be less than the total amount of grants to be paid to all contracting parties with Corporation for that year, then in that event, all contracting parties shall receive only their pro rata share of the available sales tax revenue for that year, less Corporation's customary and usual costs and expenses, as compared to each contracting parties' grant amount for that year, and Corporation shall not be liable to for any deficiency at that time or at any time in the future. In this event, Corporation will provide all supporting documentation, as requested. Payments to be made shall also require a written request from CIVIC to be accompanied by all necessary supporting documentation. 17. Notices. a. Any required written notices shall be sent mailed, certified mail, postage prepaid, addressed as follows: CIVIC: Commercial Metals Company Attn.: General Counsel's Office 6565 N MacArthur Blvd Suite 800 Irving, TX 75039 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. Page 6 of 9 CMC BUSINESS INCENTIVE AGREEMENT Final (2).docx 18. Incorporation of other documents. The Corpus Christi Business and .lob Development Corporation Guidelines and Criteria for Granting Business Incentives ( "Corporation Guidelines "), as amended, are incorporated into this Agreement. 19. 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. 20. Relationship of Parties. In performing this Agreement, both the Corporation and CMC 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. 21. 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. 22. Severability. a. 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. 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 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. 23. Venue. Venue for any legal action related to this Agreement is in Nueces County, Texas. 24. Sole Agreement. This Agreement constitutes the sole agreement between Corporation and CMC regarding the subject matter herein. Any prior agreements, promises, negotiations, or representations, verbal or otherwise, not expressly stated in this Agreement, are of no force and effect. Page. 7 of 9 CMC BUSINESS INCENTIVE AGREEMENT Final (2).docx 25. Survival of terms of agreement and obligations of parties. The terms of this Agreement and the obligation of the parties relating to Section 14.a and b shall survive the termination of this Agreement. Corpus Christi Business & Job Development Corporation By: /,V EI alaza Chairperson Date: Attest: By: 7 Armando Chapa Assistant Secretary Page 8 of 9 RY COUNCl�....�.' o -, SECRETARY fj- CMC BUSINESS INCENTIVE AGREEMENT Final (2).docx Commercial Metals Company By: Ann ]. uder Senior Vice President of Law, Government Affairs and Global Compliance, General Counsel and Corporate Secretary Date: „ y Qo THE STATE OF TEXAS COUNTY OF -1414E -a This instrument was acknowledged before me on 7n , 2011, by Ann J. Bruder, Senior Vice President of Law, Govern me airs and Global Compliance, General Counsel and Corporate Secretary, for Commercial Metals Company, a Delaware corporation, on behalf of the corporation. Notary Public State of Texas Page 9 of 9 CMC BUSINESS INCENTIVE AGREEMENT Final (2).docx .* f f = DANNA CAR Notary Pubic, State of Texas ITV _ ''':�;;;:r MY Carer wim Expires JUNE 18 2013 Page 9 of 9 CMC BUSINESS INCENTIVE AGREEMENT Final (2).docx EXHIBIT A PERFORMANCE MEASURES AND CORPORATION GRANTS 1. CIVIC shall open another metal recycling plant in Corpus Christi. 2. CIVIC shall invest $20 million in the new construction, equipment, furniture, and fixtures. 3. CIVIC shall retain 39 current jobs at either its new Bronco Road location, existing Agnes Street location, or at a combination of both locations. 4. CIVIC shall create 12 new jobs. 5. CIVIC shall create at least 12 new, full -time jobs and retain at least 39 full-time jobs within the City, with an average annual salary of at least $35,000, during the term of this Agreement. 6. The Corporation will award a grant for each new job created and retained, including any additional new jobs over the minimum number of required by subsection c of this section. a. The grant will be $2,340 for each job if the average annual salary is $31,500. b. The grant will be $2,600 for each job if the average annual salary is $35,000 or more, but less than $38,500. c. If the average annual salary is more than $31,500, but less than $35,000, the grant will be computed by dividing the average annual salary by 35,000 and multiplying the result by $2,600. For example, if the average annual salary is $33,000 the grant would be $2,444 (33,000 = 35,000 X $2,600 = $2,444). d. The grant will be $2,860 for each job if the average annual salary is $38,500 or more. e. No grants will be awarded if the average annual salary of the new and retained jobs is less than $31,500. f. Grants, not to exceed a cumulative total of $132,600, are available on a per job created basis. A -1 CMC BUSINESS INCENTIVE AGREEMENT Final (2).docx 8. If CMC does not create the minimum number of new jobs or maintain the number of jobs for any given year, as defined in the following chart below, the Corporation will not award any grant to CMC for that calendar year. Year Number of Minimum Number Minimum Targeted of New Jobs Number of New Jobs Retained Jobs 1 12 12 39 2 0 0 51 3 0 0 51 4 0 0 51 5 0 0 51 9. CMC will invest at least $20 million in new construction, equipment, and furniture, and fixtures. CMC shall annually report their actual investments within the City of Corpus Christi, and provide documentation to support the report to the Corpus Christi Regional Economic Development Corporation. l' J CMC BUSINESS INCENTIVE AGREEMENT Final (2),docx