HomeMy WebLinkAboutC2011-471 - 11/15/2011 - ApprovedI 1 1 ) ;'!' - 1,C) � rt - 4 1
BUSINESS INCENTIVE AGREEMENT
BETWEEN THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT
CORPORATION AND LAKESIDE STEEL TEXAS, INC. FOR CREATION OF JOBS
This Business Incentive Agreement ( "Agreement ") is entered into between the Corpus Christi
Business and Job Development Corporation ( "Corporation") and Lakeside Steel Texas Inc., a
Delaware corporation ( "Lakeside").
WHEREAS, the Texas Development Corporation Act, now codified as Title 12, Subtitle C1
(Chapters 501— 507) of the 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 residents;
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 Corporation's Board of Directors ( "Board ");
WHEREAS, the Corporation exists for the purposes of encouraging and assisting entities in the
creation of jobs for the residents of the City;
WHEREAS, the Board amended the Corporation's Guidelines and Criteria for Granting
Business Incentives on October 18, 2010;
WHEREAS, the City Council approved the Corporation's amended Guidelines and Criteria for
Granting Business Incentives on November 9, 2010;
WHEREAS, Section 501.073 of the Texas Local Government Code requires the City Council to
approve all programs and expenditures of the Corporation;
WHEREAS, Lakeside has acquired an existing non - operating pipe finishing facility ( "Facility ")
and will invest in new equipment and hire new employees;
WHEREAS, Lakeside proposes to invest approximately $1.4 million over a five year period in
furniture, fixtures, and equipment;
WHEREAS, the Board has determined (i) that it is in the best interests of the residents of the
City to provide business development funds to Lakeside, through this Agreement, to partially
offset the costs of building improvements, computer purchases, office stations, furniture and
fixtures, and (ii) that this Agreement will result in the creation of up to sixty (60) new full -time
permanent jobs in the City, with an estimated annual average gross salary of $23,000.00.
In consideration of the covenants, promises, and conditions stated in this Agreement, the
Corporation and Lakeside agree as follows:
2011 -471
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Res029284 Lakeside Steel - Execution Copy
CCBJDC and Lakeside Steel Texas
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 five years beginning on the Effective Date.
3. Performance Requirements and Grants.
a. Lakeside's performance requirements:
(1) During the first year, Lakeside shall (i) invest at least $1.4 million on
furniture, fixtures, and equipment and (ii) employ at least fifty (50) new
employees with an average annual gross salary of at least $23,000 per employee.
(2) During the second year, Lakeside shall (i) retain at least fifty (50) existing
employees with an average annual gross salary of at least $23,000 per existing
employee and (ii) employ at least ten (10) new employees with an average annual
salary of at least $23,000 per new employee.
(3) During the third year, Lakeside shall retain at least sixty (60) existing
employees with an average annual gross salary of at least $23,000 per existing
employee.
(4) During the fourth year, Lakeside shall retain at least sixty (60) existing
employees with an average annual gross salary of at least $23,000 per existing
employee.
(5) During the fifth year, Lakeside shall retain at least sixty (60) existing
employees with an average annual gross salary of at least $23,000 per existing
employee.
(6) Lakeside shall annually report its actual investments within the City and
provide documentation to support its report to the Corporation.
b. Corporation's Grants. The Corporation will grant Lakeside up to $150,000 under the
following conditions:
(1) If Lakeside, during the first year, (i) invests at least $1.4 million on furniture,
fixtures, and equipment and (ii) employs at least fifty (50) new employees with an
average annual gross salary of at least $23,000 per new employee, the
Corporation will grant Lakeside $30,000.
(2) If Lakeside, during the second year, (i) retains at least fifty (50) existing
employees with an average annual gross salary of at least $23,000 per existing
employee and (ii) employs at least ten (10) new employees with an average
annual gross salary of at least $23,000 per new employee, the Corporation will
grant Lakeside $30,000.
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BUSINESS INCENTIVE AGREEMENT Lakeside Steel - Execution Copy
(3) If Lakeside, during the third year, retains at least sixty (60) existing
employees with an average annual gross salary of at least $23,000 per existing
employee, the Corporation will grant Lakeside $30,000.
(4) If Lakeside, during the fourth year, retains at least sixty (60) existing
employees with an average annual gross salary of at least $23,000 per existing
employee, the Corporation will grant Lakeside $30,000.
(5) If Lakeside, during the fifth year, retains at least sixty (60) existing employees
with an average annual gross salary of at least $23,000 per existing employee, the
Corporation will grant Lakeside $30,000.
(6) If Lakeside does not create the minimum number of new jobs or maintain the
minimum number of jobs for any given year, as shown in the chart below, the
Corporation will not award a grant to Lakeside for that calendar year.
Minimum Minimum
Number of New Number of
Year Jobs Retained Jobs
50 0
2 10 50
3 0 60
4 0 60
5 0 60
(7) If Lakeside does not make the annual minimum capital investment in
construction of facilities or acquisition of furniture, fixtures, and equipment in any
year as required by Section 3.a.(1), the Corporation will not award a grant to
Lakeside for that calendar year.
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 of the Texas Local Government Code, as amended, which is
the median entry level wage of the occupation in the Corpus Christi MSA as determined
by the Texas Workforce Commission's Texas Industry Profiles report.
b. A full -time job is one that meets the criteria submitted by the Corporation.
c. Lakeside 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 Lakeside.
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BUSINESS INCENTIVE AGREEMENT Lakeside Steel - Execution Copy
d. Lakeside agrees to provide the Corporation with a sworn certificate by an authorized
representative certifying the number of full -time permanent employees employed by
Lakeside.
e. Lakeside shall ensure that the Corporation is allowed reasonable access to personnel
records under this Agreement.
5. Buy Local Provision.
a. Lakeside 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.
6. Warranties. Lakeside warrants and represents to Corporation the following:
a. Lakeside 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 the City.
b. Lakeside has the authority to enter into and perform, and will perform, the terms of
this Agreement to the best of its ability.
c. Lakeside has timely filed and will timely file all local, state, and federal tax reports
and returns required by law to be filed, and all 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. Lakeside has received a copy of the Texas Development Corporation Act, 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 Lakeside are duly authorized to
execute this Agreement on behalf of Lakeside.
7. Compliance with Laws. Lakeside shall observe and obey all applicable federal, state, and
local laws, ordinances, regulations, and rules.
8. Non - Discrimination. Lakeside covenants and agrees that Lakeside 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 United States
or the State of Texas.
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BUSINESS INCENTIVE AGREEMENT Lakeside Steel - Execution Copy
9. Force Majeure. If the Corporation or Lakeside 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
Lakeside 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. Lakeside 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 the City. Any
attempted assignment without approval is void, and constitutes a breach of this Agreement.
11. INDEMNITY. LAKESIDE COVENANTS TO FULLY INDEMNIFY, SAVE, AND
HOLD HARMLESS THE CORPORATION, THE CITY, AND 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 LAKESIDE'S 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. LAKESIDE MUST, AT ITS OWN EXPENSE,
INVESTIGATE ALL 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.
12. Events of Default. The following events constitute a default of this Agreement:
a. Failure of Lakeside 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 the minimum number of jobs maintained by the end of the
contract term.
b. The Corporation or the City determines that any representation or warranty on behalf
of Lakeside 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;
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BUSINESS INCENTIVE AGREEMENT Lakeside Steel - Execution Copy
c. Any judgment is assessed against Lakeside or any attachment or other levy against the
property of Lakeside with respect to a claim remains unpaid, undischarged, or not
dismissed for a period of 120 days.
d. Lakeside makes an assignment for the benefit of its creditors.
e. Lakeside files a petition in bankruptcy, or is adjudicated insolvent or bankrupt.
f. The taxes owed by Lakeside become delinquent, and Lakeside fails to timely and
properly follow the legal procedures for protest or contest.
g. Lakeside changes the general character of its business as conducted as of the date this
Agreement is approved by the Corporation.
13. Notice of Default. Should the Corporation or the City determine that Lakeside is in default
according to the terms of this Agreement, the Corporation or City shall notify Lakeside in
writing of the event of default and provide sixty (60) days from the date of the notice ( "Cure
Period") for Lakeside 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 Lakeside, as determined by the Board, the following actions must be
taken for any default that remains uncured after the Cure Period.
a. Lakeside shall immediately repay all funds paid by the Corporation under this
Agreement.
b. Lakeside shall pay the Corporation for the reasonable attorney fees and costs of court
incurred by the Corporation to collect amounts due.
c. The Corporation shall have no further obligations to Lakeside 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.
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BUSINESS INCENTIVE AGREEMENT Lakeside Steel - Execution Copy
c. Any waiver or indulgence of Lakeside's default may not be considered an estoppel
against the Corporation.
d. It is expressly understood that if at any time Lakeside 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 the Corporation may at any time
avail itself of any rights or remedies or elect to terminate this Agreement on account of
the default.
16. Limitation of Liability. Lakeside specifically agrees that the Corporation shall only be
liable to Lakeside for the actual amount of the money grants to be conveyed to Lakeside, and
shall not be liable to Lakeside for any actual or consequential damages, direct or indirect,
interest, attorney fees, or cost of court for any act of default by the Corporation under the terms
of this Agreement. Payment by the Corporation is strictly limited to those funds so allocated,
budgeted, and collected solely during the term of this Agreement. The Corporation shall use its
reasonable 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 the
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 the Corporation's customary and
usual costs and expenses, as compared to each contracting party's grant amount for that year, and
the Corporation shall not be liable for any deficiency at that time or at any time in the future. In
this event, the Corporation will provide all supporting documentation, as requested. Payments to
be made shall also require a written request from Lakeside to be accompanied by all necessary
supporting documentation.
17. Notices.
a. Any required written notices shall be sent by United States certified mail, postage
prepaid, addressed as follows:
Lakeside:
Lakeside Corporation
4400 Post Oak Parkway
Houston, TX 77027
City:
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 to the City at the following
address:
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BUSINESS INCENTIVE AGREEMENT Lakeside Steel - Execution Copy
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 if sent in the manner
provided above.
18. Incorporation of Other Documents. The Corpus Christi Business and Job Development
Corporation Guidelines and Criteria for Granting Business Incentives, 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 Lakeside
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.
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BUSINESS INCENTIVE AGREEMENT Lakeside Steel - Execution Copy
24. Sole Agreement. This Agreement constitutes the sole agreement between the Corporation
and Lakeside. Any prior agreements, promises, negotiations, or representations, verbal or
otherwise, not expressly stated in this Agreement, are of no force and effect.
25. Survival of Terms of Agreement and Obligations of Parties. The terms of this agreement
and the obligation of the parties relating to Sections 14.a and 14.b shall survive the termination
of this Agreement.
Corpus Christi Business & Job Development Corporation
By:
E I Wy 5 alaza
President
Date:
Attest:
By:
Armando Chapa
Assistant Secretary
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BUSINESS INCENTIVE AGREEMENT Lakeside Steel - Execution Copy
Lakeside Steel Texas Inc.
By: - I 'Y"'
President
Date: Oc (G
THE STATE OF TEXAS
COUNTY OF HARRIS
(� 6 A his instrument was acknowledged before me on --i a 1 J� ( , 2011, by
P J , President of Lakeside Steel Texas, Inc., a Delaware corporation, on
behalf of the corporation.
Notary Pu li
State of Texas
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BUSINESS INCENTIVE AGREEMENT Lakeside Steel - Execution Copy
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