HomeMy WebLinkAboutC2012-135 - 5/22/2012 - ApprovedX012 1 - 55
BUSINESS INCENTIVE AGREEMENT BETWEEN
THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION AND
NORTH PADRE WATERPARK HOLDINGS LTD
FOR INFRASTRUCTURE CONSTRUCTION TO ENHANCE ECONOMIC
DEVELOPMENT '
This Business Incentive Agreement for Capital Investments and the Creation and
Retention of Jobs ( "Agreement ") is entered into between the Corpus Christi Business
and Job Development Corporation ( "Corporation ") and North Padre Waterpark Holdings
Ltd. ( "Schlitterbahn "), a Texas limited partnership.
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 ( "Type A Guidelines "), 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 September 18, 2007;
WHEREAS, the Board, on November 9, 2010, amended the Corporation's Guidelines
and Criteria for Granting Business Incentives;
WHEREAS, the City Council approved the Corporation's amended Guidelines and
criteria for Granting Business Incentives on November 9, 2010;
2012-135.
5122/12 Page 1 of 9
Res029487 1-12
CCBJDC and Schlitterbahn INDEXED
WHEREAS, Section 501.073, Texas Local Government Code, formerly Section 21 of
the Texas Development Corporation Act of 1979, Art. 5190.6, Vernon's Texas Revised
Civil Statutes, requires the City Council to approve all programs and expenditures of the
corporation;
WHEREAS, Schlitterbahn is a major destination waterpark resort that will draw tourists
and visitors from outside of the local area;
WHEREAS, Schlitterbahn proposes to invest approximately $39 million over a 3 year
period;
WHEREAS, on May 4, 2012, the Board determined that it is in the best interests of the
citizens of Corpus Christi, Texas that business development funds be provided to
Schlitterbahn, through this Agreement with Schlitterbahn, to be used by Schlitterbahn to
pay for the creation of certain infrastructure improvements allowed under Section
501.103 of the Texas Local Government Code needed for the development of the
Schlitterbahn waterpark and that will result in increased economic development and the
creation of 40 new full -time permanent jobs and 300 seasonal jobs in the City of Corpus
Christi.
In consideration of the covenants, promises, and conditions stated in this Agreement,
the Corporation and Schlitterbahn 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 three years beginning on the effective date.
3. Performance Requirements.
a. Schlitterbahn agrees to use these funds to pay for the creation of certain
infrastructure improvements allowed under Section 501.103 of the Texas Local
Government Code needed for the development of the Schlitterbahn waterpark.
b. Schlitterbahn agrees to provide the Corporation with a sworn certificate by
authorized representative of the business, certifying the amount used for
infrastructure improvements.
c. Schlitterbahn will provide the Corporation with a detailed list of infrastructure
expenditures each year within 30 days of the anniversary of the effective date
Until the end of this agreement.
4. Grant Award.
a. The Board will grant Schlitterbahn the amount of $5,000,000 over the term of
the agreement, to be paid to North Padre WPH GP, LLC, general partner of
Schlitterbahn.
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Schlitterbahn Type A Agmt; CPY 5 -18 -12
b. One half of the grant ($2,500,000) will be awarded upon the Developer
providing documentation that they have spent $5,000,000 for infrastructure
improvements for the waterpark allowed under Section 501.103 of the Texas
Local Government Code or have achieved 50% completion of the waterpark.
50% completion of the waterpark means that at least $10,000,000 has been
spent on construction of the first phase of the waterpark.
c. One half of the grant ($2,500,000) will be awarded upon the completion of the
waterpark. Completion means that the Certificate of Occupancy for the
waterpark has been issued by the City.
5. Buy Local Provision.
a. Schlitterbahn 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 in the normal course of business.
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.
8. Warranties. Schlitterbahn warrants and represents to Corporation the following:
a. Schlitterbahn is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Texas, has all corporate power and
authority to carry on its business as presently conducted in Corpus Christi,
Texas.
b. Schlitterbahn has the authority to enter into and perform, and will perform, the
terms of this Agreement to the best of its ability.
c. Schlitterbahn has timely filed and will timely file all local, State, and Federal tax
reports and returns required by laws to be filed and all Texas, 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. Schlitterbahn 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 Schlitterbahn are duly
authorized to execute this Agreement on behalf of Schlitterbahn.
f. Schlitterbahn does not and agrees that it will not knowingly employ an
undocumented worker. If, after receiving payments under this Agreement,
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Schlitterbahn Type A Agmt; CPY 5 -18 -12
Schlitterbahn is convicted of a violation under §U.S.C. Section 1324a (f),
Schlitterbahn shall repay the payments at the rate and according to the terms as
specified by City Ordinance, as amended, not later than the 120 day after the
date Schlitterbahn has been notified of the violation.
7. Compliance with Laws. Schlitterbahn shall observe and obey all applicable laws,
ordinances, regulations, and rules of the Federal, State, county, and city governments.
8. Non - Discrimination. Schlitterbahn covenants and agrees that Schlitterbahn 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.
9. Force Majeure. If the Corporation or Schlitterbahn 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 Schlitterbahn 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. Except as provided below, Schlitterbahn may not assign all or part of
its rights and obligations under this Agreement to a third party without prior written
approval of City Council and the Board, which approval will not be unreasonably
withheld or delayed. The City agrees, however, that Schlitterbahn may assign all or part
of its rights and obligations under this Agreement to any entity affiliated with
Schlitterbahn by reason of controlling, being controlled by, or being under common
control with Schlitterbahn or to a third party lender advancing funds for the construction
or operation of the waterpark. The City expressly consents to any assignment described
in the preceding sentence, and agrees that no further consent of City Council or the
Board to such an assignment will be required. Schlitterbahn agrees to provide City with
written notice of any such assignment. The foregoing notwithstanding, any assignment
of Schlitterbahn's rights under this Agreement shall not release Schlitterbahn from its
obligations hereunder.
99. Indemnity. Schlitterbahn 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
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Schlitterbahn Type A Agmt; CPY 5 -18 -12
Schlitterbahn 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.
Schlitterbahn 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.
12. Events of Default by Schlitterbahn. The following events constitute a default of this
Agreement by Schlitterbahn:
a. The Corporation or City determines that any representation or warranty on
behalf of Schlitterbahn 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;
b. Any judgment is assessed against Schlitterbahn or any attachment or other
levy against the property of Schlitterbahn with respect to a claim remains unpaid,
undischarged, or not dismissed for a period of 120 days.
c. Schlitterbahn makes an assignment for the benefit of creditors.
d. Schlitterbahn files a petition in bankruptcy, or is adjudicated insolvent or
bankrupt.
e. If taxes owed by Schlitterbahn become delinquent, and Schlitterbahn fails to
timely and properly follow the legal procedures for protest or contest.
f. Schlitterbahn changes the general character of business as conducted as of
the date this Agreement is approved by the Corporation.
13. Notice of Default. Should the Corporation or City determine that Schlitterbahn is in
default according to the terms of this Agreement, the Corporation or City shall notify
Schlitterbahn in writing of the event of default and provide 60 days from the date of the
notice ( "Cure Period ") for Schlitterbahn to cure the event of default.
14. Results of Uncured Default by Schlitterbahn. 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 Schlitterbahn, 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. Schlitterbahn shall immediately repay all funds paid by Corporation to them
under this Agreement.
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Schlitterbahn Type A Agmt; CPY 5 -18 -12
b. Schlitterbahn shall pay Corporation reasonable attorney fees and costs of
court to collect amounts due to Corporation if not immediately repaid upon
demand from the Corporation.
c. Upon payment by Schlitterbahn of all sums due, the Corporation and
Schlitterbahn shall have no further obligations to one another under this
Agreement.
d. Neither the City, the Corporation, nor Schlitterbahn may be held liable for any
consequential damages.
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 Schlitterbahn's default may not be considered an
estoppel against the Corporation.
d. It is expressly understood that if at any time Schlitterbahn 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. Schlitterbahn specifically agrees that Corporation shall only be liable to
Schlitterbahn for the actual amount of the money grants to be conveyed to
Schlitterbahn, and shall not be liable to Schlitterbahn for 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
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Schlitterbahn Type A Agmt; CPY 5 -18 -12
requested. Payments to be made shall also require a written request from Schlitterbahn
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:
Schlitterbahn:
North Padre Waterpark Holdings Ltd.
Attn: Gary Henry
381 East Austin
New Braunfels, Texas 78130
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.
18. 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.
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
Schlitterbahn 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.
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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 Schlitterbahn. 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 Section 14.a and b shall survive
the termination of this Agreement.
Corpus Christi B in s & Job Development Corporation
By: !/
Robert Tamez
Vice President
Date:
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& L2-2? - 7
Attest: . AU HUR1 cc►
O T Clt Z
By: RFrWT
Armando Chapa
Assistant Secretary
Schlitterbahn
North Padre Waterpark Holdings Ltd
By: North. Padre WPH GP, LLC, general partner
By:
ry enry
Manager
Date:
THE STATE OF TEXAS
COUNTY OF &VVD
This instrument was acknowledged before me on p m , 2012, by
Gary Henry, Manager of North Padre WPH GP, LLC, genekal partrq of North Padre
Waterpark Holdings. Ltd for North Padre Waterpark Holdings Ltd., a Texas limited
partnership, on behalf of the partnership.
.. y •
State of Texas
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5chiderbahn Type A Agmt; CPY 5 -18 -12
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