HomeMy WebLinkAboutC2012-189 - 7/10/2012 - ApprovedBUSINESS INCENTIVE AGREEMENT BETWEEN
THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION AND
MAJEK BOATWORKS, INC. and TURNER -MAJEK REAL ESTATE, LLC
FOR CAPITAL INVESTMENTS AND THE CREATION AND RETENTION OF JOBS
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 Majek Boatworks, Inc. ( "Majek "),
a Texas domestic for - profit corporation, and Turner-Majek Real Estate, LLC ("Turner-
Turner-Majek LLC "), a Texas Limited Liability 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, 2602, 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, 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, the City Council approved the Corporation's amended Guidelines and
Criteria for Granting Business Incentives on November 9, 2010;
WHEREAS, Majek is the manufacturer of flat and bay boats with manufacturing facilities
located within the City;
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Majek Boatworks Inc. INDEXED
WHEREAS, Turner -Majek LLC holds legal title to the real property on which Majek has
their facilities and business operations located within the City and has a binding lease
agreement with Majek for Majek's use of said real property;
WHEREAS, Majek and Turner -Majek LLC propose to invest approximately $1,050,000
to expand their existing manufacturing facilities over a five year period, including the
construction of a 10,500 square foot lamination shop, including furniture, fixtures, and
equipment;
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 Majek and
Turner-Majek LLC, through this Agreement with Majek and Turner-Majek LLC, to be
used by Majek and Tumer -Majek LLC to expand their existing manufacturing facilities
over a five year period, including the construction of a 10,500 square foot lamination
shop, including furniture, fixtures, and equipment, which will result in creation of up to 26
new full -time permanent jobs in the City of Corpus Christi and the retention df 24
existing full -time jobs, with an estimated annual average salary of $24,300.
In consideration of the covenants, promises, and conditions stated in this Agreement,
Corporation, Majek and Turner -Majek LLC agree as follows:
1. Effective Date. The effective date of this Agreement ( "Effective Date ") is January 1,
2012_
2. Term. The term of this Agreement is for five years beginning on January 1, 2012.
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 at least as high as the wages 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. Majek and Turner -Majek LLC agree 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 the Business.
d. Majek and Turner -Majek LLC agree to provide Corporation with a sworn
certificate by authorized representative of each business assisted under this
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BUSINESS INCENTIVE AGREEMENT —Majek Boats 05 31 2012
Agreement certifying the number of full -time permanent employees employed by
the business.
e. Majek and Turner- -Majek LLC shall ensure that the Corporation is allowed
reasonable access to personnel records of the businesses assisted under this
Agreement.
5. Buy Local Provision.
a. Majek and Turner -Majek LLC agree to use their 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.
6. Warranties. Majek warrants and represents to Corporation the following:
a. Majek 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. Majek has the authority to enter into and perform, and will perform, the terms
of this Agreement to the best of its ability.
c. Majek 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. Majek 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 Majek are duly authorized
to execute this Agreement on behalf of Majek.
Turner -Majek LLC warrants and represents to Corporation the following:
f. Turner-Majek LLC is a limited liability 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.
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BUSINESS INCENTIVE AGREEMENT- -Majek Boats 05 312012
g. Turner-Majek LLC has the authority to enter into and perform, and will
perform, the terms of this Agreement to the best of its ability.
h. Turner -Majek LLC 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.
i. Turner -Majek LLC 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.
j. The parties executing this Agreement on behalf of Turner -Majek LLC are duly
authorized to execute this Agreement on behalf of Tumer Majek LLC.
7. Aompliance with Laws. Majek and Turner- Majek'LLC shall observe and obey all
applicable laws, ordinances, regulations, and rules of the Federal, State, county, and
city governments.
8. Non - Discrimination. Majek covenants and agrees that Majek will not discriminate or
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. Turner -Majek LLC
covenants and agrees that Turner -Majek LLC will not discriminate or 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, Majek or Turner -Majek LLC 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, Majek or Turner -Majek LLC are
temporarily suspended during continuation of the force majeure. If any party's
obligation is affected by any of the causes of force majeure, the party affected shall
promptly notify the other parties 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. Neither Majek nor Turner -Majek LLC may assign all or any part of its
rights, privileges, or duties under this Agreement without the prior written approval of the
Corporation and City. Any attempted assignment without approval is void, and
constitutes a breach of this Agreement.
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BUSINESS INCENTIVE AGREEMENT - -Majek Boats 05 31 2012
1 1. Indemnity. Majek 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 Majek 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. Majek 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.
Turner -Majek LLC covenants to fully indemnify, save, and hold harmless the
Corporation, the City, their respective ofcerp, 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 Turner -Majek LLC
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. Turner -Majek LLC 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 Majek or Turner -Majek LLC. The following events constitute a
default of this Agreement by Majek or Turner -Majek LLC:
a. The Corporation or City determines that any representation or warranty on
behalf of Majek or Turner -Majek LLC 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 Majek or Turner -Majek LLC or any
attachment or other levy against the property of Majek or Turner -Majek LLC with
respect to a claim remains unpaid, undischarged, or not dismissed for a period of
120 days.
c. Majek or Turner -Majek LLC makes an assignment for the benefit of creditors.
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BUSINESS INCENTIVE AGREEMENT —Majek Boats 05 312012
d. Majek or Turner -Majek LLC files a petition in bankruptcy, or is adjudicated
insolvent or bankrupt.
e. If taxes owed by Majek or Turner -Majek LLC become delinquent, and Majek
or Turner -Majek LLC fails to timely and properly follow the legal procedures for
protest or contest.
f. Majek or Turner -Majek LLC 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 Majek or Turner -
Majek LLC is in default according to the terms of this Agreement, the Corporation or
City shall notify Majek and/or Turner -Majek LLC in writing of the event of default and
provide 64 days from the date of the notice ("Cure Period ") for Majek and/or Turner-
Majek LLC to cure the event of default.
14. Results of Uncured Default by Majek or Turner -Majek LLC. 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 Majek or
Turner -Majek LLC, 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. Majek and Turner -Majek LLC shall immediately repay all funds paid by
Corporation to them under this Agreement.
b. Majek and Turner -Majek LLC 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 Majek and Turner -Majek LLC of all sums due, the
Corporation and Majek and Turner -Majek LLC shall have no further obligations to
one another under this Agreement.
d. The City, the Corporation, Majek and Turner -Majek LLC each may not 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.
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BUSINESS INCENTIVE AGREEMENT- -Majek Boats 05 312012
c. Any waiver or indulgence of Majek's or Turner -Majek LLC's default may not
be considered an estoppel against the Corporation.
d. It is expressly understood that if at any time Majek or Tumer -Majek LLC 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. Majek and Turner -Majek LLC specifically agree that Corporation shall only be liable
to Majek and Turner-Majek LLC for the actual amount of the money grants to be
conveyed to Majek and Turner -Majek LLC, and shall not be liable to Majek and Turner-
Majek LLC 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 requested. Payments to be made shall also
require a written request from Majek and Turner -Majek LLC 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:
Majek:
Majek Boatworks, Inc.
Attn: Javier Trevino
7021 Saluki Street
Corpus Christi, TX 78414
Turner -Majek LLC:
Turner -Majek Real Estate, LLC
Attn: Javier Trevino
PO Box 171720
San Antonio, TX 78217
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BUSINESS INCENTIVE AGREEMENT - -Majek Boats 05 312012
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 abode.
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, or 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, the Corporation, Majek and
Turner-Majek LLC each 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 any party may not be, or be construed to be, the
employees or agents of another 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,
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BUSINESS INCENTIVE AGREEMENT —Majek Boats 05 312012
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, Majek and Turner -Majek LLC. Any prior Agreements, promises,
negotiations, or representations, verbal or otherwise, not expressly stated in this
Agreemene,, 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 Business & Job Development Corporation
Im
Ery Salazd'r
President
Date:
Attest:
c4WftCjL 10 `7s
By:
Armando Chapa
Assistant Secretary
Page 9 of 10
BUSINESS INCENTIVE AGREEMENT - -Majek Boats 05 312012
Majek Boatworks, Inc.
By: - '- ; 7 -- :-�—
a er Trevino
re ident NJ
Date: j1 - 31 1
THE STATE OF TEXAS
COUNTY OF NUECES
This instrument was acknowledged before me on VV 315t , 2012, by
Javier Trevino, President, Majek Boatworks, Inc., a Texa omestic for - profit
co ation onbehaIf of the corporation.
Statp Public ��YaL LYNE M JACKSON
of Texas NOTARY PUBLIC
q� STAN OFTEW
Of
My Comm, Exp. 10I3112014
Turner -Majek Real Estate, LLC
B
J i r Trevino
Pfe,s Went
Date: – V / A L
THE STATE OF TEXAS
COUNTY OF NUECES
This instrument was acknowledged before me on A7 , 2012, by
Javier Trevino, President, Turner -Majek Real Estate, LL , a T' xas limited liability
corporation, on behalf of the limited liability corporation.
1
i
Natal�ublic
State of Texas
Page 10 of 10
��YpU LYNE M JACKSON
* NOTARY PUBLIC
uy STATE OFTEM
A�FOF My COMMO , 1
BUSINESS INCENTIVE AGREEMENT —Majek Boats 05 312012
EXHIBIT A
PERFORMANCE MEASURES AND CORPORATION GRANTS
1. Majek and Turner -Majek LLC (collectively "the Company') shall invest at least
$1,050,000 to expand their existing manufacturing facilities over a five year period,
including the construction of a 10,500 square foot lamination shop, and including
furniture, fixtures, and equipment. Majek and Turner -Majek LLC shall further, over the
term of this Agreement, retain 24 full -time jobs and create up to 26 new full -time jobs,
with an average annual salary of $24,300 as described in the schedule below.
Year
Number of
New Jobs
Number of
Retained Jobs
Annual
Payroll
Capital
Investment
1
0
24
555,000
375,000
2
8
24
571,000
75,000
3
10
32
740,000
75,000
4
4
42
1,000,000
75,000
5
4
46
1,100,000
450,000
a. Grants, not to exceed $30,000 per year and a cumulative total of $150,000
over five years, are available on a per job created basis.
b. Should the Company fall below the Performance Standards in any one year,
the Company shall receive a reduced percentage of the Cash Incentive in effect
that year. Such reduction will be in that percentage equal to the percentage the
Company's performance falls below the Performance Standards. However if the
Company falls below 70% then there is no payment for that year.
By way of example only: assume a partial Cash Incentive payment is required in
the fifth year of this Agreement and the Performance Standards have not been
reached. For the purposes of calculating this reduced Cash Incentive, it is agreed
that $6,600 or 22% of the Cash Incentive is being given premised on the payroll
requirements of this Agreement and $23,400 or 78% is attributable to the capital
investment requirements.
The reduced Cash Incentive shall be calculated as follows:
Annual payroll commitment
5th year: $1,100,000
5th year actual: $ 770,000
Percent of Total 70%
Annual Investment commitment
5th year: $450,000
5th year actual: $450,000
Percent of Total 100%
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BUSINESS INCENTIVE AGREEMENT - -Majek Boats 05 31 2012
5th year incentive calculation
Reduced Cash Incentive calculation: Economic Incentive Calculation:
70% x 22% x $30,000 = $4,620 100% x 78% x $30,000 = $23,400
Total Cash Incentive $4,620 + $23,400 = $28,020
In the 5th year, the Company would receive a reduced Cash Incentive of $28,020
from the Corporation for not meeting the performance goals for annual payroll
requirements.
2. The Corporation will grant up to $210,000 for the improvement of Saluki Street to a
dedicated City street constructed to the Rodd Field Public Improvement District street
standards.
3. The Corporation will award a grant to Majek and Turner -Majek LLC based on the
formula above, payable not later than ; June 15 of each year if Majek and Turner-Majek
LLC make the required capital investment in buildings, furniture, fixtures and equipment,
retain the minimum number of jobs in the preceding year described in paragraph 1,
above (collectively, the "annual performance benchmarks ").
4. Majek and Turner -Majek LLC must present to the City a business plan that includes
the current expansion plan, time line, and future expansion plans before the road
construction will start.
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BUSINESS INCENTIVE AGREEMENT —Majek Boats 05 31 2012