HomeMy WebLinkAboutC2012-378 - 10/23/2012 - ApprovedBUSINESS INCENTIVE AGREEMENT BETWEEN
THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION AND M&G
RESINS USA, LLC
FOR 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 M&G RESINS USA, LLC ("M&G"), a Delaware limited liability
company.
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, Section 504.002 et seq, ("the Act"), 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, Section 501.073 of the Act requires the City Council to approve all programs and
expenditures of the Corporation;
WHEREAS, M&G plans to construct a PET and a PTA plant on the north side of the Port of
Corpus Christi inner harbor;
WHEREAS, M&G proposes to invest approximately $751,000,000 over a three year period;
WHEREAS, on September 17, 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 M&G, through
this Agreement with M&G, to be used by M&G to construct their manufacturing facilities, which
will result in the creation of at least 220 full-time jobs, with an estimated annualized salary of
$11,700,000 (annual average salary of $53,181).
In consideration of the covenants, promises, and conditions stated in this Agreement,
Corporation and M&G agree as follows:
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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. 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 median wage of the occupation in the Corpus Christi MSA as
determined by Texas Workforce Commission's Texas Industry Profiles report.
b. A "job" is defined in the Type A Guidelines as a full-time employee, contractor,
consultant, or leased employee who has a home address in the Corpus Christi MSA.
c. M&G 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, after the creation of
such jobs, maintained throughout the term of this Agreement.
d. M&G 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. M&G shall ensure that the Corporation is allowed reasonable access to personnel
records of the businesses assisted under this Agreement, subject to any applicable
privacy laws.
5. Utilization of Local Contractors and Suppliers. M&G agrees to exercise reasonable efforts in
utilizing local contractors and suppliers in the construction of the Project, except where not
reasonably possible to do so without added expense, substantial inconvenience, or sacrifice in
operating efficiency in the normal course of business, with a goal of 50% of the total dollar
amount of all construction contracts and supply agreements, with respect to the construction of
the Project, being paid to local contractors and suppliers. 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. For the purpose of this Section the term "construction of the Project" means activities
related to the execution of the Project which take place at the Project site, such as civil
construction, installation of equipment, and fabrication at site of piping, materials or equipment.
M&G agrees, during the construction of the Project and for four years after Completion, to
maintain written records documenting the efforts of M&G to comply with the Local Requirement,
and to provide an annual report to the City Manager or designee, from which the City Manager
or designee shall determine if M&G is in compliance with this requirement. Failure to
substantially comply with this requirement, in the sole determination of the City Manager or
designee, shall be a default hereunder. It is understood that M&G may contract the supply and
construction of the Project to an affiliate or other non-local contractor. In such case M&G may
ensure compliance with this Section by including in such contract a flow through provision
requiring such compliance.
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6. Utilization of Disadvantaged Business Enterprises ("DBE'). M&G agrees to exercise
reasonable efforts in utilizing contractors and suppliers that are determined to be disadvantaged
business enterprises, including minority business enterprises women-owned business
enterprises and historically-underutilized business enterprises in the construction of the Project.
In order to qualify as a business enterprise under this provision, the firm must be certified by the
City, the Regional Transportation Authority or another governmental entity in the jurisdiction of
the home office of the business as complying with state or federal standards for qualification as
such an enterprise. M&G agrees to a goal of 30% of the total dollar amount of all construction
contracts and supply agreements being paid to disadvantaged business enterprises, with a
priority made for disadvantaged business enterprises which are local. For the purpose of this
Section the term "construction of the Project" means activities related to the execution of the
Project which take place at the Project site, such as civil construction, installation of equipment,
and fabrication at site of piping, materials or equipment. M&G agrees, during the construction of
the Project and for four years after Completion, to maintain written records documenting the
efforts of M&G to comply with the DBE Requirement, and to provide an annual report to the City
Manager or designee, from which the City Manager or designee shall determine if M&G is in
compliance with this requirement. Failure to substantially comply with this requirement, in the
sole determination of the City Manager or designee, shall be a default hereunder. For the
purposes of this section, the term "local" as used to describe contractors and suppliers that are
determined to be disadvantaged business enterprises, including minority business enterprises
women-owned business enterprises and historically - underutilized business enterprises includes
firms, businesses, and persons who reside in or maintain an office within a 50 mile radius of
Nueces County. It is understood that M&G may contract the supply and construction of the
Project to an affiliate or other non-DBE contractor. In such case M&G may ensure compliance
with this Section by including in such contract a flow through provision requiring such
compliance.
7. Living Wage Requirement. In order to count as a permanent full-time job under this
agreement, the job should provide a "living wage" for the employee. The target living wage
under this agreement is that annual amount equal or greater than poverty level for a family of
three, established by the U.S. Department of Health and Human Services Poverty Guidelines,
divided by 2,080 hours per year for that year.
8. Health Insurance. To qualify for this incentive, an employer shall certify that it has offered a
health insurance program for its employees during the term of the Agreement.
9. Warranties. M&G warrants and represents to Corporation the following:
a. M&G is a limited liability company duty organized under the laws of the State of
Delaware, 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 in Texas.
b. M&G has the authority to enter into and perform, and will perform, the terms of this
Agreement to the best of its ability.
c. M&G 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.
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d. M&G has received a copy of the 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 person executing this Agreement on behalf of M&G is duly authorized to execute
this Agreement on behalf of M&G.
f. M&G does not and agrees that it will not knowingly employ an undocumented worker.
If, after receiving payments under this Agreement, M&G is convicted of a violation under
§U.S.C. Section 1324a(f)I, M&G 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 M&G has been notified of the violation.
10. Compliance with Laws. During the Term of this Agreement, M&G shall observe and obey
all applicable laws, ordinances, regulations, and rules of the Federal, State, county, and city
governments.
11. Non-Discrimination. M&G covenants and agrees that M&G 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.
12. Force Majeure. If the Corporation or M&G 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 M&G 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.
13. Assignment. M&G 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, such approval not
to be unreasonably withheld. Any attempted assignment without approval is void, and
constitutes a breach of this Agreement.
14. Indemnity. M&G 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 M&G 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. M&G 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.
V
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15. Events of Default by M&G. The following events constitute a default of this Agreement by
M&G:
a. Any representation or warranty on behalf of M&G contained in this Agreement or in
any financial statement, certificate, report, or opinion submitted to the Corporation in
connection with this Agreement is incorrect or misleading in any material respect when
made;
b. Any judgment is assessed against M&G or any attachment or other levy against the
property of M&G with respect to a claim remains unpaid, undischarged, or not dismissed
for a period of 120 days.
c. M&G makes an assignment for the benefit of creditors.
d. M&G files a petition in bankruptcy, or is adjudicated insolvent or bankrupt.
e. If taxes owed by M&G become delinquent, and M&G fails to timely and properly follow
the legal procedures for protest or contest.
f. M&G changes the general character of business as conducted as of the date this
Agreement is approved by the Corporation.
g. M&G fails to comply with one or more of the terms of this Agreement.
16. Notice of Default. Should the Corporation or City determine that M&G is in default
according to the terms of this Agreement, the Corporation or City shall notify M&G in writing of
the event of default and provide 60 days from the date of the notice ("Cure Period") for M&G to
cure the event of default.
17. Results of Uncured Default by M&G. 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 M&G, 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. M&G shall immediately repay all funds paid by Corporation to them under this
Agreement.
b. M&G 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 M&G of all sums due, the Corporation and M&G shall have no
further obligations to one another under this Agreement.
d. Neither the City, the Corporation, nor M&G may be held liable for any consequential
damages.
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18. 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 M&G's default may not be considered an estoppel against
the Corporation.
d. It is expressly understood that if at any time M&G 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.
19. M&G specifically agrees that Corporation shall only be liable to M&G for the actual amount
of the money grants to be conveyed to M&G, and shall not be liable to M&G 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
M&G to be accompanied by all necessary supporting documentation.
20. The parties mutually agree and understand that funding under this Agreement is subject to
annual appropriations by the City Council; that each fiscal year's funding must be included in the
budget for that year; and the funding is not effective until approved by the City Council.
2 1. Notices.
a. Any required written notices shall be sent mailed, certified mail, postage prepaid,
addressed as follows
M&G:
M&G RESINS USA, LLC
450 Gears Road, Suite 240
Houston, TX 77067
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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.
22. Incorporation of other documents. The Type A Guidelines, as amended, are incorporated
into this Agreement. In the event of any conflict between the Guidelines and this Agreement, the
terms of this Agreement shall control.
23. Amendments or, odifications. 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.
24. Relationship of Parties. In performing this Agreement, both the Corporation and M&G 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.
25. 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.
26. 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,
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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.
27, Venue. Venue for any legal action related to this Agreement is in Nueces County, Texas.
28. Sole Agreement, This Agreement constitutes the sole Agreement between Corporation and
M&G. Any prior Agreements, promises, negotiations, or representations, verbal or otherwise,
not expressly stated in this Agreement, are of no force and effect.
29. 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 Bfisine
,As & Job Development Corporation
By: z
Robert Tamez
President
' z (3 - cp".$ ♦ �'
Attest:
By:
Armando Chapa
Assistant Secretary
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THE STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me 2092*b
President, for M &G RESINS USA, LLC a Delaware fo profit limited liability comehalf
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GUADALUPE R DIIAZ
My Commission Expires
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PERFORMANCE MEASURES AND CORPORATION GRANTS
1. M &G shall invest at least $751,000,000 to construct a PET and PTA manufacturing facility,
over a three year period. M &G shall further, over the term of this Agreement, create 220 full -
time jobs, with an annualized salary equal to or greater than $11,700,000 (average annual
salary of $53,181), as described in the schedule below.
a. Grant, not to exceed $3,000,000, will be paid in full upon proof of creation of 220 new
jobs, $751,000,000 in investment, and an annualized salary equal to or greater than
$11,700,000.
b. Should the Company fall below the Performance Standards the Company shall
receive a reduced percentage of the Cash Incentive. 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.
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