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HomeMy WebLinkAboutC2015-072 - 5/12/2015 - Approved e . ■ BUSINESS INCENTIVE AGREEMENT BETWEEN THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION AND QSRONLINE.COM, INC. 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 QSROnline.com, Inc. ("QSROnline"), a Texas for profit corporation. WHEREAS, the Texas Legislature in Section 4A of Article 5190.6, Vemon's Texas Revised Civil Statutes (Development Corporation Act of 1979), now codified as Subtitle Cl, 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 1/8th 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 October 18, 2010, amended the Corporation's Guidelines and Criteria for Granting Business Incentives ("Type A Guidelines"),which the City Council approved on November 9, 2010; WHEREAS, Section 501.073 of the Act requires the City Council to approve all programs and expenditures of the Corporation; WHEREAS, QSROnline, a software development company serving restaurant's throughout the country, located 817 Ayers Street; WHEREAS, QSROnline proposes to invest approximately$400,000 over a five year period; 1 2015-072 QSROnline 03 11 15 5/12/15 Ord. 030499 INDEXED QSROnline.com Inc. WHEREAS, on March 9, 2015 the Board determined that it is in the best interests of the citizens of Corpus Christi, Texas that business development funds be provided to QSROnline, through this Agreement with QSROnline, to be used by QSROnIine to redevelopment their software office and will result in the creation of 10 full-time jobs and the retention of 17 existing full-time jobs, with an estimated annual average wage of$50,000. In consideration of the covenants, promises, and conditions stated in this Agreement, Corporation and QSROnline 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 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. a. QSROnline shall invest at least $400,000 to redevelop their software office in year 1. QSROnline shall further, over the term of this Agreement, create 10 full-time jobs and retain 17 full-time jobs, with an average annual wage of $50,000 as described in the schedule below. Year Number of Number of Annual Payroll Capital New Jobs Retained Jobs Investment 1 2 17 1,013,927 400,000 2 2 19 1,140,623 3 2 21 1,273,655 4 2 23 1,413,337 5 2 25 1,560,004 b. Grants, not to exceed $25,900 per year and a cumulative total of $129,500 over 5 years, are available on a per job created/retained basis. c. 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 50% of the Cash 2 Type A Business Incentive Agreement QSROnline 03 11 15 Incentive is being given premised on the payroll requirements of this Agreement and 50% is attributable to the capital investment requirements. The reduced Cash Incentive shall be calculated as follows: Annual payroll commitment: Annual Investment commitment: 5th year: $1,560,004 5th year: $0 5th year actual: $1,248,003 5th year actual: $0 Percent of Total 80% Percent of Total 100% 5th year incentive calculation: Reduced Cash Incentive calculation: Economic Incentive Calculation: 50% x 80% x$25,900= $10,360 100% x 50% x$29,500 = $14,750 Total Cash Incentive $10,360 + $14,750 = $25,110 In the 5th year, the Company would receive a reduced Cash Incentive of$25,110 from the Corporation for not meeting the performance goals for annual payroll requirements. d. 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. e. The Corporation will award a grant to QSROnline based on the formula above, payable not later than May 15 if QSROnline makes the required capital investment in buildings, furniture, fixtures and equipment in year 1, creates 10 new jobs, and retains the minimum number of full-time jobs in the preceding year described in paragraph 3. a. above (collectively, the"annual performance benchmarks"). f. QSROnline will display signage that states that they are recipients of Type A funding. This signage will be created at the company's own expense and will be displayed in a location that is visible to a visitor to their facility. All Type A funded projects must have signage erected in a prominent publicly visible area acknowledging funding. The grantee must pay for the signage and a photo must be submitted as part of contract compliance. Signage must include: • Approved Type A logo (provided by the Board) • Indoor signage must be a minimum of 10"x 10"; Outdoor signage must be a minimum of 12"x 12" (only one sign is required) • Made of durable materials as to placement • Displayed during the length of the contract • Worn or damaged signs must be replaced as necessary Additional acknowledgement beyond signage is encouraged at the discretion of the grantee which could include websites, media coverage, special events, etc. 3 Type A Business Incentive Agreement QSROnline 03 11 15 4. Job Creation Qualification. a. In order to count as a created job under this Agreement, a "job" must be as 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. b. QSROnline 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 the Business. c. QSROnline agrees to provide Corporation with a sworn certificate by authorized representatives of each business assisted under this Agreement certifying the number of full-time permanent employees employed by the business. d. QSROnline shall ensure that the Corporation is allowed reasonable access to personnel records of the businesses assisted under this Agreement. 5. Utilization of Local Contractors and Suppliers. QSROnline 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 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. QSROnline agrees, during the construction of the Project and for four years after Completion, to maintain written records documenting the efforts of QSROnline 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 QSROnline 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. 6. Utilization of Disadvantaged Business Enterprises ("DBE"). QSROnline 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 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. QSROnline 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. QSROnline agrees, during the construction 4 Type A Business Incentive Agreement QSROnline 03 11 15 of the Project and for four years after Completion, to maintain written records documenting the efforts of QSROnline 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 QSROnline 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. 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. QSROnline warrants and represents to Corporation the following: a. QSROnIine 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. QSROnline has the authority to enter into and perform, and will perform, the terms of this Agreement to the best of its ability. c. QSROnline 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. QSROnIine 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 QSROnIine is duly authorized to execute this Agreement on behalf of QSROnline. f. QSROnline does not and agrees that it will not knowingly employ an undocumented worker. If, after receiving payments under this Agreement, QSROnIine is convicted of a 5 Type A Business Incentive Agreement QSROnline 03 11 15 violation under§U.S.C. Section 1324a(f), QSROnIine shall repay the payments received under this Agreement to the City, with interest at the Wall Street Journal Prime Rate, not later than the 120th day after the date QSROnline has been notified of the violation. 10. Compliance with Laws. During the Term of this Agreement, QSROnline shall observe and obey all applicable laws, ordinances, regulations, and rules of the Federal, State, county, and city governments. 11. Non-Discrimination. QSROnline covenants and agrees that QSROnline 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 QSROnline 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 QSROnline 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. QSROnline 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. Any attempted assignment without approval is void, and constitutes a breach of this Agreement. 14. Indemnity. QSROnline 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 QSROnline 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. QSROnline 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 lndemnitees, 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. 15. Events of Default by QSROnline. The following events constitute a default of this Agreement by QSROnline: 6 Type A Business Incentive Agreement QSROnline 03 11 15 a. The Corporation or City determines that any representation or warranty on behalf of QSROnline 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 QSROnline or any attachment or other levy against the property of QSROnline with respect to a claim remains unpaid, undischarged, or not dismissed for a period of 120 days. c. QSROnline makes an assignment for the benefit of creditors. d. QSROnIine files a petition in bankruptcy, or is adjudicated insolvent or bankrupt. e. If taxes owed by QSROnline become delinquent, and QSROnline fails to timely and properly follow the legal procedures for protest or contest. f. QSROnline changes the general character of business as conducted as of the date this Agreement is approved by the Corporation. g. QSROnline fails to comply with one or more terms of this Agreement. 16. Notice of Default. Should the Corporation or City determine that QSROnline is in default according to the terms of this Agreement, the Corporation or City shall notify QSROnline in writing of the event of default and provide 60 days from the date of the notice ("Cure Period") for QSROnline to cure the event of default. 17. Results of Uncured Default by QSROnline. 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 QSROnline, 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. QSROnline shall immediately repay all funds paid by Corporation to them under this Agreement. b. QSROnline 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 QSROnline of all sums due, the Corporation and QSROnline shall have no further obligations to one another under this Agreement. 7 Type A Business Incentive Agreement QSROnline 03 11 15 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 QSROnline's default may not be considered an estoppel against the Corporation. d. It is expressly understood that if at any time QSROnline 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. QSROnline specifically agrees that Corporation shall only be liable to QSROnline for the actual amount of the money grants to be conveyed to QSROnline, and shall not be liable to QSROnline 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 QSROnline 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. 21. Notices. 8 Type A Business Incentive Agreement QSROnline 03 11 15 a. Any required written notices shall be sent mailed, certified mail, postage prepaid, addressed as follows: QSROnline: QSROnline.com, Inc. Attn: President PO Box 6496 Corpus Christi, Texas 78466-6496 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. 23. 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. 24. Relationship of Parties. In performing this Agreement, both the Corporation and QSROnline 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. 9 Type A Business Incentive Agreement QSROnline 03 11 15 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, 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 QSROnline. 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. (Remainder of this page intentionally left blank) 10 Type A Business Incentive Agreement QSROnline 03 11 15 Corpus Christi B is & . % -f • - - Corporation By: Bart Br-selton President i Ci / Date: ef Attest: By: T2k Rebecca Huerta Assistant Secretary ` QSROnline.com, Inc. fel,ti Q (Atakis By: 7 —. to _ gY CSWNCIL c Michael A. Cuevas President `•rmo. " • Date: cis""J S`` THE STATE OF TEXAS COUNTY OF NUECES This instrument was acknowledged before me on 0 , 2015, by Michael A. Cuevas, President, for QSROnline.com, Inc., a Texa For profit corporation, on behalf of the corpor on _ILI.Ai4A/ut jj..) Notary Public State of Texas ` UIDIA STRUB ,, . Notary Public,State of Texas •;,roF:�t'... My Commission Expires '4404/26/2018 11 Type A Business Incentive Agreement QSROnIine 03 11 15