HomeMy WebLinkAboutC2018-328 - 5/15/2018 - Approved BUSINESS INCENTIVE AGREEMENT BETWEEN
THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION
AND NUECES COUNTY COURTHOUSE DEVELOPMENT PARTNERS, LLC FOR
THE CREATION OF JOBS AND INFRASTRUCTURE CONSTRUCTION TO
ENHANCE ECONOMIC DEVELOPMENT
This Business Incentive Agreement for Capital Investments and the Creation of Jobs
("Agreement") is entered into between the Corpus Christi Business and Job Development
Corporation ("Corporation")and Nueces County Courthouse Development Partners, LLC
("Courthouse"), a Texas limited liability corporation.
WHEREAS, the Texas Legislature in Section 4A of Article 5190.6, Vernons Texas
Revised Civil Statutes (Development Corporation Act of 1979), now codified as Subtitle
Cl, Tine 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 February 19, 2018
last amended the Corporation's Guidelines and Criteria for Granting Business Incentives
("Type A Guidelines"), which the City Council approved on April 17, 2018;
WHEREAS, Section 501.073 of the Act requires the City Council to approve all programs
and expenditures of the Corporation;
WHEREAS, the Courthouse plans to redevelop the old Nueces County Courthouse into
a four-star hotel for tourists and visitors from outside of the local area (the"Project");
WHEREAS, Courthouse proposes to invest over $40 million within a 5-year period, with
intent to begin construction in 2019,
2018-328
5/15/18
Ord. 031432
Nueces County Courthouse Dev.
INDEXED
WHEREAS, on April 16, 2018, the Board determined that it is in the best interests of the
citizens of Corpus Christi, Texas that business development funds be provided to
Courthouse, through this Agreement to be used 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 Courthouse hotel and that will result
in increased economic development and the creation of a minimum of 25 new full-time
equivalent positions in the City of Corpus Christi.
In consideration of the covenants. promises, and conditions stated in this Agreement, the
Corporation and Courthouse agree as follows:
1. Effective Data The effective date of this Agreement (`Effective Date") is the latest
date that either party executes this Agreement, so long as the Agreement has been
approved by the City's City Council. Courthouse understands that this Agreement is
dependent upon the approval of City Council.
2. Term. The term of this Agreement is for five years beginning on the Effective Date.
3 Performance Requirements.
a. Courthouse 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 Project.
b. Courthouse agrees to provide the Corporation with a sworn certificate by
authorized representative of the business, certifying the amount used for
infrastructure improvements.
c. Courthouse will provide the Corporation with a detailed list of infrastructure
expenditures each year within 30 days of the anniversary of the Effective Date until
construction is complete.
d. During the term of this Agreement, Courthouse will create at least 25 new full-
time equivalent positions in the City of Corpus Christi.
e. During the term of this Agreement. Courthouse will invest at least $40,000,000
in the Project.
4. Grant Award.
a. The Board will grant Courthouse the amount of$3,000,000, to be paid to Nueces
County Courthouse Development Partners, LLC, so long as all of the terms and
conditions of the Agreement are met prior to the Agreement's expiration.
b. The grant ($3,000,000) will be within 60 days after Courthouse provides
documentation that they have received a permanent certificate of occupancy for
the Project issued by the City's Development Services department. Along with the
Certificate of Occupancy, Courthouse must submit certification that there are no
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mechanics, contractor's or materialman's liens against the property and provide
documentation establishing that all other performance requirements, including the
creation of jobs, have been met. If Courthouse does not provide the required
documentation prior to the end of the Term, this Agreement shall expire and
Courthouse shall not be entitled to the grant funds.
5 Buy Local Provision.
a. Courthouse 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. Courthouse warrants and represents to Corporation the following:
a. Courthouse 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. Courthouse has the authority to enter into and perform, and will perform, the
terms of this Agreement to the best of its ability.
c. Courthouse 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. Courthouse has received a copy of the Texas Development Corporation Act,
Subtitle Cl, 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 Courthouse are duly
authorized to execute this Agreement on behalf of Courthouse.
f. Courthouse does not and agrees that it will not knowingly employ an
undocumented worker. If, after receiving payments under this Agreement,
Courthouse is convicted of a violation under 8 U.S.C. Section 1324a(f),
Courthouse 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 Courthouse has been notified of the violation.
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7. Compliance with Laws. Courthouse shall observe and obey all applicable laws,
ordinances, regulations, and rules of the Federal, State, county, and city governments.
8. Non-Discrimination. Courthouse covenants and agrees that Courthouse 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
Project boundaries, 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 Courthouse 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 Courthouse 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, Courthouse may not assign all or pad of its
rights and obligations under this Agreement to a third party without prior written approval
of Corporation, which approval will not be unreasonably withheld or delayed. The
Corporation agrees, however, that Courthouse may assign all or part of its rights and
obligations under this Agreement to any entity affiliated with Courthouse by reason of
controlling, being controlled by, or being under common control with Courthouse or to a
third-party lender advancing funds for the construction or operation of the hotel. The
Corporation expressly consents to any assignment described in the preceding sentence
and agrees that no further consent of Corporation to such an assignment will be required.
Courthouse agrees to provide Corporation with written notice of any such assignment.
The foregoing notwithstanding, any assignment of Courthouse's rights under this
Agreement shall not release Courthouse from its obligations hereunder.
11. Indemnity. Courthouse 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 Courthouse 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. Courthouse 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.
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12. Events of Default by Courthouse. The following events constitute a default of this
Agreement by Courthouse:
a. The Corporation or City determines that any representation or warranty on
behalf of Courthouse 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 Courthouse or any attachment or other levy
against the property of Courthouse with respect to a claim remains unpaid,
undischarged, or not dismissed for a period of 120 days.
c Courthouse makes an assignment for the benefit of creditors.
d. Courthouse files a petition in bankruptcy or an order for relief is entered by the
bankruptcy court in an involuntary bankruptcy listing Courthouse as the debtor.
e. If taxes owed by Courthouse become delinquent, and Courthouse fails to timely
and properly follow the legal procedures for protest or contest.
f. Courthouse 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 Courthouse is in
default according to the terms of this Agreement, the Corporation or City shall notify
Courthouse in writing of the event of default and provide 60 days from the date of the
notice (`Cure Period")for Courthouse to cure the event of default.
14. Results of Uncured Default by Courthouse. 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 Courthouse, 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. Courthouse shall immediately repay all funds paid by Corporation to them under
this Agreement.
b. Courthouse 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 Courthouse of all sums due, the Corporation and Courthouse
shall have no further obligations to one another under this Agreement.
d. Neither the City, the Corporation, nor Courthouse may be held liable for any
consequential damages.
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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 Courthouse's default may not be considered an
estoppel against the Corporation.
d It is expressly understood that if at any time Courthouse 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. Courthouse specifically agrees that Corporation shall only be liable to Courthouse for
the actual amount of the money grants to be conveyed to Courthouse and shall not be
liable to Courthouse 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 Courthouse 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:
If to Courthouse: Nueces County Courthouse Development
Partners, LLC
650 California Street, Floor 7
San Francisco, California 94704
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ATTN: Stephen L, Goodman
If to the City: City of Corpus Christi
P. O. Box 9277
Corpus Christi, Texas 78469
ATTN: City Manager
With Copy to: City of Corpus Christi
P. O. Box 9277
Corpus Christi, Texas 78469
ATTN: City Attorney
c. Notice is effective upon deposit in the United States mail in the manner provided
above.
18. Incorporation of other documents. The Corpus Christ 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
Courthouse will act in an individual capacity, and not as agents, representatives,
employees, employers, partners, joint-venturers, or associates of one another. The
employees or agents of either party may not be, nor be construed to be, the employees
or agents of the other party for any purpose.
21. Captions. The captions in this Agreement are for convenience only and are not a
part of this Agreement. The captions do not in any way limit or amplify the terms and
provisions of this Agreement.
22. Severability.
a. If for any reason, any section, paragraph, subdivision, clause, provision, phrase
or word of this Agreement or the application of this Agreement to any person or
circumstance is, to any extent, held illegal, invalid, or unenforceable under present
or future law or by a final judgment of a court of competent jurisdiction, then the
remainder of this Agreement, or the application of the term or provision to persons
or circumstances other than those as to which it is held illegal, invalid, or
unenforceable,will not be affected by the law or judgment, for it is the definite intent
of the parties to this Agreement that every section, paragraph, subdivision, clause,
provision, phrase, or word of this Agreement be given full force and effect for its
purpose.
b. To the extent that any clause or provision is held illegal, invalid, or
unenforceable under present or future law effective during the term of this
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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 Courthouse. Any prior Agreements, promises. negotiations, or
representations, verbal or otherwise, not expressly slated 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.
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Corpus C i ti :usines A ,•: De -lopment Corporation
By: if ji
Bart B Vis:- ton p
President
proved as to f• :I Ii1/1&•
Date: ' �, _
/zee,' i
Attest: ' / '
Assistant City Attorney
For City Attorney
By: 111 ' liP.: - k ■ _ . .1
Re.-cca Huerta
Assistant Secretary
Courthouse OXCA . I L 32
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By: Nueces County Courthouse Development Partners, LLC sY CONCIL tS 1 I
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By: — •
Date: - DA .. B
The State of Texas
County of
This instrument was acknowledged before me on 2018, by
of Nueces County Courthouse Development Partners,
LLC, a Texas limited partnership, on behalf of the partnership.
is t
Notary Public `�
State of California
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