HomeMy WebLinkAboutC2021-265 - 9/21/2021 - ApprovedBUSINESS INCENTIVE AGREEMENT BETWEEN
THE CORPUS CHRISTI B CORPORATION AND
TEXAS A&M UNIVERSITY — CORPUS CHRISTI
re: LONE STAR UNMANNED AIRCRAFT SYSTEMS CENTER
This Business Incentive Agreement for Capital Investments and the Creation and Retention of
Jobs ("Agreement") is entered into between the Corpus Christi B Corporation ("Corporation")
and Texas A&M University — Corpus Christi, a member of The Texas A&M University System,
an agency of the State of Texas, on behalf of its Lone Star Unmanned Aircraft Systems Center
("TAM U-CC").
WHEREAS, the Texas Legislature in Chapter 501 et seq. of the Local Government Code
(Development Corporation Act of 1979) (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 8, 2016, residents of the City of Corpus Christi, Texas ("City") passed
Proposition 1, Adopt Type B Sales Tax to Replace Expiring Portion of Type A Sales Tax, which
authorized the adoption of a sales and use tax to be administered by a Type B Corporation at the
rate of one -eighth of one percent to be imposed for 20 years with use of the proceeds for (1) 50%
to the promotion and development of new and expanded enterprises to the full extent allowed by
Texas law, (2) $500,000 annually for affordable housing, and (3) the balance of the proceeds for
the construction, maintenance and repair of arterial and collector streets and roads;
WHEREAS, the 1/8th cent sales tax authorized by passage of Proposition 1 was subsequently
enacted by the City Council and filed with the State Comptroller of Texas, effective April 1, 2018,
to be administered by the Corpus Christi B Corporation Board;
WHEREAS, the Corpus Christi B Corporation exists for the purposes of encouraging and assisting
entities in the creation of jobs for the citizens of Corpus Christi, Texas;
WHEREAS, Section 501.073 of the Act requires the City Council to approve all programs and
expenditures of the Corporation;
WHERAS, Section 501.103 of the Act authorizes expenditure of Type B Corporation funds for
certain infrastructure improvements, including site improvements, that promote or develop new
and expanding business enterprises within the City;
WHERAS, Section 501.101(2)(K) of the Act authorizes expenditure of Type B Corporation funds
for projects that are for the creation and retention of primary jobs and found by the Board to be
Business Incentive Agreement between The Corpus Christi B Corporation and TAMU-CC
re: Lone Star Unmanned Aircraft Systems Center
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required or suitable for the development of primary job training facilities for use by institutions of
higher education;
WHEREAS, TAMU-CC is a four-year State university located within the City of Corpus Christi;
WHEREAS, TAMU-CC has already invested $2,300,000.00 into the purchase of the building and
proposes to invest approximately $9,300,000.00 over a five-year period, including the funding
provided under this Agreement and create two full-time jobs with an estimated annual average
salary of $120,000;
WHEREAS, on August 27, 2021, the Board determined that it is in the best interests of the citizens
of Corpus Christi, Texas that business development funds be provided to TAMU-CC, through this
Agreement with TAMU-CC, to be used by TAMU-CC to expand the Lone Star Unmanned Aircraft
Systems Center ("LSUASC"), which will result in job training that will give our citizens the
knowledge and skills required for the jobs of the future (the "Project"). With these improvements,
it is anticipated the Project will result in at least five (5) drone -related companies relocating to the
Corpus Christi community with initial job projections of 100-150 full-time employees. New jobs will
pay wages that are at least equal to the prevailing wage for the applicable occupation in the local
labor market.
In consideration of the covenants, promises, and conditions stated in this Agreement, Corporation
and TAMU-CC agree as follows:
1. Effective Date. The effective date of this Agreement ("Effective Date") is the latest date that
either party executes this Agreement or the date of City Council approval, whichever is later.
2. Tenn. The term of this Agreement is for five years beginning on the Effective Date.
3. Performance Requirements and Conditions.
a. TAMU-CC 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 and for costs related to primary job
training as allowed under Section 501.101 of the Texas Local Government Code.
b. TAMU-CC agrees to provide the Corporation with a sworn certificate by an
authorized representative of TAMU-CC, certifying the amount used for
infrastructure improvements.
c. TAMU-CC agrees to complete the Project in accordance with the description
provided in its proposal, which is attached here to as Exhibit A and to continue
operating and maintaining the LSUASC throughout the term of this Agreement.
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re: Lone Star Unmanned Aircraft Systems Center
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c. TAM U-CC 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, TAMU-CC will create at least two (2) new
full-time jobs at TAMU-CC in relation to this Agreement, within the City Limits of
the City of Corpus Christi and maintain all such jobs for the full term of the
Agreement. A "job" is defined as a full-time employee, contractor, consultant, or
leased employee who has a home address in the Corpus Christi Metropolitan
Statistical Area ("MSA").
e. During the term of this Agreement, TAMU-CC will invest at least $7,000,000.00
in the Project, in addition to the funding provided under §4.a in this Agreement. At
least $4,000,000.00 will be invested in eligible infrastructure costs, job training
program costs and/or economic development as authorized by the Act.
f. TAM U-CC will complete all construction of the Project and obtain a permanent
Certificate of Occupancy from the City's Development Services Department by
June 30, 2024 (See, Exhibit B).
h. TAMU-CC will display signage that states that TAMU-CC is a recipient of Type B
funding. This signage will be created at TAMU-CC's own expense and will be displayed
in a location that is visible to a visitor to the facility.
4. Grant Award.
a. The Corporation will grant TAMU-CC the amount not to exceed $4,000,000.00 subject
to appropriations as described in paragraphs 20 and 21 below.
b. The Corporation will reimburse TAMU-CC for the costs incurred by TAMU-CC related
to the Project. TAMU-CC shall submit to the Corporation documentation reasonably
satisfactory to the Corporation of costs incurred by TAMU-CC related to the Project and
the Corporation shall provide reimbursement within 60 days of receipt of such
documentation. The amount reimbursed by the Corporation may not exceed $4,000,000.
5. Utilization of Local Contractors and Suppliers. TAMU-CC 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. TAMU-CC agrees, during the
construction of the Project and for four years after Completion, to maintain written records
documenting the efforts of TAMU-CC 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
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determine if TAMU-CC 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"). TAMU-CC agrees to exercise
reasonable efforts in utilizing contractors and suppliers that are determined to be DBEs, 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. TAMU-CC agrees to a goal of 30% of the total dollar
amount of all construction contracts and supply agreements being paid to DBEs, with a priority
made for DBEs which are local. TAMU-CC agrees, during the construction of the Project and for
four years after Completion, to maintain written records documenting the efforts of TAMU-CC 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 TAMU-CC 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 DBEs, 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. Sales Tax Sourcing. TAMU-CC shall, except where not reasonably possible to do so without
significant added expense, substantial inconvenience, or sacrifice in operating efficiency in the
normal course of business, utilize, or cause its contractors to utilize, Separated Building Materials
and Labor Contracts for all taxable building material contracts related to the Project in the amount
of $100,000 or more, to site payment of the sales tax on building materials for the Project to the
location of the Project.
8. 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.
9. Health Insurance. To qualify for this incentive, TAMU-CC shall certify that it has offered a
health insurance program for its employees and that, for all jobs included in the total for purposes
of meeting the jobs requirement, a health insurance program was offered throughout the term of
the Agreement. The health insurance program(s) must comply with all applicable laws.
10. Warranties. TAMU-CC warrants and represents to Corporation the following:
Business Incentive Agreement between The Corpus Christi B Corporation and TAMU-CC
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a. TAMU-CC is an institution of higher education duly organized, validly existing, and in
good standing under the laws of the State of Texas and has all corporate power and
authority to carry on its business as presently conducted in Corpus Christi, Texas.
b. TAMU-CC has the authority to enter into and perform, and will perform, the terms of this
Agreement to the best of its ability.
c. TAMU-CC has timely filed and will timely file all applicable local, State, and Federal tax
reports and returns required by laws to be filed and all taxes, 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. TAMU-CC has received a copy of the Act and the Corpus Christi B Corporation
Guidelines & Criteria for Granting Business Incentives (See, Exhibit B) 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 TAMU-CC is duly authorized to
execute this Agreement on behalf of TAMU-CC.
f. TAMU-CC does not and agrees that it will not knowingly employ an undocumented
worker. If, after receiving payments under this Agreement, TAMU-CC is convicted of a
violation under 8 U.S.C. Section 1324a(f), TAMU-CC shall repay the payments received
under this Agreement to the Corporation (or City if the Corporation has been dissolved),
with interest at the Wall Street Journal Prime Rate, not later than the 1201" day after the
date TAMU-CC has been notified of the violation.
11. Compliance with Laws. During the Term of this Agreement, TAMU-CC shall observe and
obey all applicable laws, ordinances, regulations, and rules of the Federal, State, county, and city
governments.
12. Non -Discrimination. TAMU-CC covenants and agrees that TAMU-CC will not illegally
discriminate nor permit illegal discrimination against any person or group of persons, with regard
to employment and the provision of services at, on, or in the Project, 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.
13. Force Majeure. If the Corporation or TAMU-CC 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 TAMU-CC
are temporarily suspended during continuation of the force majeure. If either party's obligation is
Business Incentive Agreement between The Corpus Christi B Corporation and TAMU-CC
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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.
14. Assignment. TAMU-CC 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.
15. Events of Default by TAMU-CC. The following events constitute a default of this Agreement
by TAMU-CC:
a. The Corporation or City determines that any representation or warranty on behalf of
TAMU-CC 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 TAMU-CC or any attachment or other levy against
the property of TAMU-CC with respect to a claim remains unpaid, undischarged, or not
dismissed for a period of 120 days.
c. TAMU-CC makes an assignment for the benefit of creditors.
d. TAMU-CC files a petition in bankruptcy or is adjudicated insolvent or bankrupt.
e. If taxes owed by TAMU-CC become delinquent, and TAMU-CC fails to timely and
properly follow the legal procedures for protest or contest.
f. TAMU-CC changes the general character of business as conducted as of the date this
Agreement is approved by the Corporation.
g. TAM U-CC fails to comply with one or more terms of this Agreement.
16. Notice of Default. Should the Corporation or City determine that TAMU-CC is in default
according to the terms of this Agreement, the Corporation or City shall notify TAMU-CC in writing
of the event of default and provide 60 days from the date of the notice ("Cure Period") for TAMU-
CC to cure the event of default.
17. Results of Uncured Default by TAMU-CC. 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 TAMU-CC, 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.
Business Incentive Agreement between The Corpus Christi B Corporation and TAMU-CC
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a. TAMU-CC shall immediately repay all funds paid by Corporation to them under this
Agreement.
b. TAMU-CC shall, to the extent authorized by law, 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 TAMU-CC of all sums due, the Corporation and TAMU-CC shall have
no further obligations to one another under this Agreement.
d. Neither the City, the Corporation, nor TAMU-CC may be held liable for any
consequential damages.
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 TAMU-CC's default may not be considered an estoppel
against the Corporation.
d. It is expressly understood that if at any time TAMU-CC 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. Limitation of Liability. TAMU-CC specifically agrees that Corporation shall only be liable to
TAMU-CC for the actual amount of the money grants to be conveyed to TAMU-CC, and shall not
be liable to TAMU-CC 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
Business Incentive Agreement between The Corpus Christi B Corporation and TAMU-CC
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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 notify TAMU-
CC in writing of the shortfall as soon as reasonably practicable, and provide all supporting
documentation, as requested.
20. Appropriations. 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.
a. Any required written notices shall be sent mailed, certified mail, postage prepaid,
addressed as follows:
TAM U-CC:
Texas A&M University — Corpus Christi
Attn: Vice President for Institutional Advancement
6300 Ocean Drive, Unit 5741
Corpus Christi, Texas 78412-5731
With an electronic copy to:
Texas A&M University — Corpus Christi
Attn: Contracts Administration
Email: contracts@tamucc.edu
Corporation:
Corpus Christi B 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
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re: Lone Star Unmanned Aircraft Systems Center
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c. Notice is effective upon deposit in the United States mail in the manner provided above.
22 Incorporation of other documents. TAMU-CC's Proposal (Exhibit A), and The Type B
Guidelines, as amended (Exhibit B), 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 TAMU-CC
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, 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.
Business Incentive Agreement between The Corpus Christi B Corporation and TAMU-CC
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28. Sole Agreement. This Agreement constitutes the sole Agreement between Corporation and
TAMU-CC. 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 teens claims. Termination of this Agreement will not release either party from any
claim that accrued prior to the effective date of termination.
30. Limitations. The Parties are aware that there are constitutional and statutory limitations on
the authority of TAMU-CC (a State agency) to enter into certain terms and conditions of this
Agreement, including, but not limited to, those terms and conditions relating to liens on TAMU-
CC's property; disclaimers and limitations of warranties; disclaimers and limitations of liability for
damages; waivers, disclaimers and limitations of legal rights, remedies, requirements and
processes; limitations of periods to bring legal action; granting control of litigation or settlement to
another party; liability for acts or omissions of third parties; payment of attorneys' fees; dispute
resolution; indemnities; and confidentiality (collectively, the "Limitations"), and terms and
conditions related to the Limitations will not be binding on TAMU-CC except to the extent
authorized by the Constitution and the laws of the State of Texas. Neither the execution of this
Agreement by TAMU-CC nor any other conduct, action, or inaction of any representative of
TAMU-CC relating to this Agreement constitutes or is intended to constitute a waiver of TAMU-
CC's or the State's sovereign immunity to suit.
31. Conflict of Interest. By executing this Agreement, Corporation and each person signing
on behalf of Corporation certifies, and in the case of a sole proprietorship, partnership or
corporation, each party thereto certifies as to its own organization, that to the best of their
knowledge and belief, no member of The Texas A&M University System or The Texas A&M
University System Board of Regents, nor any employee, or person, whose salary is payable in
whole or in part by The Texas A&M University System or its members, has direct or indirect
financial interest in the award of this Agreement, or in the services to which this Agreement
relates, or in any of the profits, real or potential, thereof.
32. Entire Agreement. This document constitutes the entire agreement between TAMU-CC
and Corporation. This document supersedes all oral or written previous and contemporary
understandings or agreements relating to matters contained herein. This Agreement may not
be amended or otherwise altered except by mutual agreement in writing signed by TAMU-CC
and Corporation.
Business Incentive Agreement between The Corpus Christi B Corporation and TAMU-CC
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Corpus Christi B Corporation
By:
Scott Haitis
President
Date: o
Attest:
Rebecca Huerta
Assistant Secretary
PROVED AS TO FORM:
Assistant City Attorney Date
Texas A&M University — Corpus Christi
JCL�p� By: �h,� 22%re-r?
Kelly I Iler, A.D.
President / CEO
DZ E Date:
THE STATE OF TEXAS
COUNTY OF NUECES
iMWH Y5 AUTNORI2El�
3r MuNclL
CFr,RFTACV
This instrument was acknowledged before me on �fafkia 4, 2021 by Dr. Kelly Miller,
President and CEO of Texas A&M University -Corpus Christi, a member of the Texas A&M
University System, an agency of the State of Texas, on behalf of the university.
MARY E GONZALEZ
z
Notary Puhtic
3.11-2923
r1. �
`••.+�,�..��P,` STATE OF TEXAS
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Business Incentive Agreement between The Corpus Christi B Corporation and TAMU-CC
re: Lone Star Unmanned Aircraft Systems Center
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EXHIBIT A — TAMU-CC PROPOSAL
Executive Summary
Texas A&M University -Corpus Christi requests $4 million from the Corpus Christi Business
and Job Development Corporation to expand the University's Lone Star Unmanned Aircraft
System Center of Excellence & Innovation (LSUASC) and further grow economic
development opportunities related to drones in Corpus Christi. LSUASC advances the
integration of drone technologies across educational, public, and commercial agency
interests; provides an economic stimulus to attract related industry partners to Texas; and,
informs governing agencies on drone operations in the National Airspace System.
LSUASC is one of seven Federal Aviation Administration (FAA) drone test sites in the
United States. The Texas A&M University System Board of Regents established Lone Star
UAS in the Fall of 2013 as a research center at Texas A&M University -Corpus Christi with
support from the Corpus Christi Business and Job Development Corporation. Our center is
a global partner for research, development, testing and evaluation of drone technologies
across educational, public and commercial agency interests. LSUASC supports the
aeronautical research needs of research institutions, private -sector service providers, non-
profit corporations, and local, state and federal agencies. LSUASC capabilities include:
• Five story, 320,000 cubic foot netted structure
• Fully Operational Mission Control
• Mobile Beyond Visual Line of Sight infrastructure
• ESIL — Electronic Systems Integration Lab
• Mobile Operations Center
• Radar Array Capabilities
• Custom 3D Printing
• Fleet of small UAV's
• Sensors
LSUASC also provides an economic stimulus to attract related industry partners to Texas
and informs governing agencies regarding drone operations in the National Airspace
System.
Texas A&M University -Corpus Christi is thankful for the Business and Job Development
Corporation's generous support in the past that has allowed the University to expand
research, engineering degree programs and drone -related initiatives. Most recently,
support from the Business and Job Development Corporation helped with the addition of
civil and industrial engineering degrees to support the growing needs of the local economy.
In addition to the $2 million in funding provided by the Business and Job Development
Corporation, $2.3 million was secured in the last legislative session to support these
programs, showing confidence in Texas A&M University -Corpus Christi's efforts to meet
the workforce development needs of our economy.
Exhibit A —page 1
Proposed Programmatic Initiatives
The overall mission of this request is to strengthen and expand LSUASC and its capabilities
for developing economic opportunities in the Coastal Bend.
Beyond -Visual -Line -Of -Sight (BVLOS) StudX
To make Corpus Christi an approved Beyond -Visual -Line -Of -Sight (BVLOS) site that will
attract more drone -related businesses to consider relocating to our city, we must first
conduct an airspace study. Much of the airspace surrounding Corpus Christi is restricted
for either Military or Commercial Aviation (Airport) use. The cost of this study will include
partial cost of the staff time needed to conduct the study, such LSUASC personnel as the Air
Space Coordinator, Program Director for Operations, Associate Director for UAS, etc. In
addition, this access will fund one additional LSUASC position, an Aviation Safety Officer,
creating a new job instead of simply modifying existing jobs for new purposes.
The purpose and significance of this study is to identify airspace that can be accessed by
LSUASC for public or commercial use. Depending on the classification of the airspace,
controlled or public, will either allow or prevent operations. LSUASC will conduct this
study to find these areas where we could perform routine operations, which areas are
accessible, and how to deconflict it for development. This will include contacting the
proper FAA, Department of Defense, and protected infrastructure entities (Port of Corpus
Christi, oil and gas companies, etc.) to identify issues and concerns with potential airspace
usage. Additionally, LSUASC would also develop use cases for the BVLOS capabilities
(Inter/Intrastate transport, Commercial Services, Public safety, etc.). After use case
development, LSUASC would work with the FAA for permissions needed to conduct BVLOS
operations. Companies would then be able to come to Corpus Christi and use our airspace
rather than traveling to other major cities.
Second Mission Control Center
A second Mission Control Center (MCC) would also be located in the University's newly
acquired building in downtown Corpus Christi. This second operations center will benefit
from being located near and working with our center for emergency management. The
vision is to create a training and development catalyst for innovative technologies, best
practices and effective & efficient processes for drone operations.
The MCC will include a Thales USA, Inc. designed and LSUASC equipped, purpose-built
state-of-the-art Operations Center to support research, development, routine and
emergency response operations, testing, and evaluation of UAS technologies. Given the
dynamic nature of the UAS industry, this center will need to be modular, remotely
accessible, secure, resilient, and scalable. Thales' Operations Center design for LSUASC,
illustrated in Figure 1, is predicated on deployed, operationally proven components
engineered to provide advanced autonomous services, systems monitoring, test and
validation, and operations support. The design and operations of the Operations Center
includes:
Exhibit A — page 2
SUppUrt
Sy Stems
• A decomposition of the system architecture into fundamental components,
major hardware,and software components
• Interrelationships between major hardware and software components
• A service -to -function mapping
• An approach to interfacing with other systems and communications
requirements
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Figure 1- LSUASC MCC System Architecture
The MCC system architecture features four operational capabilities to provision traffic
management services, support, and logistics. They are interconnected via a
communication backbone to help real-time and near real-time data exchanges
between the systems. These include the Operations Center, CNS Infrastructure, UAS
Operator Infrastructure, and the Support Systems.
• The Operations Center is the core of the MCC. It consists of the Operations Room
which hosts the physical components that allow users to monitor and control all
aspects of the system, and the Cloud Services which are implemented using a
proven cyber-secure cloud infrastructure.
• The UAS Operator Infrastructure includes all air/ground communications
equipment enabling the communication between UAV and its ground control
station, the ground infrastructure (which provides the backhaul network), and
the surveillance infrastructure (which provides detection and tracking of
aircraft).
• UAS Operator infrastructure is composed of the UAS, AUS Traffic Management,
and other services used to run a mission and includes all LSUASC, emergency
response/public safety, or research customer aircraft and equipment
Exhibit A — page 3
Support Systems makes up all applications to monitor, control, and test the
Operations Center and are co -hosted by the same cloud infrastructure as the
Cloud Services.
In addition, this access will fund one new LSUASC position, a Senior Software Developer
instead of simply changing an existing job for new purposes. This person will handle
working day to day with Thales during the installation and implementation of MCC Systems
Architecture and maintenance, once installed.
Along with a BVLOS study allowing more airfield access near the Flour Bluff location, this
development would directly correlate with the newly acquired airfield access and allow for
more extensive research and expansion.
Supporting Centers with Drone -Related Activities
While LSUASC is the lead center responsible for the integration of drone technologies
across educational, public, and commercial agency interests and the economic
development opportunities related to drones, several other centers at Texas A&M
University -Corpus Christi support LSUASC by providing additional expertise. A portion of
each of the following center's time and effort will be directed at drone -related innovation,
technology and economic development.
Office of Economic Development and Industry Partnerships
The Office of Economic Development and Industry Partnerships, a part of the Division of
Research and Innovation at Texas A&M-Corpus Christi, will serve as a catalyst for economic
development with a focus on drones and autonomous systems. It will act as an innovation
and technology transfer hub for South Texas. Its mission is to cultivate a market -
translatable culture of innovation promoting business development and an entrepreneurial
workforce. This office will facilitate partnerships with the private sector and will
complement LSUASC's efforts to attract drone -centered businesses to Corpus Christi. This
work will be the seed for a drone innovation district (i.e. a collaborative industry/research
work environment); the first of its kind in South Texas. The office will work closely with
regional economic development agencies to accelerate job creation and to help small
businesses and young entrepreneurs through the:
1) fostering of research and development activities by identifying, evaluating,
protecting and managing intellectual property for commercialization and start-up
purposes,
2) development of industry partnerships around new product development programs,
and
3) development of proven -to -work training programs for local entrepreneurs
including, but not limited to, coaching, networking and product pitching.
Exhibit A — page 4
Innovation in Port Studies (iPORTs)
The mission of the Innovation in Port Studies Institute (iPORTs) is to promote the economic
development of the region around port -related industries and the development of a skilled
workforce for such businesses. LSUASC and iPORTs will work jointly on developing and
deploying drone -related technologies for relevant industries. From drone -based fog
navigation to security and surveillance, the innovation and economic opportunities are
unlimited. iPORTs will advance, develop and disseminate knowledge in port -related
sciences and technologies. With a strong commitment to excellence and international
leadership in education, training, research and commercialization of related port studies,
iPORTs will become a multidisciplinary catalyst for related domains. Working closely with
the Port of Corpus Christi and relevant industries, iPORTs will actively engage in the
following:
1) engineering and development of innovative technologies related to air, land and
seaports; particularly the Port of Corpus Christi,
2) port -inspired business development in Corpus Christi and the South Texas region
leading to increased job opportunities and economically sound businesses,
3) training and education of the workforce of the future, including certifications, in port -
related fields, and
4) commercialization and new venture development of intellectual property.
Center of Innovation in Emergency Management (CIEM)
Texas A&M University -Corpus Christi and the Texas Division of Emergency Management
(TDEM), in collaboration with the City of Corpus Christi and Nueces County, are partnering
to establish a one of its kind CIEM. In addition to an Emergency Operations Center (EOC),
this innovative facility will include a research and development center for emergency
management and will be located in the downtown building to capitalize on its central
location, sturdy structure, and the proximity of LSUASC and its MCC. LSUASC has been
actively participating in emergency response and recovery efforts since its founding. This
includes join drone missions with TDEM and Texas Task Force One.
The vision is to create a training and development catalyst for innovative technologies, best
practices and effective & efficient processes for emergency management. This will include
resiliency, preparedness, response, recovery and mitigation. The EOC will feature state of
the art infrastructure. CIEM will host and facilitate the interaction among experts from
different fields and community sectors with a special focus on:
1) developing skills for workforce and professionals: Real -world hands-on training
curricula will be developed targeting different audiences including first responders,
city & county officials, etc.
2) building a robust and resilient community for strong economy: Given the geographic
location of the region and its vulnerability to natural emergencies, it is critical to
ensure that resiliency is interwoven into all levels of the society for economic
Exhibit A — page 5
stability and growth. CIEM, through research, development and outreach, will
promote and support the resiliency of the Coastal Bend.
Needs Statement
Texas A&M University -Corpus Christi requests that the Business and Job Development
Corporation support modernization and infrastructural needs related to the expansion of
LSUASC and drone -related efforts of the Office of Economic Development and Industry
Partnerships, iPORTs, and the Center of Innovation in Emergency Management to
contribute to the expansion of economic development opportunities related to drones in
Corpus Christi. Growing this program and its operations is a direct investment in the
economic development of the Coastal Bend, as well as its attractiveness to a growing
business market in drone research and innovation.
1. Beyond -Visual -Line -Of -Sight (BVLOS) airspace study [$250,000]
o One new position (—$116,000 annually salary and benefits)
2. Second Mission Control Center in newly acquired University building in downtown
Corpus Christi [$2.13M]
o Two years of Thales support ($1.5M)
■ Implementation of system architecture and supporting labor
■ Provision of back -end services
■ Support services applications and two-year support agreement
o Purchase of hardware (computers, monitors, displays, etc.), software and
licenses (—$120,000)
o One new position (—$130,000 annual salary and benefits)
o Space renovation and buildout in the downtown building for 2,500 square
feet at $152/square foot ($380,000)
3. Supporting centers with drone -related activities will be established within the
downtown building to facilitate collaboration and integration with LSUASC's efforts
[$1.62M]
o Costs include renovating space, buildout needs and a prorated portion based
on anticipated square feet of addressing IT/AV, electrical, plumbing, roof and
elevator requirements within the downtown building estimated at
$152/square foot
o Dedicate the University's building in the Flour Bluff district to drone -related
business incubation and move non -drone -related business incubation to
downtown building
o Establish the Office of Economic Development and Industry Partnerships,
iPORTs, and the Center of Innovation in Emergency Management within the
downtown building to provide additional expertise for drone -related
technology, innovation and economic development.
Exhibit A — page 6
Building Budget. including Match:
$3 MILLION -
NEW LAR
ADDITIONAL
FUNDING
MATCH
RELATION TO
Start-up Years 1 & 2 Salaries and
(Years 1 & 2
(Years 1 & 2
TOTAL LSUAS
EM/DOWNTOWN
Wages
total)
total)
MATCH
PROJECT
Program Director - Emergency
Management
$220,000.00
$220,000.00
Engineer - Rapid Deployment
Development
$170,000.00
$170,000.00
Advanced Level Pilot
UAS Pilot I or II (20% on the match)
$120,000.00
$30,000.00
$150,000.00
Preferred
Advanced Level Pilot
UAS Pilot I or II (20% on the match)
$120,000.00
$30,000.00
$150,000.00
Preferred
Chief -Aviation Maintenance
$170,1300.00
$170,000.00
Facilities Coordinator III/Inventory
Control
$128,320.00
$128,320.00
Software App Developer IV 100%
$195,810.00
$195,810.00
1 Data Capabilities
Software App Developer II 100%
$150,000.00
$150,000.00
Data Capabilities
Airspace Manager 100&
$200,000.00
$200,000.00
Safety Capabilities
Additional Admin
Associated with
Admin Associate 100%
$70,000.00
$70,000.00
Second Location
Additional Effort/Line
Director 10 0
$37,200.00
1 $37,200.00
1 for Director
Additional
Effort/Training for
OPS Director 10%
$23,200.00
$23,200.00
OPS Director
Students - Years 1 & 2
Additional Student
2 Student Interns
$43,168.00
$4,832.00
$48,000.00
Hours
Consideration for
1 Graduate Research Assistant,
Tuition on Advanced
Salary & Partial Tuition
$28,800.00
$5,170.00
$33,970.00
Candidates
Travel - Years 1 & 2
Additional Travel
Disaster Response Travel and
Related to
Disaster Training Travel (Years 1 & 2)
$40,000.00
$40,000.00
$80,000.00
Downtown Efforts
Other Operating Expenses - Years 1
&2
Exhibit A — page 7
Direct support
Increased Support
Counties, Cities o Texas Agencies, $358,032.00 I $41,968.00 $400,000.00 I Downtown Effort to
Capital Expenditures
Radar Capabilites - Detect and Avoid,
Aircraft
$100,000.00
$100,000.00
Radar Capabilities - Rapid Response
and Mobility
$100,000.00
$100,000.00
Radar Capabilities - Weather
$100,000.00
law
$100,000.00
Air Space Studies
$300,000.00
$300,000.00
Data Capabilities Software and
Simulation
$300,000.00
$300,000.00
Data Capabilities Equipment
$150,000.00
$150,000.00
Equipment for Specific Preparedness
in South Texas
$400,000.00
$400,000.00
Equipment Other
$151,680.00L.
$151,680.00
TOTAL BUILOING
INVESTMENT
REQUESTED AREA
REMAINING UNIVERSITY
MATCH
Building Purchase
$2,300,000.OD
$2,300,000.00
Building Core
Roof Replacement
$1,000,000.00
$378,378.38
$621,621.62
Elevator replacement
$700,000.00
$264,864.86
$435,135.14
Basic building system replacements and code compliance
structural
$500,000.00
$189,189.19
$310,810.81
Mechanical
$2,000,000.00
$756,756.76
$1,243,243.24
Plumbing
$85Q000.00
$321,621.62
$528,378.38
Electrical
$1,000,000.00
$378,378.38
$621,621.62
IT/AV
$750,000.00
$293,793.78
$466,216.22
Architectural Buildout
$4,500,000.00
$1,702,702.70
$2,797,297.30
Funds Requested
Requested Area UniversityMatch
Exhibit A — page 8
EXHIBIT B
CORPUS CHRISTI B CORPORATION GUIDELINES & CRITERIA
FOR GRANTING BUSINESS INCENTIVES
WHEREAS, the attraction of long-term investment and the establishment of primary
jobs in Corpus Christi would enhance the City's economic base bringing new revenues
into the economy; and,
WHEREAS, Corpus Christi must compete with other communities across the nation
currently offering a variety of business incentives to attract jobs and business; and,
WHEREAS, the Texas Legislature in Section 4B 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, ("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 8, 2016, residents of the City of Corpus Christi ("City") passed
Proposition 1, Adopt Type B Sales Tax to Replace Expiring Type A Sales Tax, 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 20 years;
WHEREAS, Proposition 1 limited the use of the 1/8th cent sales tax to the following:
1) 50% for economic development, specifically the promotion and development
of new and expanded business enterprises to the full extent allowed by Texas
law;
2) Up to $500,000 annually on affordable housing; and
3) Balance of proceeds to be used for the construction, maintenance and repair
of arterial and collector streets and roads;
WHEREAS, the 1/8th cent sales tax authorized by passage of Proposition 1 was
subsequently enacted by the City Council and filed with the State Comptroller of Texas,
effective April 1, 2018, to be administered by the City's Section Type B board of
directors (Corpus Christi B Corporation Board);
WHEREAS, it is stated desire of the Corporation's Board of Directors that funds
approved for the promotion and development of new and expanded business
enterprises can only be used for any eligible project under Texas Local Government
Code Chapters 501 and 505.
Exhibit B — page 1
WHEREAS, to assure a common, coordinated effort to promote economic development,
these Guidelines and Criteria have been circulated among the City of Corpus Christi,
other governmental entities, the Corpus Christi Regional Economic Development
Corporation, area chambers of commerce and the Corpus Christi community in general
for consideration;
NOW, THEREFORE, BE IT RESOLVED by the Corpus Christi B Corporation that these
Guidelines and Criteria for Granting Business Incentives be adopted:
Section 1. Definitions.
(a) "Agreement" means a contractual agreement between a property owner and/or
lessee within the City of Corpus Christi City Limits and the "Corporation" for the
purposes of granting business incentives.
(b) "Basic Manufacturing or Service Facility" means buildings and structures, including
fixed machinery and equipment not elsewhere described, used or to be used for the
production of products or services.
(c) "Board" means the Corpus Christi B Corporation Board (Section 4B Board) as
established by "City" Resolution 031343 and pursuant to the "Act".
(d) "Business Incubator" means a program established with the primary objective of
improving the potential success of emerging primary employers, preferably through the
transfer or application of technology, and in doing so, creates jobs, ensures self-
sufficiency and invigorates the local economy. Through such programs, small business
owners typically have access to assistance which might include items such as rental
space, administrative support services, on -site business consulting, workshops,
enterprise facilitation, and business management seminars.
(e) "Capital Investment" means the increase in the assessed value of an eligible
property as a result of "expansion" or "modernization" of an "existing facility" or
construction of a "new facility." It does not mean or include "deferred maintenance".
(f) "City" means the City of Corpus Christi, Texas.
(g) "CCREDC" means the Corpus Christi Regional Economic Development Corporation
which serves as a professional economic development advisor to the City, the
Corporation, and the Board:
(h) "Corporation" means the City of Corpus Christi B Corporation established by "City"
Resolution 031343.
(i) "Deferred Maintenance" means improvements necessary for continued operations
which do not improve productivity or are performed to meet regulatory obligations.
Exhibit B — page 2
0) "Economic Driver" means a project that will add at least 50 full time employees and at
least 50% of their sales and revenue come from outside a 50-mile radius from the
intersection of Staples Street and Leopard Street. These revenues will increase the
wealth of the area.
(k) "Economic Life" means the number of years a property improvement is expected to
be in service in a "facility'.
(1) "Executive Director" means the City Manager or his/her designee.
(m) "Expansion" means the addition of buildings, structures, fixed machinery or
equipment for the purposes of increasing capacity.
(n) "Facility" means property improvements completed or in the process of construction
which together compromise an integral whole, as well as new fixed machinery or
equipment.
(o) "Jobs" means employment of a full-time employee, contractor, consultant, or leased
employee who has a home address in the Corpus Christi MSA.
(p) "Living wage" means the annual amount determined by the U.S. Department of
Health and Human Services for the Corpus Christi area as being at the poverty level for
a family of three, divided by 2,080 hours per year.
(q) "Modernization" means the replacement and upgrading of existing "facilities" which
increase the productive input or output, updates the technology or substantially lowers
the unit cost of the operation, and extends the economic life of the "facilities' .
Modernization may result from the construction, alteration or installation of buildings,
structures, fixed machinery or equipment. It shall not be for the purpose of
reconditioning, refurbishing, repairing or completion of "deferred maintenance".
(r) "New Facility" means a property previously undeveloped which is placed into service
by means other than or in conjunction with an "expansion" or "modernization".
(s) "Owner" means the owner of a "facility" or "program" subject to business incentives.
If the "facility" is constructed on a leased property, the owner shall be the party which
owns the property subject to the business incentive. The other party to the lease shall
join in the execution of the "agreement" but shall not be obligated to assure
performance of the party receiving business incentive.
(t) "Petrochemical Facility" means buildings and structures, including fixed machinery
and equipment, the primary purpose of which is or will be the manufacture or
processing of petrochemicals or fuels by physical or chemical change.
(u) "Primary Employer" means a business in which at least 50% of its goods and/or
services are sold to customers that are located more than 50 miles from the intersection
Exhibit B — page 3
of Staples Street and Leopard Street and (1) whose goods and/or services are in one of
the following two -digit NAICS codes 31-33 Manufacturing; 42 Wholesale Trade; 48-49
Transportation and Warehousing; 52 Finance and Insurance; 54 Professional and
Technical; or 55 Management of Companies; or (2) which is a supplier of who supplies
at least 50% of its non -retail goods and/or services to local primary employer(s) that are
located within a 50 mile radius away. Professional services companies qualifying for
incentives must have more than 50% of their contract work (i.e. the location where the
physical work/construction/manufacturing, etc. resulting from the professional services
is done) located outside of a 50-mile radius of the region. The inability of a company to
satisfactorily document the "primary" nature of the jobs shall be deemed ineligible for
this incentive agreement payments.
(v) "Regional Distribution Center Facility" means buildings and structures, including
fixed machinery and equipment, used or to be used primarily to receive, store, service
or distribute goods or materials owned by the Facility operator where a majority of the
goods or services are distributed to points beyond a 50-mile radius of Nueces County.
(w) "Regional Telecommunications/Data Processing Center Facility" means buildings
and structures used or to be used primarily for the provision of telecommunication or
data processing services by the Facility operator where a majority of the services are
provided to points beyond a 50-mile radius of Nueces County.
(x) "Research and Development Facility" means buildings and structures used or to be
used primarily for the purpose of product developmental engineering, testing and
evaluation.
(y) "Retention" means to retain existing primary employers so that they continue their
business operation within the Corpus Christi city limits and its extraterritorial jurisdiction
(ETJ).
(z) "Small Business" means an employer that employs 49 or less full time (2,080
hours/year) permanent jobs at the time of application.
(aa) "Small Business Primary Employer" means a primary employer that employs 49 or
less full time permanent jobs at the time of application and complies with the
requirement(s) set forth under "Definitions" letter (z).
Section 2. Mission & Goals
(a) It shall be the mission of the Board in administration of these Guidelines and Criteria
to promote, encourage and enhance the expansion of the City tax base and economy
through granting business incentives.
(b) The goals of the Board in administration of these Guidelines and Criteria are to:
- Create and retain jobs;
Exhibit B — page 4
• Expand the City tax base and economy;
• Strengthen and diversify the local economy.
(c) The role of the Corporation in carrying out this mission and goals is to review and
approve applications for business incentives, recognizing that the Corpus Christi
Regional Economic Development Corporation exists for the purpose of organizing,
coordinating and leading the City's economic development efforts. CCREDC shall be
responsible for accepting and processing all Type B incentive applications and
forwarding to the Board and Corporation with recommendations for action. When
applications are received, CCREDC will provide a courtesy copy to the Mayor, the
Mayoral appointee to the CCREDC Board of Directors, and the City Manager. All
completed applications filed with CCREDC that meet the qualifying standards of the
Type B Program, provided that allocated and budgeted funds are available, will be
presented to the Type B Board along with a recommendation on course of action at an
appropriate meeting following the review of the CCREDC Board. CCREDC will provide
a monthly report to the Board of any application that was deemed ineligible and the
reason.
Section 3. Business Incentives Authorized.
(a) Primary Employer and Small Business Primary Employer Business Incentives
Authorized. Incentives granted by Agreement under these guidelines pursuant to
Section 4 below may include, but are not limited to the following:
• land, facilities, equipment & infrastructure grants;
• loan participation/guarantees;
• direct low interest loans;
• rent subsidies;
• relocation and moving expense grants;
• job training grants/loans;
• business incubation activities; and
• Projects located in a tax increment reinvestment zone will be given preference.
(b) Small Business Incentives Authorized. Incentives granted by Agreement for Small
Business under these guidelines pursuant to Section 5 below may include, but are
not limited to the following:
• Small Business start-up grants/loans;
• Business Incubation grants/loans; and
• Business Incubator development.
(c) Education Skills Development (defined below)
Section 4. Primary Employer Business Incentives.
(a) Authorized Facilities. A Capital Investment for a Facility may be eligible for
incentives by Agreement if it creates or retains jobs for a Primary Employer. Incentives
Exhibit B — page 5
may be granted for land or Capital Investment related to either New Facilities or
improvements to existing Facilities for the purpose of Modernization, Expansion, or for
Capital Investment necessary for the retention of an existing primary employer. The
following types of property shall be ineligible for business incentives: inventories;
supplies; tools; furnishings and other forms of movable personal property (not including
capital production equipment); vehicles; vessels; aircraft; deferred maintenance
investments; improvements to real property which have an economic life of less than 15
years; and, with the exception of the City of Corpus Christi, property owned or used by
the State of Texas or its political subdivisions or by any organization owned, operated or
directed by a political subdivision of the State of Texas.
(b) Annual Certification. The Business Incentive Agreement shall require annual
certification of capital investment as required by the Agreement.
(c) Completion of Facility Construction. The completion of Facility construction or
installation of Capital Investment shall be deemed to occur upon the earliest of the
following events (as determined by the Board):
• when a permanent certificate of occupancy is issued for the project;
• when commercial production of a product or provision of a service is achieved at the
Facility;
• when the architect or engineer supervising construction issues a certificate of
substantial completion, or some similar instrument; or,
• two (2) years after the date of the Agreement.
(d) Average Wage Requirement. In determining an incentive based on net jobs, the
following matrix shall be considered as a guiding principal for incentive reviews.
Gross Payroll Incentive per Job for employees, leased employees, contractors, and
consultants. Benefits shall not be included in the gross payroll calculations.
<$30,000 per job
A maximum of $750 per net Job*
$30,000 to $40,000 per job
$751 to $5,000 perjob*
$40,001 to $50,000 per job
$5,001 to $10,000 per job*
>$50,000 per job
$10,001+ per job*
*up to, or not -to -exceed amounts, based on projected economic impact report and
CCREDC staff recommendations.
(e) For each project an economic impact report using accepted industry standards will
be completed. For purposes of calculating the impact, only direct and indirect (not
induced) revenue impacts shall be considered. As a guiding principle, no company
creating fewer than 50 net jobs (FTEs) should receive more than 50% of the positive
economic impact value calculated and paid over a five-year period.
Companies creating over 50 net jobs may be eligible to receive greater than 50% of the
net positive economic impact. As a guiding principle, major employment projects (over
50 net jobs) will have a significant city-wide economic impact and may be generally
Exhibit B — page 6
considering multiple cities or metro areas and shall be designated as Economic Driver
projects. When there is clear and direct evidence that the City is in direct competition
with another region for such a major project (over 50 net jobs) the guiding principle may
require the Board and City to extend incentives offers beyond 50% of the direct and
indirect economic impact of the project. The CCREDC staff will present to the Board a
recommendation including the summary economic impact report, based on careful
analysis and negotiations with the applicant company along with a clear
acknowledgement when a project may require (or has requested) incentives in excess
of the 50% direct and indirect positive benefits for the project. As a further guiding
principle, incentives should not exceed 100% of the direct and indirect project benefits
unless clear evidence exists that the project will bring further investments or is a "game
changer" deal that will significantly and positively impact the wider Corpus Christi
economy.
(f) Job Creation Qualification. In order to be eligible for business incentives, the planned
Capital Investment must create and maintain the minimum number of 50 full-time (2,080
hours/year) permanent jobs within the agreed time of an effective date as set out in the
Agreement. Annual validation of wage rates shall be provided as set forth in Section 11
(b) herein. With regard to job training, an exception to this requirement may be granted
by the Board on a case by case basis.
(g) Health Insurance. To qualify for incentives, a primary employer shall certify that it
has offered a health insurance program that meets federal and/or state standards for its
employees during the term of the Agreement.
Section 5. Small Business Incentives.
(a) Authorized Projects/Dedicated Allocation. For projects which may not meet the
requirements of Section 4 above, business incentives may also be granted to Small
Business to create jobs through Small Business start-up and/or Business Incubation.
On an annual basis, the Board may budget a separate allocation for funding all small
business start-up and/or business incubation incentives.
(b) Wage and Job Creation Requirements. Wage and job creation requirements for
Small Business start-up and Business Incubation shall be evaluated and determined by
the Board on a case by case basis.
(c) Each Small Business incentive application shall be accompanied by an economic
impact report prepared by CCREDC and each company shall adequately report job and
payroll numbers to CCREDC for reporting and compliance. The CCREDC staff shall
prepare a recommendation to the Board on an appropriate course of action on levels of
incentives to be offered.
Section 6. Small Business Primary Employer Incentives.
Exhibit B — page 7
Authorized Projects/Dedicated Allocation. For projects which may not meet the
requirements of Section 4 above, business incentives may also be granted to Small
Business Primary Employers to create jobs through Small Business start-up and/or
Business Incubation. On an annual basis, the Board may budget a separate allocation
for funding all small business start-up, expansion, retention, and/or business incubation
incentives.
Section 7. Small Business Support
(a) Small business support programs are programs designed to help small businesses
grow in the community to create jobs. These programs may include technical
assistance, business assistance, loan programs, and internships.
(b) Internships will be funded at a maximum of 50% of the wage plus FICA.
(c) The programs must report at a minimum; the number of interns, the companies
using interns, intern duties, whether the intern received a job at that company, and
whether the intern received a job in the area. Companies cannot use this as a
supplement to their workforce. Interns must be used in their academic major field.
Internship programs shall not be used as a substitute for permanent job or position
creation. Companies cannot use interns more than two years without creating a job. If
they do not create a job in that time they will be removed from the list for one year. No
company shall receive an intern if another company, who has never had an intern, is
requesting one.
(d) Small business support program grants will not automatically be renewed;
organizations must reapply annually.
Section 8. Education/Skills Development.
(a) Requests for education/skills development grants must be made through the
application process adopted for all other business applicants.
(b) Education/Skills Development projects must target job skills that are currently
needed or will become needed within the next three years as identified by WorkForce
Solutions, Inc.
(c) The Education/Skills Development grant must be matched by the applicant by at
least 50% of the cash contributed. In -kind donations/contributions will not count toward
this minimum.
(d) The programs must report the number of students, the number of graduates, and
their location and average salary when they are ultimately hired. Failure to do so may
jeopardize future applications.
(e) Economic Impact, given the unique nature of these projects, may include direct,
indirect and even induced economic impact, but awarded incentive grants should be
matched with the educational institution's actual cash (not in -kind) participation, or
exceed 50% of the value of the economic impact.
(f) The grant shall be used for capital expenditures and not for operations.
(g) Economic impact report should be completed by an independent third party deemed
acceptable by CCREDC, on behalf of the Board.
Exhibit B — page 8
(h) Grants for internships made through the Education/Skills Development portion of the
sales tax fund must meet following requirements:
• Requests must be made through the application process adopted for all
other business applicants.
• The internships must target job skills that are currently needed or will
become needed within the next three years as identified by WorkForce
Solutions, Inc. unless it is under the internships for business.
• The companies using interns must pay a portion of the wage and
applicable FICA payroll tax portion
• The internship must be through an approved academic or training program
• The grant agreement will be with that academic or training program.
• The grant recipient must implement a program to educate companies that
can make use of interns, of the program specifics and how those
companies may participate.
Section 9. Certain targeted infrastructure
These projects will promote or develop new or expanded business enterprises. The
grants are limited to streets and roads, rail spurs, water and sewer utilities, and electric
utilities, gas utilities, drainage, site improvements, and related improvements,
telecommunications and internet improvements, especially in locations that eliminate
blight or areas of high unemployment such as Texas Enterprise zones, Tax Increment
Reinvestment Zones (TIRZ #2 and #3), other reinvestment zones, and Opportunity
Zones.
Section 10. Other Projects.
Projects under this section can be any project allowed under Texas Local Government
Code Chapter 505.
Section 11. Universal Requirements.
(a) Project Implementation. An authorized project funded by a business incentive under
this Section must be implemented within two (2) years from the date of the Agreement.
(b) Location or Residency Requirement. Facilities or land may be eligible for business
incentives only in the event that any associated Capital Investment is located within the
City. Property which is covered by an executed industrial district agreement shall be
considered to be within the City for purposes of determining if a project meets location
requirements. With regard to job training incentives, these may be eligible outside of the
City only in the event that at least 51 % of the jobs created during the term of the
Agreement are held by residents of the City. Incentives for any property not within City
limits, including properties in the Industrial District will require permission from the
governing body who controls the property in accordance with Texas law.
Exhibit B — page 9
(c) Living Wage Requirement. In order to count as a permanent full-time job under this
incentive program, the job should provide a "living wage" for the employee. The target
living wage under this abatement program is that annual amount equal to 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.
The City has the right to adjust the living wage target under these Guidelines and insert
a specific target in each property Agreement to govern the abatement offered under that
Agreement.
(d) Health Insurance. To qualify for any incentive, an employer shall certify that it has
offered a health insurance program for its employees during the term of the Agreement
and in compliance with state and federal standards for healthcare coverage.
(e) Utilization of Local Contractors and Suppliers. Developer must agree 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 for elements that are not owner -provided or owner affiliate -provided
being paid to local contractors and suppliers within the 50 mile radius of Leopard Street
and Staples Street intersection. 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 the 50-mile radius of Leopard Street
and Staples Street intersection. The Developer agrees, during the construction of the
Project and for four years after Completion, to maintain written records documenting the
efforts of the Developer to comply with the Local Requirement.
(f) Utilization of Disadvantaged Business Enterprises. Developer must agree 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 elements of the Project that are not owner -provided or owner affiliate -
provided. 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. The Developer agrees to a goal
of 30% of the total dollar amount of all construction contracts and supply agreements, for
elements of the Project that are not owner -provided or owner affiliate -provided, being paid
to disadvantaged business enterprises, with a priority made for disadvantaged business
enterprises which are local. The Developer agrees, during the construction of the Project
and for four years after Completion, to maintain written records documenting the efforts
of the Developer to comply with the DBE Requirement. 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.
Exhibit B — page 10
(g) Insurance Requirements. Each recipient of business incentives shall carry worker's
compensation insurance and other appropriate insurance coverage as the Board may
determine is appropriate and required in the Business Incentive Agreement.
(h) Performance Agreement. Each recipient of a business incentive will enter into a
performance agreement with the Corporation. The performance agreement will provide,
at a minimum, a schedule of additional payroll or jobs to be created or retained and the
capital investment to be made as consideration for an incentive provided or expenditure
made by the Corporation under the agreement. Additionally, the performance agreement
will specify the terms under which repayment must be made if the business enterprise
does not meet the performance requirements specified in the agreement.
Section 12. Application.
(a) Written Application. Any present or potential Owner or sponsor may request
business incentives by filing an authorized and signed application with the President of
the CCREDC, who will provide a courtesy copy to the Mayor, the Mayoral appointee to
the CCREDC Board of Directors, the City Manager and appropriate City staff.
(b) Contents of Application. The application shall consist of a completed application
form accompanied (when applicable) by the following:
• a general description of proposed Capital Investments to the Facility;
• a descriptive list of the improvements or program for which business incentives
are requested;
• a list of the kind, number and location of all proposed improvements of the
property;
• a map and property description; and,
• a time schedule for undertaking and completing the proposed improvements or
programs.
In the case of a Modernization or Expansion project, a statement of the assessed value
of the Facility, separately stated for real and personal property, shall be given for the tax
year immediately preceding the application. The application form may require such
financial and other information as the Corporation or City deems appropriate for
evaluating the financial capacity and other relevant factors of the applicant.
(c) Feasibility/Economic Impact Study. After receipt of a completed application, the
President of the CCREDC shall cause to be performed an economic impact report. This
report may be completed by CCREDC (or its consultant) using established accepted
economic impact models such as IMPLAN, RIMS II, EMSI, or similar model. This study
shall include, but not be limited to, an estimate of the economic effect of incentives,
including job creation, employment enhancement and capital investment. Once
completed, the study and the application will be forwarded to the Board for review
before consideration of any Agreement. The costs and expenses of the
feasibility/economic impact study shall be borne by the Economic Development
Exhibit B — page 11
Corporation. The economic impact report should clearly identify the direct and indirect
economic impact of each project.
(d) No Business Incentives if Construction or Program has commenced. No business
incentive Agreement shall be approved if the application was filed after the
commencement of any construction, alteration or installation of improvements related to
the proposed Facility Modernization, Expansion or New Facility. Similarly, no business
incentive Agreement shall be approved for any program if the application was filed after
the program has been established or program activity has commenced.
(e) Financial Information. The applicant shall provide to the Corporation, or the
Corporation's appointed agent, the last three years of financial statements —company
and/or personal financial statements for review and evaluation to assess the financial
strength of the applicant. After receipt of the financial statements, the President of the
CCREDC may cause a financial review to be performed. Upon completion, any negative
findings from the financial review will be forwarded to the City Manager and the Board
for review before consideration of an Agreement. The applicant will be allowed to
address, and explain in writing, any negative findings before the Corporation takes
action on an Agreement.
Section 13. Approval.
Reservation of Rights. The Board reserves the right to determine the eligibility of a
project and the terms and conditions of any loan, grant or guarantee based on the
mission, goals and objectives in Section 2 above. Nothing herein shall be construed to
limit the authority of the Board to examine each application for business incentives
before it on a case -by -case basis and determine in its sole and absolute discretion
whether or not the proposed project should be granted any business incentive and
whether or not it complies with these Guidelines and Criteria, is feasible, and whether or
not the proposed business incentives will be to the long-term benefit of the City.
Section 14. Agreement.
(a) Contents of Business Incentive Agreement. The Agreement shall include (when
applicable):
• the estimated value of Capital Investment,
• the commencement date and termination date of the business incentive;
• the proposed use of the Facility, nature of construction, time schedule, map,
property description and improvements list as provided in the application as
required;
• in the case of programs, the proposed program description, targeted employment
market, nature and schedule of activities, facilities and equipment used to carry
out activities, and complete program budget listing all sources of funding and
projected expenditures;
Exhibit B — page 12
the contractual obligations in the event of default, delinquent taxes, recapture,
administration and assignment as provided in these Guidelines or other
provisions that may be required for uniformity or by state law; and,
the number of permanent jobs, and wage/salary minimums for jobs created.
Commencement must occur within the time frame specified and agreed to in the
agreement.
(b) Time of Execution. The business incentive Agreement shall normally be considered
by the Board within 60 days after the applicant has provided all necessary information
and documentation.
(c) Deadline for Execution. If the incentive proposal is approved by the Corporation
Board of Directors, then the Owner will have ninety (90) days from the date the final
Business Incentive Agreement is received by the Owner to execute the Agreement.
Failure to execute the Business Incentive Agreement within ninety (90) days from date
of receipt will result in the Agreement being null and void and of no effect.
Section 15. Recapture.
(a) Failure to Timely Comply and Continue Operations. In the event that the Owner of a
Facility or program fails to timely, fully and completely comply with any one or more of
the Agreement requirements, obligations, duties, terms, conditions or warranties, such
failure shall be an act of default and, if not fully and completely cured and corrected,
Corporation and/or City may terminate the Agreement and pursue all legal remedies as
provided by law. If the Owner is not in compliance during any compliance reviews, then
the Corporation, in its sole discretion, shall determine the incentives that the Owner
shall be required to refund. As a best practice, incentive agreements should include an
appropriate graded scale of penalties negotiated on a case -by -case basis to ensure
applicants adhere to performance goals and to ensure any penalties are reflective of the
level of non-performance.
(b) Employment Verification. Owner shall annually provide documentation, in the form of
quarterly Texas Workforce Commission payroll reports or other mutually acceptable
employment and payroll report, to verify compliance with job and payroll commitments.
The four quarterly reports, required to be filed with the Texas Workforce Commission,
shall be due not later than the fifteenth day after the deadline for filing the fourth quarter
report with the Texas Workforce Commission, each year. Corporation may request
Owner to provide such documentation at any time.
(c) Delinquent Taxes. In the event that the Owner allows its ad valorem taxes to
become delinquent and fails to timely and properly follow the legal procedures for its
protest and/or contest, the Agreement shall terminate and so shall the business
incentives.
(d) Utility Payments. In the event that the Owner allows its utility billing payments to
become delinquent, the Agreement shall terminate and so shall the business incentives.
Exhibit B — page 13
(e) Notice of Default. Should the Corporation and/or City determine that the Owner be in
default according to the terms and conditions of its Agreement, it shall notify the Owner
in writing at the address stated in the Agreement that if such is not cured within 60 days
from the date of such notice (the "Cure Period"), then the Agreement may be
terminated. In the event the Owner fails to cure said default during the Cure Period, the
Agreement may be terminated. If default on new construction occurs at the fault of the
Owner, then the Owner must provide a written explanation of the reason for the default
to the Corporation. This written explanation, and any legitimate reasons for delay, will
be taken into consideration as a possible remedy for the default. The Owner shall also
notify the Corporation, in writing, explaining any delays in completing any required
Agreement milestones as soon as the delays are realized. These Agreement milestones
would include deadlines for completion of new construction, hiring new employees, or
any other required Agreement milestones.
(f) Potential Liability. After exhausting good faith attempts to address any perceived
default during the Cure Period, and taking into account any extenuating circumstances
that might have occurred through no fault of the Owner as determined by the Board,
potential liability under an Agreement may include the immediate return of all money
grants and consideration previously paid, the maximum lawful rate of interest on all
money paid until fully repaid, reasonable attorney fees and costs of court to collect such
money, and the termination of all further obligations made under Agreement. In
addition, City and/or Corporation shall not be liable for any alleged consequential
damages.
Section 16. Administration.
(a) Access to Facility. The Agreement shall stipulate that employees and/or designated
representatives of the City will have access to the Facility or program during the term of
the Agreement for inspection to determine if the terms and conditions of the Agreement
are being met. All inspections will be made only after giving 24-hours prior notice and
will only be conducted in such manner as to not unreasonably interfere with the
construction and/or operation of the Facility or program. Inspections will be made with
one or more representatives of the Owner and in accordance with its safety standards.
(b) Annual Reviews. Business Incentive Agreement reviews will be conducted annually
to ensure that the Owner is in compliance with the provisions of the Agreement. If the
Owner is not in compliance or is in default, then the appropriate provision of the
Agreement, as outlined in Section 9 herein and the Agreement, will be enforced to
recover incentives paid to Owner, unless the Owner remedies the default on or before
the conclusion of any Cure Period.
(c) Annual Evaluation. The City, or designee, acting on behalf of the Corporation, shall
annually evaluate compliance with the Agreement and report possible violations of the
Agreement. As part of this evaluation, the Owner shall provide information sufficient to
ensure compliance.
Exhibit B — page 14
(d) Right to Modify or Cancel. Notwithstanding anything herein or in any agreement to
the contrary, the Board may cancel or modify the Agreement if the Owner fails to
comply with the Agreement.
Section 17. WaiversNariances
The Corporation shall have discretion to vary, alter, and/or waive any guideline or
criteria set forth herein when such variance, alteration, and/or waiver shall be in the
public interest and in furtherance of the purposes and goals of the Corporation as set
forth in its Certificate of Formation, its By-laws, Ordinance 030930, and the Act.
Exhibit B — page 15