06-01-15 Meeting of the La Porte Development Corporation Board of Directors

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Background On 26 January 2015, the 4B Board voted and authorized staff to “ . . . publish 60-day notice of a public hearing to consider awarding an economic development incentive to Gantstein Esquire, LLC, for an amount not to exceed $300,000 or equal to 25% of the project expenditures not to exceed $300,000”. On Thursday, 5 February 2015, staff published public notice in the Bay Area Observer of a hearing to be held more than 60 days later on 13 April 2015. On 13 April 2015, the Directors of the Board voted 6-0 in favor of giving an incentive in the amount not to exceed $300,000 to “Gantstein Esquire, LLC” to develop a new Pipeline Grill at 10003 Spencer Hwy in La Porte, Texas. Development Agreement(s) The City Attorney and staff have prepared two (2) different forms of a development agreement, referred to “Option A” and “Option B” for the Board’s consideration. The managing principal of “Gantstein Esquire, LLC” has approved and signed only “Option A”. Additional information about both Option A and B are provided here: Option A – This development agreement contains the original terms which staff and the Directors of the Board discussed with the principals of Gantstein Esquire, LLC since the earliest discussions up of this proposed project. The conditions of three (3) payments, each for a maximum amount to $100,000, are predicated upon the company’s performance as follows: (1)The LPDC will pay “Gantstein Esquire, LLC” an amount not to exceed $100,000 upon receipt of a Certificate of Occupancy for a Pipeline Grill at 10003 Spencer Hwy and proof of expenditure of at least $1.2 million in infrastructure and site related improvements, (2)The LPDC will pay “Gantstein Esquire, LLC” an amount not to exceed $100,000 upon proof of employment of at least 35 full time employees and 50 part time employees, plus at least $3.75 million in annual taxable retail sales. No payment will be made for annual taxable retail sales in calendar year 2017 which are less than $3.75 million. A pro-rata payment will be made only for annual taxable retail sales of at least $3.75 million. (3)The LPDC will pay “Gantstein Esquire, LLC” an amount not to exceed $100,000 upon proof of employment of at least 35 full time employees and 50 part time employees, plus at least $3.75 million in annual taxable retail sales. No payment will be made for annual taxable retail sales in calendar year 2018 which are less than $3.75 million. A pro-rata payment will be made only for annual taxable retail sales of at least $3.75 million. Option B-- This development agreement contains terms which were introduced by staff to account for market “cannibalization” of existing business from the current restaurants and other food establishments in La Porte. The conditions of four (4) payments, the sum of which will not $300,000 exceed, are predicated upon the company’s performance as follows: