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HomeMy WebLinkAboutO-2007-3046 12 REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: 10/31/2007 Budl!:et ::::::.::' :::::. ~~ Source of Funds: N/A Account Number: N/A Report: Resolution: Ordinance: X Amount Budgeted: N/A Exhibits: Proposed Agreement SUMMARY & RECOMMENDATION Attached you will find a copy of the proposed Agreement with between the La Porte Economic Development Corporation (LPEDC) and WesMor Cryogenic Manufacturing L TO for your review and consideration. The agreement will be considered by the LPEDC at their November 12 meeting. Per the LPEDC By-Laws any expenditure over $15,000 requires City Council approval. This is the same agreement which was reviewed by the Board at their August 27,2007 meeting. The agreement has been signed and returned to us by WesMor. Representatives of the Company were notified of the meeting although as of this writing we have not heard if they will be in attendance. Action Reauired bv Council: Approve the attached Ordinance authorizing the Mayor to execute the Agreement between the La Porte Economic Development Corporation and WesMor Cryogenic Manufacturing LT . ORDINANCE NO. 2007 - !lJ4y; AN ORDINANCE APPROVING AND AUTHORIZING AN AGREEMENT BETWEEN THE CITY OF LA PORTE, TEXAS, THE CITY OF LA PORTE DEVELOPMENT CORPORATION, AND WESMOR CRYOGENIC MANUFACTURING LTD. FOR USE OF 4B SALES TAX FUNDS; MAKING VARIOUS FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW; PROVIDING AND EFFECTIVE DATE HEREOF. BE IT ORDAINDED BY THE CITY COUNCIL OF THE CITY OF LA PORTE: Section 1. The City Council of the City of La Porte hereby approves and authorizes the contract, agreement, or other undertaking described in the title of this ordinance, in substantially the form as shown in the document which is attached hereto and incorporated herein by this reference. The Mayor is hereby authorized to execute such document and all related documents on behalf of the City of La Porte. The City Secretary is hereby authorized to attest to all such signatures and to affix the seal of the City to all such documents. Section 2. The City Council officially finds, determines, recites, and declares that a sufficient written notice of the date, hour, place, and subject of this meeting of the City Council was posted at a place convenient to the public at the City Hall of the City for the time required by law preceding this meeting, as required by the Open Meetings Law, Chapter 551, Texas Government Code; and that this meeting has been open to the public as required by law at all times during which this ordinance and the subject matter thereof has been discussed, considered and formally acted upon. The City Council further ratifies, approves and confirms such written notice and the contents and posting thereof. Section 3. This Ordinance shall be effective from and after its passage, and it is so ordered. PASSED AND APPROVED THIS THE IJJI- DAY OF NOV : ,2007. CITY OF LA PORTE By: ~y~ Alton Porter, Mayor ATTEST: By: Y!l~d:fdJ Martha Gillett City Secretary APPROVED: By: ~r ,(~~ lark Askins Assistant City Attorney AGREEMENT BETWEEN THE LA PORTE DEVELPOMENT COPRPORA TION, THE CITY OF LA PORTE, TEXAS AND WESMOR CRYOGENIC MANUFACTURING, LTD. FOR USE OF 4B SALES TAX FUNDS THIS A$3REEMENT made by and entered into this IJ-+ day of ~, 2007 between the La Porte Economic Development Corporation, a non-profit corporation organized under the laws of the State of Texas, hereinafter "LPEDC", the City of La Porte, Texas, a Texas home-rule municipal corporation hereinafter referred to as "City", and WesMor Cryogenic Manufacturing, LTD., hereinafter referred to as "Recipient". WITNESSETH: WHEREAS, the voters of the City of La Porte authorized the levying of additional sales tax within the City, and the creation of an economic development corporation and pursuant to the provisions of Texas Revised Civil Statutes Anno. Art. 5190.6 Section 48, et seq., may use such tax revenues for certain economic development purposes; and WHEREAS, Recipient wishes to expand its current business operation in La Porte, Texas by opening and operating a cryogenic tank and vessel manufacturing facility, and which after five (5) years is anticipated to employ up to 70 additional personnel and to generate cumulative gross sales in excess of $32,640,000.00; and WHEREAS, Recipient has requested that LPEDC provide financial incentives to promote the expansion of its La Porte operations in an amount to cover or subsidize certain infrastructure costs, including streets and roads, water, electric, and gas utilities, drainage and related improvements, telecommunications, associated acquisition costs, and any other purposes authorized by Texas Revised Civil Statutes Anno. Art. 5190.6, Section 48, et seq., and it is the desire of LPEDC to assist in the funding of same, finding that such expenditures will contribute to promoting economic growth and development in the City; and WHEREAS, Texas law and the by-laws of the LPEDC require that certain expenditures and projects by Section 48 corporations be approved by the governing body of the City; and WHEREAS, the LPEDC 80ard and the La Porte City Council have each duly approved such project and expenditures; NOW THEREFORE, in consideration of the covenants and conditions stated herein, and in consideration of the mutual benefits that will accrue to each of the parties hereof, as well as to the citizens of the City of La Porte, Texas, the parties have agreed and do hereby agree as follows: 1 ARTICLE I In consideration of Recipient locating its proposed manufacturing facility within the City of La Porte, as specifically described in that certain staff presentation and public hearing authorizing proposed expenditure of LPEDC funds for the promotion of said manufacturing facility, held before the LPEDC on January 22, 2007 (copies of appropriate minutes and documents are attached hereto and incorporated by reference and made a part of this Agreement for all purposes), LPEDC agrees to provide Recipient an incentive package consisting of cash payments in the total sum of $50,000.00, to be distributed in four installments, and which installment payments are conditioned upon Recipient's satisfaction of job creation and gross sales performance standards, under the schedule described below. The $50,000.00 cash incentive herein described shall be distributed as follows: 1) a cash incentive in the amount of $10,000.00 will be distributed when 1) the LPEDC is in receipt of a Certificate of Occupancy from the City of La Porte issued to Recipient for the operation of a cryogenic tank and vessel manufacturing facility, and which is applicable to land owned or leased by Recipient, and 2) at least 60 days have passed since the publication of notice for public hearing required under Texas Revised Civil Statutes Anno. Art. 5190.6 Section 48, et seq., for expenditure of 48 funds on a proposed project, without the filing of a petition with the City registering a protest to the proposed grant. 2) a cash incentive in the amount of $10,000.00 will be distributed after the conclusion of the twelve (12) month period following the date of the initial distribution of funds by the LPEDC, made pursuant to paragraph one (1) above, but not before the LPEDC has had the opportunity to verify that the following conditions have been met at the time of the proposed payment: a) Documentation demonstrating that 25 new full-time employees have been hired by Recipient from the start of operations (and which does not include employees transferred from Recipient's preexisting operations), is provided to LPEDC. Such documentation shall include Federal and State employment reports and monthly report to the Texas State Comptroller's office. b) WesMor has achieved annual gross sales of $3,000,000.00 since receipt of the first installment, pursuant to paragraph one (1), above, and documentation indicating same is provided to the LPEDC. c) WesMor provides all documentation required under this section relating to hiring of new employees and annual gross sales within 30 days after the conclusion of the 2 twelve (12) month period following the date of the initial distribution of funds by the LPEDC. 3) a cash incentive in the amount of $15,000.00 will be distributed after the conclusion of the twenty-four (24) month period following the date of the initial distribution of funds by the LPEDC, made pursuant to paragraph one (1) above, but not before the LPEDC has had the opportunity to verify that the following conditions have been met at the time of the proposed payment: a) Documentation demonstrating that 30 new full-time employees have been hired by Recipient from the start of operations (and which does not include employees transferred from Recipient's preexisting operations), is provided to LPEDC. Such documentation shall include Federal and State employment reports and monthly report to Texas State Comptroller. b) WesMor has achieved annual gross sales of $5,000,000.00 since receipt of the second installment, pursuant to paragraph one (1), above, and documentation indicating same is provided to the LPEDC. c) WesMor provides all documentation required under this section relating to hiring of new employees and annual gross sales within 30 days after the conclusion of the twenty-four (24) month period following the date of the initial distribution of funds by the LPEDC. 4) a cash incentive in the amount of $15,000.00 will be distributed after the conclusion of the thirty-six (36) month period following the date of the initial distribution of funds by the LPEDC, made pursuant to paragraph one (1) above, but not before the LPEDC has had the opportunity to verify that the following conditions have been met at the time of the proposed payment: a) Documentation demonstrating that 35 new full-time employees have been hired by Recipient from the start of operations (and which does not include employees transferred from Recipient's preexisting operations), is provided to LPEDC. Such documentation shall include Federal and State employment reports and monthly report to Texas State Comptroller. b) WesMor has achieved annual gross sales of $5,500,000.00 since receipt of the third installment, pursuant to paragraph one (1), above, and documentation indicating same is provided to the LPEDC. 3 c) WesMor provides all documentation required under this section relating to hiring of new employees and annual gross sales within 30 days after the conclusion of the thirty-six (36) month period following the date of the initial distribution of funds by the LPEDC. All funds received as herein provided shall be expended solely for the purpose of assisting Recipient in locating its new facility to the City of La Porte at the following location: 1802 West D Street, more particularly described by metes and bounds description as reflected Exhibit A, attached to this agreement, and incorporated by reference for all purposes. ARTICLE II Disbursement of the $50,000.00 cash incentive identified in Article I of this Agreement shall be made as follows: A. Disbursement shall be made to Recipient, subject to the satisfaction of the conditions precedent contained with Article I of this Agreement, upon its written request for funds to the LPEDC, in conjunction with presentation of appropriate documentation evidencing that it has met said conditions precedent for receipt of funds under Article I of this Agreement. B. LPEDC and City's obligation to Recipient shall not exceed $50,000.00, nor shall LPEDC or City be obligated to reimburse Recipient for requests delivered to LPEDC or City after the termination of this Agreement. C. If Recipient receives and holds funds obtained pursuant to this Agreement in advance of paying the expenses for which reimbursement is made, Recipient shall establish a separate bank account to deposit funds in order to avoid commingling of the funds with Recipient's other funds and accounts. ARTICLE III Recipient understands that the funds paid to Recipient by the LPEDC and authorized by City are derived from tax revenues collected under Texas Revised Civil Statutes Anno. Art. 5190.6 Section 4B, et seq., and that LPEDC and City have estimated the tax revenues to be collected during the term of this Agreement. Recipient further understands, acknowledges, and agrees that if the tax revenue actually collected is less than the estimated tax revenues to be collected during the term of this Agreement, LPEDC will be under no obligation to provide funding to Recipient for the full amount set forth in Article I, above. ARTICLE IV If Recipient at any time during the duration of this Agreement shall fail to meet any of the job creation and gross sales performance standards outlined in the schedule contained in Article I of this Agreement, LPEDC shall have the right to reclaim and recapture any and all cash incentive funds previously disbursed to Recipient, whether or not such disbursements have been spent by Recipient at 4 the time of the reclamation by the LPEDC. For purposes of this Agreement, LPEDC's right of recapture shall extend to and include all disbursements previously made to Recipient, regardless of whether said previous disbursements were made to Recipient in return for its having satisfied earlier performance milestones under Article I of this Agreement. In each such case, the previously paid cash payment or payments shall be remitted to the LPEDC within thirty (30) of receipt of written demand for same. In the event of any default by Recipient hereunder, including, but not limited to, use of the funds provided herein for purposes other than those stated in Article I of this Agreement, LPEDC may cease all future payments hereunder and terminate this Agreement. In addition, LPEDC shall have the right to reclaim and recapture, and Recipient shall refund, any funds that are not spent in accordance with the terms of this Agreement, including 1) LPEDC funds spent by Recipient in contravention of this Agreement and 2) any unspent and unobligated LPEDC funds previously paid to Recipient but not yet paid or pledged by Recipient to third parties. In each such case, the previously paid cash payment or payments shall be remitted to the LPEDC within thirty (30) of receipt of written demand for same. Any breach of this covenant shall be grounds for immediate termination of the distribution of funds. Recipient also agrees that LPEDC and City may place a lien against the property made the subject of this Agreement and located at 1802 West D Street, to secure repayment, if necessary, and may enforce this Agreement by any and all other remedies available in law and equity. ARTICLE V The term of this Agreement is for a period beginning on the date of approval by LPEDC and La Porte City Council, and ending three years from the date of the payment by the LPEDC of the last installment of the proposed cash incentive to Recipient made pursuant to Article 1 of this Agreement. ARTICLE VI Recipient shall provide to the LPEDC within sixty (60) days following each installment payment made pursuant to Article 1 of this Agreement, a report and full documentation showing that expenditures were made by Recipient pursuant to this Agreement and that the funds provided by the LPEDC pursuant to this Agreement were used only for the purposes authorized by this Agreement and Texas Revised Civil Statutes Anno. Art. 5190.6, Section 48, et seq. Recipient shall maintain books of account with correct entries of all expenditures that are made according to the terms of this Agreement and of any funds from other sources. Any and all books of account of Recipient shall be at all times open to the inspection of LPEDC or the City or any its officers or duly authorized agents. Upon such inspection, LPEDC, the City or its officers or agents shall be afforded the opportunity to make photographic copies of any and all documentation of books of account, including but not limited to statements of account relating to the disposition of funds provided by LPEDC under this Agreement and any funds 5 from other sources. Recipient shall maintain these books of account in Harris County for a period of three (3) years following receipt of the last cash incentive disbursement by the LPEDC, pursuant to Article I of this Agreement. Notwithstanding Article I, above, City shall be under no obligation to make any fund disbursements if the reports required under this Article have not been delivered to the LPEDC or City. ARTICLE VII Not later than October 31. 2008, and thereafter annually on the same date, for the term of this Agreement, Recipient shall provide to the LPEDC a written report of employment and other economic impact factors the Recipient's proposed business has generated for the City. Such report shall include Federal and State employment reports and monthly reports to the Texas State Comptroller. ARTICLE VIII This Agreement does not create any joint venture, partnership, or agency relationship between the LPEDC, City, and Recipient, it being the intent of the Parties that Recipient shall at all times be and operate hereinafter as an independent contractor. Recipient shall have exclusive control of, and the exclusive right to control the details of the work to be performed by Recipient hereunder and all personnel performing same, and shall be solely responsible for the acts and omissions of its officers, members, agents, servants, employees, subcontractors, program participants, volunteers, licensees, and invitees. In no event shall any person participating in or performing any of Recipient's duties or responsibilities hereunder be considered an officer, agent, servant, or employee of the LPEDC or City. ARTICLE IX Recipient agrees to assume and does hereby assume all responsibility and liability for damages sustained by persons or property, whether real or asserted, by or from the carrying on of work by Recipient or in the performance of services performed and to be performed by Recipient hereunder. Recipient covenants and agrees to, and does hereby indemnify, defend, and hold harmless LPEDC, the City and all their respective officers, agents, and employees from all suits, actions, claims, and expenses of any character, including attorney's fees, brought for or incurred on account of any injuries or damages, whether real or asserted, sustained by any person or property by or in consequence of any intentional or negligent act, omission, or conduct of Recipient, its agents, servants or employees. ARTICLE X This Agreement may be amended by the mutual agreement of the Parties hereto in writing to be attached to and incorporated into this Agreement. 6 ARTICLE XI Recipient shall adhere to all local, state, and federal laws and regulations that may affect its actions made pursuant to this Agreement, and shall maintain in effect during the term of this Agreement any and all federal, state, and local licenses and permits which may be required of Recipients generally. ARTICLE XII Recipient may not assign this Agreement without the written consent of LPEDC and City. ARTICLE XIII The waiver by LPEDC or City of any breach of any term, condition, or covenant herein contained shall not be deemed a waiver of any subsequent breach of the same, or any other term, condition, or covenant. ARTICLE XIV The obligations of the Parties to this Agreement are performable in Harris County, Texas and if legal action is necessary to enforce same, venue shall lie in Harris County, Texas. ARTICLE XV This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. ARTICLE XVI This Agreement may be executed in triplicate, each of which shall be deemed an original and constitute one and the same instrument. ARTICLE XVII Neither LPEDC, City nor Participant shall be required to perform any term, condition, or covenant in this Agreement so long as such performance is delayed or prevented by force majeure, which shall mean Acts of God, civil riots, floods, and any other cause not reasonably within the control of LPEDC, City or Recipient except as herein provided, and which by the exercise of due diligence LPEDC, City or Recipient is unable, wholly or in part, to prevent or overcome. 7 ARTICLE XVIII The Agreement embodies the complete agreement of the parties hereto, superceding all oral or written pervious and contemporary agreements between the Parties, which relate to matters in this Agreement. SIGNED AND AGREED to by LPEDC, City, and Recipient on the dates indicated below. LA PORTE ECONOMIC DEVELOPMENT CORPORTION / I" / 2 -I) ] , Date ATTEST ~d7l/d {/<1dLl S cr tary of the CorporatIon CITY OF LA PORTE, TEXAS ~~~ Alton Porter, Mayor !I-/J ~l'~ Date ATTEST 7rJ-tirdtt Wg/ City Secretary 8 WESMOR CRYOGENIC MANUFACTURING, LTD. BYk\v~ l()~ Date ATTEST ~~ 9 Exhibit A, page 1 TRACT I: BEING A 0.9668 (42,114 SQ. FT.) ACRE TRACT OF LAND OUT OF PARTS OF LOTS 1 THROUGH 8, AND ALL OF LOTS 9 THROUGH 16, IN BLOCK 788 OF TOWN OF LA PORTE, IN HARRIS COUNTY, TEXAS ACCORDING TO THE MAP OR PLAT THEREOF RECORDED IN VOLUME 58, PAGE 460 ET SEQ. OF THE DEED RECORDS OF HARRIS COUNTY, TEXAS, BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS ON EXHIBIT "A" ATTACHED HERETO. TRACT II: LOTS 17 THROUGH 32, IN BLOCK 787, IN THE CITY OF LA PORTE, IN HARRIS COUNTY, TEXAS, ACCORDING TO THE MAP OR PLAT THEREOF, RECORDED IN VOLUME 58, PAGE 460 ET SEQ OF THE DEED RECORDS OF HARRIS COUNTY, TEXAS. TRACT III: LOTS 1 THROUGH 8, IN BLOCK 787, IN THE CITY OF. LA PORTE, IN HARRIS COUNTY, TEXAS, ACCORDING TO THE MAP OR PLAT THEREOF, RECORDED IN VOLUME 58, PAGE 460 ET SEQ OF THE DEED RECORDS OF HARRIS COUNTY, TEXAS, AND THE ADJOINING ABANDONED ALLEY AS VACATED, ABANDONED AND CLOSED BY THE CITY OF LA PORTE, BY ORDINANCE NO. 1138, A CERTIFIED COPY OF WHICH IS FILE FOR RECORD UNDER HARRIS COUNTY CLERK'S FILE NO. F978591. TRACT IV: THE EAST <?NE-HALF (E-1/2) OF THAT CERTAIN ABANDONED ALLEY AS VACATED, ABANDONED AND CLOSED BY THE CITY OF LA PORTE, BY ORDINANCE NO. 1138, A CERTIFIED COpy OF WHICH IS FILED FOR RECORD UNDER HARRIS COUNTY CLERK'S FILE NO. F978591, WHICH IS LOCATED WEST OF, ADJACENT TO AND ADJOINING THE WEST PROPERTY LINES OF LOTS 17 THROUGH 24, IN BLOCK 787 IN THE CITY OF LA PORTE, IN HARRIS COUNTY, TEXAS, ACCORDING TO THE MAP OR PLAT THEREOF, RECORDED IN VOLUME 58, PAGE 460 ET SEQ OF THE DEED RECORDS OF HARRIS COUNTY, TEXAS. TRACT V: ALL THAT PORTION OF SOUTH SEVENTEENTH (17TH) STREET, LYING AND BEING SITUATED BETWEEN WEST "C" STREET AND WEST "0" STREET AND BETWEEN BLOCKS SEVEN HUNDRED EIGHTY-SEVEN (787) AND SEVEN HUNDRED EIGHTY-EIGHT (788), IN THE TOWN OF LA PORTE, HARRIS COUNTY, TEXAS, ACCORDING TO THE MAP OR PLAT THEREOF RECORDED IN THE OFFICE OF THE COUNTY CLERK OF HARRIS COUNTY, TEXAS, AS VACATED, ABANDONED AND CLOSED BY THE CITY OF LA PORTE, BY ORDINANCE NO. 1143, RECORDED IN HCCF # 20070127142. Exhibit A, page 2 TRACT I ALL THAT PARCEL OF LAND BEING A 0.9668 ACRE (42,114 SQUARE FEET) TRACT OF LAND OUT OF BLOCK 788, TOWN OF LA PORTE, AS RECORDED IN VOLUME 58, AT PAGE 460 ET SEQ., OF THE DEED RECORDS OF HARRIS COUNTY, TEXAS, MORE PARTICULARLY DESCRIBED AS FOLLOWS; ALL THAT PARCEL OF LAND BEING A 0.9668 (42,114 SQUARE FEET ACRE TRACT OF LAND OUT OF BLOCK 788, TOWN OF LA PORTE, AS RECORDED IN VOLUME 58 AT PAGE 460 ET SEQ., OF THE DEED RECORDS OF HARRIS COUNTY, TEXAS, OUT OF THE JOHNSON HUNTER SURVEY, A 35, LA PORTE, HARRIS COUNTY, TEXAS, SAID 0.9668 ACRE TRACT BEING PART OF LOTS 1 THROUGH 7 BOTH INCLUSIVE, BLOCK 788 AS RECORDED, AS MORE PARTICULARLY DESCRIBED AS FOLLOWS; BEGINNING AT A 5/8 INCH IRON ROD SET FOR THE NORTHWEST CORNER OF SAID LOT 1, BLOCK 788, TOWN OF LA PORTE, IN THE SOUTH RIGHT-OF-WAY LINE OF WEST "C" STREET; THENCE NORTH 90 DEGREES 00 MINUTES 00 SECONDS EAST, ALONG THE NORTH LINE OF SAID LOT 1 AND THE SOUTH RIGHT-OF-WAY LINE OF WEST "C" STREET A DISTANCE OF 72.75 FEET TO A FENCE CORNER FOR CORNER; THENCE SOUTH 00 DEGREES 45 MINUTES 38 SECONDS EAST, A DISTANCE OF 153.42 FEET TO A 5/8 INCH IRON ROD SET FOR CORNER; THENCE SOUTH 88 DEGREES 50 MINUTES 17 SECONDS EAST, A DISTANCE OF 50.22 FEET TO A 5/8 INCH IRON ROD SET FOR CORNER IN THE EAST LINE OF LOT7, INTHE WEST LINE OF A 15 FOOT ALLEY; THENCE SOUTH 00 DEGREES 00 MINUTES 00 SECONDS EAST, ALONG THE EAST LINE OF LOTS 7 THROUGH 16, A DISTANCE OF 245.57 FEET TO AN "X" SET IN CONCRETE IN THE NORTH RIGHT -OF- WAY LINE OF WEST "0" STREET; THENCE SOUTH 90 DEGREES 00 MINUTES 00 SECONDS WEST, ALONG THE SOUTH LINE OF SAID LOT 16 AND THE NORTH RIGHT-OF-WAY LINE OF WEST "0" STREET, A DISTANCE OF 125.00 FEET TO AN "X" SET IN CONCRETE FOR THE SOUTHWEST CORNER OF LOT 16; THENCE NORTH 00 DEGREES 00 MINUTES 00 SECONDS WEST, ALONG THE WEST LINE OF LOTS 16 THROUGH 1, BOTH INCLUSIVE, A DISTANCE OF 400.00 FEET TO THE POINT OF BEGINNING.