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HomeMy WebLinkAbout09-23-13 Meeting of the La Porte Development Corporation Board of Directors RICHARD WARREN,PRESIDENT MIKE CLAUSEN, BOARD MEMBER MIKE COOKSLEY, BOARD MEMBERRANDY WOODARD, BOARD MEMBER JAY MARTIN, BOARD MEMBERNANCY OJEDA,BOARD MEMBER CHUCK ENGELKEN, BOARD MEMBER CITY OF LA PORTE DEVELOPMENT CORPORATION MEETING AGENDA Notice is hereby given of a meeting of theCity of La Porte Development Corporation to be held on September 23,2013, at the City Hall Council Chambers, 604 West Fairmont Parkway,La Porte, Texas, at 5:00p.m. to consider the followingitems of business: 1. Call to order ( 2.CONSENT AGENDA All consent agenda items are considered routine by the La Porte Development Corporation Boardand will be enacted by one motion. There will be no separate discussion of these items unless a Board memberrequests anitem be removed and considered separately) (a) Consider approval of minutes of the meeting of La Porte Development Corporation Board held on August 26,2013–P. Fogarty (b) Consider approval or other action regarding proposed Amendment No.1 to an Incentive Agreement dated June 10, 2013 between the La Porte Development Corporation and Intergulf Corporation –S. Livingston (c) Consider approval or other action authorizing firstincentive payment of $375,000.00to Intergulf Corporation pursuant to Incentive Agreement dated June 10, 2013–S. Livingston (d) Consider approval or other action regarding proposedIncentive Agreement between the La Porte Development Corporation and INEOS USA, LLC.S. Livingston – 3.PUBLIC HEARING AND ASSOCIATED MATTERS (a) Public Hearing to receive comments regardingproposedincentive grant in an amount not to exceed $66,000.00to Rob Johnson Interests to demolish and remove concrete slab in preparation for a new retail development on the former Chevrolet dealership lot, as a project of the La Porte Development Corporation S. Livingston – (b) Consider approval or other action regarding proposed incentive grant in an amount not to exceed $66,000.00to Rob Johnson Interests to demolish and remove concrete slab in preparation for a new retail development on the former Chevrolet dealershiplot,as a projectof the La Porte Development Corporation S. Livingston – 4.AUTHORIZATIONS (a) Consider approval or other action to authorize staff to move forward with preparations for a proposed project for an incentive grant in the amount not to exceed $15,000.00to the Richard Industrial Group to open a new office and relocate and/or hire at least 75 full-time employees in La Porte –S. Livingston (b) Consider approval or other action to expand the Enhancement Grant Program to include existing businesses on both Broadway and SH-146 –S. Livingston 5. Set date for next meeting –S. Livingston Page 1of 2 September 23, 2013, La Porte Development Corporation Agenda Staff Reports 6. (a)Receive Financial Report –M. Dolby Board member commentsregarding matters appearing on agenda; recognition of community 7. members, city employees, and upcoming events; inquiry of staff regarding specific factual information or existing policies. 8. Executive Session –The La Porte Development Corporation reserves the right to meet in executive session on any agenda item should the need arise and if authorized by the Texas Open Meetings Act, Title 5, Chapter 551, of the Texas Government Code. 9. Reconveneinto regular session and consider action, if any, on items discussed in executive session. 10. Adjourn In compliance with the Americans with Disabilities Act, the City of La Porte City will provide for reasonable accommodations for persons attending publicmeetings. To better serve attendees, requests should be received 24 hours prior to the meetings. Please contact Patrice Fogarty, City Secretary, at 281.470.5019. CERTIFICATION I certify that a copy of the September 23, 2013, agenda of items to be considered by the Board of the La Porte Development Corporation was posted on the City Hall bulletin Boardon September 17,2013. Page 2of 2 September 23, 2013, La Porte Development Corporation Agenda RICHARD WARREN,PRESIDENT MIKE CLAUSEN, BOARD MEMBER MIKE COOKSLEY, BOARD MEMBERRANDY WOODARD,BOARDMEMBER CHUCK ENGELKEN, BOARD MEMBERNANCY OJEDA, BOARD MEMBER JAY MARTIN, BOARD MEMBER MINUTES OF LA PORTE DEVELOPMENT CORPORATION BOARD MEETING OF AUGUST26, 2013 August26,2013, The City of La Porte Development Corporation Board met onat the City Hall Council 5:00p.m Chambers, 604 West Fairmont Parkway, La Porte, Texas, at .to consider the followingitems of business: 1. Call to Order President Warren called the meeting to order at 5:00p.m. The following members of the LaPorte Development Corporation Board were present: Board membersEngelken, Martin, Woodard, Clausen, Cooksley andOjeda. Staff Present:Corby Alexander,Traci Leach, Patrice Fogarty,Scott Livingston, Michael Dolbyand Assistant City Attorney ClarkAskins. 2. Consider approval of Minutes of the La Porte Development Corporation Board held on July23, 2013–P. Fogarty Board memberEngelkenmoved to approve the minutes with correction to Paragraph 4 of Page 2. MOTION PASSED. Board member Woodardseconded. Ayes: President Warren, Vice-President Cooksley, Boardmembers Clausen, Woodard,Martin, Engelkenand Ojeda Nays: None Absent:None 3. Consider approval or other action authorizing staff to disburse a grant of $14,935 to Horace Leopard and Aubry Sartori, owner of Stepping Stone Funeral Home and grant a 6-month extension to complete two murals included within the approved scope of work allowing submittal of final receipts for the remaining balance of the approved grant in the amount of $1,065 once completed - S. Livingston Economic Development Coordinator Scott Livingstonpresented a summary,and Joe Sartori provided a presentation. Mr. Satori thanked Board members for the help and support of Stepping Stone Funeral Homeby approving the grant. President Warren asked why the parking lot barrier was left open. Mr. Satori responded to facilitate cars for drivingthrough the parking lot. Board member Martinquestioned why the item had to come back to the La Porte Development Corporation Board. Assistant City Manager Traci Leach responded it has been prior practice for the Board to view improvements before issuing a reimbursement check.She stated if the Board wishes to change that practice, she would be willing to work with other avenues in order to provide the Board with information. Page 1of 3 August 26, 2013, La Porte Development Corporation Board Minutes Board member Martinmoved toauthorize staff to disburse a grant of $14,935 to Horace Leopard, owner of Stepping Stone Funeral Home; and grant a 6-month extension to complete two murals included within the approved scope of work allowing submittal of final receipts for the remaining balance of the approved grant in the amount of $1,065.10once completed.Board member MOTION PASSED. Engelkenseconded. Ayes: President Warren, Vice-President Cooksley, Boardmembers Clausen, Woodard, Martin, Engelken and Ojeda Nays: None Absent:None 4. Consider approval or other action concerning the proposed expenditure of the La Porte Development Corporation Board for funding of the Golf Course/Little Cedar Irrigation System–T. Leach Assistant City Manager Traci Leach presented a summaryandasked for payment by the La Porte Development Corporation Board in the amount of $154,000. Ms. Leach advised Board members there are 3 choices–pay all costs;paya portion; or pay no portion of the funding needed for the Golf Course/Little Cedar Irrigation System. Board member Woodard asked if the La Porte Development Corporation Board can use Hotel/Motel Funds. City Manager Corby Alexander responded he doesn’t think so. Assistant City Attorney Clark Askins also responded he doesn’t think that’sa permissible use of HOT funds. Board member Martin moved tofund 50percentof the Golf Course/Little Cedar Irrigation System MOTION PASSED. project.Board member Engelken seconded. Ayes: President Warren, Vice-President Cooksley, Boardmembers Clausen, Woodard, Martin, and Ojeda Nays: Board member Engelken Absent:None 5. Set date for next meeting –S. Livingston Board members set the next meeting datesfor September 23, 2013; October 14, 2013; and November 11,2013at 5:00 p.m. 6.Board member commentsregarding matters appearing on agenda; recognition of community members, city employees, and upcoming events; inquiry of staff regarding specific factual information or existing policies. Board member Ojeda and President Warren commented that Stepping Stone Funeral Home looks great. 7. Executive Session–The La Porte Development Corporation reserves the right to meet in executive session on any agenda item should the need arise and if authorized by the Texas Open Meetings Act, Title 5, Chapter 551, of the Texas Government Code. There was no executive session. 8. Reconveneinto regular session and consider action, if any, on items discussed inexecutive session. There was no executive session. Page 2of 3 August 26, 2013, La Porte Development Corporation Board Minutes 9. Adjourn There being no further business, at 5:30p.m., Board member Woodard moved to adjourn the MOTION PASSED. meeting.Board member Clausenseconded. Ayes: President Warren, Vice-President Cooksley, Board members Clausen, Woodard, Engelken, Martin andOjeda Nays: None Absent:None Respectfully submitted, ____________________________________ Patrice Fogarty,City Secretary Passed and approved on this____ dayof______________, 2013. ____________________________________ President RichardWarren Page 3of 3 August 26, 2013, La Porte Development Corporation Board Minutes REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEM Budget Agenda Date Requested:23September2013 Source of Funds: Requested By:Traci E. Leach Account Number: Department: Administration/Economic Development Amount Budgeted: Report: Resolution:Ordinance: Amount Requested: Exhibits:Amendment to Agreement Exhibit:Original Agreement Budgeted Item:YESNO SUMMARY & RECOMMENDATION On June 10, 2013, the La Porte Development Corporation approved an incentive agreement with Intergulf Corporation for the relocation of a corporate headquarters in La Porte. As part of this relocation, Intergulf requested an incentive to assist in the construction of drainage improvements to the DStreet right-of-way to expand the buildable area of the lot. The incentive agreement, as approved by the Board, is attached an exhibit. Since that time, Intergulf has been working on the drainage work is prepared to present a request for the Board to consider making the first payment pursuant to the agreement terms. During the process of verifying documentation for this payment request, it was discovered that there was an error in Article 1 (2)(a) and (2)(b). This section outlines the benchmarks that Intergulf must achieve prior to receiving any incentive funds. Article 1 (2)(a) was intended to specify that Intergulf complete the drainage structure and all associated work prior to requesting the first payment. However, the benchmark that was included in the approved agreement included Item No. 5 (refer to Exhibit B in the original agreement), which is not work related to the drainage, but rather to the parking structure/surface construction. The amendment attached removes Item No. 5 from the benchmarks for the first payment and places it in the benchmarks for the parking structure/surface required for the second payment. Staff recommends approving the amendment to correct Article 1 (2)(a) and (2)(b). Action Required by the La Porte Development Corporation: Consider approval or other action of Amendment No. 1 to an Incentive Agreement dated June 10, 2013 between the La Porte Development and Intergulf Corporation. Approved for the La Porte Development CorporationAgenda Corby D. Alexander,City ManagerDate REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEM Budget Agenda Date Requested:23September2013 Source of Funds: Requested By:Traci E. Leach Account Number: Department: Administration/Economic Development Amount Budgeted: Report: Resolution:Ordinance: Amount Requested: Exhibits:Request Letter from Intergulf Exhibit: Original Agreement Budgeted Item:YESNO Exhibit:Deed for Reserve B Exhibit: Ordinance/Deed for Closing D Street Exhibit: Executed Construction Contract SUMMARY & RECOMMENDATION On June 10, 2013, the La Porte Development Corporation approved an incentive agreement with Intergulf Corporation for the relocation of a corporate headquarters in La Porte. As part of this relocation, Intergulf requested an incentive to assist in the construction of drainage improvements to the D Street right-of-way to expand the buildable area of the lot. The incentive agreement, as approved by the Board, is attached an exhibit. Since that time, Intergulf has completedthe drainage work and haspresenteda request for the Board to consider making the first payment pursuant to the agreement terms. According to the agreement, Intergulf must provide the following documentation to the Board for review: Documentation that Intergulf has purchased the property upon which the corporate headquarters is to be constructed; and th Documentation that Intergulf has closed West D Street right of way between N. 11 Street and SH 146; and Executed construction contract Staff has reviewed the required documentation and inspected the work on site to verify that Items 1 through 4 (as outlined in Exhibit B to the agreement) related to drainage have been satisfactorily completed. All documentation is attached for Board review. Staff recommends thatthe Board approve the first payment to Intergulf Corporation in the amount of $375,000, based upon Intergulf’s successful completion of the benchmarks set forth in the Agreement. Action Required by theLa Porte Development Corporation: Consider approval or other action ofan incentive payment of $375,000 to Intergulf Corporation, pursuant to that Incentive Agreement, dated June 10, 2013. Approved for the La Porte Development CorporationAgenda Corby D. Alexander,City ManagerDate REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEM Budget Agenda Date Requested:23 September2013 Source of Funds:4B Board Requested By:Scott D. Livingston Account Number: 038 Department: Administration/Economic Development Amount Budgeted:$1,000,000 Report: Resolution:Ordinance: Amount Requested: $1,000,000 Exhibits: INEOS Project PowerPoint Presentation Budgeted Item:YESNO Exhibits: INEOS Incentive Agreement (Signed by INEOS) SUMMARY & RECOMMENDATION INEOS is a global manufacturer of petrochemicals and specialty chemicals. It comprises 15 businesses,each with a major chemical company heritage. Its production network spans 51 manufacturing facilities in 11 countries throughout the world with 15,000 employees. Annual revenue for the INEOS Group is more than $30 billion with about 40 million metric tons of production capacity. INEOS,USA is considering building two large chemical projects:(1) an Ethylene Oxide/Ethylene Glycol (EO/EG) plant,and (2) a High-Density Polyethylene (HDPE) plant at the company’s Battleground Manufacturing Complex in La Porte. The company is considering the La Porte Battleground site, as well as Chocolate Bayou and Plaquemine, Louisiana. The EO/EG project is being planned as a world scale 550,000 tons per year EO plant, along with appropriately sized Ethylene Glycol (EG) units, will advance INEOS’ strategy to grow its business over the next few years based on advantaged U.S. shale gas economics. The new EO/EOD plant is expected to start up in 2017, producing purified Ethylene Oxide, Mono-, Di-, and Tri-Ethylene Glycol. The EO/EG plant is expected to cost approximately $750 million and will create up to 60 new, high-paying jobs with an average salary of $65,000 or more. The HDPE project is expected to produce 450,000 tons per year of high-density polyethylene, rd increasing INEOS’ position as the 3largest North American producer of high density polyethylene and polypropylene. Construction on the HDPE facility is planned to start in 2014 and is expected to be operational in 2015. The project investment is approximately $250 million and will add 24 new, high-paying jobs with an average wage of $65,000 or more. At the La Porte site these projects can take advantage of access to the region’s raw material connections and logistics capabilities to the Houston ship channel. However, in order to fully meet the needs of the company the site requires significant infrastructure enhancements, in the form of road and drainage improvements. These improvements are expected to cost over $8 million. In April of 2012, the LPDC Board approved an incentive grant of $1,000,000, to be paid to INEOS in two installments, to help offset the cost of these improvements and make the site more competitive. INEOS requeststhe 4B Board’s approval of the final, signed incentive agreement, so that it mayinclude this incentive in the final site and financial decision its board will be making in the first quarter of 2014. Action Required by the La Porte Development Corporation: Consider approval or other action of an incentive agreement between the La Porte Development Corporation and INEOSUSA, LLC. Approved for the La Porte Development CorporationAgenda Corby D. Alexander,City ManagerDate REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEM Budget Agenda Date Requested:23September2013 Source of Funds:4B Board Requested By:Scott D. Livingston Account Number: 038 (General Revenue) Department: Administration/Economic Development Amount Budgeted: N/A Report: Resolution:Ordinance: Amount Requested:$66,000 Exhibit:Incentive Grant Request fromMr. Rob Johnson Budgeted Item:YESNO Exhibit: Boundary Survey Exhibit: Marketing Flyer Exhibit: Project Facts and Figures SUMMARY & RECOMMENDATION Mr. Rob Johnson is the Owner of Rob Johnson Interests, which is a local Real Estate DevelopmentCompany. He developedthe Shoppes of Town Square on Center Street and Pasadena Blvd in Deer Park, Texas. He recently placed a portion of the Jay Marks Chevrolet dealership under contract to do a new retail/commercial development. Phase I is planned to encompass 2.86 acres, while Phase II is planned to encompass 1.67 acres. Mr. Johnsonplansto complete Phase I in 2014 and Phase II by either late 2014 or early 2015. Thecurrent plan is to start the project this fall, once tenant interest issecured and the approved site plan has been finalized.The project principal is pursuing and negotiating with multiple prospects which have each expressed interest in the market.In order to make this project more $66,000 competitive and viable, Mr. Johnsonis requesting an incentive grant in anamount up to to demolish and remove the existing slab structure and level the site for development. The subject property is currently on the tax rolls for $650,000, which yields approximately $4,615(at $0.71/$100 of assessed value) annually in taxes to the CityofLa Porte. Once the multiple-phase development has been completed, the estimated taxable value of the new development is $6,000,000 to $8,000,000.Excludingsales tax revenue, the estimated annual taxes would be $42,600 to $56,800. Taking an average of the two, if the estimated taxable value were to be $7,000,000, the annual taxes would be $49,700. Therefore, the estimated annual $45,085 increase in taxes upon completion of the multi-phase project is . th Based upon some of the questions about the project on June 10, please note that the following information has also been provided: Legal Description of the Property Being that tract of land containing approximately 2.8 acres -Lots 3 -26 and a portion of Lot 2 out of Block 47, La Porte Townsite Vol 67, Page 196, H.C.D.R.; Lots 1 –4 and 29 –32 out of Block 26, Vol 57, page 320, H.C.D.R. and the West “A” Street Abandonment all shown attached thereto:(see attached) Itemized List of Work Done to Secure the Property Payment of earnest money Property is under contract for purchase Phase I Environmental “No Further Action Required”, dated May 24, 2013. Closure Letter from the State of Texas (T.E.C.Q.), December 2012 –After current owner had done a Phase II on site. Marketing –Aerial Photographs and Demographics (see attached) Itemized List of Expenses to Date: Phase I -$2,500.00 Aerial Photographs -$1,500.00 Demographics -$750.00 Architect and Engineering -$6,500.00 Earnest Money -$11,500.00 CenterPointEnergyEasement Removal -$1,000.00 Survey -$3,275.00 Architectural Site Plan Design with City comments -$1,850.00 Alley Easement ROW Acquisition -$6,500.00 (est.) $35,375. TOTAL invested capitalat risk is Other Closing Schedule –October 2013 Do not have the right to extend the contracts Partners –Robert E. Johnson, Jr. and Robert E. Johnson, III Per the Board’s directionon 8 July 2013, staff scheduleda public hearing to discuss this incentive grant request on23September 2013, which satisfied the 60-day petition period.No qualified petition was received.This project will require that Rob Johnson enter into a performance agreement with the La Porte Development Corporation, the terms of which would establish minimum thresholds for key performance indicators such actual expenses for infrastructure and site improvements, capital investment, and possibleitems.All parties involved will have the opportunity to provide input on the performance agreement before it is completed. Action Required by the La Porte Development Corporation Board: Consider approval or other action to designate an incentive grant in anamount not to exceed $66,000toRob Johnson Interests to demolish and remove the concrete slab in preparation for a new retail development on the former Chevrolet dealershipas a project of the La Porte Development Corporation. Approved for the La Porte Development CorporationAgenda Corby D. Alexander,City ManagerDate REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEM Budget Agenda Date Requested:23September2013 Source of Funds:4B Board Requested By:Scott D. Livingston Account Number: 038 (General Revenue) Department: Administration/Economic Development Amount Budgeted: N/A Report: Resolution:Ordinance: Amount Requested:$66,000 Exhibit:Incentive Grant Request fromMr. Rob Johnson Budgeted Item:YESNO Exhibit: Boundary Survey Exhibit: Marketing Flyer Exhibit: Project Facts and Figures SUMMARY & RECOMMENDATION Mr. Rob Johnson is the Owner of Rob Johnson Interests, which is a local Real Estate DevelopmentCompany. He developedthe Shoppes of Town Square on Center Street and Pasadena Blvd in Deer Park, Texas. He recently placed a portion of the Jay Marks Chevrolet dealership under contract to do a new retail/commercial development. Phase I is planned to encompass 2.86 acres, while Phase II is planned to encompass 1.67 acres. Mr. Johnsonplansto complete Phase I in 2014 and Phase II by either late 2014 or early 2015. Thecurrent plan is to start the project this fall, once tenant interest issecured and the approved site plan has been finalized.The project principal is pursuing and negotiating with multiple prospects which have each expressed interest in the market.In order to make this project more $66,000 competitive and viable, Mr. Johnsonis requesting an incentive grant in anamount up to to demolish and remove the existing slab structure and level the site for development. The subject property is currently on the tax rolls for $650,000, which yields approximately $4,615(at $0.71/$100 of assessed value) annually in taxes to the CityofLa Porte. Once the multiple-phase development has been completed, the estimated taxable value of the new development is $6,000,000 to $8,000,000.Excludingsales tax revenue, the estimated annual taxes would be $42,600 to $56,800. Taking an average of the two, if the estimated taxable value were to be $7,000,000, the annual taxes would be $49,700. Therefore, the estimated annual $45,085 increase in taxes upon completion of the multi-phase project is . th Based upon some of the questions about the project on June 10, please note that the following information has also been provided: Legal Description of the Property Being that tract of land containing approximately 2.8 acres -Lots 3 -26 and a portion of Lot 2 out of Block 47, La Porte Townsite Vol 67, Page 196, H.C.D.R.; Lots 1 –4 and 29 –32 out of Block 26, Vol 57, page 320, H.C.D.R. and the West “A” Street Abandonment all shown attached thereto:(see attached) Itemized List of Work Done to Secure the Property Payment of earnest money Property is under contract for purchase Phase I Environmental “No Further Action Required”, dated May 24, 2013. Closure Letter from the State of Texas (T.E.C.Q.), December 2012 –After current owner had done a Phase II on site. Marketing –Aerial Photographs and Demographics (see attached) Itemized List of Expenses to Date: Phase I -$2,500.00 Aerial Photographs -$1,500.00 Demographics -$750.00 Architect and Engineering -$6,500.00 Earnest Money -$11,500.00 CenterPointEnergyEasement Removal -$1,000.00 Survey -$3,275.00 Architectural Site Plan Design with City comments -$1,850.00 Alley Easement ROW Acquisition -$6,500.00 (est.) $35,375. TOTAL invested capitalat risk is Other Closing Schedule –October 2013 Do not have the right to extend the contracts Partners –Robert E. Johnson, Jr. and Robert E. Johnson, III Per the Board’s directionon 8 July 2013, staff scheduleda public hearing to discuss this incentive grant request on23September 2013, which satisfied the 60-day petition period.No qualified petition was received.This project will require that Rob Johnson enter into a performance agreement with the La Porte Development Corporation, the terms of which would establish minimum thresholds for key performance indicators such actual expenses for infrastructure and site improvements, capital investment, and possibleitems.All parties involved will have the opportunity to provide input on the performance agreement before it is completed. Action Required by the La Porte Development Corporation Board: Consider approval or other action to designate an incentive grant in anamount not to exceed $66,000toRob Johnson Interests to demolish and remove the concrete slab in preparation for a new retail development on the former Chevrolet dealershipas a project of the La Porte Development Corporation. Approved for the La Porte Development CorporationAgenda Corby D. Alexander,City ManagerDate Project Rob Johnson’sFACTS AND FIGURES Assumptions: $650,000 Current value of the subject property: $6,000,000$8,000,000 Total estimated project value, after construction: to 2015 Construction will conclude byearly . Current Property Value and Taxes (based upon HCAD valuation) $650,000 Current property value: Total annual taxes currently paid to the Community of La Porteat a fully loaded tax $18,720 burden of 2.88 per $100 of assessed taxable value: Real, Business Personal Property Received Annually After Expansion: Total, fully loadedannual taxes paid to the Community of La Porte upon completion of $201,600 the project anda taxable project value of $7,000,000: $62,500four (4) months Community of La Porte Break-Even Point on Grantis . $65,728.25four (4) months. Community of La Porte Break-Even Point on Grant is $66,000four (4) months. Community of La Porte Break-Even Point on Grant is REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEM Budget Agenda Date Requested:23September2013 Source of Funds:4B Board Requested By:Scott D. Livingston Account Number: 038 Department: Administration/Economic Development Amount Budgeted: N/A Report: Resolution:Ordinance: Amount Requested:$15,000 Exhibit:Project Facts and Figures Budgeted Item:YESNO Exhibit: Richard Industrial Group Flyer SUMMARY & RECOMMENDATION The Richard Industrial Group(RIG)(www.rig-rds.com) is a full-service engineering, procurement, and constructionfirm that has completed projects for Chevron Phillips, LLC, Enterprise ProductPartners, LP, ExxonMobil, Firestone Polymers, Flint Hills Resources, Hess, Honeywell, INEOS Phenol, Motiva Enterprises, LLC, Panther Companies, Sunoco Logistics, Total, and Valero to name a few. With a reputation for integrity and reliability, the Richard Industrial Group offerssome of the industry’s top talent through a family of four companies that capture synergies and integrateservices across the full spectrum of any project. Baton Rouge The Richard Industrial Group(RIG)currently has offices in ,LA, and three (West) HoustonBeaumont,Huffman locations in Texas: ,and . Due tothe investment and growth of the companies in the area surrounding the Houston Ship Channel, RIGis considering the possibility ofopeninga new office in the ship channel area.RIG is considering an option to sign a 3 year lease for 14,000 square feet at 1200 SH 146 in La Porte, Texas.The initial space will house a new engineering office to establish a presence on the ship channel.Over the next 2 years, while the engineering office is working to develop market share in the area, RIG will search for undeveloped land sites in the Bayport Industrial District upon which to construct a permanent, brand new facility in year #3. \[Note: More information is provided about RIG’s future plans beyond year #3 after the Incentive Request at the conclusion of this summary.\] 90full-time However, over the next 3 years, RIG plans to relocate and/or hire employees with full (medical, dental, and 401k) benefits: By the End of 2013RelocatedNew HiresTotal Managers 279 Admin 011 Engineers 156 Designers 52530 Total Employmentby the End of 2013:46 By the End of 2014New HiresTotal Managers 110 Admin 12 Engineers 17 Designers 1747 Total Employment by the End of 2014:66 By the End of 2015 New HiresTotal Managers 010 Admin 13 Engineers 310 Designers 20 67 Total Employment by the End of 2015:90 In addition to full benefits (medical, dental, and 401k), the average, annual salary for each category of employees is as follows: Managers $250,000 Admin $ 55,000 Engineers $160,000 Designers $200,000 In order to open the new engineering office in La Porte, RIG estimates that it will spend: $160,000 inbuilding improvements, infrastructure/utility installation, and furniture, $120,000 in hiring/human resource expensesincluding signing bonuses, and $340,000 in computers and software. Other than fresh paint in the lease space and carpet cleaning, the owner of the 1200 Building on SH 146 is not offering RIG any allowance for tenant improvements. Incentive Grant Request In order to facilitate theopening of theirnew office in La Porte, RIGrequests a cash incentive $15,000 grant in the amount of .In order to attract RIG’s new office to La Porte and support the 90 creation of new full-time jobs in La Porte, staff recommends that the 4B Board award RIG a $15,000 cash incentive grant in the amount of . RIG’s Future Plans The new, proposed facilityto be constructed in year #3will include engineering office space for up to 150 personnel including designers, admin, project managers, managers, accounting, project controls, human resources,etc.The new facility will also include space for RIG’s automation engineering/fabrication group, whichwill have office space for 35 +/-employees (designers, project managers, procurement, admin and managers),plus 45+/-fabrication/shop personnel.It will also include warehouse, fabrication and testing facilities.The testing facility will be designed for clients who are taking delivery of new automation buildings to set up and test the buildings/instruments over a several week period, bringing in testing personnel from other communities. The new, proposed facility will also include facilities for our construction group with office space for 50+/-managers, human resources, admin, construction managers, accounting, safety, project controls, etc.Warehouse space will be for storage of tools, consumables and small equipment with 5-10 employees to control inventory. Alarge storage area will also be provided for large equipment parking and some material. The number of construction field personnel will fluctuate with workload. Should the Board like to move forward with this incentive, staff recommends that the Board vote to approvethe project in concept and approve the posting of a public hearing. The 60-day petition period would begin once the notice of public hearing appears in the Houston Chronicle (expire on December 2 assuming publication on October 3).The Board would conduct the public hearing in December 9, 2013 and then formally vote to appropriate funds or not for the project at that time. Action Required by the La Porte Development Corporation Board: Consider approval or other action to approve moving forward with an incentive grant request in $15,000 the amount not to exceed to the Richard Industrial Group to open a new office and re- 75 locate and/or hire at least full-time employees in La Porteand allow staff to post appropriate notice for a public hearing. Approved for the La Porte Development CorporationAgenda Corby D. Alexander,City ManagerDate RICHARD INDUSTRIAL GROUP:FACTS AND FIGURES Assumptions: 90 Relocate and/or hire approximately full-time employees with full benefits. Pay average salaries for employees as follows: $250,000 Managers $ 55,000 Admin $160,000 Engineers $200,000 Designers $160,000 RIG will spend in building improvements, infrastructureinstallation, and furniture, $120,000 RIG will spend in hiring/human resource expensesincluding signing bonuses, $340,000 RIG will spend in computers and software, $400,000 RIG will own roughly ($340,000 plus $60,000 in furniture and other property) of taxable business personal property, RIG will spend the first two years looking for a site upon which to construct a new, permanent facility in year #3. Real andBusiness Personal Property Tax Projections: $2,840 Total annual taxes paid to the City of La Porte over 3 years: ($400,000/100 x 0.71 = $2,840) Primary Job Opportunities for La Porte Residents: 82 RIG willoffer approximately new full-time, well paid positions with benefits to work in their engineering office in La Porte. Other Benefits of the Project: Improvement of an old suburban office in town, Opportunity to forge a new relationship with a growing company that may builda new, permanent facility, and further expand in La Porte after 3 years, Opportunity to attract other quality tenants/businesses to both the 1200 Building and the City of La Porte. REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEM Budget Agenda Date Requested: 23 September2013 Source of Funds: General Fund Requested By:Scott D. Livingston Account Number: 015-9892-993 Department: Administration/Economic Development Amount Budgeted:$200,000 Report: Resolution:Ordinance: Amount Requested: $67,365 Exhibit:Pgs. from the City Strategic Plan 2013-2017 Budgeted Item:YESNO Exhibit: Enhancement Grant Project Application Exhibit: SUMMARY & RECOMMENDATION In the Strategic Plan for 2013 -2017, City Councilexpressedan interest in re-developing and eliminating blight on both Broadwayand SH 146. Marked in redon the attached document: 4aDress up facades on Broadway Goal #says, “shopping center.” 6Revitalize SH 146 & Eliminate Blight Goal #says, “”. 6aneeded incentives Goal #says, “Identify and document the commonly sought or and to attract new retail development/redevelopment infrastructure inputs needed ”and will attract new “Create a plan to put the necessary infrastructure inputs into place that retail development and redevelopment .” 6bPromote revitalizationSH Goal #says, “and development (where appropriate) along 146, Main Street, and Broadway by facilitating contact, providing information, and offering incentives to development types consistent with our industry/market”, plus needed incentives “Identify and document the commonly soughtor and infrastructure attract new retail development/redevelopment inputs needed to ”, and attract new “Create a plan to put the necessary infrastructure inputs into place that will retail development and redevelopment .” Ogarrios Restaurant , which was recently purchased by a new owner, has expressed interest in applying for an Enhancement Grant to re-develop and expand the restaurant. Tonight, the Board Richard Industrial Group met a representative of the whichhas applied to the 4B Board for a cash incentive to open a new engineering office in La Porte. Althoughthe cash incentive would be tied to the creation of new full time job, the applicant has expressed an interest in using the funds to defray the cost of installing newoutdoor signage on the 1200 Building. 136,041.69 The current balance of the Enhancement Grant Account is $. However, grant commitments forBoard-approved butin progress Enhancement Grant Projects are as follows: Entrust Professional Insurance Company-$17,611 Paskey, Inc.-$25,000 FollisConstruction-$25,000 Stepping Stone Funeral Home-$1,065.10 Therefore, assuming that each Enhancement Grant Project receives a full reimbursement of the committed grant funds, the remaining balance in the Enhancement Grant Account would be $67,365.59. Staff continues to promote the Enhancement Grant Program to the businesses on Main Street. However, in light of the City’s Strategic Plan and the need for re-development and the elimination of blight along both Broadway and SH 146, staff requests that the 4B Board consider expanding the Enhancement Grant Program to include existing businesses on both Broadway and SH 146. Action Required by the La Porte Development Corporation Board: Consider approval or other action to expand the Enhancement Grant Program to include existing businesses on both Broadway and SH 146. Approved for the La Porte Development CorporationAgenda Corby D. Alexander,City ManagerDate BUSINESS. BY THE BAY. Main Street Enhancement Grant PROGRAM DESCRIPTION The Main Street Enhancement Grant provides matching funds to enhance existing building designs in the Main Street District (see attached map). Owners and tenants may be eligible for a reimbursement grant of monies used to enhance and/or beautify their new or existing businesses. ELIGIBLE PROJECTS The following types of projects are eligible for reimbursement grants: Façade Rehabilitation/Enhancement This includes work done on existing structures, such as removing non-historic/added facades, re- pointing brick or replacing mortar joints, replacing or restoring cornices, removing paint from brick, replacing windows, restoring transom windows, repairing facades, etc. New Awnings, Canopies, Porches and Signage This includes replacing, adding, or repairing awnings, canopies, porches and signs. Signs may include signboards, projecting signs, pedestrian signage, window signs, hanging signs, and awning/canopy signs. Beautification Projects This may include public art, landscaping, and other beautification projects as approved by the Enhancement Grant Evaluation Committee (EGEC). ENHANCEMENT GRANT PROGRAM DESCRIPTION, PAGE 1 BUSINESS. BY THE BAY. GRANT GUIDELINES 1.Grant funds are available only for exterior work on commercial property and building facades in the Main Street District that are visible from public streets. 2.In general, grants are available for converting existing structures to their original historic condition, or to renovate them to resemble the buildings currently on Main Street. 3.Grants will be processed and considered for award on a first-come, first-served basis until funds are depleted or until the program ends, whichever comes first. 4.No grants will be awarded for work that has already been started or completed, or for work that is covered by insurance. If desired work is above what insurance will pay and is considered an upgrade and enhancement in the opinion of the EGEC, it may be eligible for grant funds. 5.No grant will be awarded to any Applicant that owes any delinquent indebtedness* to the City of La Porte or the La Porte Development Corporation. 6.All grants will be awarded on a reimbursement basis once completed work has been verified by the EGEC to be compliant with the plans proposed in the approved application. Any deviation from the approved grant project may result in the total or partial withdrawal of the grant. 7.All projects submitted for enhancement grants will be subject to a review by the EGEC, and approval from the La Porte Economic Development Corporation (EDC). The review criteria includes the following: That the project demonstrates a significant improvement over the existing situation That the project will add to the beautification of Main Street That the project will enhance Main Street’s appeal to new businesses and visitors That the project will complement the surrounding buildings That the project will add value to the City of La Porte 8.Grant applications and awards can be made in any of the reimbursable activities described above and may be combined for any single property or project. An applicant is defined as an owner, tenant, or combination thereof occupying an eligible property within the Main Street District. A single owner of multiple properties may apply for grant funds for each property owned but the match must be for no less than $2,500, and the owner may not receive more than $25,000 per property in a three (3) year period. ENHANCEMENT GRANT PROGRAM DESCRIPTION, PAGE 2 BUSINESS. BY THE BAY. APPLICATION PROCESS 1.Determine eligibility: Discuss project plans with Main Street/Economic Development Coordinator. Coordinator will set up a pre-development meeting with the EGEC. 2.Fill out the application and sign the agreement form. All grant applications must include the following: a.A scale drawing by the project architect or design professional of all grant work. b.Samples—e.g. paint samples, fabric swatches, sign material, etc.—that will enable the EGEC to envision the finished project. c.Itemized work estimates on all project work from contractors or project architects. Self-contracted work will be reimbursed for actual legitimate expenses, excluding labor. d.Photographs of the building’s exterior. The Applicant shall be required to provide before and after photographs of the building before the reimbursement grant can be awarded. For the initial application, before photographs will suffice, but photographs of the completed project must be submitted before the grant can be considered for approval. 3.Return the completed application form, with all applicable items, to the Economic Development Office, 604 W. Fairmont Parkway, La Porte, TX 77571. 4.Application will undergo an approval process, which includes but is not limited to the following: a.All projects must meet current building standards and codes, as well as building permit requirements. b.The EGEC will only consider applications that have been properly and fully completed and which contain all information requested in the application and/or by the committee. c.All construction bids submitted by the Applicant must be current and must be dated no earlier than ninety (90) days prior to the Application request. Bids shall be submitted on the contractor’s or project architect’s letterhead and shall contain the contractor’s name, address, and telephone number and shall itemize the bid in a manner that allows the EGEC to determine the bid components and authenticity of the bid. d.Applications receiving approval by the EGEC shall commence construction described in the application within ninety (90) days from the date the grant is approved. All Applicants must complete the construction described in the Application within one (1) year from the date the grant is approved. If the Applicant cannot meet these timelines, the Applicant may submit a written request for an extension for the commencement date or completion date provided the extension request is made prior to the ninety (90) day or one (1) year time limit. The EGEC shall not be obligated to grant an extension but may do so for good cause determined solely by the members of the Committee. The extensions, if granted, shall be for the term and for ENHANCEMENT GRANT PROGRAM DESCRIPTION, PAGE 3 BUSINESS. BY THE BAY. the conditions determined exclusively by the EGEC. An extension denial cannot be appealed and shall be final. e.As a condition of this grant Application, the Applicant consents and shall allow the EGEC to request city inspections to determine that the grant, if awarded, will not be used for construction on any building that is not in compliance with the City Municipal Codes and Ordinances that are applicable to the construction contemplated in the application. f.The EGEC and EDC shall have sole discretion in awarding grants. They shall award grants considering the amount requested, grant funds available, the guidelines of the grant program, condition of the building in which the grant funds will be used, economic impact, other grant requests, the type and nature of the construction, and the proposed construction results considering the grant program. g.No Applicant has a proprietary right to receive grant funds. The EGEC shall consider any application within its discretionary authority to determine what grant amount would be in the best interest of the grant program. h.The Applicant shall be required to furnish photographs of the building’s exterior, and any other site locations that are included as part of the application request and shall provide photographs after the construction is completed as a condition of final grant disbursement. i.The EGEC has the final discretion with regard to funding and reserves the right to recommend modifications or reject any project or elements of any project. 5.Reimbursement. When the entire grant project has been satisfactorily completed, the Applicant shall present the Economic Development Office with the following: a.Copies of all paid invoices, including copies of cancelled checks and/or credit card receipts for a single payment reimbursement of the approved funding b.Photographs of all completed work 6.When the project has been reviewed and signed off by the EGEC and their recommendations have been presented and approved by the EDC, a reimbursement check will be issued. ENHANCEMENT GRANT PROGRAM DESCRIPTION, PAGE 4 BUSINESS. BY THE BAY. Main Street Enhancement Grant APPLICATION City of La Porte Economic Development Office 604 W. Fairmont Pkwy La Porte, TX 77571 APPLICANT INFORMATION: APPLICATION DATE: Applicant Name Business Name Physical Business Address Business Owner (if different from applicant) Mailing Address Contact Phone Email Address TYPE OF WORK (): Façade Rehabilitation/Enhancement Awnings/Signage Beautification Other (): DETAILS OF PLANNED IMPROVEMENTS (): ENHANCEMENT GRANT APPLICATION, PAGE 1 BUSINESS. BY THE BAY. Please list Contractor and/or Project Architect Proposals and Total Amounts (): CONTRACTOR/PROJECT ARCHITECT TOTAL AMOUNT 1. $ 2. $ 3. $ 4. $ 5. $ BUDGET DETAIL: PROJECT EXPENDITURES FUNDS REQUESTED FUNDS APPLIED TOTAL Façade Rehab $ $ $ Awnings/Signage $ $ $ Beautification $ $ $ Other (list):$ $ $ Other (list):$ $ $ TOTALS $ $ $ Total estimated cost of proposed project: $ Amount requested (up to 50% of total cost, $2,500 to $25,000): $ I have met with the EGEC and I fully understand the Enhancement Grant procedures and details established. I intend to use these grant funds for the renovation projects, as spelled out in the application. I have not received, nor will I receive insurance monies for this revitalization project OR I have disclosed all pertinent insurance information. I understand that if I am awarded an Enhancement Grant, any deviation from the approved project may result in the partial or total withdrawal of the grant funds. If I am awarded a reimbursement grant for façade, awning, signage, beautification, or other approved work, alterations should not be made within five (5) years from construction; otherwise I may be required to reimburse the La Porte Economic Development Corporation immediately for the full amount of the grant. APPLICANT SIGNATURE DATE ENHANCEMENT GRANT APPLICATION, PAGE 2 This is an Unaudited Statement. City of La Porte La Porte Development Corporation (038) Fund Summary (Section 4B Sales Tax) Previous ReportFY 2012-13FY 2011-12 Unaudited Beginning Fund Balance 9/302,196,9352,196,9352,123,808 Plus Year to Date Revenues: 1/2 Cent Sales Tax1,167,6111,515,9901,432,632 Transfers-In--154,914 Interest Income3,6064,4403,844 Total Revenues1,171,2171,520,4301,591,390 Equals Total Resources3,368,1523,717,3653,715,198 Less Year to Date Expenditures: Payroll36,60947,02649,901 Supplies7941,5252,480 Services & Charges (Memberships, Training, Advertising, Legal, Utilities)124,470150,376107,281 Debt Service Transfer307,546375,889605,310 * ** Capital Projects Transfers93,750684,583889,167 Total Expenditures563,1691,259,3991,654,139 Estimated Year to Date Fund Balance$2,804,983$2,457,966$2,061,059 *Debt Service Payments for Library, Bay Area Boulevard & Canada Road and Ballfields. **Capital Project Transfer is for the 3rd Street Parking Lot Project.