HomeMy WebLinkAbout07-14-14 Meeting of the La Porte Development Corporation Board of DirectorsRICHARD WARREN, PRESIDENT
MIKE COOKSLEY, BOARD MEMBER
JAY MARTIN, BOARD MEMBER
CHUCK ENGELKEN, BOARD MEMBER
MIKE CLAUSEN, BOARD MEMBER
RANDY WOODARD, BOARD MEMBER
NANCY OJEDA, BOARD MEMBER
[•moi � -•- � •. •�•..•., • e� �,
Notice is hereby given of a meeting of the City of La Porte Development Corporation to be held on
July 14, 2014, at the City Hall Council Chambers, 604 W. Fairmont Parkway, La Porte, Texas,
beginning at 05:00 PM to consider the following items of business:
1. CALL TO ORDER
2. CONSENT AGENDA (All consent agenda items are considered routine by the La Porte
Decelopment Corporation Board and will be enacted by one motion. There will be no separate
discussion of these items unless a Board member requests an item be removed and considered
separately)
(a) Consider approval of minutes of the meeting of La Porte Development Corporation Board
held on June 9, 2014 - P. Fogarty
(b) Consider approval or other action authorizing Staff to execute payment in the amount of
$300,000 to INEOS USA, LLC pursuant to the Development Agreement - S. Livingston
(c) Discussion or other action regarding the proposed budget for La Porte Development
Corporation Board for Fiscal Year 2014-2015 - S. Livingston
3. DISCUSSION OR OTHER ACTION
(a) Discussion or other action authorizing Staff to post appropriate notice for a public hearing
for an economic incentive grant to ACT Independent Turbo Services, Inc. - S. Livingston
(b) Discussion or other action authorizing Staff to revise the existing Development Agreement
with INEOS - S. Livingston
4. SET DATE FOR NEXT MEETING
5. STAFF REPORTS
(a) Receive report of the Economic Alliance Houston Port Region - S. Livingston
(b) Receive Financial Report - M. Dolby
(c) Receive report on the recent ICSC (International Council of Shopping Centers) Show held in
Las Vegas - S. Livingston
6. Board member comments regarding matters appearing on agenda; Recognition of
community members, city employees, and upcoming events; inquiry of staff regarding
specific factual information or existing policies.
7. Adjourn
The La Porte Development Corporation Board reserves the right to meet in closed session on any
agenda item should the need arise and if applicable pursuant to authorization by Title 5, Chapter 551,
of the Texas Government Code (the Texas open meetings laws).
In compliance with the Americans with Disabilities Act, the City of La Porte will provide for reasonable
accommodations for persons attending public meetings. 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 July 14, 2014, agenda of items to be considered by the Board of the La Porte De\,elopment
Corporation was placed on the City Hall Bulletin Board on July 8, 2014.
signature here
Patrice Fogarty, City Secretary
RICHARD WARREN, PRESIDENT
MIKE COOKSLEY, VICE PRESIDENT
CHUCK ENGELKEN, BOARD MEMBER
JAY MARTIN, BOARD MEMBER
MIKE CLAUSEN, BOARD MEMBER
RANDY WOODARD, BOARD MEMBER
NANCY OJEDA, BOARD MEMBER
MINUTES OF LA PORTE DEVELOPMENT CORPORATION BOARD
MEETING OF JUNE 9, 2014
The City of La Porte Development Corporation Board met on June 9, 2014, at the City Hall Council Chambers,
604 West Fairmont Parkway, La Porte, Texas, at 5:00 p.m. to consider the following items of business:
1. CALL TO ORDER
President Warren called the meeting to order at 5:00 p.m. The following members of the La Porte
Development Corporation Board were present: Board members Martin, Clausen, Woodard, Ojeda
Engelken and Vice President Cooksley.
Staff Present: Corby Alexander, Patrice Fogarty, Scott Livingston, Clark Askins and Traci Leach.
2. CONSENT AGENDA (All consent agenda items are considered routine by the La Porte Development
Corporation Board and will be enacted by one motion. There will be no separate discussion of these items unless
a Board member requests an item be removed and considered separately.)
(a) Consider approval of minutes of the meeting of La Porte Development Corporation Board
held on May 12, 2014 — P. Fogarty
Vice President Cooksley moved to approve the consent agenda as presented. Board member
Engelken seconded.
Ayes: President Warren, Vice -President Cooksley, Board members
Clausen, Woodard, Ojeda, Martin and Engelken
Nays: None
Absent: None
3. DISCUSSION OR OTHER ACTION
(a) Discussion or other action regarding Proposed Projects for Fiscal Year 2014-2015 Budget — S.
Livingston
Economic Development Coordinator Scott Livingston presented discussion on Proposed Projects for
the Fiscal Year 2014-2015 Budget.
Board member Woodard asked the difference between the Economic Alliance and Bay Area Houston
Economic Partnership. Economic Development Coordinator Scott Livingston responded they are both
alike as far as what he would refer to as sub -regional Chambers of Commerce, with Bay Area Houston
Economic Partnership gravitating to the south, representing quality of life and technology, assisted with
the Ike Dike Project and flood insurance. The Economic Alliance gravitating to the north around the
Houston Ship Channel, representing the Petrochemical and Maritime industries. Mr. Livingston added
Page 1 of 3
June 9, 2014, La Porte Development Corporation Board Minutes
they help him develop prospects for industry and retail developers. Mr. Livingston also advised he will
set dates for the Economic Alliance and Bay Area Houston Economic Partnership to come before the
Board members and City Council for a presentation before the adoption of the Fiscal Year 2014-2015
Budget.
Board member Martin commented Bay Area Houston Economic Partnership worked well with the
Biggert Waters Act, and he feels comfortable with supporting them.
Board member Clausen commented the Economic Alliance is working hard with San Jacinto College on
workforce development.
EDC Livingston added Bay Area Houston Economic Partnership has a big interest in healthcare.
Board member Woodard questioned $23,900 for land acquisition in 2011-2012 and if the City actually
owned the land or if the land had been transferred. Assistant City Manager Traci Leach informed the
Board that lots at 908 and 912 West Main were sold. Board member Woodard then questioned $35,500
for Harris County Bus Service. Assistant City Manager Traci Leach informed the Board that the first two
years of the service included the City of La Porte, San Jacinto College and the City of Pasadena in a
partnership for the communities. Ms. Leach advised the City of Pasadena and San Jacinto College
opted out of the agreement; and for the last 12 months, the City has been providing services for the
City of La Porte. Ms. Leach informed the Board that since November 2012 through October 2013, there
were 7220 riders; and from November 2014 through February 2014, there were 2672 riders. Board
member Woodard then questioned the routes for the bus service. Assistant City Manager Traci Leach
informed there are 12-15 stops in La Porte; a Social Service bus that goes to the Social Security Office
in Pasadena and the Strawberry Clinic; and a bus that goes to the Transit Center in Baytown. Ms.
Leach advised that as of November 2012 through October 2013, there were 4168 riders here in La
Porte, and 3052 for the Social Service bus. Board member Woodard commented none of the bus
service should be paid out of the Economic Development budget.
Returning to the subject of the budget, Economic Development Coordinator Scott Livingston advised
that the Debt Service will be increased to pay the debt a lot faster. Finance Director Michael Dolby
added the principal will be moved up in the payment schedule to reduce the interest; and, eventually,
the debt will go down when the interest rates are better. Mr. Dolby also added he estimates about $10
million has been allocated to the La Porte Development Corporation Board for issues such as the
library and the work done on Bay Area Blvd. Board member Woodard asked if the City of La Porte can
allocate debt services to the La Porte Development Corporation Board funds for the payment on
outstanding indebtedness when the Board does not have any outstanding bonds. Mr. Dolby responded
the La Porte Development Corporation Board cannot and is not ready to issue debt on its own due to
the length of operation, and the City Council has designated the Board to pay the debt due to it being a
budget issue.
4. SET DATE FOR NEXT MEETING — S. Livingston
Board members set the next meeting date for Monday, July 14, 2014, at 5:00 p.m.
5. STAFF REPORTS
(a) Receive Financial Report — M. Dolby
Finance Director Michael Dolby provided a report.
Page 2 of 3
June 9, 2014, La Porte Development Corporation Board Minutes
(b) Receive report on the recent ICSC (International Council of Shopping Centers) Show held in
Las Vegas — S. Livingston
Economic Development Coordinator Scott Livingston provided a report. More time will be spent on this
discussion at the next meeting.
6. BOARD MEMBER COMMENTS regarding matters appearing on agenda; recognition of community
members, city employees, and upcoming events; inquiry of staff regarding specific factual information
or existing policies.
President Warren thanked everyone for attending the meeting.
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. RECONVENE into regular session and consider action, if any, on items discussed in executive session.
There was no executive session.
9. ADJOURN
There being no further business the meeting adjourned at 5:48 p.m.
Respectfully submitted,
Patrice Fogarty, City Secretary
Passed and approved on this 14th day of July, 2014.
President Richard Warren
Page 3 of 3
June 9, 2014, La Porte Development Corporation Board Minutes
REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA
ITEM
Agenda Date Requested: July 14, 2014
Requested By: Scott D. Livingston
Department: Economic Development/Tourism
Report: ' Resolution:'' Ordinance: ''
Exhibits:
1. $250 Million Letter of Commitment
2. INEOS Development Agreement
Appropriation
Source of Funds: N/A
Account Number:
Amount Budgeted:
Amount Requested:
Budgeted Item: ' YES NO
SUMMARY & RECOMMENDATIONS
Under the terms of the development agreement which this board approved on 23 September 2013, INEOS USA,
LLC has made a commitment to invest at least $250 million in the "Polyethylene Project", which is also referred to
as "Unit #F'.
Per the terms of the same development agreement, under Article LA.2, INEOS USA, LLC respectfully requests
payment in the amount of $300,000.
Action Required by the La Porte Development Corporation:
Consider approval or other action to authorize staff to execute payment in the amount of $300,000 to INEOS
USA, LLC pursuant to the Development Agreement.
Approved for the La Porte Development Corporation Agenda
Corby D. Alexander, City Manager
Date
INE Cl."O'S Olefins &Polymers USA
July 1, 2014
Mr. Richard Warren
President, Board of Directors
La Porte Development Corporation
604 W. Fairmont Parkway
LaPorte, TX 77571
INEOS olefins & Polymers USP.
A Division of INEOS USA LLC
Marina View Building
2600 South Shore Boulevard
Suite 500
League city,-fexas 77573
Tel: 29 1 -535-661 1
Fax: 281-535-6765
1 on Avery( ineos.coin
Re: Economic Development Incentive Agreement Between The La Porte Development Corporation, and
INEOS USA LLC, A Delaware Limited Liability Company, for Use of Type B Development Corporation Sales
Tax Funds, dated September 23, 2013 ("Incentive Agreement")
Dear Mr. Warren:
By this letter, INEOS USA LLC ("INEOS") makes a financial commitment to construct the Polyethylene
Project at the Battleground Manufacturing Complex, including a minimum capital investment of $250,000,000
and employment of at least 24 new full-time employees by December 31, 2017, as provided for in Article I of
the Incentive Agreement.
In consideration of the foregoing commitment, INEOS respectfully requests payment by The La Porte
Development Corporation ("LPDC") of the $300,000 cash incentive pursuant to Article I.A.2 of the Incentive
Agreement.
INEOS very much appreciates the support of the LPDC in the effort to make the investment in the Polyethylene
Project in La Porte. INEOS looks forward to continuing this cooperative relationship with the City of La Porte
and the LPDC as it moves towards construction and operation of the Polyethylene Project.
Yours sincerely,
INEOS USA LLC
w
Timothy A. Avery
CFO. INEOS Olefins and Polymers USA,
A division of INEOS USA LLC
ZIM, lots
JiJi
MIATIAIMIN
'�3, ybetween4 da
T , HIS AGREEMENT' rnade by aandPirtered into thiisr"
2013 between the La PDe
orte velopment Corporation, a Type B
f� 19- 1 a *ro i,)c'rafion operating under aUth0ty of "'I"exas Local Governnien't
Codo Chapters 501 and 505 (hereinatt'PF "Irr.PDC"), andINFOS USA LIE,
[)61arare lirnitpd lilability cowany (hereinafter 'Reciipienit" ).
WITNESSETH.
WHEREAS, the. voters of the City of' La Porte authorized the lev,yi,ing of
additional sales, tw vvithir'i, the City for promotion of ecorlornc devefopnlent and
the, LP DC us authorized to use such tax revenuos for certa4i qLlalifyillg proi I ects
arid other, ic,,.�conornic developmeri4 reWed P!Lirposes; and
WHERFAS, Recipient wishes to expand nts current busiliness operatiorl at
its jndusldal complex at 1230 1 Fide p aj w1amce Parkway In 1he Ba(tl,ogro,und
IndL.11,1tri al ts[nicf, located adjacent to 1ho', northern corporate krrii,ts, of the City of
Lo Porte, 'I"exas (hereinafter, "Battleground Manufacturing Comphex`), by openirig
and operating 1) an Ell"iy1eI ie oxide rnanLlfactuMg facility at a minimum capital
investrtient cost of S500,000,000-00 and which of three (3) years is anticipated
to ernloloy up to 60 additional personnel (here 1 n after, Ethylene Oxide Project);
�ind 2) a Poyethylerie 111aPufactur, Ing frac oity at a mininiunI capital investment
cost of $250,000,000,00, and which alter three (3) years is anticipated to employ
up to 24 addilional personnel (hrareinafter, PDIyethyen e Project), and
WHEREAS, LDPC and [�ecipent anticipate that the conStIFIUCUOln of the
facilities 'for the Ethylono Oxide project and the Polyethylene Project wifl be
substantially ccnipNele by the end of2017� -and
WHEREAS, Texas Local Gov err)rnent Code section 501,159 aUthorizes a
Type B corporation to and flak' a project i11 anOfll(-,r.jUrisdction in th,le stale if` the
govermng bDdy of the other Jurisdiction, requesis the corporation to exercise its
p0VV01`$ VVithin it JiUrisd_�ction; and whereas Harris County, Texas has requested
and authorized the LPDC to u ride rta ke the pi ojeG'Is described in this Aqreenr nit
at die Bal,tl.c
.jfnund ManufaCtUring Complex; and
WFIEREAS, Recipient has requested that LPIDC provide, financiaN
Incentives to lornote the expansion of its Battleground lel allUfacturing Complex
III earl arnOUni't to over 01' $Libsidize certain infrastructure costs, incluffing streets
and roads, drainage and related irriprovements, assoclated aCqUi$it10r1 COMM, and
other purposes aUfl1DfiZPd by I exas Local Governi-nent Code chapters 5101 and
505, and it is the desire of L..PDG to assist in the fUnding of sarne., f4ichng that
such expenditures will contr'bute to protnoflng econornic grovAh and
development in the City-, and
V4HEREAS, Trn,,xas law and the lby4avvs of (lie LPDC require tViat certain
eXpenddures and projects by the I -PDO tie approved by the governing body of
the City,- and whereas the LPDC Board has duly approved such projects and the
expendituies, for same, have belell Mthorized by the La Porte City Gouncfl�; and
WHEREAS, Publication Of notice for public hearing reqUired Under Texas,
Local Government Code sention 505160 for expenditure of Type B funds on a,
proposed project was niade ar)d tfiera were no petition filed Wth the City
registering a protest to the proposed grant.
NOW THEREFORE, in considleration of the covenants and Conditions
stated hefoln, and in con sideraU011 Of the mutual benefits that will accru(;� to, each
of the parties, hereDf, as well as to the citizen s of than City of L.a Porte,, Texas, the
pailes have agreed and do hereby ag!ree as follows.
ON m
A In consicleration of Recipient, laicating its proposed Rhylene Oxide Project
at its Battleground ManufactUfinq COMPI'r�X, as, specifically described in
that certain pUblic hearIi ig aUthOriZi11g this proposed protects, and
expenditure of I..[10 furids for the lji-Dniofion of sand projects, held before
the LRDC on July 16, 20,12 (hereinafter, the "Public Hearing"), LPDC
to provide Recipient an iri;cenfive package consisting of a cash
payment of'$70000MD accurdinto the sc[nedule outlined in, this Article I
and the, retention of said payment bel,rig conditioned upon Recipi,ent's
satisfacFon of certain rniniML.irn constr(Action, related capital investroent
costs anci additional permanent direct Jobs as provided 41, fts Article 1,
Fufthermore, in cons idera,ficri of Recipient locating Its proposed,
Polyethyhene Project at its BattlegmUnd M8.n'L1faC[U1'-i1'1q C01 In P l C X, a, S
specifically rdescribed 411 the, Pubilk, H,earing, 1-1-11DC , aro to provide
Reciplent am incentive package, ccnsrsting of a cash payment of
$300,1000,00 accord'Ing to the schedule at.,il1ned in this Ailicka I and the
reteritlon of 9EM payment b6nq conditioned upon Recipient's ",fisfaction
of Certain mininlurn coratractionrelated oapital investment costs and
additional pernianent direct jobs as provided in this Arficle l,
Ric, cash incienUves heroin described shall be distributed as follows�
1 a cash ii"icentive payrrient in the amount of $700,000,00 for tl,,Ie
Ethylene Oxide Project will be distnbUted to Reciprent no later
than 30 clays after receipf. by L �FIDC of lettrAr froa'l Re6piient's
Officer eviclencing Recipient's financial comryiitrnei it to
consta,iction of the Ethylene Oxide Project at the Battlegrourld
MarklifactuiJnq Complex-, such letter of corni-nifi-neurit shall b(s,
subrnfttedl to LDDC no later than August 1, 2014,
2) a, cash inGenti've paynient in the arnount of $300,000,00 will be
clistdbuted to Recipient no later, than 30 days after Feceipt, by
LYDC of letter fron-i Recipient's Officer evidencing Recipient'
financial comnAment to construction oaf the Polyethylene Project
at the Dattlegromid Manufacturit"ig Coniplex; such lettc,,r of
0
cornmitnient h ll be submMed to l-PF)C ru) latpr ManAur ,quqt '11,
20'14,.
B, As a caindqion for the receil")t and' retention of each of the reforenced cash
incenhvp, payi'vents rovided rn this Articl I, and as required by Texas
Loca� vernment Code, section 501.158, Recipbnt shall prNdrr',, In I -PDC
verificaOii that it has satisfied the following performance s1tand'ards, as
applicaMe, to each of the projects, Based on the foregoing,, Rec,ilpi.ent
agrees to the foHowing requiremen1s,
1) FoT [lie Ethylene Ogide Project., Nm eupierit w0l subn'14 10 t1 ILI by
Deceaiber 31, 2017"
a) DOCUrnentatin domonstrating fi")at 60 new full-tiMO eMp,10yeeS
have been hired y Recippent. SLXI"� dOGUnwmllation sI oll 41clocle
Federal andlor State employment re -ports andr rion'thly report
to, the Texas State Comptroller,
b) Documentation that SUbstantiates Recipient's expenditure of a
minimwi'i of 00, 00,t' 0i +0f ire caprial Investmeni.
2), 1 'ne Project, Reciplent will 9,Ubriiit to the LDDC b,y
a) Docua'ientation demonstrating that 24 11eW W111 --UR) e employees
have been hired by Reciple-W. StAClr] documentation shall include
17 edera'I andr State &nnployrnent reports andlur nrianthly report
to the 'T-exas, State ComptroHer.
b) Docur)ienlafion that SUbstatitiates Rcicipient's expenditure of a
mMilmui')i of $250.000,000,00 in capital investment.
Re(#ent will expend the cash incentive payty)erits only fewards the
cons,truOorl of streets arid roads, drainage and related imp rove n'ients,
aSSOCl01(;Id aCqUiSitiM CGSIS, 8nd atf-ier related PL1rpc)ses, aull-tori zed by
"Texas Liacaa Govern,ment Coclo, chapters 501 xd 505, in furtherance of
the Ethylene Oxide Project and the, Rolyetl-iylerle Project at the
Battle g mLi nd MWT,AaCtUnng Complex, ruore, parti,culady described by
metes mid, boundC-SCriptioin as refiected Exhibit A, attached to this
agreement, and, j1,.1CO1nrpU1--'itod by r� fee-ence foi, all pUrposes.
c
Drshursenrent an(]/or retention of''the cash incenfive payments iderVifled in
Article 11 of tl'',ils Agreem&A Sh be roade, as fnllovjs
A, LPDC Slr'la 'Se
� 11 diGIDLF to Recrpjent, Subject to the satJsfactlon of the
mndMons precccluit ar uondjliorsubsequent contained within I of
this Agreement as applivable for each project�
3
I , I.PCIG's obligation to Recipient shall not exceed $700..000.00 for the
Ethylene Oxide Project and $300,000,00 fQr the Pulyet[lylene Project
Recipient undcrstands ftlat the funds, paid to Recipient by the I....PDC are
derived frorri to revenuecollected under 'Texas Local Governinant Code
505 2,52, arid, that LPDC has estiniated the tax revenues to be collected during
the learn of tWs Agreement Rec,pjent further understands, acknowledge.s, and
agre(,,as that if the tax reVeTILie; actuadlly o0ected is less than 80% of the esfi'rnated
'tax revenue—, to be collect rt in, any 2 of 3 successive- fiscal years during tt'ie term
of this AgFeennent and prior to the year Recipient is othlpmyVlSe ej,-Ititle(j JU reCe�Ve
a casl") incentive payniont pur$Lfarit to tNs Agreement, I PDC will be entitled to
terminate all, fUrther c -ash incentive payments to Recipient dLiring or after the
ftSCal year -ftyrr �N[JCJI tl,Ia ri a �e C - v -i u, short fall- provided, Recipient's obligations
..e s, �,e i! r,
vdth respect to the project so affected shall likewise be terminated.
UWE �111 Zi
If Recipient shaH fail to me any of the capital hives trPenl: or job Creafion
thresholds outlinerd in thesoheldUICI contained in Article l Df this Agreement fur the
Etlhyla,ne Omde Pru.iecor the P6yethylene Pl-oject uafter, individually, a
W Project"), LPDC ,;hall have [lie dUht to reclaim and rocapture, ot'i a pro -rata
basis, all or a portion of 0,ie cash incentive paynients, 111LIS IfIE' PO�Ai011 of accri.,ied
interest of the cash 4icentive payments to Inc repaid, which were pare vious1ly
disbUrSE,K] to Recipient with respect to, the affccted Project, whether or not such
dlsbt,trsenrtents have been spent by Rec'Pent at tho aim e of the re-&lanliatioin by
the LPDC. In such everit interest shall be, cal(1,1,0ated uttjzing the rate periodically
announced by the VNIall Street Journal as the prin-ie or base cornniercial lending
rate, or K the Wal[ Street Journal shall ever cease to eXiSt Of Ce@S,c to annOUr)(3-0- EI
prime or base lendirirate, then at the annual rate of inteilest from finie to Uaie
annDL]riced by CA"Jibank, NA. (or by any other New York money center bank
elects by by the t..1-:11 C), as its pricne or base cornmercial lending rats:, from the,
Effective Date until pliu(Ilr For pUrposes of this Agreement, LPDC's right of
recaptILIMI, shall apply or) a Project -by -Project, basm area shall apply to the
Per'Crentage of the capital investment or job creation target not mel by Reclpie,nt
for the, atf(-,,cted Project M each such case, applicable percentage of the
preViOL,191Y Paid cash Pay[Tent or payrnents, for the affected Project(s) shall be
rerriAted to the LP[ DC withir"i sixty (60) days of receipt of written deawd for sarne,
nie applicable per centage of theca captal investment ol"job, creaCon target not rnet
by lir ,sciperit shall be T-nUtLI8l1Y agreed by 11he Parficsprovided however, should
the Particls tail to agree on, such percentage the Dispute Resolutior) claLMC in
Ai ticle XV shall apply.
In the, event of a rnatr�rjal breach by Recipient hereunder, inclu(Jir)g, but
rIot liaiited to, use of flare, funds provided; herein for fi(,,irposes other than those
stated Ira Article I of this Agreement, I PID C may cease aH furture
hereunder and ti3rnrlinafe fl-iis Apreernent" and, fUrthenvore, LP DC shall hiave the
right to reclairn a r)d recapture, and Recipie nt. sfiafl refL.wd, any funds that are not
spea
nt in ccordane W
race' thie ternis of this Agreerjj(�
,rIt arid ar�y unspent and
unobligaled I -PDC fund S PrCVIOUSlY P0i'd to Re6pient bt.rt not yet paid or pledged
by FZecil)ient to third parfies In eWarh siich case, Reulpient shall rernit payrnents
to ttie LPD C within sixty (60) days of raceipt of w0ten demand lor same,
FTYM
The terni of fts Aoreernerit will expire on or before, December 31, 2017,
PUT$ 1_1011ttO AWJCle 1 of this, Agrtn-amei it -
Recipient shall provid,c:, to the LFIX wilNn ninety (90) days f0owing each,
payment made p1jrS-uant to Article I of this Pkqreennent, repf,'A and fall
documentati,DTI �[IFIR,'irmfler. "ExpenditUre Report"), showing thea c�xpencfituires
triade by Re6pient pursuaint to this Agreenier,it and a den,vonstration that the
furids were LIMA Only for 11ie purposes authorized by this Agreennent; and
Reciipient shall SUPplement the Expenditure repci-t at 9& -day intervals uritil cash
incentive payn'ients are fully spent. Recipient shall ii,7,iaiintaln books of account
vvitl"i correct entries of all expetiOUres that are nnade accordir-ig to the terms of
this Agreerrient arid o,f, any funds frorn other sources,- Any and 0 books of
account of Re6pient shall be, at all finries open to the, in,spection of LPD C sur any
its, officer s or duly �!Lithoidzed agents. UPOFI SLIGh inspecliuri and with appropriate
measures to, protect Reciplerit's confidenfiM business information, LI DO, or its
officers or agents shall be afforded the OPPOOLiinity to niake photographlc copes
of any and all docurneantation of books of' account, includ;ung but not limited to
statenients of accoi,,int relaUng to the dispositiorr) of funds provided by LPDC
LITIcler this Agreement and any funds froai other sources. Recipient shafl maintain
such bookS of HOCOLIM in T(=,xas for a pedod of three (3) year 'follooAng receipt of,'
the last cash incentive disbursement by the LPDC, PIASUallt to Article I of this
Agreement. Notwithstanding Article 1, above, the I..PDC shall be Linder no
obligation to MakO ai]YfUnd, disbLIFS011,C]rpt S rf Reciplent falls to provide an
Exper'Witure FIeporl-
MAIMMAIIIII INTI
Either party hereto i'my enforce this Agreenierit by any and all mearls
available at kavi or in equity,
This Agreement does not create ally jOlIlt Vel'ItUre, partnership, or agency
relationship betty err Vv,-, UDDCI and Recipient. Recipient Shall have exclusIve
control of, anr,f tl-ie eruler sire right to control the, detnJIS of the workto be
poi-fDrmod by Re6pient hereunder and 01 personnell perlorming sarne, and shall
be solely re.spori sible for the acs arid cunni ssioris of its officers, memb(,,�rs, agents,
servwits, err pn oyees, subcontractors, program paiticipants, voltinleers,
licer,)sees, and invitees, In no evert shall any person participating in or
performlrig any of F�rvmpienl's duties or responsibikties hereunder [)Q considered
an officer, agent, servarit, or employee of the LPDC.
I
OBEHIM
Recipnt Eigrees [D MSLUIIEand dues hen-eby @SSUIrrrra all responsit.)1ky
and liablOity, for dariiages sustained by persons or, property, whether real or,
acrtr d,
by (,,)r frori,i the carryiing oii of work by HecilL,)ient or in the perforimance of
services performed. and to be pet -fort -nod by Recipient hereunder. Recipient
covenants and agrees to, arid does hereby irrdemni'fy, defem,.I, and hold harmless
LP,DC and, all their respectivenflficer-s, agents, arid; employee-; fi"Ofr') all SUitS,
actio,''is, cllaltiis, and exfens es of ariy character, rincluding, attorney's fates,
lbl'OLIght for or iIICUrred an, account of any injuries, or darnages, whether real or
asserted, st,islained by any person or property by or- in conseq.ience of any
intentiorval or negligent act, omission, or conduct of Reciperrt, its, agents,
servants or criployees ai-d in the cv,rrse of perforruance by LP'DC and Recipnt
under dais Agreement.
TN s Agreement rnay be ar-nended by the mutual agreement of the parties
N..tTre,to in writing to be attaclhed Io aind inc r or leA Into tfils Agreernent,
RecOenl shaH adhere to all lcuqli, state„ and federal laws and regulations,
that ri'lay affuxt ilts actions made pursuant to this Agreement, and shall maintain
in effect during t1le 'term, of this Agreenient any and all f(,,-;derM, state, aind local
licenses, and 1,-i.wnrfs which ilay be reqWred of Recipients gen eraHy,
Re,,61jierit may not asp. l9i"i this Agreement %.NiftUt 11110 J611 1°1 co,nsc°nt of
L.PDC, which corment MI not he uirrrelasonaNy dpiayed, coriditioned, or denied;
provided, however, the foregoing notwithstanding, Recl'*-,,lnt rnay ass'Uni I[Iis
Agreenien,tin whole or on a Project -by. -Project basis, to an entity acqoliring M Or
$(-Ibstarlfially all of its o-lterast in the Ethylene Oxide Project or Polly rat h y1ene
Project.
ART11CLE XIIJ
The waiver by cither ' party hereto of any breach of parry teral, condition; or
covenant herein contained shall riot be deen-red a waiver of: any sing sequient
breach of the sarne, or any othier term, condition, or covenant,
-HLIXIV
The obligations, of the parties, to IN's Agreement are pei forrriaWe inl.,JarriS
Courity, 'Texas and if legzil act[ori is necessary to enforce sairne, ver me shail lie in
1--larris County, Texns'
I
The par11(--,,i' represeritalkiles Wk r-nect as to irrplenient the terms
of this Agreen"ient and shall make a good faith atteimpt to hnforqiafly resolve any
dJSP'Ute$.
Except to prevent irreparable harui for which there is no adeClUate remedy,
at law, neither party herralln shall file sLilt to enforce this Agreernei it vvitl")out first
8 1
Ubn*fir)q We dispute to confidentW, non-binding niechaflon before a n,)ediator
[T)Uklallly agre�ed Lll-JCAI by the pardes,
This Agreeili,ie.ilt shall be governed by and construed in accord'ance with
fl"ie laws of the State of 'Turas.,
ARTICLE XVII
ThAgreeirent rnay be executed in triplicate, each of villich shall be
deerned an orligjnal� and constitute, one and the Uln)e illStIlin"i,eant.
Neither Ll-N)C n Recipient shall be required to perform any term,
condrtion, or covenant ii r this Agreernent so long as such poJorrmance is delayed
UrL prevented by force majeure. As used in 'this Article XVII, farce rnajek,ae, means
any cw,,tse not reasonably within the control of a parl�y [')eretol and which by the
exercise of (Jue diiJgence such pearty is unable, whoHly or 4') part, to prevent or
ove.rcome, inClUdllngl but not HrMea(J to,, plhysrcal events such as acts of God,
landslides, ,,jf'Ihquakes, Fres, storrns or storm warn,ings,SUCI) as
hurricane s resulting in evacuation, floods, washr)Uts, exposion s, rnachinery
n-talfunctioris or breakdovons, inablllty to obt@4i fuel, power, or materizils
necessary for production, deficient transportation, electric power olutagres, strikes,
lockouts, or other illdUstriall disturbances, acts of a Public, eneniy, sabotage',
wars, inSUrrectinns, riots, acts of terror, and con-pliance with any lavd,
arder, rule. 01`J'egUlatiOr11 of any gc)vvenni enW agency,
ARTICLE XV111
In executinq fl -vis Agreement the Recipient whose. signature appears
belovv affirrns its intent arixl carnnr iitrnent to comply jr) I'Li,11 with Slection 2264,052 of
the Gove rnrne nt Cade and certifies that it: does not and will not knowingly employ
an Undlocurnented worker during the term of this Agreement.. 'rhe Recipfent
fUrthor ccrtifies its, kinderstanr,'Jing at x1 agreement that if it is conv[lated of a
V10126011 Df 8 U.S.C, Section I 4r (f), providing for crvil anid/or criminal penalties
For engagin.g 0 a patterf"I Or pr@cfte of knovoirigly hiring or continuing to employ
unauthorizer] afiens, it shall, repay fhe amount of the IfUnds received hereunder
vMh interest, at the rate and according to the terms of the agreement signed
under Sr cfiori 2,264,053, of the Governiment Code, not later, thai-i the 1201h day
after the datethe I -POC ilioh[ieS ty, tau it Of th(-D V101,16011,
ARTICLE XIX
q no event wifl either party be liable to the other parly, for wny incurs: 1,
SPCCi@l, PILMili-VC, r�Xell-iplary� Incidental or consequenfial darnages and this
lir6tafion will ajpl,,)ly regar(fless of whether or notthe other la arty hal s been adOsed
ofthe possibility of such daanriagem Reciplient's tol[W liabIlIty under this
Ag repr nerif, including for ils indernnification1l clef e,,rise, and hold harm�ess
obligations, not exceied the ari-)ount of funds acfttafly received by Recipent
frown the LPIDC , and r the
IIIIIIIIIIIIIIIIIAM
The Agreen ,),eml c,,rn[)OCflOs flic, conlp[oto, agrccuwnt of the pard es hereto,
superseding all oral or writteri piarvIOLIS' and canternporary agreeriients between
the parties, M,)�ch relate to iym,ttors �in tl"i�s Agreement,
SIGNE'l) AND ACI�r)IRJZIJ-D [r) ley LFIDC and Recipient Grp the dates indicated
LA POR I L- 1")FVR OFIMM-IF CORPORTION
. .... .. ..... ..
Ric ard Warren, Pvvdent
mm
ATTE--�SJ
. .. .... . ... ........ .
Secretary of, 11-1q, "'aporat'I'M
INIE-OS USA LI -C, a Debware WTIO.ad IObIlity GOIII�Yi�fly
By
. . ........
... .... .. .. ......
;�--7 .,l j:
"'Do
. . . . ..... ...... .... ..
REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA
ITEM
Agenda Date Requested: July 14, 2014
Requested By: Scott D. Livingston
Department: Economic Development/Tourism
Report: ' Resolution:'' Ordinance: ''
Exhibits:
1. Porposed Budget, Fiscal Year 2014-2015
Appropriation
Source of Funds:
Account Number:
Amount Budgeted:
Amount Requested:
Budgeted Item: C YES C NO
SUMMARY & RECOMMENDATIONS
Based upon previous discussions with the 4B Board on 12 May 2014 and 9 June 2014, staff made changes to the
Proposed 4B Budget for FY 2014 - 2015.
Staff met with the City Manager and Department of Finance on Wednesday, 11 June 2014 and made the
following changes:
Moved "Travel for $2,000" in "Advertising" (Acct. #038-6030-565.60-05) to "Mileage" in
"Training/Seminars" (Acct. #038-6030-565.30-20), which decreased "Advertising" from $50,000 to $48,000, and
increased "Training/Seminars" from $8,500 to $10,500
Updated the debt service figure for FY 2014-2015 in Account #038-6030-680.90-04, Adm Trans to Fund 004,
from $ 852,496 to $1,083,817.
All other figures and information in the proposed 4B Budget for FY 2014 - 2015, since the last presentation of the
same information to the 4B Board on 9 June 2014, remains unchanged.
Action Required by the La Porte Development Corporation:
Consider approval or other action of the proposed 4B budget for Fiscal Year 2014-2015.
Approved for the La Porte Development Corporation Agenda
Corby D. Alexander, City Manager
Date
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REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA
ITEM
Agenda Date Requested: July 14, 2014
Requested By: Scott D. Livingston
Department: Economic Development/Tourism
Report: ' Resolution:'' Ordinance: ''
Exhibits:
1. Business Overview, ACT Independent Turbo
2. Incentive Request, ACT Independent Turbo
3. LPDC Project Score Card, July 1, 2014
Appropriation
Source of Funds:
Account Number:
Amount Budgeted:
Amount Requested:
Budgeted Item: C YES C NO
SUMMARY & RECOMMENDATIONS
ACT Independent Turbo Services, Inc. (ACT) is a fast growing company that specializes in industrial gas turbine
overhaul and repair and has positioned itself as a leader in the market. Based upon the successes over the last
couple of years, increases in production capacity and expanded facilities will be required to keep up with the
demand for ACT's service offerings. Company management believes that consolidating and relocating all service
offerings to La Porte will benefit the business, employees, and the community. However, a significant cost
difference exists between expanding at ACT's existing location in Houston versus relocating to La Porte. In order
to assist ACT in the proposed relocation of its Main Production facility to La Porte, ACT requests economic
assistance in the amount of $450,000.
Proposed Expansion Him
If ACT relocates to La Porte, it will:
Invest a total, estimated taxable value of $6.6 million in property and business personal property as follows:
. Invest $3.6 million in new building construction as follows:
. 15,000 square foot office,
■ 33,000 square foot, crane served industrial building,
. Relocate $2 million of existing equipment and inventory,
. Purchase $1 million in new equipment,
Relocate seventy-three (73) full time employees from its existing location at Hobby Airport in Houston.
Note: Seven (7) full time employees are already working at ACT's facility in La Porte.
Start the project in September of 2014 and finish the relocation by the end of 2015.
Personnel Information
Below is an itemized categorization of the ACT's employment:
(6) Executive Management
(9) Sales, Accounting and Support Staff
(12) Engineering & Supervision
(53) Hourly Technicians
ACT offers competitive salary and benefits. Many of ACT's hourly employees make between $20 - $30/hr.
Supervisors and engineering staff are typically compensated at or above the industry average. All full time
employees are eligible to receive benefits that include generous insurance benefits (medical, vision, dental), 401(k)
plan with matching program, disability & life insurance, profit sharing incentives, paid vacation and holidays.
Other Pertinent Information
Of the six (6) senior members of ACT's executive management team, three (3) are La Porte High School
graduates and two (2) others have lived and/or worked in La Porte for over 20 years.
Impact Analysis
Excluding the multiplier effect of the seventy-three (73) new jobs to be relocated to La
Porte, this project would directly contribute approximately $46,860 of new, annual property
tax revenue to the City of La Porte. Please refer to "Project Facts and Figures" and the
"LPDC Project Score Card - Final, 1 July 2014" (enclosed) for additional information.
Demand for Capital, Other Projects, and Priorities
According to the enclosed monthly financial reports, the 4B Board currently has approximately $756,901
available at its discretion to use for new economic development projects. According to the same financial reports,
the 4B Board's projected fund balance, assuming that no additional funds are committed to new projects, by 30
September 2014 is $1,261,251.
Other projects, which are in various stages of discussion and may request funds from the 4B Board, are as
follows:
. AMPAC Fine Chemicals
. Jack Doheny Companies
unknown
unknown
S. Broadway Re -Development Retail Strip Center South $250,000+
S. Broadway Re -Development Retail Strip Center North $250,000+
. Re -Development Former Kroger $250,000+
Waterfront Development $2 million +
(Note: Includes buying 3 homes, jetty, pier, and other infrastructure)
. Buy 6,250 square feet of property south of La Quinta on SH 146 $100,000
(Note: To have exclusive ownership over 4.59 acres of land south of
La Quinta on SH 146)
. Restaurant/retail development unknown
(Note: Land, infrastructure, and incentives)
Staff Recommendation
Based upon the 4B Board's priorities, existing capital constraints, and demand for capital by other projects, Staff
recommends that the 4B Board consider awarding an economic development incentive to ACT for an amount
less than $450,000.
Action Required by the La Porte Development Corporation:
Consider approval or other action of the proposed 4B budget for Fiscal Year 2014-2015.
Approved for the La Porte Development Corporation Agenda
Corby D. Alexander, City Manager
Date
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Component Facility
Rotor Facility
8525 Freeland St
12022 N. P Street
Houston, TX 77061
La Porte, TX 77571
713-364-7500
713-364-7500
To: City of La Porte Economic Development Corporation
604 W. Fairmont
La Porte, TX 77571
Attn: Scott Livingston
Re: ACT Independent Turbo Services Application for Economic Assistance
Executive Summary
ACT Independent Turbo Services is a fast growing company that specializes in IGT Overhaul and Repair. The company has
worked hard to position itself as a leader in the market and based on the successes over the last couple of years, increase in
production capacity and facilities expansion will be required to keep up with demand and expand our service offerings.
Company management believes that relocating all service offerings to La Porte will be beneficial to the business, employees
and the community. However, there is significant cost difference between expanding at the existing Houston location and
performing a relocation of the business to La Porte. To assist in the relocation of our Main Production facility to La Porte,
ACT Independent Turbo Services is requesting economic assistance in the amount of $450,000.
About ACT Independent Turbo Services
ACT Independent Turbo Services was founded in 1996 and served as a small niche market IGT (Industrial Gas Turbine)
service provider for many years. In 2011 the decision was made to expand the service offerings as well as make significant
investments in capabilities and personnel. Today, we employ 80 people between two locations and provide skilled services
to industrial rotating equipment and power generation clients all over North and South America. We take pride in our
highly skilled employee base that includes expert craftsman such as super -alloy welders, precision machinists, industrial
mechanics, engineers and a tenured supervision and support network. With the addition of our Rotor facility in early 2013
and installation of state of the art equipment; ACT has invested more than $8MM into the business since 2011.
Starting in early 2013, ACT Independent Turbo Services opened a second facility with expanded capabilities. This allows us
to serve our clients out of not only our original and main facility located near Hobby Airport but a newly built rotor & heavy
mechanical facility located in La Porte TX. Since 2012, the business has experienced growth greater than 20% year over
year growth and are projected to reach full capacity at our main facility near Hobby Airport before or during the 2016
calendar year. The company is at a critical juncture as there is a requirement to invest capital to expand our operations to
meet the current and projected demand. ACT Independent Turbo Services will need to enlarge the existing Hobby Airport
location or totally relocate the entire business to La Porte.
Why La Porte?
The management team is familiar with the La Porte area and the benefits that living and working in the area have to offer.
Our Rotor Facility property has room for an expanding business and could easily accommodate the current Houston
business plus room for future expansions. In addition to La Porte's favorable location, our executive management is
comprised of (6) senior members of which (3) are La Porte High School graduates and (2) others have lived and/or worked
in La Porte for over 20 years. We not only have a commitment to make the business grow, but also a personal connection
to the community.
Some of the many benefits to the local La Porte economy and community upon relocation of ACT's operations to La Porte
will be:
- Several of our Employees are looking to relocate and buy homes in the area
- We often entertain our clients and staff at local restaurants and golf courses
- Development of Vocational programs to train students and recent graduates with vocational skills
o Drafting/ Engineering
o Welding/ Fabrication
o Machining
June 30, 2014 Page: 1 of 3
Proposed Expansion
Component Facility
Rotor Facility
8525 Freeland St
12022 N. P Street
Houston, TX 77061
La Porte, TX 77571
713-364-7500
713-364-7500
ACT Independent Turbo Services is proposing to custom build 48,OOOsgft of NEW crane building and offices, and move our
existing equipment, operations and (73) full time personnel from our Hobby Location to La Porte. This will require a new
build, likely utilizing local contractor(s) on undeveloped land. Assuming all hurdles are met and the company receives
approval from the ACT Board of Directors for the relocation, we would anticipate the start of the project in September of
2014 and completion by the end of 2015.
The Taxable Value of the proposed improvement is estimated to be:
- $3.6MM in New Building Construction
- $1.OMM in New Equipment
- $2.OMM in movement of existing equipment and inventory
- $6.6MM Total estimated property & equipment value
- This would lead to an estimated Yearly City Tax Revenue of $46,860
- This would lead to an estimated Yearly LPISD Tax Revenue of $87,780
Employee Relocation
ACT Independent Turbo Services currently employs (80) people at various levels within the organization. As of June 2014 we
have (73) personnel reporting full time to our Hobby facility and (7) personnel reporting full time to our La Porte Facility.
Below is a breakdown of Employees throughout ACT:
- (6) Executive Management
- (9) Sales, Accounting and Support Staff
- (12) Engineering & Supervision
- (53) Hourly Technicians
As a leader in the service business, ACT Independent Turbo Services also offers competitive salary and benefits. Many of
our Hourly employees make between $20 - $30/hr. Our supervision and engineering staff are typically compensated at our
above industry average. All Full Time employees (Hourly and Salaried) are eligible to receive benefits that include generous
insurance benefits (medical, vision, dental), 401(k) plan with matching program, disability & life insurance, profit sharing
incentives, paid vacation and holidays. If approved and finalization of construction, all personnel would report to the La
Porte facility.
June 30, 2014 Page: 2 of 3
Component Facility
Rotor Facility
8525 Freeland St
12022 N. P Street
Houston, TX 77061
La Porte, TX 77571
713-364-7500
713-364-7500
La Porte Development Corporation Board Assistance
Since 2011, ACT Independent Turbo Services has added additional service offerings and experienced rapid growth. The
company is prepared to invest in additional capacity and capabilities, but the move to La Porte at this time is very cost
prohibitive. Below is a summary of the costs associated with moving the business to La Porte versus expanding at our
existing location near Hobby Airport.
Hobby Facility
Estimated Costs
Additional Building and Laydown Capacity
15,000sgft
Pavement Improvements
Developer Cost -Estimated
$1,700,000
Note: The Building Costs would be born by the developer
and amortized to ACT as lease costs. This is to Expand Hobby
Facilityto Match Capacity with Proposed LP Facility.
Business Interruption
$ 200,000
Project Management Expenses
$ 75,000
ACT Independent Turbo Services 2014/2015 Expenses
$ 275,000
La Porte Facility
Estimated Costs
N EW 40,000sgft Crane & Offices Building
Developer Cost - Estimated
$2,600,000
Note: The Building Costs would be born by the developer
and amortized to ACT as lease costs.
NEW 6,000sgft Main Office Building& Employee Parking
Developer Cost - Estimated
$1,000,000
Mitigated Lease Obligations at Hobby until early 2018
$ 600,000
Note: Previous Management signed longterm lease. The
total lease obligation is over $1MM. This is the estimated
mitigated value.
Business Interruption
$ 400,000
Moving Expenses
$ 450,000
Project Management
$ 150,000
ACT Independent Turbo Services 2014/2015 Expenses
$ 1,600,000
The company Board of Directors has indicated that approval may be given for relocation if management can keep the total
expansion and relocation cost to the company at less than $11VIM total. The management team feels that with a
commitment of assistance from the Development Corporation of $450k and internal efforts by management on the
continued mitigation of existing lease obligations, moving expenses, business interruption and overall project costs that we
can achieve the $11VIM target.
June 30, 2014 Page: 3 of 3
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REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA
ITEM
Agenda Date Requested: July 14, 2014
Requested By: Scott D. Livingston
Department: Administration
Report: ' Resolution:'(' Ordinance:
Exhibits:
1. INEOS Request to Reivse the Development
Agreement
2. INEOS Developmetn Agreement, Executed
September 23, 2013
Appropriation
Source of Funds:
Account Number:
Amount Budgeted:
Amount Requested:
Budgeted Item: C YES C NO
SUMMARY & RECOMMENDATIONS
According to Article LA.1 of the INEOS Development Agreement, approved 23 September 2013, the principals of
INEOS must make a commitment to invest at least $500 million in an Ethylene Oxide Project, also known as
"Unit #2", by 1 August 2014 in order to receive a payment of $700,000 from the 4B Board.
In order to enable further development of commercial aspects of the Ethylene Oxide Project, which are taking
longer than originally planned, the principals of INEOS respectfully request a two-year extension of certain
deadlines relating to the Ethylene Oxide Project under the existing development/incentive agreement.
Staff Recommendation
INEOS's incentives consultant, Eric D. Geisler, reports that the anticipated amount of investment for the
Polyethylene Project (i.e. Unit #1) is now expected to be $400 - $500 million, which is 60-100% greater than the
initially expected amount of $250 million. By the time INEOS decides to commit to the Ethylene Oxide Project
(ie. Unit #2), assuming that the size of the project remains the same, staff anticipates that the level of investment
for Unit #2 will also be greater than $500 million.
Considering the impact that Unit #2 will have on the City of La Porte, even at the minimum stated value of $500
million, staff recommends extending the terms of the development agreement, plus the ancillary terms pertaining to
employment and growth for Unit #2, by two (2) years to 1 August 2016.
Action Required by the La Porte Development Corporation:
Consider voting to approve and authorize staff to revise the existing development agreement with INEOS to
extend the term by two (2) years, from 1 August 2014 to 1 August 2016, by which the principals of INEOS must
commit to investing at least $500 million for the Ethylene Exide Project, including revisions to the ancillary
deadlines regarding employment growth and reporting for the same project.
Approved for the La Porte Development Corporation Agenda
Corby D. Alexander, City Manager
Date
INEC'.*0')$ Olefins &Polymers USA
July 1, 2014
Mr. Richard Warren
President, Board of Directors
La Porte Development Corporation
604 W. Fairmont Parkway
LaPorte, TX 77571
INEOS Olefins & Polymers USA
A Division of INEOS USA LLC
Marina View Building
2600 South Shore Boulevard
Suite 500
League City, Texas 77573
Tel: 281-535-6611
Fax: 281-535-6765
Tire Avery@ineos,com
Re: Economic Development Incentive Agreement Between The La Porte Development Corporation, and
INEOS USA LLC, A Delaware Limited Liability Company, for Use of Type B Development Corporation Sales
Tax Funds, dated September 23, 2013 ("Incentive Agreement")
Dear Mr. Warren:
INEOS USA LLC ("1NEOS") respectfully requests a two-year extension of certain deadlines relating to the
Ethylene Oxide Project under the Incentive Agreement to enable further development of commercial aspects of
the project which are taking longer than originally planned. Specifically, INEOS requests modification of the
following deadlines:
1. Extend the time by which INEOS must submit to The La Porte Development Corporation ("LPDC") the
letter of financial commitment for the Ethylene Oxide Project under Article 1. A.1 from August 1, 2014
to August 1, 2016.
2. Extend the time by which INEOS must submit to LPDC documentation of 60 new full-time employees
and expenditure of a minimum $500,000,000 in capital investment for the Ethylene Oxide Project under
Article I. B.1 from December 31, 2017 to December 31, 2019.
3. Extend the latest expiration date of the Incentive Agreement under Article V from December 31, 2017 to
December 31, 2019.
By separate cover, INEOS has provided notice to your office of its financial commitment to and request for
cash incentives for the Polyethylene Project portion of the Incentive Agreement.
Your consideration and support to extend the deadlines for the Ethylene Oxide Project is very much
appreciated. We look forward to our continued collaboration as we progress our decision to invest further in La
Porte.
Yours sincerely,
INEOS USA LLC
Timothy A. Avery
CFO. INEOS Olefins and Polymers USA,
A division of INEOS USA LLC
ZIM, lots
JiJi
MIATIAIMIN
'�3, ybetween4 da
T , HIS AGREEMENT' rnade by aandPirtered into thiisr"
2013 between the La PDe
orte velopment Corporation, a Type B
f� 19- 1 a *ro i,)c'rafion operating under aUth0ty of "'I"exas Local Governnien't
Codo Chapters 501 and 505 (hereinatt'PF "Irr.PDC"), andINFOS USA LIE,
[)61arare lirnitpd lilability cowany (hereinafter 'Reciipienit" ).
WITNESSETH.
WHEREAS, the. voters of the City of' La Porte authorized the lev,yi,ing of
additional sales, tw vvithir'i, the City for promotion of ecorlornc devefopnlent and
the, LP DC us authorized to use such tax revenuos for certa4i qLlalifyillg proi I ects
arid other, ic,,.�conornic developmeri4 reWed P!Lirposes; and
WHERFAS, Recipient wishes to expand nts current busiliness operatiorl at
its jndusldal complex at 1230 1 Fide p aj w1amce Parkway In 1he Ba(tl,ogro,und
IndL.11,1tri al ts[nicf, located adjacent to 1ho', northern corporate krrii,ts, of the City of
Lo Porte, 'I"exas (hereinafter, "Battleground Manufacturing Comphex`), by openirig
and operating 1) an Ell"iy1eI ie oxide rnanLlfactuMg facility at a minimum capital
investrtient cost of S500,000,000-00 and which of three (3) years is anticipated
to ernloloy up to 60 additional personnel (here 1 n after, Ethylene Oxide Project);
�ind 2) a Poyethylerie 111aPufactur, Ing frac oity at a mininiunI capital investment
cost of $250,000,000,00, and which alter three (3) years is anticipated to employ
up to 24 addilional personnel (hrareinafter, PDIyethyen e Project), and
WHEREAS, LDPC and [�ecipent anticipate that the conStIFIUCUOln of the
facilities 'for the Ethylono Oxide project and the Polyethylene Project wifl be
substantially ccnipNele by the end of2017� -and
WHEREAS, Texas Local Gov err)rnent Code section 501,159 aUthorizes a
Type B corporation to and flak' a project i11 anOfll(-,r.jUrisdction in th,le stale if` the
govermng bDdy of the other Jurisdiction, requesis the corporation to exercise its
p0VV01`$ VVithin it JiUrisd_�ction; and whereas Harris County, Texas has requested
and authorized the LPDC to u ride rta ke the pi ojeG'Is described in this Aqreenr nit
at die Bal,tl.c
.jfnund ManufaCtUring Complex; and
WFIEREAS, Recipient has requested that LPIDC provide, financiaN
Incentives to lornote the expansion of its Battleground lel allUfacturing Complex
III earl arnOUni't to over 01' $Libsidize certain infrastructure costs, incluffing streets
and roads, drainage and related irriprovements, assoclated aCqUi$it10r1 COMM, and
other purposes aUfl1DfiZPd by I exas Local Governi-nent Code chapters 5101 and
505, and it is the desire of L..PDG to assist in the fUnding of sarne., f4ichng that
such expenditures will contr'bute to protnoflng econornic grovAh and
development in the City-, and
V4HEREAS, Trn,,xas law and the lby4avvs of (lie LPDC require tViat certain
eXpenddures and projects by the I -PDO tie approved by the governing body of
the City,- and whereas the LPDC Board has duly approved such projects and the
expendituies, for same, have belell Mthorized by the La Porte City Gouncfl�; and
WHEREAS, Publication Of notice for public hearing reqUired Under Texas,
Local Government Code sention 505160 for expenditure of Type B funds on a,
proposed project was niade ar)d tfiera were no petition filed Wth the City
registering a protest to the proposed grant.
NOW THEREFORE, in considleration of the covenants and Conditions
stated hefoln, and in con sideraU011 Of the mutual benefits that will accru(;� to, each
of the parties, hereDf, as well as to the citizen s of than City of L.a Porte,, Texas, the
pailes have agreed and do hereby ag!ree as follows.
ON m
A In consicleration of Recipient, laicating its proposed Rhylene Oxide Project
at its Battleground ManufactUfinq COMPI'r�X, as, specifically described in
that certain pUblic hearIi ig aUthOriZi11g this proposed protects, and
expenditure of I..[10 furids for the lji-Dniofion of sand projects, held before
the LRDC on July 16, 20,12 (hereinafter, the "Public Hearing"), LPDC
to provide Recipient an iri;cenfive package consisting of a cash
payment of'$70000MD accurdinto the sc[nedule outlined in, this Article I
and the, retention of said payment bel,rig conditioned upon Recipi,ent's
satisfacFon of certain rniniML.irn constr(Action, related capital investroent
costs anci additional permanent direct Jobs as provided 41, fts Article 1,
Fufthermore, in cons idera,ficri of Recipient locating Its proposed,
Polyethyhene Project at its BattlegmUnd M8.n'L1faC[U1'-i1'1q C01 In P l C X, a, S
specifically rdescribed 411 the, Pubilk, H,earing, 1-1-11DC , aro to provide
Reciplent am incentive package, ccnsrsting of a cash payment of
$300,1000,00 accord'Ing to the schedule at.,il1ned in this Ailicka I and the
reteritlon of 9EM payment b6nq conditioned upon Recipient's ",fisfaction
of Certain mininlurn coratractionrelated oapital investment costs and
additional pernianent direct jobs as provided in this Arficle l,
Ric, cash incienUves heroin described shall be distributed as follows�
1 a cash ii"icentive payrrient in the amount of $700,000,00 for tl,,Ie
Ethylene Oxide Project will be distnbUted to Reciprent no later
than 30 clays after receipf. by L �FIDC of lettrAr froa'l Re6piient's
Officer eviclencing Recipient's financial comryiitrnei it to
consta,iction of the Ethylene Oxide Project at the Battlegrourld
MarklifactuiJnq Complex-, such letter of corni-nifi-neurit shall b(s,
subrnfttedl to LDDC no later than August 1, 2014,
2) a, cash inGenti've paynient in the arnount of $300,000,00 will be
clistdbuted to Recipient no later, than 30 days after Feceipt, by
LYDC of letter fron-i Recipient's Officer evidencing Recipient'
financial comnAment to construction oaf the Polyethylene Project
at the Dattlegromid Manufacturit"ig Coniplex; such lettc,,r of
0
cornmitnient h ll be submMed to l-PF)C ru) latpr ManAur ,quqt '11,
20'14,.
B, As a caindqion for the receil")t and' retention of each of the reforenced cash
incenhvp, payi'vents rovided rn this Articl I, and as required by Texas
Loca� vernment Code, section 501.158, Recipbnt shall prNdrr',, In I -PDC
verificaOii that it has satisfied the following performance s1tand'ards, as
applicaMe, to each of the projects, Based on the foregoing,, Rec,ilpi.ent
agrees to the foHowing requiremen1s,
1) FoT [lie Ethylene Ogide Project., Nm eupierit w0l subn'14 10 t1 ILI by
Deceaiber 31, 2017"
a) DOCUrnentatin domonstrating fi")at 60 new full-tiMO eMp,10yeeS
have been hired y Recippent. SLXI"� dOGUnwmllation sI oll 41clocle
Federal andlor State employment re -ports andr rion'thly report
to, the Texas State Comptroller,
b) Documentation that SUbstantiates Recipient's expenditure of a
minimwi'i of 00, 00,t' 0i +0f ire caprial Investmeni.
2), 1 'ne Project, Reciplent will 9,Ubriiit to the LDDC b,y
a) Docua'ientation demonstrating that 24 11eW W111 --UR) e employees
have been hired by Reciple-W. StAClr] documentation shall include
17 edera'I andr State &nnployrnent reports andlur nrianthly report
to the 'T-exas, State ComptroHer.
b) Docur)ienlafion that SUbstatitiates Rcicipient's expenditure of a
mMilmui')i of $250.000,000,00 in capital investment.
Re(#ent will expend the cash incentive payty)erits only fewards the
cons,truOorl of streets arid roads, drainage and related imp rove n'ients,
aSSOCl01(;Id aCqUiSitiM CGSIS, 8nd atf-ier related PL1rpc)ses, aull-tori zed by
"Texas Liacaa Govern,ment Coclo, chapters 501 xd 505, in furtherance of
the Ethylene Oxide Project and the, Rolyetl-iylerle Project at the
Battle g mLi nd MWT,AaCtUnng Complex, ruore, parti,culady described by
metes mid, boundC-SCriptioin as refiected Exhibit A, attached to this
agreement, and, j1,.1CO1nrpU1--'itod by r� fee-ence foi, all pUrposes.
c
Drshursenrent an(]/or retention of''the cash incenfive payments iderVifled in
Article 11 of tl'',ils Agreem&A Sh be roade, as fnllovjs
A, LPDC Slr'la 'Se
� 11 diGIDLF to Recrpjent, Subject to the satJsfactlon of the
mndMons precccluit ar uondjliorsubsequent contained within I of
this Agreement as applivable for each project�
3
I , I.PCIG's obligation to Recipient shall not exceed $700..000.00 for the
Ethylene Oxide Project and $300,000,00 fQr the Pulyet[lylene Project
Recipient undcrstands ftlat the funds, paid to Recipient by the I....PDC are
derived frorri to revenuecollected under 'Texas Local Governinant Code
505 2,52, arid, that LPDC has estiniated the tax revenues to be collected during
the learn of tWs Agreement Rec,pjent further understands, acknowledge.s, and
agre(,,as that if the tax reVeTILie; actuadlly o0ected is less than 80% of the esfi'rnated
'tax revenue—, to be collect rt in, any 2 of 3 successive- fiscal years during tt'ie term
of this AgFeennent and prior to the year Recipient is othlpmyVlSe ej,-Ititle(j JU reCe�Ve
a casl") incentive payniont pur$Lfarit to tNs Agreement, I PDC will be entitled to
terminate all, fUrther c -ash incentive payments to Recipient dLiring or after the
ftSCal year -ftyrr �N[JCJI tl,Ia ri a �e C - v -i u, short fall- provided, Recipient's obligations
..e s, �,e i! r,
vdth respect to the project so affected shall likewise be terminated.
UWE �111 Zi
If Recipient shaH fail to me any of the capital hives trPenl: or job Creafion
thresholds outlinerd in thesoheldUICI contained in Article l Df this Agreement fur the
Etlhyla,ne Omde Pru.iecor the P6yethylene Pl-oject uafter, individually, a
W Project"), LPDC ,;hall have [lie dUht to reclaim and rocapture, ot'i a pro -rata
basis, all or a portion of 0,ie cash incentive paynients, 111LIS IfIE' PO�Ai011 of accri.,ied
interest of the cash 4icentive payments to Inc repaid, which were pare vious1ly
disbUrSE,K] to Recipient with respect to, the affccted Project, whether or not such
dlsbt,trsenrtents have been spent by Rec'Pent at tho aim e of the re-&lanliatioin by
the LPDC. In such everit interest shall be, cal(1,1,0ated uttjzing the rate periodically
announced by the VNIall Street Journal as the prin-ie or base cornniercial lending
rate, or K the Wal[ Street Journal shall ever cease to eXiSt Of Ce@S,c to annOUr)(3-0- EI
prime or base lendirirate, then at the annual rate of inteilest from finie to Uaie
annDL]riced by CA"Jibank, NA. (or by any other New York money center bank
elects by by the t..1-:11 C), as its pricne or base cornmercial lending rats:, from the,
Effective Date until pliu(Ilr For pUrposes of this Agreement, LPDC's right of
recaptILIMI, shall apply or) a Project -by -Project, basm area shall apply to the
Per'Crentage of the capital investment or job creation target not mel by Reclpie,nt
for the, atf(-,,cted Project M each such case, applicable percentage of the
preViOL,191Y Paid cash Pay[Tent or payrnents, for the affected Project(s) shall be
rerriAted to the LP[ DC withir"i sixty (60) days of receipt of written deawd for sarne,
nie applicable per centage of theca captal investment ol"job, creaCon target not rnet
by lir ,sciperit shall be T-nUtLI8l1Y agreed by 11he Parficsprovided however, should
the Particls tail to agree on, such percentage the Dispute Resolutior) claLMC in
Ai ticle XV shall apply.
In the, event of a rnatr�rjal breach by Recipient hereunder, inclu(Jir)g, but
rIot liaiited to, use of flare, funds provided; herein for fi(,,irposes other than those
stated Ira Article I of this Agreement, I PID C may cease aH furture
hereunder and ti3rnrlinafe fl-iis Apreernent" and, fUrthenvore, LP DC shall hiave the
right to reclairn a r)d recapture, and Recipie nt. sfiafl refL.wd, any funds that are not
spea
nt in ccordane W
race' thie ternis of this Agreerjj(�
,rIt arid ar�y unspent and
unobligaled I -PDC fund S PrCVIOUSlY P0i'd to Re6pient bt.rt not yet paid or pledged
by FZecil)ient to third parfies In eWarh siich case, Reulpient shall rernit payrnents
to ttie LPD C within sixty (60) days of raceipt of w0ten demand lor same,
FTYM
The terni of fts Aoreernerit will expire on or before, December 31, 2017,
PUT$ 1_1011ttO AWJCle 1 of this, Agrtn-amei it -
Recipient shall provid,c:, to the LFIX wilNn ninety (90) days f0owing each,
payment made p1jrS-uant to Article I of this Pkqreennent, repf,'A and fall
documentati,DTI �[IFIR,'irmfler. "ExpenditUre Report"), showing thea c�xpencfituires
triade by Re6pient pursuaint to this Agreenier,it and a den,vonstration that the
furids were LIMA Only for 11ie purposes authorized by this Agreennent; and
Reciipient shall SUPplement the Expenditure repci-t at 9& -day intervals uritil cash
incentive payn'ients are fully spent. Recipient shall ii,7,iaiintaln books of account
vvitl"i correct entries of all expetiOUres that are nnade accordir-ig to the terms of
this Agreerrient arid o,f, any funds frorn other sources,- Any and 0 books of
account of Re6pient shall be, at all finries open to the, in,spection of LPD C sur any
its, officer s or duly �!Lithoidzed agents. UPOFI SLIGh inspecliuri and with appropriate
measures to, protect Reciplerit's confidenfiM business information, LI DO, or its
officers or agents shall be afforded the OPPOOLiinity to niake photographlc copes
of any and all docurneantation of books of' account, includ;ung but not limited to
statenients of accoi,,int relaUng to the dispositiorr) of funds provided by LPDC
LITIcler this Agreement and any funds froai other sources. Recipient shafl maintain
such bookS of HOCOLIM in T(=,xas for a pedod of three (3) year 'follooAng receipt of,'
the last cash incentive disbursement by the LPDC, PIASUallt to Article I of this
Agreement. Notwithstanding Article 1, above, the I..PDC shall be Linder no
obligation to MakO ai]YfUnd, disbLIFS011,C]rpt S rf Reciplent falls to provide an
Exper'Witure FIeporl-
MAIMMAIIIII INTI
Either party hereto i'my enforce this Agreenierit by any and all mearls
available at kavi or in equity,
This Agreement does not create ally jOlIlt Vel'ItUre, partnership, or agency
relationship betty err Vv,-, UDDCI and Recipient. Recipient Shall have exclusIve
control of, anr,f tl-ie eruler sire right to control the, detnJIS of the workto be
poi-fDrmod by Re6pient hereunder and 01 personnell perlorming sarne, and shall
be solely re.spori sible for the acs arid cunni ssioris of its officers, memb(,,�rs, agents,
servwits, err pn oyees, subcontractors, program paiticipants, voltinleers,
licer,)sees, and invitees, In no evert shall any person participating in or
performlrig any of F�rvmpienl's duties or responsibikties hereunder [)Q considered
an officer, agent, servarit, or employee of the LPDC.
I
OBEHIM
Recipnt Eigrees [D MSLUIIEand dues hen-eby @SSUIrrrra all responsit.)1ky
and liablOity, for dariiages sustained by persons or, property, whether real or,
acrtr d,
by (,,)r frori,i the carryiing oii of work by HecilL,)ient or in the perforimance of
services performed. and to be pet -fort -nod by Recipient hereunder. Recipient
covenants and agrees to, arid does hereby irrdemni'fy, defem,.I, and hold harmless
LP,DC and, all their respectivenflficer-s, agents, arid; employee-; fi"Ofr') all SUitS,
actio,''is, cllaltiis, and exfens es of ariy character, rincluding, attorney's fates,
lbl'OLIght for or iIICUrred an, account of any injuries, or darnages, whether real or
asserted, st,islained by any person or property by or- in conseq.ience of any
intentiorval or negligent act, omission, or conduct of Reciperrt, its, agents,
servants or criployees ai-d in the cv,rrse of perforruance by LP'DC and Recipnt
under dais Agreement.
TN s Agreement rnay be ar-nended by the mutual agreement of the parties
N..tTre,to in writing to be attaclhed Io aind inc r or leA Into tfils Agreernent,
RecOenl shaH adhere to all lcuqli, state„ and federal laws and regulations,
that ri'lay affuxt ilts actions made pursuant to this Agreement, and shall maintain
in effect during t1le 'term, of this Agreenient any and all f(,,-;derM, state, aind local
licenses, and 1,-i.wnrfs which ilay be reqWred of Recipients gen eraHy,
Re,,61jierit may not asp. l9i"i this Agreement %.NiftUt 11110 J611 1°1 co,nsc°nt of
L.PDC, which corment MI not he uirrrelasonaNy dpiayed, coriditioned, or denied;
provided, however, the foregoing notwithstanding, Recl'*-,,lnt rnay ass'Uni I[Iis
Agreenien,tin whole or on a Project -by. -Project basis, to an entity acqoliring M Or
$(-Ibstarlfially all of its o-lterast in the Ethylene Oxide Project or Polly rat h y1ene
Project.
ART11CLE XIIJ
The waiver by cither ' party hereto of any breach of parry teral, condition; or
covenant herein contained shall riot be deen-red a waiver of: any sing sequient
breach of the sarne, or any othier term, condition, or covenant,
-HLIXIV
The obligations, of the parties, to IN's Agreement are pei forrriaWe inl.,JarriS
Courity, 'Texas and if legzil act[ori is necessary to enforce sairne, ver me shail lie in
1--larris County, Texns'
I
The par11(--,,i' represeritalkiles Wk r-nect as to irrplenient the terms
of this Agreen"ient and shall make a good faith atteimpt to hnforqiafly resolve any
dJSP'Ute$.
Except to prevent irreparable harui for which there is no adeClUate remedy,
at law, neither party herralln shall file sLilt to enforce this Agreernei it vvitl")out first
8 1
Ubn*fir)q We dispute to confidentW, non-binding niechaflon before a n,)ediator
[T)Uklallly agre�ed Lll-JCAI by the pardes,
This Agreeili,ie.ilt shall be governed by and construed in accord'ance with
fl"ie laws of the State of 'Turas.,
ARTICLE XVII
ThAgreeirent rnay be executed in triplicate, each of villich shall be
deerned an orligjnal� and constitute, one and the Uln)e illStIlin"i,eant.
Neither Ll-N)C n Recipient shall be required to perform any term,
condrtion, or covenant ii r this Agreernent so long as such poJorrmance is delayed
UrL prevented by force majeure. As used in 'this Article XVII, farce rnajek,ae, means
any cw,,tse not reasonably within the control of a parl�y [')eretol and which by the
exercise of (Jue diiJgence such pearty is unable, whoHly or 4') part, to prevent or
ove.rcome, inClUdllngl but not HrMea(J to,, plhysrcal events such as acts of God,
landslides, ,,jf'Ihquakes, Fres, storrns or storm warn,ings,SUCI) as
hurricane s resulting in evacuation, floods, washr)Uts, exposion s, rnachinery
n-talfunctioris or breakdovons, inablllty to obt@4i fuel, power, or materizils
necessary for production, deficient transportation, electric power olutagres, strikes,
lockouts, or other illdUstriall disturbances, acts of a Public, eneniy, sabotage',
wars, inSUrrectinns, riots, acts of terror, and con-pliance with any lavd,
arder, rule. 01`J'egUlatiOr11 of any gc)vvenni enW agency,
ARTICLE XV111
In executinq fl -vis Agreement the Recipient whose. signature appears
belovv affirrns its intent arixl carnnr iitrnent to comply jr) I'Li,11 with Slection 2264,052 of
the Gove rnrne nt Cade and certifies that it: does not and will not knowingly employ
an Undlocurnented worker during the term of this Agreement.. 'rhe Recipfent
fUrthor ccrtifies its, kinderstanr,'Jing at x1 agreement that if it is conv[lated of a
V10126011 Df 8 U.S.C, Section I 4r (f), providing for crvil anid/or criminal penalties
For engagin.g 0 a patterf"I Or pr@cfte of knovoirigly hiring or continuing to employ
unauthorizer] afiens, it shall, repay fhe amount of the IfUnds received hereunder
vMh interest, at the rate and according to the terms of the agreement signed
under Sr cfiori 2,264,053, of the Governiment Code, not later, thai-i the 1201h day
after the datethe I -POC ilioh[ieS ty, tau it Of th(-D V101,16011,
ARTICLE XIX
q no event wifl either party be liable to the other parly, for wny incurs: 1,
SPCCi@l, PILMili-VC, r�Xell-iplary� Incidental or consequenfial darnages and this
lir6tafion will ajpl,,)ly regar(fless of whether or notthe other la arty hal s been adOsed
ofthe possibility of such daanriagem Reciplient's tol[W liabIlIty under this
Ag repr nerif, including for ils indernnification1l clef e,,rise, and hold harm�ess
obligations, not exceied the ari-)ount of funds acfttafly received by Recipent
frown the LPIDC , and r the
IIIIIIIIIIIIIIIIIAM
The Agreen ,),eml c,,rn[)OCflOs flic, conlp[oto, agrccuwnt of the pard es hereto,
superseding all oral or writteri piarvIOLIS' and canternporary agreeriients between
the parties, M,)�ch relate to iym,ttors �in tl"i�s Agreement,
SIGNE'l) AND ACI�r)IRJZIJ-D [r) ley LFIDC and Recipient Grp the dates indicated
LA POR I L- 1")FVR OFIMM-IF CORPORTION
. .... .. ..... ..
Ric ard Warren, Pvvdent
mm
ATTE--�SJ
. .. .... . ... ........ .
Secretary of, 11-1q, "'aporat'I'M
INIE-OS USA LI -C, a Debware WTIO.ad IObIlity GOIII�Yi�fly
By
. . ........
... .... .. .. ......
;�--7 .,l j:
"'Do
. . . . ..... ...... .... ..
REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA
ITEM
Agenda Date Requested: July 14, 2014
Requested By: Scott D. Livingston
Department: Economic Development/Tourism
Report: ' Resolution:'' Ordinance: ''
Exhibits:
1. Economic Alliance's Annual Report
Appropriation
Source of Funds: N/A
Account Number:
Amount Budgeted:
Amount Requested:
Budgeted Item: ' YES NO
SUMMARY & RECOMMENDATIONS
Chad Burke, President/CEO of the Houston Port Region Economic Alliance, willpresent the Economic Alliance's
Annual Report to the 4B Board.
Action Required by the La Porte Development Corporation:
None
Approved for the La Porte Development Corporation Agenda
Corby D. Alexander, City Manager
Date
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REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA
ITEM
Agenda Date Requested: July 14, 2014
Requested By: Scott D. Livingston
Department: Economic Development/Tourism
Report: ' Resolution:'' Ordinance: ''
Exhibits:
1. 413 Fund Summary
2. FY2014 Financial Report
Appropriation
Source of Funds: N/A
Account Number:
Amount Budgeted:
Amount Requested:
Budgeted Item: ' YES NO
SUMMARY & RECOMMENDATIONS
Michael Dolby, Director of Finance for the City of La Porte, will present the monthly financial reports as of 30
June 2014 for the La Porte Development Corporation.
Action Required by the La Porte Development Corporation:
None.
Approved for the La Porte Development Corporation Agenda
Corby D. Alexander, City Manager
Date
City of La Porte
La Porte Development Corporation (038) Fund Summary
(Section 4B Sales Tax)
Beginning Fund Balance 9/30/13
Plus Estimated 13-14 Revenues
Less 13-14 Expenditures and Commitments
Debt Payments
Economic Development Operations
Capital Projects/Transfers
Total Expenditures
Estimated Fund Balance 9/30/14
Plus 14-15 Revenues:
1/2 Cent Sales Tax
Interest Income
Total Revenues
Equals Total Resources
Less 14-15 Expenditures:
Economic Development Operations
Debt Service Transfer
Total Expenditures
Ending Fund Balance 9/30/15
6/30/2014
$ 2,768,155
2,160,472
948,545
504,983
177,000
1,630,528
3,298,099
2,208,630
4,500
2,213,130
334,794
1,083,817
Estimated Projected
2013-14 2014-15
Revenues $ 2,160,472 $ 2,213,130
Expenditures & Commitments 1,630,528 1,418,611
Revenues over Expenditures $ 529,944 $ 794,519
*Debt Service Payments for Library, Bay Area Boulevard & Canada Road and Ballfields.
5,511,229
1,418,611
$ 4,092,618
This is an Unaudited Statement
City of La Porte
La Porte Development Corporation (038) Fund Summary
(Section 413 Sales Tax)
Unaudited Beginning Fund Balance 9130
Plus Year to Date Revenues:
1/2 Cent Sales Tax
Interest Income
Total Revenues
Equals Total Resources
Less Year to Date Expenditures:
Payroll
Supplies
Services & Charges (Memberships, Training, Advertising, Legal, Utilities)
Debt Service Transfer *
Capital Projects Transfers **
Total Expenditures
Estimated Year to Date Fund Balance as of 513112014
Commitments
Project Nebula
Intergulf
Rob Johnson Interests
Richardlndustrial Group
Debt Service Reserve
Adjusted Year to Date Fund Balance
Projection Through Year End
Previous
$ 756,901
Plus: Estimated Sales Tax
Report
FY 2013-14
FY 2012-13
$ 2,768,155
$ 2,768,155
$ 2,196,935
904,033
1,112,908
995,980
2,846
3,336
3,443
906,879
1,116,244
999,423
3,675,034
3,884,399
3,196,358
37,551
44,995
31,400
541
855
617
161,435
249,407
99,076
553,318
632,363
273,374
144,917
151,333
83,333
897,762
1,078,953
487,800
$ 2,777,272
$ 2,805,446
$ 2,708,558
$ 1,000,000
45,000
40,000
15,000
948,545
$ 2,048,545
$ 756,901
AdFusted Year to Date Fund Balance
$ 756,901
Plus: Estimated Sales Tax
876,530
Less: Estimated Operational Costs
(30,331)
Less: Debt Service Transfers
(316,182)
Less: Capital Projects Transfers
(25,667)
Projected Year End Fund Balance
$ 1,261,251
Sales tax revenues for Fiscal Year 2015 are estimated to be $2,029,227. (2% growth over current year)
Previously Funded Projects (Funding in Fund 015 - General CIP Fund)
Budget Expenditures Balance
District 23 Street Paving 175,000 - 175,000
Eagade Chants 300,000 81,570 218,430
Total 475,000 81,570 393,430
*Debt Service Paymentsfor Library, Bay Area Boulevard & Canada Road and Ballfzelds.
* *Capital Project Transfer is for 112 of the Golf Course/Little Cedar Bayou Park Irrigation Syts tem.
REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA
ITEM
Agenda Date Requested: July 14, 2014
Requested By: Scott D. Livingston
Department: Economic Development/Tourism
Report: ' Resolution:'' Ordinance: ''
Exhibits:
1. Schedule and Itinerary
2. Exhibitor List and ICSC Hall Maps
3. ICSC Marketing Materials
Appropriation
Source of Funds: 4B Board
Account Number:
Amount Budgeted:
Amount Requested:
Budgeted Item: ' YES NO
SUMMARY & RECOMMENDATIONS
The La Porte Team advertised in the May issue of REDNews, which was distributed by REDNews, MIMCO,
and Boxer Realty at the ICSC Show in Las Vegas. The LaPorte Team also benefitted by using REDNews'
booth at the show at no additional cost.
For two (2) months prior to the show, staff contacted over two hundred (200) developers, retailers, and
prospective restaurants. The retail industry is still in a recession, except for the areas along the major highways
which are experiencing significant residential growth. The developers and brokers are hungry and looking for
retail opportunities just as much as the communities. The site selection decision process for new retail
store/restaurant development is being driven by the retailers/restaurants, rather than the brokers
and/or developers.
During the recent ICSC Show in Las Vegas, two (2) 4B Board members and staff:
Learned from conference sessions regarding:
1. 1. Ways to structure successful public private partnerships,
2. 2. Current retail development trends,
3. 3. Future retail development projections, and
4. 4. Ideas to support creative re -development.
Networked with several key brokerage firms,
. Promoted La Porte as a valuable investment opportunity, and
. Contacted over sixty (60) retailers.
Basic plan for moving forward in the next twelve (12) months:
30 June 2014
. Fulfill all requests for information from each of the contacts at the recent ICSC Show,
. Encourage the Weitzman Group to do more retail development across from the Kroger on Fairmont
Parkway,
. Continue to support Rob Johnson's development by looking for prospective retail or restaurant tenants,
Support retail development on the southeast corner of Spencer Hwy and Canada Drive,
. Continue a redevelopment discussion with the owner of the former Kroger,
. Promote redevelopment along the west side of S. Broadway,
. Refresh all key broker/developer contacts and remind them about the ongoing retail development
opportunities in La Porte,
. Promote La Porte's message regarding development opportunities in the special edition of the Houston
Business Journal on 6 June 2014, and
. Identify and contact retailers that may be impacted by the expansion of SH 146 and offer them an
opportunity to re -locate to La Porte.
30 September 2014
. Continue to support Rob Johnson's development by looking for prospective retail or restaurant tenants,
. Obtain a copy of the proposed site plan for the new HEB retail center on the northeast corner of Spencer
Hwy and East Blvd.,
. Obtain a commitment for new retail development on the southeast corner of Spencer Hwy and Canada
Drive,
. Continue conversations with three (3) to four (4) shopping center owners at the intersection of S.
Broadway and W. Fairmont Parkway regarding redevelopment projects,
Support the owners efforts to re -tenant the former Kroger with a national credit tenant,
. Re -contact all the retailers and restaurants that were initially contacted before the ICSC Show in La Vegas
and identify development opportunities for them in La Porte,
. Promote opportunities along the bay front for commercial development, and
. Contact prospective retailers that may need a strong distribution/logistics base (Project Stratis, Project
Evergreen, etc.)
30 November 2014
ICSC Show in Dallas from 12-14 Nov. 2014,
and
. Highlight and publicize additional industrial expansions and new plants,
. Highlight and publicize new commercial development such as new hotels and restaurants,
Support new residential and mixed use development.
Other Miscellaneous and Current Information:
Discussion with NewQuest Properties, Inc.,
. 300 - 400,000 sf of retail north of Spencer Hwy,
. John Nicholson of Casiddy Turley and the PPG Property,
. Port of Houston Authority (John Moseley and Ricardo Arias),
. 4.3 acres and 45,000 sf, new retail development called "Underwood Place" on Underwood Road, just north
of N. L Street,
. Local Broker/Owner/Developer Network,
. Retail Lease Trac,
. Proposed retail development on the southeast corner of Spencer Hwy and Canada Rd,
. Austin Retail Live! (Aug. 20-22, 2014), and
. ICSC Texas Deal Making Conference (Nov. 11-14, 2014)
Action Required by the La Porte Development Corporation:
No formal action or vote is required.
Approved for the La Porte Development Corporation Agenda
Corby D. Alexander, City Manager
Date
Nancy
Date Saturday, 17 May,
Hotel Mandalay Bay Resort
Other
Richard
Travel Information (Arrival)
Flight Southwest #2904 Time 9:45 am
M o b i l e# XXX-XXX-XXXX
Date Saturday, 17 May, Flight Southwest #1875 Time 3:50 Pm
Hotel Mandalay Bay Resort Mobile # XXX-XXX-XXXX
Other
Scott
Date Saturday, 17 May Flight Southwest #1875
Hotel Mandalay Bay Resort Mobile # XXX-XXX-XXXX
Other
REDNews' booth # is 352
Boxer Retail's booth # is N745Z
Time 3:50 Pm
Bases of Operation
Proposed Schedule
Saturday, 17 May 2014
8:00 am -- Registration/Badge Pickup Opens
6:00 pm -- Registration/Badge Pickup Closes
Sunday, 18 May 2014
8:00 am -- Registration/Badge Pickup Opens
Breakfast -- On our own
Noon -- Lunch on our own
1:30 pm -- 5:00 pm -- Time in the Leasing Mall and/or Marketplace Mall
2:00 — 3:00 pm -- Seminar on "The New Math: 1 + 1 = 3: Leveraging the Omni -Channel Shopper",
N255 -N257 (verify with program materials)
7:30 — 9:30 pm -- Opening Reception at the Encore Beach Club, Encore at Wynn
Monday, 19 May 2014
Breakfast -- On our own
9:00 am — 11:00 am -- Time in the Leasing Mall
11:00 am — Noon -- Seminar on "Successful Public/Private Partnerships for Retail Development",
N252-256
Noon — 2:00 pm -- Lunch and Keynote Presentation, N4
3:00 pm — 4:00 pm -- Seminars on:
• "Acquiring and then Revitalizing a Challenged Center", N259 -N261
• "How to Restart Your Engines", N258 -N260
4:00 pm — 5:00 pm -- Seminars on:
• "Lemons into Lemonade", N258 -N260
Tuesday, 20 May 2014
Breakfast -- On our own
8:00 am — 10:00 am -- Time in the Leasing Mall
10:00 am — 11:00 am -- Seminar on "The New Frontiers: A Look Back, A Look Forward", N252 -
N256
Noon — 2:00 pm -- Lunch and Keynote Presentation, N4
Travel Information (Departure)
Richard
Date Tuesday, 20 May Flight Southwest #353 Time 1:55 Pm
Hotel Mandalay Bay Resort Mobile # XXX-XXX-XXXX
Other
Nancy
Date Tuesday, 20 May Flight Southwest #353 Time 1:55 Pm
Hotel Mandalay Bay Resort Mobile # XXX-XXX-XXXX
Other
Scott
Date Tuesday, 20 May Flight Southwest #920 Time 4:50 Pm
Hotel Mandalay Bay Resort Mobile # XXX-XXX-XXXX
Other
Exhibitor List for ICSC
Ston Stores
S471Q
S4067
Retail Properties
Farrell's Restaurant
C1913_..
Male Retail Group, Inc.
N679X
S472N
Ines
Fazoli's Restaurants
S332N
ashions
S3.48.N
S478N
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�Store Guide
GameStor). Inc.
4�5�5�����������������
_inks Retail Advisors, Inc.
S266Q
_inks Retail Advisors, Inc.
S276Q
:Ie Mexican Grill
S4739
r Bakery Cafe
.,
N572W
harmacy
S411Q
Dickev's B
am S332N
' Brands Inc. S3616
Fallas Stores
S471Q
Famous Footwear
S4812
Farrell's Restaurant
C2143
Fashion Indulge
N679X
Fashion Indulge
C1910
Fazoli's Restaurants
N482V
.....Restaurant
....G..p.
Firehouse rou Inc
S3.48.N
Focus Brands (McAlister's Deli, Cinnabon, Moe's Southwestern Grill)
S487Q
GameStor). Inc.
S3635
Hibbett SDortina Goods. Inc. f S290S
t Inc., The
C1837
's Franchise Systems
S494Q
's Gourmet Sandwiches
S387Q
cets
C2139
ott International Inc.
S332N
ear
C1924
Bryant
S332N
's Companies, Inc.
N663X
-hite Group, Ltd.
S349S
aritaville
N486V
ott International Inc.
S470N
ices
S332N
Newmark Grubb Knight Frank C155L
NewQuestPronerties. Inc.
C160F
S460N
S480Q
S344S
Poag and McEwen Lifestyle Centers, LLC
C172G
RedNews
352
Retail Connection Tne
52.43
Rita's Franchise Company
S3344
Sally Beauty Holdings, Inc.
S423N
Save -a -Lot Food Stores
Sears Holdings Corporation
S2337
Simply Fashion Stores, Ltd.
S320P
Site Analvtics Co.
925
Sites USA
701
SRS Real Estate Partners
Starbucks Coffee Company
N580W
Steiner + Associates, Inc.
C1124
Trammell Crow Company
C100J
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Twin Peaks Restaurants
N�4�7�0V��
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S290N
S300Q
C2136
C1264
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Opportunities for New
Scott D. Livingston
Economic Development
The Gateway City: La Porte, Texas
holds promise for retailers.
~U & Gas Production and International Trade Fuels
Retail Development ^ La Porte,
In 1889 French settlers gave La Porte, Texas its
name because ofits proximity Lothe entrance
ofwhat isknown today asthe Houston Ship
Channel. "La Porte", translated into English
means "Gateway",which isthe Gateway tuthe
Houston Ship Channel and the Port o[
Houston, both ofwhich are iconic symbols of
the Houston Region's international trade and
commerce. LaPorte also sits atthe center of
the 2nd largest petrochemical and refining
complex inthe world, which isanintegral part
ufthe United Skates'aconomicrecovery and
shift toward independence from foreign oil.
Technological advances inhacNngand
natural gas extraction from shale rock
formations has generated aboom inthe U�.
energyindustr«, Over $]Sbillion ofnew
capital investment along the Houston Ship
Channel inoil &gasrefining and
petrochemical production iscreating over
lll.00Onew directjobs,154'000indirect jobs,
and spinoff investment inManufacturing,
international trade, and ofhce/warehouse
development.' Since Princess and Norwegian
Cruise Lines began offering cruises from the
newly opened Houston Bayport Cruise
Terminal, tourism isalso growing! More than
$2.34billion ofindustrial investment, and an
additional $l.5billion ofanticipated
investment bythe end o[2Ol4inLaPorte,
isfuelling opportunities for new retail and
restaurant development!
10 QEONevvs.com
Over $357million inretail salesand5U0,000
square feet ofretail space are needed toaddress
the pent-up and unmet demand for today's new
retail and restaurant development in La Porte's
primary trade area today.This scenario offers
many and varied opportunities for retailers,
restaurants, developers, and tenant
representatives inLaPorte. LaPortp'sprimary
trade area includes apopulation of3O0,OOU.a
daytime employment population nfl54.0OO'an
average household income of$72,0O0'and
access kn6million tourists. As home of the San
Jacinto Monument, San Jacinto Battleground
where Texas won its battle for independence
from Mexico in1836'Battleship Texas, and
Sylvan Beach, La Porte possesses rich heritage
and aunique place in Texas hist
The discovery ofshale gas and the resulting
drop in�S.natural gas prices has changed the
global dynamics ofthe petrochemical industry.
U.lproduction ofpetrochemicals, plastics, and
other chemical products from natural gas and
natural gas liquids will significantly increase, and
U.lpetro- chemical exports from Texas will not
beashort term phenomenon.' VNththe
opening ofthe expanded Panama Canal in2U16,
both the Port ofHouston and Houston Ship
Channel will continue toplay amajor role in
international trade.' The expanding new
economy based upon domestic oi|&gas
production and international trade ishereto
stay.
LaPorte welcomes the opportunity topartner
with retailers, estaumnts,deveopeo.and
tenant representatives todevelop new retail and
restaurant projects inLaPorte,Texas.Threceive
afree map and information which highlights the
retail and restaurant development opportunities
inLaPorte, please contact Scott D.Livingston at
/ "Billions Planned mShip
Shale Boom", Houston Business Journal, 18 Oct. 2013.
u Port Region Investment Survey Shows
Strong Private Investment, Construction Employment
Through 2015", Port of Houston Bureau, Jan. 2013.
3 "Houston's Chemical Reaction — Shale Gas Powers
Industrial novm^.Tierra Grande, July 2013.
* "Port Inspires Industrial Development mu^Porte and
Deer Park", Houston Business Journal, 4 Feb. 2014.
OVERVIEW
La Porte is locatd fn Harris County,
1'exas, apr,)r(-.)xin')a[ely 26 driving miles
horn Downtown I lousion.
La Florteberreffls frorrri be4ig 0ocated
u-� il-)e western edge Of (..",'�aNeston
Bay. La Porte is ako hornto the
San Jacinto Monument and
the Batflesh�p Texas whiCh
combined are the deslinaflon
of over 500,000 visitors per
year. La Fort e also has the only
pubHc beach in IHarris
County, Sylvan Beach.,
T
7
La P(Dr-le Ihas Ng[-ier incornes
flhan its Prirricry "l"r("VJe Area
(Pl"A). ."he La PortE,� rnecfiar)
k)corrie �n 2W2 mm, $53,9�7
am,-] is expected to grow
10 $60,765 by 2017, a 2%
increase.
RETAUL IPRIMARY TRADE AREA STATISTICS
Pop.flation 2012
382,969
M,056 2,630 28,922
65,637
2017
4031,956
35,607
2,844 30,526
68,689
Is e(fian Age 201 y
33.9
34.8
3,C8 31 5. 3
34.8
Medan MInc c)rne 20 1 ?
$53917
$59,337 $70,204 $60,48,E,
$62,274
01 /
$60,16,.)
$64,938 $,/4,/65 $65,899
$68,6/5
glIMMEMMUMEMEMIMMEMEM
1 lwy 146, n (-..)f F drnoni F'kwy
17,428
Cdlc.ge, C.4c�dude,
3Ci.9%
3lcflrrnon I F'kwy, w of Hwy 146
26,/89
Some, C()(Iege, no --)gi
24.9Y,,
Sr.-,�e,nc-,en V lwy, w of [ My 146
17,428
Gil 4i School Graduc.fle
'24.3',",,
I es s I han r--lkjh Sc,'Nx
M0%
Avercige Househdd $72,023
$80,/94
Medcin � lousehold $53,917
$60,/6' �
Ccjp� I a $26,2/0
$29,337
III
IIII
III III
() - 9 yecu�
150%
10 14 year,,,
7 6%
WhHe Ak-)ne
74L%
T','1.'97,
15 19 years
7.3%
Nac�k Alone�
5'9111v,
J.9%
20 24 yeas
7,3%
Arner. I ndar i Aone
Cl. 7'1v,,
0./%
25 '34 year,,,
14.3%
Askx-i /plc ne
4.1`%>
11 A%
35 44 yea's
13.0%
lladflcWcv'idepA�cme
(), I %
0.1%
45 54 years
I4. I %
S(X-1V6'()lhei Flace
12.2%
19,8'�,,
55 and okleY
24A%
�wo or Mc)rcac os
101Y.
33%
Hi sr: (Any RC: ccP)
40.3%
43.0%
146
'EXAS
7 IM 134,710 F40,3921 F4T,-6-41-1 `28810]
7 A . A , ''I lov ' I
do , " 18 W Fairmont Pkwy a
PRIMARYTRADE AREA MAPTRAFFIUN'r MA2�
7,442
NORTH C COP
NORTH
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604 W. Fci�irrnoint Pkwy ynght 2013 GWALYM COMbERCIAL. TTe 11VOt7T7,3tM)0 PlOVIded herein dremed rehable and in subject to elfws, 01?T)sslons
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