Loading...
HomeMy WebLinkAbout3-22-21 RICHARD WARREN, PRESIDENT DANNY EARP, BOARD MEMBER NANCY OJEDA, VICE-PRESIDENT JOHN BLAKEMORE, BOARD MEMBER RACHEL COTTON, BOARD MEMBER VACANT, BOARD MEMBER CHUCK ENGELKEN, BOARD MEMBER CITY OF LA PORTE DEVELOPMENT CORPORATION MEETING AGENDA Notice is hereby given of a meeting of the City of La Porte Development Corporation to be held on March 22, 2021, at the City Hall Council Chamber, 604 West Fairmont Parkway, La Porte, Texas, beginning at 4:30 pm to consider the following items of business: Social distancing protocols will be in effect in the Council Chambers. Remote participation is available, also. Attend via a screen using this link: https://us02web.zoom.us/j/89959848809?pwd=Z1hpbzYxSUtoSjhzZ2EveS90cFUwdz09. Join by phone at 888 475 4499 or 877 853 5257. The meeting ID is 899 5984 8809 and the passcode is 055778. 1.CALL TO ORDER 2.CITIZEN COMMENT (Generally limited to five minutes per person; in accordance with state law, the time may be reduced if there is a high number of speakers or other considerations.) 3.AUTHORIZATIONS (a)Presentation, discussion, and possible action to approve the minutes of the January 25, 2021, meeting. [President W arren] (b)Presentation, discussion and possible action to approve an extension to the benchmarks by amending the development agreement for refurbishment/renovation of the old bank building located at 100 W. Main Street in La Porte, Texas. [Jason W eeks, Assistant City Manager] (c)Presentation, discussion, and possible action to approve additional funding of an approved project and to begin 60-day comment period once notice is given in order to complete refurbishment/renovation of the old bank building located at 100 W. Main Street in La Porte, Texas. [Jason W eeks, Assistant City Manager] 4.SET NEXT MEETING 5.BOARD COMMENTS Hear announcements concerning matters appearing on the agenda; items of community interest; and/or inquiries of staff regarding specific factual information or existing policy from the Committee members and City staff, for which no formal action will be discussed or taken. 6.ADJOURN If, during the course of the meeting and discussion of any items covered by this notice, the La Porte Development Corporation Board determines that a Closed or Executive Session of the Board is required, then such closed meeting will be held as authorized by Texas Government Code, Chapter 551, Section 551.071 - consultation with counsel on legal matters; Section 551.072 - deliberation regarding purchase, exchange, lease or value of real property; Section 551.073 - deliberation regarding a prospective gift; Section 551.074 - personnel matters regarding the appointment, employment, evaluation, reassignment, duties, discipline, or dismissal of a public officer or employee; Section 551.076 - implementation of security personnel or devices; Section 551.087 - deliberation regarding economic development negotiation; Section 551.089 - deliberation regarding security devices or security audits, and/or other matters as authorized under the Texas Government Code. If a Closed or Executive Session is held in accordance with the Texas Government Code as set out above, the La Porte Development Corporation Board will reconvene in Open Session in order to take action, if necessary, on the items addressed during Executive Session. Persons with disabilities who plan to attend this meeting and who may need auxiliary aids or services are requested to contact the City Secretary's office (281-470-5019), two working days prior to the meeting for appropriate arrangements. Pursuant to Texas Government Code Sec. 551.127, on a regular, non-emergency basis, members may attend and participate in the meeting remotely by video conference.Should that occur, a quorum of the members will be physically present at the location noted above on this agenda. CERTIFICATE I, Lee W oodward, City Secretary, do hereby certify that a copy of the March 22, 2021, La Porte Development Corporation Board agenda was posted on the City Hall bulletin board, a place convenient and readily accessible to the general public at all times, and to the City's website, www.LaPorteTX.gov, in compliance with Chapter 551, Texas Government Code. DATE OF POSTING TIME OF POSTING TAKEN DOW N Lee Woodward Lee W oodward, City Secretary Page 1 of 2 January 25, 2021, La Porte Development Corporation Board Minutes RICHARD WARREN, PRESIDENT SHELLEY FULLER, BOARD MEMBER RACHEL COTTON, BOARD MEMBER CHUCK ENGELKEN, BOARD MEMBER DANNY EARP, BOARD MEMBER VACANT, BOARD MEMBER NANCY OJEDA, VICE-PRESIDENT MINUTES OF THE LA PORTE DEVELOPMENT CORPORATION BOARD MEETING OF JANUARY 25, 2021 The City of La Porte Development Corporation Board met on Monday, January 25, 2021, at the City Hall Council Chambers, 604 West Fairmont Parkway, La Porte, Texas, at 5:00 p.m., with the following in attendance: Board members present: Richard Warren, Danny Earp, Shelley Fuller, Chuck Engelken, Nancy Ojeda (arrived at 5:09) Board members attending remotely: None Board members absent: Rachel Cotton Council-appointed members present: Corby Alexander, City Manager; Lee Woodward, City Secretary; Clark Askins, Assistant City Attorney 1. CALL TO ORDER – President Warren called the meeting to order at 5:00 p.m. 2. CITIZEN COMMENT (Generally limited to five minutes per person; in accordance with state law, the time may be reduced if there is a high number of speakers or other considerations.) There were no speakers. 3. AUTHORIZATIONS (a) Presentation, discussion, and possible action to approve the minutes of the August 24, 2021, meeting. [President Warren] Member Engelken moved to approve the minutes of the August 24, 2021, meeting; the motion was seconded by Member Fuller; the motion was adopted, 4-0. (b) Presentation, discussion, and possible action to approve an enhancement grant in the amount of $12,491.41 to the applicant, Bryan and Brandy Gwin for the building and sign enhancements for their business, Boats Etc., which is located at 331 S. Highway 146 in La Porte, Texas. [Jason Weeks, Assistant City Manager] Member Earp filed a conflict of interest affidavit and did not participate in the item. Member Engelken moved to approve an enhancement grant in the amount of $12,491.41 to the applicant, Bryan and Brandy Gwin, for the building and sign enhancements for their business, Boats Etc., which is located at 331 S. Highway 146 in La Porte, Texas; the motion was seconded by Member Fuller; the motion was adopted, 3-0. Page 2 of 2 January 25, 2021, La Porte Development Corporation Board Minutes (c) Presentation, discussion, and possible action to approve an enhancement grant in the amount of $26,226.54 to the applicant, Mike Kinstley for the building and sign enhancements for his business, Precision Auto Repair, which is located at 405 S. Highway 146 in La Porte, Texas. [Jason Weeks, Assistant City Manager Member Earp filed a conflict of interest affidavit and did not participate in the item. Member Engelken moved to approve an enhancement grant in the amount of $26,226.54 to the applicant, Mike Kinstley, for the building and sign enhancements for his business, Precision Auto Repair, which is located at 405 S. Highway 146 in La Porte, Texas; the motion was seconded by Member Fuller; the motion was adopted, 3-0 (Vice President Ojeda had arrived and abstained from the vote). 4. SET DATE FOR NEXT MEETING The next meeting was not scheduled. 5. Hear announcements concerning matters appearing on the agenda; items of community interest; and/or inquiries of staff regarding specific factual information or existing policy from the Committee members and City staff, for which no formal action will be discussed or taken. The Committee discussed an email from the Assistant City Manager concerning a prior incentive agreement with INEOS. 6. ADJOURN – The meeting was adjourned without objection at 5:12 p.m. ___________________________________ Lee Woodward, City Secretary REQUEST FOR LA PORTE DEVELOPMENT CORPORATION BOARD AGENDA ITEM Agenda Date Requested: March 22, 2021 Requested By: Jason Weeks, Asst. City Mgr. Department: Administration/CMO Report Resolution Ordinance Exhibits: Original Development Agreement, Incentive Application, Design & Site Plans, and Letter from Applicant SUMMARY & RECOMMENDATION On February 24, 2020, staff brought to the La Porte Development Corporation Board a project in downtown La Porte. The applicant Marion (Marty) and Vicki Campise have purchased the Main Street bank building, which was previously occupied by Becky’s Ceramics. The building is located at 100 W. Main Street. The initial renovation proposal included remodeling the building to have two (2) or three (3) retail spaces, along with three (3) apartment units. There was a need to significantly remodel the building due to the roof needing to be completely replaced, the entire façade needing to be redone and the existing backlot needing to be turned into a children’s playground and parking lot. The initial estimates put the applicant’s investment at $500,000. Staff ran the project through the EDC matrix, which indicated that this project would be eligible for a $22,365 incentive. Staff determined that this particular project had the potential to have more intangible value to the City, specifically due to the foot traffic hub on Main Street. On February 24th, the La Porte Development Corporation Board discussed the project and approved to move forward with an incentive package for this project in an amount not to exceed of $85,000. As required by state law, a 60 -day public comment period occurred. The required public notices were done and staff did not receive any citizen feedback regarding this incentive application. Subsequent to the February 24th meeting, the applicant moved further along on this project and made changes to the initial project. The applicant secured agreements with two (2) tenants to occupy the first floor of this building. These tenants are Goodies and Appropriation Source of Funds: Special Programs Account Number: 038-6030-565-9997 Amount Budgeted: $135,000 Amount Requested: N/A Budgeted Item: Yes No the La Porte-Bayshore Chamber of Commerce. There was a reduction in the number of commercial business primarily due to the Chamber needing an additional 500 sq. ft. of space, thereby only allowing capacity for these two (2) commercial businesses. Additional changes reduced the number of apartments on the second floor from three (3) to two (2) due to a resident requiring 1800 sq. ft. of space. The applicant had secured rental tenants for the apartment units. The initial investment of the applicant was increased from $500,000 to $700,000, with the total investment of $850,000, including land and building at $150,000 and the total renovations. In addition to a $50,000 incentive approved for this project, the applicant submitted for an enhancement grant in the amount of $50,000. On July 27, 2020, the La Porte Development Corporation Board approved the enhancement grant in the amount of $50,000 and conducted a public hearing on the incentive project in the amount of $85,000 and approved moving forward with the incentive agreement. On August 24, the La Porte Development Corporation Board and La Porte City Council approved the enhancement grant along with the incentive development agreement. The development agreement provided the below benchmarks: • Total cash incentive of $85,000 with following payment schedule: two payments of $40,000 and $45,000 o First payment of $40,000, within 30 days of substantial completion of construction/ renovations. This payment is estimated to occur around January 2021. o Second payment of $45,000 when building is occupied with four (4) full - time jobs (confirmed by documentation from each business stating such). The applicant will be responsible for maintaining jobs 5 years after 2nd payment. This payment is estimated to occur around June 2021. • Claw-back provisions within the development agreement if the project doesn’t maintain the four (4) jobs for five (5) years, each year potential claw-back amount decreases by $17,000. Due to several delays in starting and performing the work, the applicant has not been able to satisfy the requirements of the 1st benchmark. The applicant is requesting an extension to the first benchmark to May 15, 2021. The applicant is requesting no other changes to the development agreement regarding the already established performance requirements. Staff recommends the La Porte Development Corporation Board approve the requested benchmark extensions for the 100 W. Main Stree t project for the refurbishment and renovation of the old bank building located at 100 W. Main Street in La Porte, Texas. If the Board approves this extension, staff will bring back to the Board in April a revised development agreement to approve. ACTION REQUIRED BY BOARD Approve or deny an extension to the benchmarks by amending the development agreement for refurbishment/renovation of the old bank building located at 100 W. Main Street in La Porte, Texas. Approved for the La Porte Development Corporation Board meeting agenda. Corby D. Alexander, City Manager Date March 11,2021 To City of La Porte Development Corporation Pursuant to our written agreement dated August 24, 2020, between Marion Campise and The City of La Porte Development Corporation, it was agreed upon at that time that the project substantial completion date would be January 31, 2021, with 4 full time employees by June 30,2021, and final completion date would be no later than August 30, 2021. Because of many delays beyond our control, we now have a substantial completion date of June 1, 2021, and the 4 full time employees and move in by June 30, 2021 and a final completion of August 30, 2021, which is the same as the original final date. Because of these delays, I am requesting an extension of our agreement. There were several reasons causing our date change and they are as follows: Delays in getting our site plan approved, and the building permit, we started our permit process in February 2020 with final approval being given November18, 2020. Delays in getting approval of plans for fire sprinkler system from City of La Porte Fire Marshall office, plans first submitted in November 2020, and permit finally granted March 5,2021. No interior work could be started until sprinkler system was installed COVID - 19 Virus depleted work staff of most of our vendors causing a labor and material shortage resulting in delays and cost increases. Freezing temperatures in February brought all work in progress to a complete stop resulting in loss of 8 days. We are extremely grateful for the monetary help from the Board. Without their assistance we would not have been able to complete the building that not only The Chamber of Commerce was expecting but Goodies as well I personally thank you for your help and hope this gives you an insight into our delay problems I also appreciate the help granted by our Fire Marshall and the City Planning Department I am aware that there is a lot of new building going on in La Porte and the workload on those two departments is monumental They are to be commended Marty Campise 1 ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT BETWEEN THE LA PORTE DEVELOPMENT COPRPORATION, AND MARION CAMPISE AND VICKI CAMPISE, FOR USE OF TYPE B DEVELOPMENT CORPORATION SALES TAX FUNDS THIS AGREEMENT made by and entered into this 24th day of August 2020 between the La Porte Development Corporation, a Type B non-profit corporation operating under authority of Texas Local Government Code Chapters 501 and 505, hereinafter “LPDC”, and Marion Campise, hereinafter referred to as “Recipient”. WITNESSETH: WHEREAS, the voters of the City of La Porte authorized the levying of additional sales tax within the City for promotion of economic development and the LPDC is authorized to use such tax revenues for certain qualifying projects and other economic development related purposes; and WHEREAS, Recipient is a Texas based commercial development company that specializes in rehabilitating underutilized commercial buildings; and WHEREAS, Recipient wishes to renovate the exterior and interior of a the building located at 100 West Main Street., and make associated site improvements, for the purpose of operating a mixed use commercial and residential facility and which would 1) result in the expenditure by Recipient of an estimated $650,000.00 in capital improvements; and 2) employ an estimated four (4) full time personnel; and WHEREAS, Recipient has requested that LPDC provide financial incentives to Recipient to contribute towards the cost of renovation of the property at 100 West Main Street under a qualifying project of the LPDC for infrastructure, site and related improvements, as authorized by Texas Local Government Code Chapters 501 and 505, and it is the desire of LPDC to assist in the funding of same, finding that such expenditures will promote or develop new or expanded business enterprises. WHEREAS, Texas law and the by-laws of the LPDC require that certain expenditures and projects by the LPDC be approved by the governing body of the City; and whereas the LPDC Board has duly approved such project and the expenditures for same have been authorized by the La Porte City Council; and NOW THEREFORE, in consideration of the covenants and conditions stated herein, and in consideration of the mutual benefits that will accrue to each of the parties hereof, as well as to the citizens of the City of La Porte, Texas, the parties have agreed and do hereby agree as follows: ARTICLE I 2 In consideration of Recipient renovating the existing structure at 100 West Main Street and operating a mixed use commercial and residential facility at the subject site (“Building” herein), which proposal was considered in that certain public hearing authorizing a proposed project for the expenditure of LPDC funds for the promotion or development of new or expanded business enterprises, held before the LPDC on July 27, 2020, LPDC agrees to provide Recipient an incentive package consisting of a cash payment in a total sum not to exceed $85,000.00, to be distributed in two increments of $40,000 and $45,000.00 each, with each distribution conditioned on the attainment of certain performance thresholds, more specifically outlined as follows: 1) A cash incentive payment in an amount equal to $40,000.00 will be distributed to Recipient by LPDC, upon a) receipt by LPDC of proof of substantial completion of renovation of the Building and b) proof of minimum capital investment in the amount of $650,000.00 applied towards renovation of the Building and related infrastructure and site work, exclusive of the cost to Recipient to purchase the existing real estate tract and vacant building. However, in no case will the $40,000.00 payment be made by LPDC if documentation substantiating 1) substantial completion of the renovation of the Building and 2) the expenditure of no less than $650,000.00 applied towards capital improvements to the Building is not delivered to and received by LPDC by January 31, 2021. In the case that proof of substantial completion of renovation of the Building and minimum capital investment of $650,000.00 applied towards capital improvements to the Building is presented to LPDC on or before said January 31, 2021 deadline, the LPDC shall convene a meeting of the LPDC Board of Directors for a date no later than forty-five (45) days after receipt of proof of substantial completion of the renovation of the Building and minimum capital investment of $650,000.00 by LPDC from Recipient. Upon verification of the substantial completion of the Building and minimum capital investment of $650,000.00, as reflected by formal vote of the LPDC Board of Directors that Recipient has satisfied the requirements of this paragraph, LPDC will then remit the $40,000.00 to Recipient within a period not to exceed thirty (30) days. In the case where Recipient fails to submit proof of substantial completion of renovation of the Building and proof of a minimum capital investment in the amount of $650,000.00 by the January 31, 2021 deadline, despite being disqualified for the incentive payment Recipient will remain eligible to qualify for receipt of the $45,000.00 incentive payment under Paragraph 2 below, in so far as the conditions precedent for permanent employment of four positions is established in such paragraph is met. However, in such case Recipient will be required to submit proof of substantial completion of renovation of the Building in order to qualify for the incentive payments outlined in Paragraph 2 below. 2) A cash incentive payment in an amount equal to $45,000.00 will be distributed to Recipient by LPDC upon delivery to the LPDC of a) an employment roster evidencing that entities leasing space within the Building cumulatively employ a minimum of four (4) full time employees at the Building site as of June 30, 2021. However, in no case will the $45,000.00 payment be made by LPDC if proof of the employment of a minimum of four (4) full time personnel as of June 30, 2021 is not delivered to and received by LPDC by August 30, 2021. Proof of employment, for purposes of this 3 agreement, may be satisfied by submission to LPDC by the said August 30, 2021 deadline of a) copies of Building site lessees’ 941 Report to the Internal Revenue Service and C3 Report to the Texas Workforce Commission for each employee (but with social security numbers of each employee redacted) and b) a notarized statement executed by Building site lessees affirming that a cumulative four (4) full time employees are employed in positions permanently located at the Building site. In the case that proof of employment of four (4) full-time personnel is presented to LPDC on or before said August 30, 2021 deadline, the LPDC shall convene a meeting of the LPDC Board of Directors for a date no later than forty-five (45) days after receipt of proof of employment by lessees at the Building site by Recipient. Upon verification of employment as reflected by formal vote of the LPDC Board of Directors, LPDC will then remit the $45,000.00 to Recipient within a period not to exceed thirty (30) days. In the event that Recipient qualifies for the $45,000.00 incentive installment based upon proof of employment of four (4) full-time positions by lessees located at the Building site pursuant to Article 1, Paragraph 2, above, then in such case Recipient shall be required to prove the continuous employment by lessees at the Building site of a cumulative minimum of four (4) full-time positions, for a continuous five (5) year period. At the conclusion of each calendar year during such five (5) year period, beginning on December 31, 2021, through and including December 31, 2025, Recipient shall be required to submit to the LPDC proof of employment of a minimum of four (4) full -time positions at the Building site, in the manner required under Article 1, Paragraph 2, above. Should Recipient fail to provide proof of the employment of four (4) full-time employees at the end of a calendar year, then for that year Recipient shall be responsible for remitting to the LPDC the sum of $17,000.00 representing recapture out of the previously awarded $85,000.00 incentive paid under this Agreement. However, in the instance that Recipient provides proof of employment of a minimum of four (4) full-time positions at the end of a calendar year, Recipient shall be relieved from the obligation to remit to the LPDC $17,000.00 recapture for that year. If Recipient fails to qualify for the $40,000 incentive installment provided for in Article I, Paragraph 1 but qualifies for payment of the $45,000.00 payment under Article 1, Paragraph 2, then in that case the obligations of Recipient to maintain the continuous employment of four (4) full -time personnel at the Building site shall continue to apply, but in the case of failure to maintain employment of four (4) full- time employees at the Building site shall subject Recipient to the requirement to remit to the LPDC $9000.00 as recapture out of the previously awarded $45,000 incentive paid under this Agreement , instead of $17,000.00. ARTICLE II All funds received as herein provided shall be solely for the purpose of contributing towards Recipient’s costs in the renovation of the exterior and interior of the building located at 100 West Main Street and for the making of associated site and infrastructure improvements, to operate a mixed-use commercial and residential facility. Recipient further acknowledges that the incentive grant provided for herein is tied to a project of the LPDC for the promotion or development of new or expanded business enterprises, as authorized by Texas Local Government Code chapters 501 and 505 . 4 ARTICLE III Disbursement and/or retention of the cash incentive identified in Article I of this Agreement shall be made as follows: A. Disbursement shall be made to Recipient, subject to the satisfaction of the conditions precedent or conditions subsequent contained within Article I of this Agreement. B. LPDC’s obligation to Recipient shall not exceed $85,000.00, nor shall LPDC be obligated to reimburse Recipient for requests delivered to LPDC after the termination of this Agreement. ARTICLE IV Recipient understands that the funds paid to Recipient by the LPDC are derived from tax revenues collected under Texas Local Government Code 505.252, and that LPDC has estimated the tax revenues to be collected during the term of this Agreement. Recipient further understands, acknowledges, and agrees that if the tax revenue actually collected is less than 90% of the estimated tax revenues to be collected in any fiscal year during the term of this Agreement, LPDC will be under no obligation to provide funding to Recipient for any payment or payments during or after the fiscal year for which there is a revenue shortfall. Upon execution of the Agreement, funds will be placed in a City of La Porte designated commitment account for purposes of this Agreement. ARTICLE V In the event of any default by Recipient hereunder, including, but not limited to, use of the funds provided herein for purposes other than those stated in Article I of this Agreement, LPDC may cease all future payments hereunder an d terminate this Agreement. In addition, LPDC shall have the right to reclaim and recapture, and Recipient shall refund, any funds that are not spent in accordance with the terms of this Agreement, including 1) LPDC funds spent by Recipient in contravention of this Agreement and 2) any LPDC funds previously paid to Recipient but not yet spent by Recipient. In each such case, the previously paid cash payment or payments shall be remitted to the LPDC within sixty (60) of receipt of written demand for same. Any breach of this covenant shall be grounds for immediate termination of the distribution of funds. ARTICLE VI The term of this Agreement is for a period beginning on the date of approval by LPDC and ending July 31, 2026. ARTICLE VII All funds provided by the LPDC pursuant to this Agreement may be used only for the purposes authorized by this Agreement. Notwithstanding Article I, above, City shall be under no obligation to 5 make any fund disbursements if the reports required under this Article have not been delivered to the LPDC. ARTICLE VIII This Agreement does not create any joint venture, partnership , or agency relationship between the LPDC and Recipient. Recipient shall have exclusive control of, and the exclusive right to control the details of the work to be performed by Recipient hereunder and all personnel performing same, and shall be solely responsible for the acts and omissions of its officers, members, agents, servants, employees, subcontractors, program participants, volunteers, licensees, and invitees. In no event shall any person participating in or performing any of Recipient’s duties or r esponsibilities hereunder be considered an officer, agent, servant, or employee of the LPDC. ARTICLE IX Recipient agrees to assume and does hereby assume all responsibility and liability for damages sustained by persons or property, whether real or asserted, by or from the carrying on of work by Recipient or in the performance of services performed and to be performed by Recipient hereunder. Recipient covenants and agrees to, and does hereby indemnify, defend, and hold harmless LPDC and all their respective officers, agents, and employees from all suits, actions, claims, and expenses of any character, including attorney’s fees, brought for or incurred on account of any injuries or damages, whether real or asserted, sustained by any person or property by or in consequence of any intentional or negligent act, omission, or conduct of Recipient, its agents, servants or employees. ARTICLE X This Agreement may be amended by the mutual agreement of the Parties hereto in writing to be attached to and incorporated into this Agreement. ARTICLE XI Recipient shall adhere to all local, state, and federal laws and regulations that may affect its actions made pursuant to this Agreement, and shall maintain in effect during the term of this Agreement any and all federal, state, and local licenses and permits which may be required of Recipients generally. ARTICLE XII Recipient may not assign this Agreement, or any of the benefits provided herein including but not limited to incentive payments identified in Article I, without the written consent of LPDC. ARTICLE XIII The waiver by LPDC of any breach of any term, condition, or covenant herein contained shall not be deemed a waiver of any subsequent breach of the same, or any other term, condition, or covenant. 6 ARTICLE XIV The obligations of the Parties to this Agreement are performable in Harris County, Texas and if legal action is necessary to enforce same, venue shall lie in Harris County, Texas. ARTICLE XV This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. ARTICLE XVI This Agreement may be executed in triplicate, each of which shall be deemed an original and constitute one and the same instrument. ARTICLE XVII Neither LPDC nor Participant shall be required to perform any term, condition, or covenant in this Agreement so long as such performance is delayed or prevented by force majeure, which shall mean Acts of God, civil riots, floods, and any other cause not reasonably within the control of LPDC or Recipient except as herein provided, and which by the exercise of due diligence LPDC or Recipient is unable, wholly or in part, to prevent or overcome. ARTICLE XVIII In submitting this application, the applicant whose signature appears below affirms its intent and commitment to comply in full with Section 2264.052 of the Government Code and certifie s that it does not and will not knowingly employ an undocumented worker during any time period associated with the public subsidy for which the application is being submitted. The applicant further certifies its understanding and agreement that if it is convicted of a violation of 8 U.S.C. Section 1324a(f), providing for civil and/or criminal penalties for engaging in a pattern or practice of knowingly hiring or continuing to employ unauthorized aliens, it shall repay the amount of the public subsidy with i nterest, at the rate and according to the terms of the agreement signed under Section 2264.053 of the Government Code, not later than the 120th day after the date the city notifies the business of the violation. ARTICLE XIX The Agreement embodies the complete agreement of the parties hereto, superseding all oral or written pervious and contemporary agreements between the Parties, which relate to matters in this Agreement. SIGNED AND AGREED to by LPDC and Recipient on the dates indicated below. LA PORTE DEVELOPMENT CORPORTION 7 __________________________ Richard Warren, President ___________________ Date ATTEST ___________________________ Secretary of the Corporation Marion Campise _________________________________ _________________________ Date ATTEST ________________________________ REQUEST FOR LA PORTE DEVELOPMENT CORPORATION BOARD AGENDA ITEM Agenda Date Requested: March 22, 2021 Requested By: Jason Weeks, Asst. City Mgr. Department: Administration/CMO Report Resolution Ordinance Exhibits: Development Agreement, Incentive Application, Design & Site Plans, Revised Project Budget, Letter from Applicant SUMMARY & RECOMMENDATION On February 24, 2020, staff brought to the La Porte Development Corporation Board a project in downtown La Porte. The applicant Marion (Marty) and Vicki Campise have purchased the Main Street bank building, which was previously occupied by Becky’s Ceramics. The building is located at 100 W. Main Street. The initial renovation proposal included remodeling the building to have two (2) or three (3) retail spaces, along with three (3) apartment units. There was a need to significantly remodel the building due to the roof needing to be completely replaced, the entire façade needing to be redone and the existing backlot needing to be turned into a children’s playground and parking lot. The initial estimates put the applicant’s investment at $500,000. Staff ran the project through the EDC matrix, which indicated that this project would be eligible for a $22,365 incentive. Staff determined that this particular project had the potential to have more intangible value to the City, specifically due to the foot traffic hub on Main Street. On February 24th, the La Porte Development Corporation Board discussed the project and approved to move forward with an incentive package for this project in an amount not to exceed of $85,000. As required by state law, a 60 -day public comment period occurred. The required public notices were done and staff did not receive any citizen feedback regarding this incentive application. Subsequent to the February 24th meeting, the applicant moved further along on this project and made changes to the initial project. The applicant secured agreements with two (2) tenants to occupy the first floor of this building. These tenants are Goodies and Appropriation Source of Funds: Special Programs Account Number: 038-6030-565-9997 Amount Budgeted: $0 Amount Requested: $95,000 Budgeted Item: Yes No the La Porte-Bayshore Chamber of Commerce. There was a reduction in the number of commercial business primarily due to the Chamber needing an additional 500 sq. ft. of space, thereby only allowing capacity for these two (2) commercial businesses. Additional changes reduced the number of apartments on the second floor from three (3) to two (2) due to a resident requiring 1800 sq. ft. of space. The applicant had secured rental tenants for the apartment units. The initial investment of the applicant was increased from $500,000 to $700,000, with the total investment of $850,000, including land and building at $150,000 and the total renovations. In addition to a $50,000 incentive approved for this project, the applicant submitted for an enhancement grant in the amount of $50,000. On July 27, 2020, the La Porte Development Corporation Board approved the enhancement grant in the amount of $50,000 and conducted a public hearing on the incentive project in the amount of $85,000 and approved moving forward with the incentive agreement. On August 24, the La Porte Development Corporation Board and La Porte City Council approved the enhancement grant along with the incentive development agreement. Due to material shortages that have led to a considerable cost increase, the applicant now expects to spend $940,000 on construction. This is much more than budgeted and expected. The applicant will cover much of the overage with personal cash but is requesting additional assistance in completing the project. Mr. Campise believes that an additional $95,000 is needed to ensure project completion. Specifically, he has requested: • $45,000 in additional grant money • $50,000 in the zero-interest loan (to be amortized over 4 years) Should the Board consider additional assistance, we will need to go through the official project creation process again, including the 60 -day public comment period and public notice requirements. Additionally, we would need to prepare and execute a promissory note and deed of trust to secure the loan. ACTION REQUIRED BY BOARD Approve or deny an additional funding of an approved project and to begin 60- day comment period once notice is given in order to complete refurbishment/renovation of the old bank building located at 100 W. Main Street in La Porte, Texas. Approved for the La Porte Development Corporation Board meeting agenda. Corby D. Alexander, City Manager Date To the City of La Porte Development Corporation 3/12/2021 As a follow up to my previous letter dated March 3, 2021, I would first like to thank the committee for their generous contribution to help offset some of the cost attributed to the rebuilding of 100 Main. For reasons spelled out previously, the costs of rebuilding have increased dramatically. Our original approval was for $130,000, $80,000 came from the La Porte Development Corporation and $50,000 was from Main Street Facade Money, based out our buildout projection of $720,000. With time delays and increase in Building Materials, our new projected cost will be approximately $940,000.00 Because our core tenants are The Chamber of Commerce and Goodies Ice Cream Parlor, I have kept the quality of the building the same as the original plans and have added several additional upgrades at my expense Although my increased cost of construction is now in excess of $200,000 my current request is for half of that I am requesting a total of $95,000 The breakdown of requested funds would break down as follows: $45,000 Grant money and $50,000 loan for 48 months paid back at $1,041.66 A second Lien would be placed on land and building as collateral 100 Main will be the show place of Main Street for decades to come setting the standard for decades to come To validate the dramatic cost increase, I have four references to show how their material cost have risen Ace hardware in Pearland says their wholesale material building costs have risen 60 to 80 percent since January. Richard Cantu, General Manager Fischer’s Hardware on Broadway Says his cost increases are fifty percent plus since January. Tony Toppeto : Asst Store Manager Mark Follis, a well-known and respected committee Member and Contractor in La Porte, says his cost estimates on current work sites have more than doubled. Steve Schonauer with Leggio Electrical says his bids have in some cases doubled or more because of the price increase in electrical materials. I would like to end by saying that the building will be paid for no matter what by me but the additional help from the City of LaPorte will help me keep it at the quality level that you would expect from me Marty Campise March 11,2021 To City of La Porte Development Corporation Pursuant to our written agreement dated August 24, 2020, between Marion Campise and The City of La Porte Development Corporation, it was agreed upon at that time that the project substantial completion date would be January 31, 2021, with 4 full time employees by June 30,2021, and final completion date would be no later than August 30, 2021. Because of many delays beyond our control, we now have a substantial completion date of June 1, 2021, and the 4 full time employees and move in by June 30, 2021 and a final completion of August 30, 2021, which is the same as the original final date. Because of these delays, I am requesting an extension of our agreement. There were several reasons causing our date change and they are as follows: Delays in getting our site plan approved, and the building permit, we started our permit process in February 2020 with final approval being given November18, 2020. Delays in getting approval of plans for fire sprinkler system from City of La Porte Fire Marshall office, plans first submitted in November 2020, and permit finally granted March 5,2021. No interior work could be started until sprinkler system was installed COVID - 19 Virus depleted work staff of most of our vendors causing a labor and material shortage resulting in delays and cost increases. Freezing temperatures in February brought all work in progress to a complete stop resulting in loss of 8 days. We are extremely grateful for the monetary help from the Board. Without their assistance we would not have been able to complete the building that not only The Chamber of Commerce was expecting but Goodies as well I personally thank you for your help and hope this gives you an insight into our delay problems I also appreciate the help granted by our Fire Marshall and the City Planning Department I am aware that there is a lot of new building going on in La Porte and the workload on those two departments is monumental They are to be commended Marty Campise 1 ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT BETWEEN THE LA PORTE DEVELOPMENT COPRPORATION, AND MARION CAMPISE AND VICKI CAMPISE, FOR USE OF TYPE B DEVELOPMENT CORPORATION SALES TAX FUNDS THIS AGREEMENT made by and entered into this 24th day of August 2020 between the La Porte Development Corporation, a Type B non-profit corporation operating under authority of Texas Local Government Code Chapters 501 and 505, hereinafter “LPDC”, and Marion Campise, hereinafter referred to as “Recipient”. WITNESSETH: WHEREAS, the voters of the City of La Porte authorized the levying of additional sales tax within the City for promotion of economic development and the LPDC is authorized to use such tax revenues for certain qualifying projects and other economic development related purposes; and WHEREAS, Recipient is a Texas based commercial development company that specializes in rehabilitating underutilized commercial buildings; and WHEREAS, Recipient wishes to renovate the exterior and interior of a the building located at 100 West Main Street., and make associated site improvements, for the purpose of operating a mixed use commercial and residential facility and which would 1) result in the expenditure by Recipient of an estimated $650,000.00 in capital improvements; and 2) employ an estimated four (4) full time personnel; and WHEREAS, Recipient has requested that LPDC provide financial incentives to Recipient to contribute towards the cost of renovation of the property at 100 West Main Street under a qualifying project of the LPDC for infrastructure, site and related improvements, as authorized by Texas Local Government Code Chapters 501 and 505, and it is the desire of LPDC to assist in the funding of same, finding that such expenditures will promote or develop new or expanded business enterprises. WHEREAS, Texas law and the by-laws of the LPDC require that certain expenditures and projects by the LPDC be approved by the governing body of the City; and whereas the LPDC Board has duly approved such project and the expenditures for same have been authorized by the La Porte City Council; and NOW THEREFORE, in consideration of the covenants and conditions stated herein, and in consideration of the mutual benefits that will accrue to each of the parties hereof, as well as to the citizens of the City of La Porte, Texas, the parties have agreed and do hereby agree as follows: ARTICLE I 2 In consideration of Recipient renovating the existing structure at 100 West Main Street and operating a mixed use commercial and residential facility at the subject site (“Building” herein), which proposal was considered in that certain public hearing authorizing a proposed project for the expenditure of LPDC funds for the promotion or development of new or expanded business enterprises, held before the LPDC on July 27, 2020, LPDC agrees to provide Recipient an incentive package consisting of a cash payment in a total sum not to exceed $85,000.00, to be distributed in two increments of $40,000 and $45,000.00 each, with each distribution conditioned on the attainment of certain performance thresholds, more specifically outlined as follows: 1) A cash incentive payment in an amount equal to $40,000.00 will be distributed to Recipient by LPDC, upon a) receipt by LPDC of proof of substantial completion of renovation of the Building and b) proof of minimum capital investment in the amount of $650,000.00 applied towards renovation of the Building and related infrastructure and site work, exclusive of the cost to Recipient to purchase the existing real estate tract and vacant building. However, in no case will the $40,000.00 payment be made by LPDC if documentation substantiating 1) substantial completion of the renovation of the Building and 2) the expenditure of no less than $650,000.00 applied towards capital improvements to the Building is not delivered to and received by LPDC by January 31, 2021. In the case that proof of substantial completion of renovation of the Building and minimum capital investment of $650,000.00 applied towards capital improvements to the Building is presented to LPDC on or before said January 31, 2021 deadline, the LPDC shall convene a meeting of the LPDC Board of Directors for a date no later than forty-five (45) days after receipt of proof of substantial completion of the renovation of the Building and minimum capital investment of $650,000.00 by LPDC from Recipient. Upon verification of the substantial completion of the Building and minimum capital investment of $650,000.00, as reflected by formal vote of the LPDC Board of Directors that Recipient has satisfied the requirements of this paragraph, LPDC will then remit the $40,000.00 to Recipient within a period not to exceed thirty (30) days. In the case where Recipient fails to submit proof of substantial completion of renovation of the Building and proof of a minimum capital investment in the amount of $650,000.00 by the January 31, 2021 deadline, despite being disqualified for the incentive payment Recipient will remain eligible to qualify for receipt of the $45,000.00 incentive payment under Paragraph 2 below, in so far as the conditions precedent for permanent employment of four positions is established in such paragraph is met. However, in such case Recipient will be required to submit proof of substantial completion of renovation of the Building in order to qualify for the incentive payments outlined in Paragraph 2 below. 2) A cash incentive payment in an amount equal to $45,000.00 will be distributed to Recipient by LPDC upon delivery to the LPDC of a) an employment roster evidencing that entities leasing space within the Building cumulatively employ a minimum of four (4) full time employees at the Building site as of June 30, 2021. However, in no case will the $45,000.00 payment be made by LPDC if proof of the employment of a minimum of four (4) full time personnel as of June 30, 2021 is not delivered to and received by LPDC by August 30, 2021. Proof of employment, for purposes of this 3 agreement, may be satisfied by submission to LPDC by the said August 30, 2021 deadline of a) copies of Building site lessees’ 941 Report to the Internal Revenue Service and C3 Report to the Texas Workforce Commission for each employee (but with social security numbers of each employee redacted) and b) a notarized statement executed by Building site lessees affirming that a cumulative four (4) full time employees are employed in positions permanently located at the Building site. In the case that proof of employment of four (4) full-time personnel is presented to LPDC on or before said August 30, 2021 deadline, the LPDC shall convene a meeting of the LPDC Board of Directors for a date no later than forty-five (45) days after receipt of proof of employment by lessees at the Building site by Recipient. Upon verification of employment as reflected by formal vote of the LPDC Board of Directors, LPDC will then remit the $45,000.00 to Recipient within a period not to exceed thirty (30) days. In the event that Recipient qualifies for the $45,000.00 incentive installment based upon proof of employment of four (4) full-time positions by lessees located at the Building site pursuant to Article 1, Paragraph 2, above, then in such case Recipient shall be required to prove the continuous employment by lessees at the Building site of a cumulative minimum of four (4) full-time positions, for a continuous five (5) year period. At the conclusion of each calendar year during such five (5) year period, beginning on December 31, 2021, through and including December 31, 2025, Recipient shall be required to submit to the LPDC proof of employment of a minimum of four (4) full -time positions at the Building site, in the manner required under Article 1, Paragraph 2, above. Should Recipient fail to provide proof of the employment of four (4) full-time employees at the end of a calendar year, then for that year Recipient shall be responsible for remitting to the LPDC the sum of $17,000.00 representing recapture out of the previously awarded $85,000.00 incentive paid under this Agreement. However, in the instance that Recipient provides proof of employment of a minimum of four (4) full-time positions at the end of a calendar year, Recipient shall be relieved from the obligation to remit to the LPDC $17,000.00 recapture for that year. If Recipient fails to qualify for the $40,000 incentive installment provided for in Article I, Paragraph 1 but qualifies for payment of the $45,000.00 payment under Article 1, Paragraph 2, then in that case the obligations of Recipient to maintain the continuous employment of four (4) full -time personnel at the Building site shall continue to apply, but in the case of failure to maintain employment of four (4) full- time employees at the Building site shall subject Recipient to the requirement to remit to the LPDC $9000.00 as recapture out of the previously awarded $45,000 incentive paid under this Agreement , instead of $17,000.00. ARTICLE II All funds received as herein provided shall be solely for the purpose of contributing towards Recipient’s costs in the renovation of the exterior and interior of the building located at 100 West Main Street and for the making of associated site and infrastructure improvements, to operate a mixed-use commercial and residential facility. Recipient further acknowledges that the incentive grant provided for herein is tied to a project of the LPDC for the promotion or development of new or expanded business enterprises, as authorized by Texas Local Government Code chapters 501 and 505 . 4 ARTICLE III Disbursement and/or retention of the cash incentive identified in Article I of this Agreement shall be made as follows: A. Disbursement shall be made to Recipient, subject to the satisfaction of the conditions precedent or conditions subsequent contained within Article I of this Agreement. B. LPDC’s obligation to Recipient shall not exceed $85,000.00, nor shall LPDC be obligated to reimburse Recipient for requests delivered to LPDC after the termination of this Agreement. ARTICLE IV Recipient understands that the funds paid to Recipient by the LPDC are derived from tax revenues collected under Texas Local Government Code 505.252, and that LPDC has estimated the tax revenues to be collected during the term of this Agreement. Recipient further understands, acknowledges, and agrees that if the tax revenue actually collected is less than 90% of the estimated tax revenues to be collected in any fiscal year during the term of this Agreement, LPDC will be under no obligation to provide funding to Recipient for any payment or payments during or after the fiscal year for which there is a revenue shortfall. Upon execution of the Agreement, funds will be placed in a City of La Porte designated commitment account for purposes of this Agreement. ARTICLE V In the event of any default by Recipient hereunder, including, but not limited to, use of the funds provided herein for purposes other than those stated in Article I of this Agreement, LPDC may cease all future payments hereunder an d terminate this Agreement. In addition, LPDC shall have the right to reclaim and recapture, and Recipient shall refund, any funds that are not spent in accordance with the terms of this Agreement, including 1) LPDC funds spent by Recipient in contravention of this Agreement and 2) any LPDC funds previously paid to Recipient but not yet spent by Recipient. In each such case, the previously paid cash payment or payments shall be remitted to the LPDC within sixty (60) of receipt of written demand for same. Any breach of this covenant shall be grounds for immediate termination of the distribution of funds. ARTICLE VI The term of this Agreement is for a period beginning on the date of approval by LPDC and ending July 31, 2026. ARTICLE VII All funds provided by the LPDC pursuant to this Agreement may be used only for the purposes authorized by this Agreement. Notwithstanding Article I, above, City shall be under no obligation to 5 make any fund disbursements if the reports required under this Article have not been delivered to the LPDC. ARTICLE VIII This Agreement does not create any joint venture, partnership , or agency relationship between the LPDC and Recipient. Recipient shall have exclusive control of, and the exclusive right to control the details of the work to be performed by Recipient hereunder and all personnel performing same, and shall be solely responsible for the acts and omissions of its officers, members, agents, servants, employees, subcontractors, program participants, volunteers, licensees, and invitees. In no event shall any person participating in or performing any of Recipient’s duties or r esponsibilities hereunder be considered an officer, agent, servant, or employee of the LPDC. ARTICLE IX Recipient agrees to assume and does hereby assume all responsibility and liability for damages sustained by persons or property, whether real or asserted, by or from the carrying on of work by Recipient or in the performance of services performed and to be performed by Recipient hereunder. Recipient covenants and agrees to, and does hereby indemnify, defend, and hold harmless LPDC and all their respective officers, agents, and employees from all suits, actions, claims, and expenses of any character, including attorney’s fees, brought for or incurred on account of any injuries or damages, whether real or asserted, sustained by any person or property by or in consequence of any intentional or negligent act, omission, or conduct of Recipient, its agents, servants or employees. ARTICLE X This Agreement may be amended by the mutual agreement of the Parties hereto in writing to be attached to and incorporated into this Agreement. ARTICLE XI Recipient shall adhere to all local, state, and federal laws and regulations that may affect its actions made pursuant to this Agreement, and shall maintain in effect during the term of this Agreement any and all federal, state, and local licenses and permits which may be required of Recipients generally. ARTICLE XII Recipient may not assign this Agreement, or any of the benefits provided herein including but not limited to incentive payments identified in Article I, without the written consent of LPDC. ARTICLE XIII The waiver by LPDC of any breach of any term, condition, or covenant herein contained shall not be deemed a waiver of any subsequent breach of the same, or any other term, condition, or covenant. 6 ARTICLE XIV The obligations of the Parties to this Agreement are performable in Harris County, Texas and if legal action is necessary to enforce same, venue shall lie in Harris County, Texas. ARTICLE XV This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. ARTICLE XVI This Agreement may be executed in triplicate, each of which shall be deemed an original and constitute one and the same instrument. ARTICLE XVII Neither LPDC nor Participant shall be required to perform any term, condition, or covenant in this Agreement so long as such performance is delayed or prevented by force majeure, which shall mean Acts of God, civil riots, floods, and any other cause not reasonably within the control of LPDC or Recipient except as herein provided, and which by the exercise of due diligence LPDC or Recipient is unable, wholly or in part, to prevent or overcome. ARTICLE XVIII In submitting this application, the applicant whose signature appears below affirms its intent and commitment to comply in full with Section 2264.052 of the Government Code and certifie s that it does not and will not knowingly employ an undocumented worker during any time period associated with the public subsidy for which the application is being submitted. The applicant further certifies its understanding and agreement that if it is convicted of a violation of 8 U.S.C. Section 1324a(f), providing for civil and/or criminal penalties for engaging in a pattern or practice of knowingly hiring or continuing to employ unauthorized aliens, it shall repay the amount of the public subsidy with i nterest, at the rate and according to the terms of the agreement signed under Section 2264.053 of the Government Code, not later than the 120th day after the date the city notifies the business of the violation. ARTICLE XIX The Agreement embodies the complete agreement of the parties hereto, superseding all oral or written pervious and contemporary agreements between the Parties, which relate to matters in this Agreement. SIGNED AND AGREED to by LPDC and Recipient on the dates indicated below. LA PORTE DEVELOPMENT CORPORTION 7 __________________________ Richard Warren, President ___________________ Date ATTEST ___________________________ Secretary of the Corporation Marion Campise _________________________________ _________________________ Date ATTEST ________________________________