HomeMy WebLinkAboutPR 20575: EDC, GRANT AGREEMENT WITH GEORGE KHALAF, MICHAEL KHALAF AND JOHN GANIM D/B/A GULFWAY PLAZA P. R. No. 20575
11/6/2018 KVM
RESOLUTION NO.
A RESOLUTION APPROVING AN ECONOMIC
DEVELOPMENT CONDITIONAL GRANT AGREEMENT
BETWEEN THE CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION AND
GEORGE KHALAF, MICHAEL KHALAF AND JOHN GANIM
D/B/A GULFWAY PLAZA
WHEREAS, the City Council deems it in the public interest to authorize the City of Port
Arthur Section 4A Economic Development Corporation ("PAEDC") to enter into an Economic
Development Conditional Grant Agreement (the "Agreement") with George Khalaf, Michael
Khalaf and John Ganim d/b/a Gulfway Plaza("Gulfway Plaza"); and
WHEREAS, PAEDC has reviewed the application presented by Gulfway Plaza and the
proposals for infrastructure improvements for the development of a multi-tenant shopping center
at 1645 Jefferson Drive in Port Arthur, Texas; and
WHEREAS, at their regular Board meeting on November 5, 2018, the PAEDC Board of
Directors made the requisite Findings of Fact attached hereto as Exhibit "A"; and
WHEREAS, the PAEDC Board of Directors has concluded that the expenditures found
for the infrastructure improvements will promote or develop new or expanded business enterprises
and indicated that Gulfway Plaza has presented an application qualifying as a Section 4A project
as set forth in the Economic Development Act; and
WHEREAS, at their regular Board meeting of November 5, 2018, the PAEDC Board of
Directors agreed on a conditional grant in the amount of$344,000.00 for the purpose of making
qualified infrastructure improvements to the property at 1645 Jefferson Drive based upon findings
of facts of economic benefit as to the development of the property; and
WHEREAS,Gulfway Plaza has reviewed and approved the Agreement attached hereto as
Exhibit "B".
NOW THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF PORT ARTHUR,TEXAS:
Section 1. That the facts and opinions in the preamble are true and correct.
Section 2. That PAEDC is herein authorized to enter into the Agreement with Gulfway
Plaza, and the President and Secretary of PAEDC are authorized to sign the Agreement in
substantially the same form attached hereto as Exhibit"B".
Section 3. That a copy of the caption of this Resolution be spread upon the Minutes of
the City Council.
READ, ADOPTED AND APPROVED on this day of A.D., 2018,
at a Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES:
Mayor
Councilmembers
NOES:
Derrick Freeman,Mayor
ATTEST:
Sherri Bellard, City Secretary
#1601321 Page 2
APPROVED:
Floyd Batiste, P DC CEO
APPROVED AS I F•RM:
I
Guy N. Goodson, PAEDC Attorney
APPROVED AS TO FORM:
Valecia R. Tizeno, City Attorney
#1601321
Page 3
EXHIBIT "A"
EXHIBIT "A"
FINDING OF FACT FOR INFRASTRUCTURE IMPROVEMENTS
FACTS:
• GULFWAY PLAZA has requested an incentive agreement from the PAEDC for
infrastructure improvements to construct a seven (7) building shopping district at 1645
Jefferson Drive,Port Arthur,Texas 77642(the`Building")and its parking area.
• GULFWAY PLAZA wants to make infrastructure improvements to the Building in order
to make it suitable for retail space which may house up to seven retail tenants.
FINDINGS:
• The PAEDC Board of Directors has found that constructing infrastructure improvements
to the Building and its parking area would lead to the development of new and expanded
business enterprises in the City of Port Arthur.
• The infrastructure improvements may lead to the opening of seven new businesses in the
City of Port Arthur.
• The opening of such businesses would increase sales tax revenues for the City of Port
Arthur and add to the City ad valorem tax base.
#1593918
Page 13
EXHIBIT " B "
ECONOMIC DEVELOPMENT CONDITIONAL GRANT AGREEMENT
BETWEEN
THE CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
AND GEORGE KHALAF, MICHAEL KHALAF AND JOHN GANIM
D/B/A GULFWAY PLAZA
Executive Summary
The City of Port Arthur Section 4A Economic Development Corporation ("PAEDC") has
found that the development of a 84,000 square foot multi-tenant shopping center located at 1645
Jefferson Drive in Port Arthur, Texas (the "Building") would be beneficial for new or expanded
business enterprises in Port Arthur, Texas (the "City"). George Khalaf, Michael Khalaf and John
Gamin d/b/a Gulfway Plaza (the "Incentive Recipient"), has acquired the property on 1645
Jefferson Drive and intents to make significate infrastructure improvements to provide space to be
occupied by multiple major commercial tenants, which will generate both sales tax and add to the
ad valorem tax base of the City.
Incentive Recipient's plan is to make necessary infrastructure improvements to the property
to attract retail tenants. The first phase will be to make necessary infrastructure improvements for a
multi-tenant building and Incentive Recipient shall provide PAEDC with certificate of occupancy
representing two tenant spaces. Incentive Recipient has agreed to construct infrastructure
qualifying as streets and roads, water and sewer utilities, electric utilities or gas utilities, drainage,
site improvements and related improvements in accordance with Section 501.103, Texas Local
Government Code as an authorized project for funding by PAEDC. Incentive Recipient has agreed
to provide to PAEDC, verification of the expenditure of funds for the qualifying infrastructure
improvements by providing contracts from prime or sub-contractors to perform construction and/or
installation of such infrastructure improvements and evidence of payment of such infrastructure
improvements in an amount equal to or in excess of the proposed condition grant by PAEDC to
Incentive Recipient. In consideration of development of the infrastructure improvements, PAEDC
has agreed to reimburse Incentive Recipient in an amount, not to exceed $344,000.00 (the
"Conditional Grant") as a conditional grant, subject to the receipt of verification of construction of
qualifying improvements and subject to the following:
• Incentive Recipient shall provide evidence of completion of the qualifying infrastructure
improvements and upon receipt, PAEDC will reimburse Incentive Recipient forty percent
(40%)of the Conditional Grant;
• Incentive Recipient shall provide a certificate of occupancy for the first retail tenant space
and upon receipt of the certificate of occupancy, PAEDC will reimburse Incentive Recipient
thirty percent(30%) of the Conditional Grant; and
• Incentive Recipient shall provide a certificate of occupancy for the second retail tenant space
and upon receipt of the certificate of occupancy, PAEDC will reimburse Incentive Recipient
the remaining thirty percent(30%) of the Conditional Grant.
Incentive Recipient shall be given a period of thirty-six (36) months from the execution of
the Conditional Grant and related agreements to receive the certificates of occupancy for all of
the retail space as noted in this Executive Summary, and if it fails to reach any of the occupancy
levels within that time period, PAEDC is not obligated to further fund and to reimburse
Incentive Recipient.
As Incentive Recipient has agreed to provide as collateral for the performance of its obligations
a letter of credit in the amount of$344,000.00.
Incentive Recipient agrees to provide PAEDC reports quarterly during the term of the
Incentive Agreement, as to the status of construction of the infrastructure improvements for the
Building and the status of procuring retail tenants to locate their facilities in the Building once
renovated.
Incentive Recipient will be encouraged to use its best efforts to (1) ensure that Port Arthur
residents are hired, both for the redevelopment of the Building and (2) to utilize architects,
engineers, and general subcontractors from the nine (9) county Southeast Texas region in the
redevelopment of the Building.
ii
ECONOMIC DEVELOPMENT CONDITIONAL GRANT AGREEMENT
BETWEEN
THE CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
AND GEORGE KHALAF, MICHAEL KHALAF AND JOHN GANIM
D/B/A GULFWAY PLAZA
Recitals
WHEREAS, GEORGE KHALAF, MICHAEL KHALAF & JOHN GANIM D/B/A
GULFWAY PLAZA desires to develop a seven (7) building shopping district at 1645 Jefferson
Drive, Port Arthur, Texas (the"Building")with retail tenants; and
WHEREAS, §501.103, Texas Local Government Code authorizes expenditures on
infrastructure by the City of Port Arthur Section 4A Economic Development Corporation
("PAEDC") if the PAEDC Board finds the expenditure "to be required or suitable for infrastructure
necessary to promote or develop new or expanded business enterprises,"and
WHEREAS, on September 10, 2018 and November 5, 2018 following presentation by
George Khalaf, the PAEDC Board found that the facts reasonably support the fording that the
infrastructure improvements for redevelopment of the Building are required in order to attract retail
tenants to open store fronts in the Building as set forth in Exhibit"A"; and
WHEREAS, the PAEDC Board approved an economic development conditional grant to
GEORGE KHALAF, MICHAEL KHALAF & JOHN GANIM D/B/A GULFWAY PLAZA
("Gulfway Plaza")to develop the Building; and
WHEREAS, the PAEDC and Gulfway Plaza desire to set forth in this Agreement the terms
and conditions for PAEDC's conditional grant payments for the infrastructure improvements to the
Building.
NOW THEREFORE, the parties agree as follows:
AGREEMENT DATES
AGREEMENT START DATE
1. This Economic Development Conditional Grant Agreement (the "Agreement") is entered
into with an effective date of , 2018,but in no case later than December 31,
2018, by and between the City of Port Arthur Section 4A Economic Development
Corporation ("PAEDC") and GEORGE KHALAF, MICHAEL KHALAF & JOHN GANIM
D/B/A GULFWAY PLAZA (the"Incentive Recipient").
AGREEMENT END DATE
2. This Agreement expires 30 days after Incentive Recipient either performs fully or breaches
the Agreement, subject to earlier termination or extension, voluntary or involuntary, as
provided herein.
PARTIES
3. City of Port Arthur Section 4A Economic Development Corporation("PAEDC"), located at
501 Procter Street, Port Arthur, Texas 77640, is a corporation. It is duly authorized to do
business in the State of Texas under Chapter 501, 504 Texas Local Government Code (the
"Act" or "Development Corporation Act") and duly authorized by Resolution of the City
Council of the City of Port Arthur to enter into this Agreement. So authorized and as
provided by the PAEDC bylaws, the President and Secretary of the PAEDC Board have the
authority to execute this Agreement.
4. GEORGE KHALAF, MICHAEL KHALAF & JOHN GANIM D/B/A GULFWAY PLAZA,
a Texas general partnership located at , , Texas
. The partnership's registered address is 935 Sugar Lakes Drive Sugarland, Texas
77478 is duly authorized to execute and enter this Agreement on behalf of GEORGE
KHALAF, MICHAEL KHALAF&JOHN GANIM D/B/A GULFWAY PLAZA.
CONDITIONS PRECEDENT
5. This Agreement has no legal consequences unless and until:
a. Both the PAEDC Board and the City of Port Arthur City Council approve the
Agreement in its final form; and
b. INCENTIVE RECIPIENT delivers to PAEDC quarterly status reports reflecting the
progress of construction improvements to the multi-tenant building and provides
PAEDC certificates of occupancy for the first retail space, and the second retail
space.
PROMISED PERFORMANCE
6. The parties agree to perform as follows:
a. Performance by PAEDC
i. PAEDC shall conditionally grant INCENTIVE RECIPIENT not to exceed
$344,000 for the purpose of making qualified infrastructure improvements
for the construction of the Building.
ii. INCENTIVE RECIPIENT will provide PAEDC evidence of completion of
the infrastructure improvements as set forth in Exhibit "B" and upon receipt
PAEDC will reimburse INCENTIVE RECIPIENT forty percent(40%) of the
Conditional Grant.
tt 1593918 Page 2
iii. INCENTIVE RECIPIENT will provide PAEDC a certificate of occupancy
for the first retail space of the Building and upon receipt of that certificate of
occupancy, PAEDC will reimburse INCENTIVE RECIPIENT thirty percent
(30%)of the Conditional Grant;
iv. INCENTIVE RECIPIENT will provide PAEDC a certificate of occupancy •
for a second retail tenant of the Building and upon receipt of the certificate of
occupancy, PAEDC will reimburse INCENTIVE RECIPIENT thirty percent
(30%)of the Conditional Grant; and
These are PAEDC's only obligations.
b. Performance by Incentive Recipient
i. INCENTIVE RECIPIENT shall make infrastructure improvements to the
Building as outlined in the Grant Application referenced in Exhibit"B."
ii. INCENTIVE RECIPIENT shall provide PAEDC with quarterly reports
detailing the progress of the infrastructure improvements.
iii. INCENTIVE RECIPIENT shall provide PAEDC certificates of occupancy
for each retail space in order to receive the reimbursable percentage that
coincides with the completion of each of the two retail spaces.
iv. INCENTIVE RECIPIENT shall use its best efforts to hire architect(s),
engineer(s), and general subcontractor(s) from the Nine-County Southeast
Texas Region for redevelopment of the Building;
v. INCENTIVE RECIPIENT will use its best efforts to ensure that Port Arthur,
Texas residents are hired for the redevelopment of the Building to the
maximum extent feasible.
vi. INCENTIVE RECIPIENT must complete the infrastructure improvements
and receive certificate of occupancy for each retail space in Section 6.a.
above within 36 months from the date this Agreement is executed.
vii. INCENTIVE RECIPIENT shall deliver to PAEDC a letter of credit in the
amount of$344,000.00 as collateral for the conditional grant.
viii. On written demand by PAEDC and in response to INCENTIVE
RECIPIENT's failure to achieve a performance milestone, INCENTIVE
RECIPIENT shall provide PAEDC within 10 business days following receipt
of such written demand with assurances that it has both the intention and
capabilities to perform fully its Agreement dual obligations.
41593918 Page 3
INCENTIVE RECIPIENT'S PERFORMANCE MILESTONE SCHEDULE
7. Although failure to achieve a performance milestone is not a breach of Agreement, a failure
is grounds for PAEDC to demand reasonable assurances1 from INCENTIVE RECIPIENT
that it can and will fully perform its Contractual obligations. Failure to provide demanded
assurances is a breach of Agreement.
8. INCENTIVE RECIPIENT's performance milestones are contained in Exhibit"C."
PAEDC's CONDITIONAL OBLIGATIONS AND LIMITED LIABILITY
9. The PAEDC's sole liability/obligations, if any, shall be to INCENTIVE RECIPIENT and
shall be limited to the conditional incentive obligations detailed in this Agreement. The
PAEDC shall not be liable, in Agreement or otherwise, to INCENTIVE RECIPIENT, or to
any person or entity claiming by or through INCENTIVE RECIPIENT, for any expense,
expenditure or cost incurred by or on behalf of INCENTIVE RECIPIENT related to the
redevelopment of the Building made the basis of this Agreement.
LIQUIDATED DAMAGES FOR BREACH OF AGREEMENT BY INCENTIVE RECIPIENT.
10. In the event INCENTIVE RECIPIENT breaches this Agreement or does not fulfill its
obligation to complete infrastructure improvements in order to provide PAEDC certificates
of occupancy, INCENTIVE RECIPIENT will not be reimbursed for costs incurred by them
for infrastructure improvements.
11. It is expressly understood and agreed by the parties that any right or remedy shall not
preclude the exercise of any other right or remedy under this Agreement or under any
provision of law, nor shall any action taken in the exercise of any right or remedy by
deemed a waiver of any other rights or remedies. Failure to exercise any right or remedy
hereunder shall not constitute a waiver of the right o exercise that or any other right or
remedy at any time.
RECORDS/INSPECTION/PAEDC AUDIT
12. INCENTIVE RECIPIENT shall maintain records as necessary to allow the PAEDC to audit
in compliance with this Agreement and the representations and warranties contained herein
and in INCENTIVE RECIPIENT's application.
13. INCENTIVE RECIPIENT shall give the PAEDC, or any of its duly authorized
representatives, access to and right to examine all books, accounts,records, reports, files and
other papers, things or property belonging to or in use by INCENTIVE RECIPIENT
pertaining to this Agreement. Such rights to access shall continue as long as the records are
maintained by INCENTIVE RECIPIENT. INCENTIVE RECIPIENT agrees to maintain
such records in and accessible location. Driver's license information is appropriate for
interim reporting of Port Arthur residents hired. The reporting objective is to include
Examples of reasonable assurances are copies of pending Agreement s and commitment letters.
#1593918 Page 4
documentation necessary for PAEDC to verify INCENTIVE RECIPIENT's reports without
further outside inquiry.
14. All records pertinent to this Agreement shall be retained by INCENTIVE RECIPIENT at
least three (3) years following the date of termination of this Agreement, whether said
termination is a result of default or whether said termination is a result of fmal submission of
a close out report by INCENTIVE RECIPIENT detailing INCENTIVE RECIPIENT's
compliance with its obligations provided herein. Further, in the event any litigation, claim
or audit arising out of or related to this Agreement is instituted before the expiration of the
three (3) year period and extends beyond the tree (3) year period, the records will be
maintained until all litigation, claims, or audit findings involving this Agreement and the
records made the basis of same has been resolved.
15. Upon written request, INCENTIVE RECIPIENT shall provide PAEDC with all reports
reasonably necessary for PAEDC to comply with the Development Corporation Act.
16. It is expressly understood and agreed by the parties hereto that if INCENTIVE RECIPIENT
fails to submit to PAEDC in a timely and satisfactory manner any report required by this
Agreement, PAEDC, may at its sole discretion, demand assurances that INCENTIVE
RECIPIENT can and will fully perform its Contractual obligations. If INCENTIVE
RECIPIENT fails to provide adequate assurances in ten (10) business days then
INCENTIVE RECIPIENT is in breach and PAEDC is not obligated to reimburse
INCENTIVE RECIPIENT for expenses incurred for infrastructure improvements.
17. The PAEDC reserves the right, from time to time, to carry out field inspections/audits to
ensure compliance with the requirements of this Agreement. After completion of any such
audit, the PAEDC, at its option, may provide INCENTIVE RECIPIENT with a written
report of the audit findings. If the audit report details deficiencies in INCENTIVE
RECIPIENT performance under the terms and conditions of this Agreement, the PAEDC
may establish requirements for the timely correction of any such deficiencies by
INCENTIVE RECIPIENT.
HOLD HARMLESS
18. INCENTIVE RECIPIENT SHALL INDEMNIFY, DEFEND AND HOLD THE PAEDC
AND THE CITY (TOGETHER THE "INDEMNIFIED PARTIES") HARMLESS FROM
ALL INJURIES, CLAIMS, LIABILITIES, COSTS OR DAMAGES (INCLUDING
COURT COSTS AND REASONABLE ATTORNEY'S FEES) SUSTAINED BY OR
THREATENED AGAINST ANY OF THE INDEMNIFIED PARTIES FOR INJURY OR
DEATH TO PERSONS OR PHYSICAL DAMAGE TO PROPERTY ARISING OUT OR
RELATING TO THE PERFORMANCE BY INCENTIVE RECIPIENT OF ITS
OBLIGATION UNDER THIS AGREEMENT.
SUBCONTRACTORS
19. INCENTIVE RECIPIENT may subcontract obligations under this Agreement; however,
INCENTIVE RECIPIENT, in subcontracting for any performances described in this
#1593918 Page 5
Agreement, expressly understands that PAEDC is in now way liable to INCENTIVE
RECIPIENT's subcontractor(s).
20. INCENTIVE RECIPIENT is responsible for performances, as if such performances
rendered were rendered by INCENTIVE RECIPIENT. PAEDC maintains any right of
action which may exist or which may be subsequently accrue to PAEDC under this
Agreement.
21. INCENTIVE RECIPIENT, as well as all of its subcontractors, shall comply with all
applicable federal, state, and local laws, regulations, and ordinances relating to the
operations and activities of the redevelop of the Building.
CONFLICT OF INTEREST/DISCLOSURE OBLIGATION
22. Conflict of Interest: No employee, agent, officer or elected or appointed official of the City
of Port Arthur or the PAEDC who has participated in a decision making process related to
this Agreement (without recusing him/herself and executing a conflict affidavit)may obtain
a personal or fmancial interest or benefit from an PAEDC assisted activity, or have an
interest in any Agreement , subcontractors , or agreement (or proceeds thereof) with respect
to an PAEDC assisted activity, during their tenure or for one (1) year thereafter.
INCENTIVE RECIPIENT shall ensure compliance with applicable provisions of the Act
and Chapter 171, Local Government Code.
23. Disclosure: In conjunction with execution of this Agreement, INCENTIVE RECIPIENT has
fully disclosed to PAEDC all known and potential owners of interests in INCENTIVE
RECIPIENT and its general partner (whether stockholder, manager, member or otherwise).
In the event of any change in ownership or control of INCENTIVE RECIPIENT of five
percent(5 %)or greater, INCENTIVE RECIPIENT shall notify PAEDC in writing. Further,
INCENTIVE RECIPIENT shall be obligated to notify in writing the PAEDC in the event
any time prior to, during or one (1) year after the term of this Agreement, any City or
PAEDC employee or representative or any third party with a conflict of interest obtains or
proposes to obtain a financial benefit, direct or indirect, from INCENTIVE RECIPIENT or
its general partner. Failure to provide said notice immediately or no later than five (5)
business days after receipt of information shall constitute a default herein.
NONDISCRIMINATION/EMPLOYMENT/REPORTING
24. INCENTIVE RECIPIENT shall ensure that no person shall on the grounds of race, color,
religion, sex, handicap, or national origin be excluded from participation in, be denied the
benefits of, or be subjected to discrimination under any Anchor Drive extension activity.
Additionally:
a. To the greatest extent feasible, opportunities for training and employment arising in
connection with the redevelop of the Building will be given to Port Arthur residents;
b. To the greatest extent feasible, Agreement s for work to be performed in connection
with the redevelopment of the Building will be awarded first to Port Arthur residents
#1593918
Page 6
and businesses, then to the residents and businesses of the nine-county Southeast
Texas Region; and
c. If INCENTIVE RECIPIENT advertises for workers in any media then it will
advertise in the"Port Arthur News."
LEGAL AUTHORITY
25. INCENTIVE RECIPIENT assures and guarantees that INCENTIVE RECIPIENT possesses
legal and/or corporate authority to enter into this Agreement, and to perform the services
INCENTIVE RECIPIENT has obligated to perform hereunder and has provided, and will in
the future provide, as requested by the PAEDC, such corporate resolutions necessary to
evidence this authority.
26. The person or persons signing and executing this Agreement on behalf of INCENTIVE
RECIPIENT, or representing themselves as signing and executing this Agreement on behalf
of INCENTIVE RECIPIENT, do hereby warrant and guarantee that he, she or they have
been duly authorized by INCENTIVE RECIPIENT to execute this Agreement on behalf of
INCENTIVE RECIPIENT and to validly and legally bind INCENTIVE RECIPIENT to all
terms,performances, and provisions herein set forth.
NOTICE OF LEGAL OR REGULATORY CLAIMS AGAINST GULFWAY PLAZA.
27. INCENTIVE RECIPIENT shall give PAEDC immediate notice in writing of 1) any legal or
regulatory action, including any proceeding before an administrative agency filed against
INCENTIVE RECIPIENT, directly or indirectly; and 2) any material claim against
INCENTIVE RECIPIENT or its general partner, which may impact continued operations.
For purposes herein, "material" claims shall mean claims in excess of$15,000. Except as
otherwise directed by PAEDC, INCENTIVE RECIPIENT shall furnish immediately to
PAEDC copies of all pertinent documentation of any kind received by INCENTIVE
RECIPIENT with respect to such action or claim.
CHANGES AND AMENDMENTS
28. Except as specifically provided otherwise in this Agreement, any alterations, additions, or
deletions to the terms of this Agreement shall be by amendment in writing and executed by
all parties to this Agreement.
29. It is understood and agreed by the parties hereto that performances under this Agreement
must be rendered in accordance with the Act, the regulations promulgated under the Act, the
assurances and certifications made to PAEDC by INCENTIVE RECIPIENT, and the
assurances and certifications made to the City of Port Arthur with regard to the construction
of the Anchor Drive extension. Based on these considerations, and in order to ensure the
legal and effective performance of this Agreement by all parties, it is agreed by the parties
hereto that the performances under this Agreement may be amended in the following
manner: PAEDC may from time to time during the period of performance of this
Agreement issue policy directives which serve to establish interpret or clarify performance
requirements under this Agreement consistent with the intent of the parties. Such policy
#1593918 Page 7
directives shall be promulgated by the PAEDC Board of Directors in the form of PAEDC
issuances shall be approved by the City Council and shall have the effect of qualifying the
terms of this Agreement and shall be binding upon INCENTIVE RECIPIENT, as if written
herein.
30. Any alterations, additions, or deletions to the terms of this Agreement which are required by
changes in federal, state, or local law are automatically incorporated into this Agreement
without written amendment hereto, and shall become effective on the date designated by
such law or regulation. INCENTIVE RECIPIENT agrees to comply with all federal, state,
and local laws whether existing or hereinafter enacted.
DEFAULT/TERMINATION
31. In the event of default of any of the obligations of INCENTIVE RECIPIENT detailed herein
or in the event of breach of any of the representations of or warranties of INCENTIVE
RECIPIENT either detailed herein or in INCENTIVE RECIPIENT's application to the
PAEDC, the PAEDC may, at its sole and exclusive option and remedy, terminate this
Agreement, in whole or in part. In the event of such termination, but subject to the
provisions hereof, in addition to (i) any other remedies available to the PAEDC as provided
by the laws of the State of Texas or (ii) any other remedies available to the PAEDC as
provided herein, the PAEDC may, at its sole option:
a. Withhold and/or disallow further PAEDC grant payments or incentives to
INCENTIVE RECIPIENT, including funds to be advanced to INCENTIVE
RECIPIENT hereunder.
32. In addition to the foregoing, the parties agree that this Agreement may be terminated at any
time when both parties agree, in writing, to the terms and conditions of any such voluntary
termination.
INCENTIVE RECIPIENT AUDITS
33. If directed by the PAEDC Board, INCENTIVE RECIPIENT shall arrange for a compliance
audit by a certified public accountant to verify performances reported under this Agreement.
34. INCENTIVE RECIPIENT shall take all necessary actions to facilitate the performance of
any and all such audits, whether annual, mandatory, or otherwise requested under this
Agreement.
35. Subject to financial privacy requirements of INCENTIVE RECIPIENT and properly
designated requests for non-disclosure due to proprietary reasons, all approved audit reports
may be made available for public disclosure to the extent required by the Public Information
Act.
ENVIRONMENTAL CLEARANCE REQUIREMENTS
36. INCENTIVE RECIPIENT understands and agrees that by execution of this Agreement,
INCENTIVE RECIPIENT shall be responsible for making all reasonable efforts in
#1593918 Page 8
providing to PAEDC all information, concerning this PAEDC funded project, required for
PAEDC to meet its responsibilities for environmental review, decision making, and other
action which applies to PAEDC in accordance with and to the extent specified in federal,
state, and local law. INCENTIVE RECIPIENT further understands and agrees that
INCENTIVE RECIPIENT shall make all reasonable efforts to assist PAEDC in handling
inquiries and complaints from persons and agencies seeking redress in relation to
environmental reviews covered by approved certifications.
ORAL AND WRITTEN CONTRACTS/PRIOR AGREEMENTS
37. All oral and written contracts between the parties to this Agreement relating to the subject
matter of this Agreement that were made prior to the execution of this Contract have been
reduced to writing and are contained in this Contract.
38. The documents listed below are hereby made a part of this Agreement for all purposes, and
constitute promised performances by INCENTIVE RECIPIENT and/or PAEDC, as the case
may be, in accordance with this Agreement:
a. Exhibit "A" Findings of Fact for Infrastructure Improvements
b. Exhibit"B" Gulfway Plaza Grant Application for PAEDC for funding
c. Exhibit"C" Performance Milestones
d. Exhibit"D" Certification Regarding Lobbying
e. Exhibit"E" Compliance Statement
VENUE
39. For purposes of litigation that may accrue under this Agreement, venue shall lie in Jefferson
County,Texas where substantially all the performance will occur.
ADDRESS OF NOTICE AND COMMUNICATIONS
City of Port Arthur Section 4A Economic Development Corporation
501 Procter Street
Port Arthur,Texas 77640
ATTN: Floyd Batiste, Chief Executive Officer
Gulfway Plaza
935 Sugar Lakes Drive
Sugarland,Texas 77478
ATTN: George Khalaf
CAPTIONS
40. This Agreement has been supplied with captions to serve only as a guide to the contents.
The captions does not control the meaning of any paragraph or in any way determine its
interpretation or application.
#1593918 Page 9
COMPLIANCE WITH FEDERAL,STATE AND LOCAL LAWS
41. INCENTIVE RECIPIENT shall comply with all federal, state, and local laws, statutes,
ordinances, resolutions, rules, regulations, orders and decrees of any court or administrative
body or tribunal related to INCENTIVE RECIPIENT's performance under this Agreement.
Upon request by PAEDC or by the City of Port Arthur, INCENTIVE RECIPIENT shall
furnish reasonable satisfactory proof of its compliance herewith including execution of the
Certification Regarding Lobbying attached hereto as Exhibit "D" and the Compliance
Statement attached hereto as Exhibit"E".
ASSIGNMENT
42. This Agreement may not be assigned by INCENTIVE RECIPIENT to another entity unless
and until the PAED,by the action of the PAEDC Board, approves the assignment.
SUPPLEMENTAL COVENANT
43. Incentive Recipient and any branch, division or department of Incentive Recipient
certifies that they have not and will not knowingly employ an "undocumented worker" which
means "an individual who, at the time of employment, is not lawfully admitted for permanent
residence to the United States or authorized under law to be employed in that manner in the United
States."
44. Incentive Recipient acknowledges that it has reviewed Chapter 2264, Texas Government
Code and hereby affirmatively agrees by execution of this Agreement to repay the amount of any
incentive with interest at the rate of ten (10%) percent per annum not later than the 120t day after
the date PAEDC notifies Incentive Recipient of a violation.
45. Incentive Recipient acknowledges PAEDC may bring a civil action or cover any
amounts owed under this Chapter and further acknowledges that PAEDC may recover court costs
and reasonable attorneys' fees incurred in an action brought under §2264.101(a). Incentive
Recipient is not liable for a violation of this Chapter by a subsidiary, affiliate or franchisee of the
Incentive Recipient or by a person with whom the Incentive Recipient contracts.
ATTORNEY APPROVALS
APPROVED AS TO FORM:
Guy Goodson, General Counsel for PAEDC
VERIFIED AS CONSISTANT
WITH CITY COUNCIL RESOLUTION: Resolution Number :
Valencia Tizeno,City Attorney
#1593918
Page 10
CONTRACT EXECUTION
CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION
SIGNED AND AGREED TO on the day of ,2018.
By: By:
President Secretary
Witness Witness
#1593918 Page 11
GULFWAY PLAZA
SIGNED AND AGREED TO on the day of ,2018.
GULFWAY PLAZA
By:
George Khalaf
By:
Michael Khalaf
By:
John Ganim
#1593918
Page 12
EXHIBIT "A"
FINDING OF FACT FOR INFRASTRUCTURE IMPROVEMENTS
FACTS:
• GULFWAY PLAZA has requested an incentive agreement from the PAEDC for
infrastructure improvements to construct a seven (7) building shopping district at 1645
Jefferson Drive,Port Arthur,Texas 77642 (the`Building")and its parking area.
• GULFWAY PLAZA wants to make infrastructure improvements to the Building in order
to make it suitable for retail space which may house up to seven retail tenants.
FINDINGS:
• The PAEDC Board of Directors has found that constructing infrastructure improvements
to the Building and its parking area would lead to the development of new and expanded
business enterprises in the City of Port Arthur.
• The infrastructure improvements may lead to the opening of seven new businesses in the
City of Port Arthur.
• The opening of such businesses would increase sales tax revenues for the City of Port
Arthur and add to the City ad valorem tax base.
#1593918 Page 13
EXHIBIT "B"
Gulfway Plaza Grant Application
,1593 ,8
Pagr 14
EXHIBIT "C"
PERFORMANCE MILESTONE SCHEDULE
GEORGE KHALAF, MICHAEL KHALAF AND JOHN GANIM
D/B/A GULFWAY PLAZA
DATE MILESTONE
Review approved construction plans by the City of Port Arthur
(a) November 30, 2018 and projected costs with PAEDC for the construction of the
project at 1645 Jefferson Drive,Port Arthur,Texas
(b) December 31 2018 Gulfway Plaza will issue a status report to PAEDC on Project
construction at 1645 Jefferson Drive, Port Arthur, Texas
Gulfway Plaza will provide evidence of completion of the
January 30, 2019 qualifying infrastructure improvements.
PAEDC will issue 40%of Economic Incentive Grant
Gulfway Plaza will obtain Certificate of Occupancy for the first
(c) December 31, 2020 retail tenant space and provide a copy to the PAEDC
PAEDC will issue 30%of Economic Incentive Grant
(d) June 30,2021 Gulfway Plaza will issue a status report to PAEDC on remaining
project construction at 1645 Jefferson Drive, Port Arthur,Texas
Gulfway Plaza will obtain Certificate of Occupancy for the
(e) June 30, 2021 second retail tenant space and provide a copy to the PAEDC.
PAEDC will issue the remaining 30%of Economic Incentive
Grant
(f) December 31, 2021 Gulfway Plaza meets all of their contractual agreement. File is
closed.
(g) December 31, 2021 PAEDC Board of Directors release Letter of Credit to Gulfway
Plaza
#1593918 Page 15
EXHIBIT "D"
CERTIFICATION REGARDING LOBBYING
For Contracts, Grants, Loans, and Cooperative Agreements
The undersigned certifies, to the best of his knowledge and belief,that:
1. No funds have been paid or will be paid, by or on behalf of the undersigned, to
any person for influencing or attempting to influence an officer or employee of
any agency, a member of the City or of the PAEDC in connection with the
awarding of any contract, the making of any grant, the making of any loan, the
entering into of any cooperative agreement, or modification of any contract, grant,
loan, or cooperative agreement.
2 The undersigned shall require that the language of this certification be included in
the award documents for all sub-awards at all tiers (including subcontracts, sub-
grants, and contracts under grants, loans, and cooperative agreements), and that
all Subs shall certify and disclose accordingly.
This certification is material representation of fact which reliance was placed when this
transaction was made or entered into. Submission of this certification is a prerequisite for
making or entering into this transaction.
GULFWAY PLAZA
Date: By:
George Khalaf
Date: By:
Michael Khalaf
Date: By:
John Ganim
#15939]8
Page 16
EXHIBIT "E"
COMPLIANCE STATEMENT
GULFWAY PLAZA hereby certifies that it has fully complied with Local
Government Code §176.006, as amended, which mandates the disclosure
requirements for persons who contract or seek to contract with a local
governmental entity.
GULFWAY PLAZA
Date: By:
George Khalaf
Date:
By:
Michael Khalaf
Date: By:
John Ganim
41593918
Page 17